Document:

Exhibit 10.2

THE 2007 LONG-TERM INCENTIVE AWARD PLAN

OF

JWH HOLDING COMPANY, LLC

JWH Holding Company, LLC, a Delaware limited liability company, has
adopted the 2007 Long-Term Incentive Award Plan of JWH Holding Company, LLC, (the “Plan”), effective March 1, 2007,
for the benefit of its eligible employees, consultants and directors.

The purposes of the Plan are as follows:

(1)
To provide an additional incentive for Employees (as defined below) to further
the growth, development and financial success of the Company by personally
benefiting through the ownership of Company equity and/or rights which
recognize such growth, development and financial success.

(2)
To enable the Company to obtain and retain the services of Employees considered
essential to the long-range success of the company by offering them an
opportunity to own equity in the Company and/or rights which will reflect the
growth, development and financial success of the Company.

ARTICLE I.

DEFINITIONS

Wherever the following terms are used in the Plan,
they shall have the meanings specified below, unless the context clearly
indicates otherwise. The singular pronoun shall include the plural where the
context so indicates.

1.1. “Administrator”
shall mean the entity that conducts the general administration of the Plan as
provided herein.

1.2. “Award” shall
mean an Option that may be awarded or granted under the Plan.

1.3. “Award Agreement”
shall mean a written agreement executed by an authorized officer of the Company
and the Holder that shall contain such terms and conditions with respect to an
Award as the Administrator shall determine, consistent with the Plan.

1.4. “Award Limit”
shall mean 0.2 LLC Interests, as adjusted pursuant to Section 8.3.

1.5. “Board” shall
mean the Board of Directors of Walter.

1.6. “Change in Control”
shall mean a change in ownership or control of the Company effected through any
of the following:

(a)
Any person or related group of persons (other than Walter or a person that,
prior to such transaction, directly of indirectly controls, is controlled by,
or is under common control with, Walter) directly or indirectly acquires
beneficial ownership of securities, possessing more than 40% of the total
combined voting power of the Company’s outstanding securities, or

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(b)
There is a change in the composition of the Board over a period of 36
consecutive months (or less) such that a majority of the Board members (rounded
up to the nearest whole number) ceases to be comprised of individuals who
either (i) have been Board members continuously since the beginning of such
period, or (ii) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described in
clause (i) who were still in office at the time such election or nomination was
approved by the Board; or

(c)
The equity holders of the Company approve a merger or consolidation of the
Company with any other corporation (or other entity), other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 66 2/3% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation; provided, however, that a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person acquires more than 25% of the combined
voting power of the Company’s then outstanding securities shall not constitute
a Change in Control; or

(d)
The equity holders of the Company approve a plan of complete liquidation of the
Company of an agreement for the sale, lease or other disposition by the Company
of all or substantially all of the Company’s assets.

1.7. “Code” shall
mean the Internal Revenue Code of 1986, as amended.

1.8. “Committee”
shall mean the Compensation Committee of the Board, or another committee or
subcommittee of the Board, appointed as provided in Section 7.1.

1.9. “Common Equity”
shall mean the LLC Interests of the Company.

1.10. “Company” shall
mean JWH Holding Company, LLC, a
Delaware limited liability company.

1.11. “Director”
shall mean a member of the Board.

1.12. “DRO” shall
mean a domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder.

1.13. “Employee”
shall mean any officer, or other employee (as defined in accordance with
Section 3401 (c) of the Code) of the Company, or of any Subsidiary.  An employee may be a Director.

1.14. “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.

1.15. “Fair
Market Value” shall have the meaning assigned in the applicable
Award Agreement.

1.16. “Holder” shall
mean a person who has been granted or awarded an Award.

1.17. “Independent Director”
shall mean a member of the Board who is not an Employee of the Company.

1.18. “Option” shall
mean an equity option granted under Article IV of the Plan.

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1.19. “Plan” shall
mean the 2007 Long-Term Incentive Award Plan of JWH Holding Company, LLC.

1.20. “Rule 16b-3”
shall mean Rule 16b-3 promulgated under the Exchange Act, as such Rule may be
amended from time to time.

1.21. “Section 162(m)
Participant” shall mean any Employee whose compensation for a given
fiscal year may be subject to the limit on deductible compensation imposed by
Section 162(m) of the Code.

1.22. “Securities Act”
shall mean the Securities Act of 1933, as amended.

1.23. “Subsidiary”
shall mean any corporation in an unbroken chain of corporations beginning with
the Company if each of the corporations other than the last corporation in the
unbroken chain then owns equity possessing 50% or more of the total combined
voting power of all classes of equity in one of the other corporations in such
chain.

1.24. “Substitute Award”
shall mean an Option granted under this Plan upon the assumption of, or in
substitution for, outstanding equity awards previously granted by a company or
other entity in connection with a corporate transaction, such as a merger,
combination, consolidation or acquisition or property or equity; provided, however, that in no event shall the term “Substitute
Award” be construed to refer to an award made in connection with the
cancellation and repricing of an Option.

1.25. “Termination of Employment”
shall mean the time when the employee-employer relationship between a Holder
and the Company or any Subsidiary is terminated for any reason, with or without
cause, including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (a) terminations
where there is a simultaneous reemployment or continuing employment of a Holder
by the Company or any Subsidiary, (b) at the discretion of the Administrator,
terminations which result in a temporary severance of the employee-employer
relationship, and (c) at the discretion of the Administrator, terminations
which are followed by the simultaneous establishment of a consulting
relationship by the Company or a Subsidiary with the former employee. The
Administrator, in its discretion, shall determine the effect of all matters and
questions relating to Terminations of Employment, including, but not by way of
limitation, the question of whether a Termination of Employment resulted from a
discharge for good cause, and all questions of whether a particular leave of
absence constitutes a Termination of Employment.

1.26. “Walter” shall
mean Walter Industries, Inc.

ARTICLE II.

LLC INTERESTS SUBJECT TO PLAN

2.1. LLC Interests Subject to
Plan.

(a)
The LLC Interests subject to Awards shall be Common Equity. Subject to
adjustment as provided in Section 8.3, the aggregate number of such LLC
Interests which may be issued upon exercise of Awards under the Plan shall not
exceed 0.2.

(b)
The maximum number of LLC Interests which may be subject to Awards granted
under the Plan to any individual in any calendar year shall not exceed the
Award Limit.

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2.2 Add-back of Options and
Other Rights; Certain Acquired Entities

(a)
If any Option expires or is canceled without having been fully exercised, or is
exercised in whole or in part for cash as permitted by the Plan, the number of
LLC Interests subject to such Options but as to which such Option was not
exercised prior to its expiration, cancellation or exercise may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Furthermore, any LLC Interests subject to Award which are adjusted
pursuant to Section 8.3 and become exercisable with respect to equity of
another corporation shall be considered cancelled and may again be optioned,
granted or awarded hereunder subject to the limitations of Section 2.1. LLC
Interests which are delivered by the Holder or withheld by the company upon the
exercise of any Award under the Plan, in payment of the exercise price thereof
or tax withholding thereon, may again be optioned, granted or awarded
hereunder, subject to the limitations of Section 2.1.

(b)
Subject to Sections 3.2(d) and 3.3, any LLC Interests that are issued by the
Company, and any Awards that are granted as a result of the assumption of, or
in substitution for, outstanding awards previously granted by an acquired
entity shall not be counted against the limitations set forth in Section 2.1.

ARTICLE III.

GRANTING OF AWARDS

3.1 Award Agreement.
Each Award shall be evidenced by an Award Agreement.

3.2. Provisions Applicable to
Section 162(m) Participants.

(a)
The Committee, in its discretion, may determine whether an Award is to qualify
as performance-based compensation as described in Section 162(m) (4) (C) of the
Code.

(b)
Notwithstanding anything in the Plan to the contrary, the Committee may grant
any Award to a Section 162(m) Participant.

(c)
Furthermore, notwithstanding any other provision of the Plan, any Award which
is granted to a Section 162(m) Participant and is intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall be subject to any additional limitations set forth in Section 162(m) of
the Code (including any amendment to Section 162(m) of the Code) or any
regulations or rulings issued thereunder that are requirements for
qualification as performance-based compensation as described in Section
162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the extent
necessary to conform to such requirements.

3.3. Limitations Applicable to
Section 16 Persons. Notwithstanding any other provisions of the
Plan, the Plan, and any Award granted or awarded to any individual who is then
subject to Section 16 of the Exchange Act, shall be subject to any additional
limitations set forth in any applicable exemptive rule under Section 16 of the
Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that
are requirements for the application of such exemptive rule. To the extent
permitted by applicable law, the Plan and Awards granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such applicable
exemptive rule.

3.4. Consideration.
In consideration of the granting of an Award under the Plan, the Holder shall
agree, in the Award Agreement, to remain in the employ of the Company or any
Subsidiary for a period of at least one year (of such shorter period as may be
fixed in the Award Agreement of by action of the Administrator following grant
of the Award) after the Award is granted.

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3.5. At-Will Employment.
Nothing in the Plan or in any Award Agreement hereunder shall confer upon any
Holder any right to continue in the employ of the Company or any Subsidiary, or
as a director of the Company, or shall interfere with or restrict in any way
the rights of the Company and any Subsidiary, which are hereby expressly
reserved, to discharge any Holder at any time for any reason whatsoever, with
or without cause, except to the extent expressly provided otherwise in a
written employment agreement between the Holder and the Company or any
Subsidiary.

ARTICLE IV.

GRANTING OF OPTIONS

4.1. Eligibility.
Any Employee selected by the Administrator pursuant to Section 4.4(a) (i) shall
be eligible to be granted an Option.

4.2. Granting of Options to
Employees.

(a)
The Administrator shall from time to time, in its discretion, and subject to
applicable limitations of the Plan:

(i)
Select from among the Employees (including Employees who have previously
received Awards under the Plan) such of them as in its opinion should be
granted Options;

(ii)
Subject to the Award Limit, determine the number of LLC Interests to be subject
to such Options granted to the selected Employees;

(iii)
Subject to Section 4.3, determine whether such Options are to be Incentive
Equity Options or Non-Qualified Equity Options and whether such Options are to
qualify as performance-based compensation as described in Section 162(m)(4)(C)
of the Code; and

(iv)
Determine the terms and conditions of such Options, consistent with the Plan; provided, however, that the terms and conditions of Options
intended to qualify as performance-based compensation as described in Section
162(m) (4) (C) of the Code shall include, but not be limited to, such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code.

(b)
Upon the selection of an Employee to be granted an Option, the Administrator
shall instruct the Secretary of the Company to issue the Option and may impose
such conditions on the grant of the Option as it deems appropriate.

ARTICLE V.

TERMS OF OPTIONS

5.1. Option Price.  The exercise price of the LLC Interests subject
to each Option granted to Employees shall be set by the Administrator, provided, however, that in the case of
Options intended to qualify as performance-based compensation as described in
Section 162(m) (4) (C) of the Code, such exercise price shall not be less than
100% of the Fair Market Value of the LLC Interests subject to the Award on the
date the Option is granted.

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5.2. Option Term.  The term of an Option granted to an Employee
shall be set by the Administrator in its discretion.  The Administrator may in its discretion (a)
extend the term of any outstanding Option in connection with any Termination of
Employment, or amend any other term or condition of such Option relating to
such a termination or (b) grant an Option for a term of less than 10 years and
subsequently extend the term of such Option to 10 years without consideration.

5.3. Option Vesting.

(a)
The period during which the right to exercise, in whole or in part, an Option
granted to an Employee vests in the Holder shall be set by the Administrator
and the Administrator may determine that an Option may not be exercised in
whole or in part for a specified period after it is granted.  At any time after grant of an Option, the
Administrator may, in its discretion and subject to whatever terms and
conditions it selects, accelerate the period during which an Option granted to
an Employee vests.

(b)
No portion of an Option granted to an Employee which is unexercisable at
Termination of Employment shall thereafter become exercisable, except as may be
otherwise provided by the Administrator either in the Award Agreement or by
action of the Administrator following the grant of the Option.

5.4. Substitute Awards.  Notwithstanding the foregoing provisions of
this Article V to the contrary, in the case of an Option that is a Substitute
Award, the price per share of the LLC Interests subject to such Option may be
less than the Fair Market Value per share on the date of grant, provided, that
the excess of:

(a)
The aggregate Fair Market Value (as of the date such Substitute Award is
granted) of the LLC Interests subject to the Substitute Award; over

(b) The aggregate exercise price thereof; does not
exceed the excess of:

(c)
The aggregate fair market value (as of the time immediately preceding the
transaction giving rise to the Substitute Award, such fair market value to be
determined by the Administrator) of the LLC Interests of the predecessor entity
that were subject to the grant assumed or substituted for by the Company; over

(d)
The aggregate exercise price of such LLC Interests.

ARTICLE VI.

EXERCISE OF OPTIONS

6.1. Partial Exercise.
An exercisable Option may be exercised in whole or in part.  However, the Administrator may require that
by the terms of the Option, a partial exercise be with respect to a minimum
number of LLC Interests.

6.2. Manner of Exercise.  All or a portion of an exercisable Option
shall be deemed exercised upon delivery of all of the following to the
Secretary of the Company or his or her office;

(a)
A written notice complying with the applicable rules established by the
Administrator stating that the Option, or a portion thereof, is exercised.  The notice shall be signed by the Holder or
other person then entitled to exercise the Option or such portion of the
Option;

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(b)
Such representations and documents as the Administrator, in its discretion,
deems necessary or advisable to effect compliance with all applicable
provisions of the Securities Act and any other federal or state securities laws
or regulations.   The Administrator may,
in its discretion, also take whatever additional actions it deems appropriate
to effect such compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer notices to agents and registrars;

(c)
Any form or forms of identification requested by the Administrator and, in the
event that the Option shall be exercised pursuant to Section 8.1 by any person
or persons other than the Holder, appropriate proof of the right of such person
or persons to exercise the Option; and

(d)
Full cash payment to the Secretary of the Company for the LLC Interests with
respect to which the Option, or portion thereof, is exercised.  However, the Administrator may, in its
discretion, (i) allow payment, in whole or in part, through the delivery of LLC
Interests which have been owned by the Holder for at least six months with a
Fair Market Value on the date of delivery equal to the aggregate exercise price
of the Option or exercised portion thereof; (ii) allow payment, in whole or in
part, through the surrender of LLC Interests then issuable upon exercise of the
Option having a Fair Market Value on the date of Option exercise equal to the
aggregate exercise price of the Option or exercised portion thereof; (iii)
allow payment, in whole or in part, through the delivery of property of any
kind which continues good and valuable consideration, or (iv) allow payment
through any combination of the consideration provided in the foregoing
subparagraphs (i), (ii) and (iii).

6.3. Conditions to Issuance of
LLC Interests.  The Company
shall not be required to issue or deliver any LLC Interests purchased upon the
exercise of any Option or portion thereof prior to fulfillment of all of the
following conditions:

(a)
The completion of any registration or other qualification of such LLC Interests
under any state or federal law, or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body
which the Administrator shall, in its discretion, deem necessary or advisable;

(b)
The obtaining of any approval or other clearance from any state or federal
governmental agency which the Administrator shall, in its discretion, determine
to be necessary or advisable;

(c)
The lapse of such reasonable period of time following the exercise of the
Option as the Administrator may establish from time to time for reasons of
administrative convenience; and

(d)
The receipt by the Company of full payment for such LLC Interests, including
payment of any applicable withholding tax, which in the discretion of the
Administrator may be in the form of consideration used by the Holder to pay for
such LLC Interests under Section 6.2(d).

6.4. Rights as Equity Holders.  Holders shall not be, nor have any of the
rights or privileges of, equity holders of the Company in respect of any LLC
Interests purchasable upon the exercise of any part of an Option unless and
such LLC Interests have been issued by the Company to such Holders.

6.5. Ownership and Transfer
Restrictions.  The
Administrator, in its discretion, may impose such restrictions on the ownership
and transferability of the LLC Interests purchasable upon the exercise of an
Option as it deems appropriate.  Any such
restrictions shall be set forth in the respective Award Agreement.

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6.6. Additional Limitations on
Exercise of Options.  Holders
may be required to comply with any timing or other restrictions with respect to
the settlement or exercise of an Option, including a window-period limitation,
as may be imposed in the discretion of the Administrator.

ARTICLE VII.

ADMINISTRATION

7.1. Compensation Committee.
The Compensation Committee (or one or more other committees or subcommittees of
the Board assuming the functions of the Committee under the Plan) shall consist
solely of two or more Independent Directors appointed by and holding office at
the pleasure of the Board, each of whom is both a “non-employee director” as
defined by Rule 16b-3 and an “outside director” for purposes of Section 162(m)
of the Code.  Appointment of Committee
members shall be effective upon acceptance of appointment.  Committee members may resign at any time by
delivering written notice to the Board. 
Vacancies in the Committee may be filled by the Board.

7.2. Duties and Powers of
Administrator.  It shall be
the duty of the Administrator to conduct the general administration of the Plan
in accordance with its provisions.  The
administrator shall have the power to interpret the Plan and the Award
Agreements, and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith, to interpret, amend or
revoke any such rules and to amend any Award Agreement provided that the rights
or obligations of the Holder of the Award that is the subject of any such Award
Agreement are not affected adversely. 
Any such grant or award under the Plan need not be the same with respect
to each Holder.  In its discretion, the
Board may at any time and from time to time exercise any and all rights and
duties of the Administrator under the Plan except with respect to matters which
under Rule 16b-3 or Section 162(m) of the Code, or any regulations or rules
issued thereunder, are required to be determined in the discretion of the
Committee.

7.3. Majority Rule; Unanimous
Written Consent.  The
Committee shall act by a majority of its members in attendance at a meeting at
which a quorum is present or by a memorandum or other written instrument signed
by all members of the Committee.

7.4. Compensation; Professional
Assistance; Good Faith Actions. 
Members of the Committee shall receive such compensation, if any, for
their services as members as may be determined by the Board.  All expenses and liabilities which members of
the Committee incur in connection with the administration of the Plan shall be
borne by the Company.  The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers or other persons. 
The Committee, the Company and the Company’s officers and Directors
shall be entitled to rely upon the advice, opinions or valuations of any such
persons.  All actions shall be taken and
all interpretations and determinations shall be made by the Administrator
reasonably and in good faith.  No member
of the Administrator shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan or Awards, and
all members of the Administrator shall be fully protected by the Company in
respect of any such action, determination or interpretation.

7.5. Delegation of Authority to
Grant Awards.  The Committee
may, but need not, delegate from time to time some or all of its authority to
grant Awards under the Plan to a committee consisting of one or more members of
the Committee or of one or more officers of the Company; provided,
however, that the Committee may not delegate its authority to grant
Awards to individuals (a) who are subject on the date of the grant to the
reporting rule under Section 16(a) of the Exchange Act, (b) who are Section
162(m) Participants, or (c) who are officers of the Company who are delegated
authority by the Committee hereunder. 
Any delegation hereunder shall be subject to the restrictions and limits
that the Committee specifies at the time of such delegation of authority and
may be rescinded at any time by the

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Committee.  At all times, any
committee appointed under this Section 7.5 shall serve in such capacity at the
pleasure of the Committee.

ARTICLE VIII.

MISCELLANEOUS PROVISIONS

8.1. Transferability of Awards.

(a)          Except as otherwise provided in Section
8.1(b):

(i)
No Award under the Plan may be sold, pledged, assigned or transferred in any
manner other than by will or the laws of descent and distribution or, subject
to the consent of the Administrator, pursuant to a DRO, unless and until such Award
has been exercised, or the LLC Interests underlying such Award have been
issued, and all restrictions applicable to such LLC Interests have lapsed;

(ii)
No Award or interest or right therein shall be liable for the debts, contracts
or engagements of the Holder or his or her successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition is permitted by the preceding sentence; and

(iii)
During the lifetime of the Holder, only he or she may exercise an Option (or
any portion thereof) granted to him or her under the Plan, unless it has been
disposed of pursuant to a DRO; after the death of the Holder, any exercisable
portion of an Option may, prior to the time when such portions becomes
unexercisable under the Plan or the applicable Award Agreement, be exercised by
his or her personal representative or by any person empowered to do so under
the deceased Holder’s will or under the then applicable laws of descent and
distributions.

(b)
Notwithstanding Section 8.1(a), the Administrator, in its discretion, may
determine to permit a Holder to transfer an Option to any one or more Permitted
Transferees (as defined below), subject to the following terms and conditions:
(i) an Option transferred to a Permitted Transferee shall not be assignable or
transferable by the Permitted Transferee other than by will of the laws of
descent and distribution; (ii) any Option which is transferred to a Permitted
Transferee shall continue to be subject to all the terms and conditions of the
Option as applicable to the original Holder (other than the ability to further
transfer the Option); and (iii) the Holder and the Permitted Transferee shall
execute any and all documents requested by the Administrator, including,
without limitation documents to (A) confirm the status of the transferee as a
Permitted Transferee, (B) satisfy any requirements for an exemption for the
transfer under applicable federal and state securities laws and (C) evidence
the transfer. For purposed of this Section 8.1(b), “Permitted Transferee” shall
mean with respect to a Holder, any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, and person sharing the Holder’s household
(other than a tenant or employee), a trust in which these persons (or the
Holder) control the management of assets, and any other entity in which these
persons (or the Holder) own more than fifty percent of the voting interests, or
any other transferee specifically approved by the Administrator after taking
into account any state or federal tax or securities laws applicable to
transferable Options.

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8.2. Amendments, Suspension, or
Termination of the Plan. Except as otherwise provided in this
Section 8.2, the Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Administrator.
However, without approval of the Company’s equity holders, no action of the
Administrator may, except as provided in Section 8.3, increase the limits
imposed in Section 8.1 on the maximum number of LLC Interests which may be
issued under the Plan. No amendment, suspension or termination of the Plan
shall, without the consent of the Holder, alter or impair any rights or
obligations under any Award theretofore granted or awarded, unless the Award
itself otherwise expressly so provides. No awards may be granted or awarded
during any period of suspension or after termination of the Plan.

8.3. Changes in Common Equity
or Assets of the Company, Acquisition or Liquidation of the Company and Other
Corporate Events.

(a)
Subject to Section 8.3(d), in the event that the Administrator determines that
any dividend or other distribution (whether in the form of cash, Common Equity,
other securities or other property), recapitalization, reclassification, equity
split, reverse equity split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer,
exchange or other disposition of all or substantially all of the assets of the
Company, or exchange of Common Equity or other securities of the company,
issuance of warrants or other rights to purchase Common Equity or other
securities of the Company, or other similar corporate transaction or event, in
the Administrator’s discretion, affects the Common Equity such that an
adjustment is determined by the Administrator to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan or with respect to an Award, then the
Administrator shall, in such manner as it may deem equitable, adjust any or all
of:

(i)
The number and kind of LLC Interests (or other securities or property) with
respect to which Awards may be granted or awarded (including, but not limited
to, adjustments of the limitations in Section 8.1 on the maximum number and
kind of LLC Interests which may be issued and adjustments of the Award
limited);

(ii)
The number and kind of LLC Interests (or other securities or property) subject
to outstanding Awards; and

(iii) The grant or exercise price with respect to
any Award.

(b)
Subject to Sections 8.3(b)(vi) and 8.3(d), in the event of any transaction or
event described in Section 8.3(a) or any unusual or nonrecurring transactions
or events affecting the Company, any affiliate of the Company, or the financial
statements of the Company or any affiliate, or of changes in applicable laws,
regulations or accounting principles, the Administrator, in its discretion, and
on such terms and conditions as it deems appropriate, either by the terms of
the Award or by action taken prior to the occurrence of such transaction or
event and either automatically or upon the Holder’s request, is hereby
authorized to take any one or more of the following actions whenever the
Administrator determines that such action is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan or with respect to any Award under the Plan, to
facilitate such transactions or events or to give effect to such changes in
laws, regulations or principles:

(i) To provide for either the purchase of any such Award for an amount
of cash equal to the amount that could have been attained upon the exercise of
such Award or realization of the Holder’s rights had such Award been currently
exercisable or payable or fully vested or the replacement of such Award with
other rights or property selected by the Administrator in its discretion;

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(ii) To provide that the Award cannot vest, be exercised or become
payable after such event;

(iii)
To provide that such Award shall be exercisable as to all LLC Interests covered
thereby, notwithstanding anything to the contrary in Section 5.3 or 5.4 or the
provisions of such Award;

(iv)
To provide that such Award be assumed by the successor or survivor corporation,
or a parent of subsidiary thereof, or shall be substituted for by similar
options, rights or awards covering the equity of the successor or survivor
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of LLC Interests and prices; and

(v) To make adjustments in the number and type of LLC Interests (or
other securities or property) subject to outstanding Awards and/or in the terms
and conditions of (including the grant or exercise price), and the criteria
included in, outstanding options, and options that may be granted in the
future.

(vi)
Notwithstanding any other provision of the Plan, in the event of a Change in
Control, each outstanding Award shall, immediately prior to the effective date
of the Change in Control, automatically become fully exercisable for all of the
LLC Interests at the time subject to such rights and may be exercised for any
or all of those LLC Interests as fully-vested LLC Interests.

(c)
Subject to Sections 8.3(d), the Administrator may, in its discretion, include
such further provisions and limitations in any Award, agreement or certificate,
as it may deem equitable and in the best interests of the Company.

(d)
No adjustment or action described in this Section 8.3 or in any other provision
of the Plan shall be authorized to the extent such adjustment or action would
result in short-swing profits liability under Section 16 or violate the
exemptive conditions of Rule 16b-3 unless the Administrator determines that the
Award is not to comply with such exemptive conditions.

(e)
The existence of the plan, the Award Agreement and the Awards granted hereunder
shall not affect or restrict in any way the right or power of the Company or
the equity holders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any
issue of equity or of options, warrants or rights to purchase equity or of
bonds, debentures, preferred or prior preference equitys whose rights are
superior to or affect the Common Equity or the rights thereof or which are
convertible into or exchangeable for Common Equity, or the dissolution or
liquidation of the company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

8.4. Tax Withholding.  The company shall be entitled to require
payment in cash or deduction from other compensation payable to each Holder of
any sums required by federal, state or local tax law to be withheld with
respect to the issuance, vesting, exercise or payment of any Award.

8.5. Forfeiture Provisions.  Pursuant to its general authority to
determine the terms and conditions applicable to Awards under the Plan, the
Administrator shall have the right to provide, in the terms of Awards made
under the plan, or to require a Holder to agree by separate written instrument,
that (a)(i) any proceeds, gains or other economic benefit actually or
constructively received by the Holder upon any

 11
 

receipt or exercise of the Award, or upon the receipt or resale of any
Common Equity underlying the Award, must be paid to the Company, and (ii) the
Award shall terminate and any unexercised portion of the Award (whether or not
vested) shall be forfeited, if (b)(i) a Termination of Employment occurs prior
to a specified date, or within a specified time period following receipt or
exercise of the Award, or (ii) the Holder at any time, or during a specified
time period, engages in any activity in competition with the Company, or which
is inimical, contrary or harmful to the interests of the Company, as further
defined by the Administrator or (iii) the Holder incurs a Termination of
Employment for cause.

8.6. Effect of Plan Upon Options and Compensation Plans.  The adoption of the Plan shall not affect any
other compensation or incentive plans in effect for the Company or any
Subsidiary.  Nothing in the Plan shall be
construed to limit the right of the Company (a) to establish any other forms of
incentives or compensation for Employees of the Company or any Subsidiary, or
(b) to grant or assume options or other rights or awards otherwise than under
the Plan in connection with any proper corporate purpose including but not by
way of limitation, the grant or assumption of options in connection with the
acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, equity or assets of any corporation, partnership, limited liability
company, firm or association.

8.7. Compliance with Laws.  The Plan, the granting and vesting of Awards
under the Plan and the issuance and delivery of LLC Interests and the payment
of money under the Plan or under Awards granted or awarded hereunder are
subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law and
federal margin requirements) and to such approvals by any listing, regulatory
or governmental authority as may, in the option of counsel for the Company, be
necessary or advisable in connection therewith. 
Any securities delivered under the Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by
the Company, provide such assurances and representations to the Company as the
Company may deem necessary or desirable to assure compliance with all
applicable legal requirements.  To the
extent permitted by applicable law, the Plan and Awards granted or awarded
hereunder shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.

8.8. Titles.  Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of the
Plan.

8.9. Governing Law.  The Plan and any agreements hereunder shall
be administered, interpreted and enforced under the internal laws of the State
of Delaware without regard to conflicts of laws thereof.

 12Exhibit 10.1

THE SERVICEMASTER COMPANY

2007
Long-Term Incentive Plan

Adopted March 15, 2007

Section 1: General

1.1   Establishment
of the Plan.   The
ServiceMaster Company, a Delaware corporation (the “Company”), hereby
establishes the 2007 Long-Term Incentive Plan as set forth herein (the “Plan”).

1.2   Effective
Date.   The Board approved the
Plan on March  15, 2007 (the “Effective Date”).  The Plan shall cover the three-year
performance period beginning on January 1, 2007 and ending on December 31, 2009
(the “Performance Period”).  The
Plan shall terminate as of December 31, 2009, unless terminated earlier by the
Board.  Termination of the Plan shall not
affect the terms or conditions of any award or the payment associated with any
Unit granted prior to termination of the Plan without the consent of the holder
of such Units.

1.3   Purpose.   The purpose of the Plan is to benefit
the Company and its shareholders by linking a substantial portion of the
compensation of key employees of the Company and its subsidiaries to the
achievement of performance targets established by the Committee or the Board
relating to Actual Pre-Tax Income and Actual Revenue.

1.4   Administration of the Plan. 
 Subject to the general authority
of the Board, the Plan shall be administered by the Committee or a successor
designated by the Board.  The Committee
shall, subject to the terms of the Plan, interpret the Plan and the application
thereof, and establish rules and regulations it deems necessary or desirable
for the administration of the Plan, including any award of Units under the
Plan.  All such interpretations, rules
and regulations shall be final, binding and conclusive absent manifest error.

Section 2: Definitions

2.1   Definitions.   Whenever used in the Plan, the
following terms shall have the meanings set forth below.

“Accounting Firm” means a registered public accounting firm within the meaning of the
Sarbanes-Oxley Act of 2002 and the regulations under such Act.

“Actual Pre-Tax Income” means the actual consolidated earnings before taxes of the Company and
its subsidiaries for the Performance Period as determined by GAAP and
consistently applied for all purposes of the Plan.  The calculation of Actual Pre-Tax Income
shall be determined by the Committee reasonably and in good faith, taking into
account any adjustments to Target Pre-Tax Income with a view towards
consistency of application and treatment.

 1
 

“Actual Revenue”
means the actual consolidated revenue of the Company and its subsidiaries for
the Performance Period as determined by GAAP and consistently applied for all
purposes of the Plan.  The calculation of
Actual Revenue shall be determined by the Committee reasonably and in good
faith, taking into account any adjustments to Target Revenue with a view
towards consistency of application and treatment.

“Actual Unit Payment” means the product of the Target Unit Payment times the percentage
payout determined on the basis of the attainment during the Performance Period
of the Target Pre-Tax Income and Target Revenue, as set forth in and calculated
consistent with Exhibit A.

“Affiliate”
means any business entity in which 50% or more of the equity interests are
owned, directly or indirectly, by the Company.

 “Board” means the Board of Directors of the Company.

 “Cause” means (1) a
material willful breach by a participant of his or her duties and
responsibilities (other than as a result of incapacity due to physical or
mental illness) which is not remedied within 30 days after receipt of written
notice from the Company or an Affiliate specifying such breach; (2) the
commission by a participant of a felony or misdemeanor involving any act of
fraud, embezzlement or dishonesty or any other intentional misconduct by the
participant that substantially and adversely affects the business affairs or
reputation of the Company or any Affiliate; or (3) any failure to cooperate
with any investigation or inquiry into a participant’s, the Company’s or any
Affiliate’s business practices, whether internal or external, including, but
not limited to a participant’s refusal to be deposed or to provide testimony at
any trial or inquiry.

“CEO” means
the Chief Executive Officer of the Company or other person serving as the
principal executive officer of the Company.

“Committee”
means the Compensation and Leadership Development Committee of the Board or any
successor thereto.

“Company” has
the meaning set forth in Section 1.1 and includes any successor entity.

“Disability”
means the absence from the employee’s duties with ServiceMaster or its
Affiliates on a full-time basis for at least 180 consecutive days as a result
of the employee’s incapacity due to physical or mental illness.

“Effective Date”
has the meaning set forth in Section 1.2.

“GAAP” means
United States generally accepted accounting principles.

“Percent of Target Payout” has the meaning set forth in Section 3.5.

 2
 

“Performance Period” has the meaning set forth in Section 1.2.

“Plan” has
the meaning set forth in Section 1.1.

“Plan Year”
means each of the three calendar years ending December 31, 2007, December 31,
2008 and December 31, 2009.

“Target Pre-Tax Income” means the target consolidated earnings before taxes of the Company and
its subsidiaries for the Performance Period as determined by GAAP and
consistently applied for all purposes of the Plan, as set forth in Exhibit
A, with the following adjustments: (1) extraordinary or unusual items, in
particular those of a non-recurring nature, including acquisitions of lines of
business that differ substantially from the businesses of the Company as of the
Effective Date, divestitures of subsidiaries or businesses where the pre-tax
income of that subsidiary or business constitutes a part of the Target Pre-Tax
Income prior to divestiture, changes in accounting principles which shall be
consistently applied for all purposes of the Plan, and restructuring and
impairment charges, which shall result in a positive or negative adjustment, as
appropriate, to the Target Pre-Tax Income for the Performance Period; and (2)
interest and investment income and expense shall be included; provided that if
the Company’s capital structure should significantly change as a result of a
stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange or repurchase of shares, liquidation,
spin-off or other similar change in capitalization or event, or any
distribution to holders of common stock other than a regular cash dividend,
appropriate adjustments shall be made to Target Pre-Tax Income to reflect the
effects of such change or event. 
Notwithstanding the foregoing, acquisitions of businesses and assets
within a similar line of business, and increased interest expense resulting
from such acquisitions, including tuck-in acquisitions, shall not result in an
adjustment. Any adjustment to the Target Pre-Tax Income for the Performance
Period shall be determined by the Committee reasonably and in good faith.

“Target Revenue”
means the target consolidated revenue of the Company and its subsidiaries for
the Performance Period as determined by GAAP and consistently applied for all
purposes of the Plan, as set forth in Exhibit A, with the following
adjustments: extraordinary or unusual items, in particular those of a
non-recurring nature, including acquisitions of lines of business that differ substantially
from the businesses of the Company as of the Effective Date, divestitures of
subsidiaries or businesses where the revenue of that subsidiary or business
constitutes a part of the Target Revenue prior to divestiture, changes in
accounting principles which shall be consistently applied for all purposes of
the Plan, and restructuring and impairment charges, which shall result in a
positive or negative adjustment, as appropriate, to the Target Revenue for the
Performance Period.  Notwithstanding the
foregoing, acquisitions of businesses and assets within a similar line of
business, including tuck-in acquisitions, shall not result in an adjustment.
Any adjustment to the Target Revenue for the Performance Period shall be
determined by the Committee reasonably and in good faith.

“Target Total Payment” means $11,000,000, the target total incentive compensation 

 3
 

payment
to participants in the Plan.

“Target Unit Payment” means the $100, the Target Total Payment divided by 110,000.

“Units” has
the meaning set forth in Section 3.2.

Section 3: Participants, Plan Calculations, Termination of Employment
and Withholding Taxes

3.1   Participants.   The participation of the CEO in the
Plan shall be subject to the approval of the Board.  Subject to the authority of the Board, the
participation of executive officers of the Company in the Plan shall be subject
to the approval of the Committee. 
Subject to the authority of the Board and the Committee, the CEO shall
determine all other participants in the Plan.

3.2   Units.   Participation in the Plan shall be determined
on the basis of participation units (“Units”). For this purpose, up to
110,000 Units shall be allocated among the designated participants.   If and to the extent that there are at any
time less than 110,000 total Units allocated to participants, the difference
between 110,000 and the number of Units which are allocated to participants
shall be deemed to be allocated to the Company. 
Each award of Units shall be evidenced by a Unit Award Agreement
substantially in the form attached as Exhibit B.

3.3   Calculations under the Plan.   Not later than the 75th day
after the end of each Plan Year, the Chief Financial Officer of the Company or
other officer performing similar duties shall prepare (or cause to be prepared
under the Chief Financial Officer’s direction) a document setting forth in
reasonable detail the following calculations: 
(1) an estimate of the Actual Pre-Tax Income for the Performance Period
based on performance through such Plan Year, (2) an estimate of the Actual
Revenue for the Performance Period based on performance through such Plan Year,
and (3) in the case of the Plan Year ending December 31, 2009, the Actual
Pre-Tax Income, the Actual Revenue and the Actual Unit Payment, if any, earned as
of the end of the Performance Period. 
Any such calculations shall be reviewed by an Accounting Firm.  The Accounting Firm shall indicate in writing
its agreement and any disagreement with any of the calculations prepared by the
Chief Financial Officer.  Any such
disagreements shall be resolved by the Accounting Firm and the Chief Financial
Officer, which resolution shall be final, binding and conclusive absent
manifest error.

3.4   Payouts. 
 If the Actual Pre-Tax Income for the
Performance Period exceeds 90% of the Target Pre-Tax Income for the Performance
Period and the Actual Revenue for the Performance Period exceeds 90% of the
Target Revenue for the Performance Period, then the Actual Unit Payment shall
be paid in cash per Unit to each participant then holding an outstanding Unit
(except as set forth and in accordance with Section 3.5).  Any such payment shall be made not later than
March 15, 2010.

 4
 

3.5   Effect of Termination of
Employment.   In
the event of the termination of employment of a participant for any reason
prior to December 31, 2007, any Units allocated to such participant shall be
cancelled as of the effective date of such participant’s termination of
employment (unless otherwise determined by the CEO), and such participant shall
not have any right to receive any cash in lieu of any such Units.

In the event of the termination of employment of a
participant on or after January 1, 2008 by the Company or any subsidiary
without Cause or by reason of the participant’s death or Disability, any Units
allocated to such participant shall be cancelled as of the effective date of
such participant’s termination of employment (unless otherwise determined by
the CEO), and such participant shall have the right to receive, in lieu of any
such Units, an amount in cash per Unit equal to the product of (1) the Percent
of Target Payout, multiplied by (2) the Target Unit Payment, multiplied by (3)
a fraction, the numerator of which is the number of days from and including
January 1, 2007 through and including the effective date of the participant’s
termination of employment, and the denominator of which is 1,096.  For purposes of the preceding calculation,
the Percent of Target Payout shall be determined by calculating the ratio of
(i) accumulated actual pre-tax income against accumulated target pre-tax income
under the Plan (taking into account any adjustments from time to time made in
accordance with the Plan) from January 1, 2007 through the last day of the
calendar month immediately preceding the effective date of the participant’s
termination of employment and (ii) accumulated actual revenue against
accumulated target revenue under the Plan (taking into account any adjustments
from time to time made in accordance with the Plan) through the last day of the
calendar month immediately preceding the effective date of the participant’s
termination of employment, with each such ratio then being applied to and in
accordance with Exhibit A to determine the Percent of Target
Payout.  The determination of accumulated
actual pre-tax income and accumulated actual revenue shall be derived from the
most recent audited financial statements of the Company and the unaudited
financial statements of the Company for any interim period.  The Chief Financial Officer of the Company or
other officer performing similar duties shall prepare (or cause to be prepared
under the Chief Financial Officer’s direction) a document setting forth in
reasonable detail the calculation of any payment pursuant to this
paragraph.  Any such calculations shall
be final, binding and conclusive absent manifest error.  Any payment pursuant to this paragraph shall
be made within 60 days after the effective date of the participant’s
termination of employment.

In the event of the termination of employment of a
participant on or after January 1, 2008 for any reason other than as set forth
herein, any Units allocated to such participant shall be cancelled as of the
effective date of such participant’s termination of employment (unless
otherwise determined by the CEO), and such participant shall not have any right
to receive any cash in lieu of any such Units.

3.6   Termination or Cancellation of Units.   The termination or cancellation of any Units
previously allocated to a participant shall not result in an increase in the
amount of any other participant’s Units or percentage interest in the Plan.
Units which are terminated or canceled shall be deemed to be assigned to the
Company.

 5
 

3.7   Withholding Taxes.   The
Company shall have the right to reduce each payment made under the Plan by the
amount which the Company is required to withhold from payments made under the
Plan in respect of Federal, state, local or other taxes.

Section 4: General Provisions

4.1   Binding
Effect.   This Plan and any Unit Award Agreement
shall be binding upon and inure to the benefit of any successor or successors
of the Company and any person or persons who shall, upon the death of the
holder of any Units, acquire any rights hereunder in accordance with this Plan
or any Unit Award Agreement.  All obligations
of the Company under this Plan and any Unit Award Agreement shall be binding on
any successor to the Company, whether the existence of such successor is the
result of a direct or indirect merger, consolidation, purchase of all or
substantially all of the business and/or assets of the Company or otherwise.

4.2.   Amendment.   The Board may amend this Plan at any time
and from time to time, in whole or in part, provided that no such amendment
shall adversely affect the terms or conditions of any award or the payment
associated with any Unit granted prior to termination of the Plan without the
consent of the holder of such Units.

4.3   No Right of Participation or Employment.   No
person shall have any right to participate in the Plan.  Neither the Plan nor any award made hereunder
shall confer upon any person any right to continued employment by the Company
and its Affiliates or affect in any manner the right of the Company and its
Affiliates to terminate the employment of any person at any time without
liability hereunder.

4.4   Severability.   If any provision of the Plan shall be held
illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of the Plan, and the Plan shall be construed
and enforced as if the illegal or invalid provision had never been set forth
herein.

4.5   Governing Law.  The Plan and all agreements hereunder, including
any Unit Award Agreement, and all determinations made and actions taken
pursuant thereto, to the extent not otherwise governed by the laws of the
United States, shall be governed by the laws of the State of Delaware and
construed in accordance therewith without giving effect to principles of
conflicts of laws.

4.6   Designation of
Beneficiaries.   If permitted by the Company, a participant may
file with the Committee a written designation of one or more persons as such
participant’s beneficiary or beneficiaries (both primary and contingent) in the
event of the participant’s death or disability. 
Such beneficiary or beneficiaries shall be entitled to receive the
participant’s award(s) in the event of the participant’s death or
disability.  Each beneficiary designation
shall become effective only when filed in writing with the Committee during the
participant’s lifetime on a form prescribed by the Committee.

 

 6

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