Document:

Exhibit 10.22

CONFIDENTIAL

September 9, 2005

Mr. Gregory E. Hyland
8315 Bar Harbor Lane
Charlotte, North Carolina 28210

Dear Greg,

We are delighted to offer you the position of Chairman, President and Chief
Executive Officer of Walter Industries, Inc. The terms of your employment will
be as follows:

1.      As Chairman, President and Chief Executive Officer of the Company and a
member of the Board of Directors, you will report to the Board of Directors,
acting in accordance with the Company's articles, bylaws and resolutions enacted
by or policies established by the Board of Directors. You will provide regular
reports to the Board on financial performance, strategic direction, management
development, business plans, and such other matters as are customarily reviewed
by or as may be required by the Board of Directors.

2.      You and your spouse will relocate to the Tampa area as quickly as
practicable, but in no event later than 150 days following your acceptance of
this offer.

3.      Your employment will commence as of the close of business on
September 16, 2005.

4.      Your compensation package will be as follows:

        a) Your base salary will be $725,000 per year. The Board will consider a
        merit increase in March 2007 and annually thereafter.

        b) Your annual target bonus under the Walter Industries Executive
        Incentive Plan (EIP) will be 100% of base pay. The calculated target
        value of your annual Long Term Incentive Plan (LTIP) equity opportunity
        will be $1.6 million. The amount of your annual bonus and equity
        opportunity will fluctuate based upon actual performance under the
        Company's EIP and LTIP plans as in effect from time to time. You will
        receive a pro-rata bonus for the portion of the year 2005 that you are
        actually employed by the Company, at the greater of the amount earned
        under plan terms or the target level. Your first award of stock options
        and Restricted Stock Units under the Company's LTIP Plan will occur at
        the time other company executives receive such awards in February, 2006.

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Mr. Gregory E. Hyland                                                     Page 2
September 9, 2005

        c) You will receive a car allowance of $2,000 per month, subject to
        usual withholding taxes.

        d) You will be awarded a non-qualified option to purchase 35,000 shares
        of Walter Industries, Inc. common stock at the average of the high and
        low price on the New York Stock Exchange on the first day of your
        employment. These options will vest at the rate of 1/3 per year over a
        three-year period and will be subject to the terms of the Company's LTIP
        Plan and your individual stock option agreement.

        e) You will be awarded 35,000 restricted stock units on the first day of
        your employment. These restricted stock units will vest on the seventh
        anniversary of your first day of employment and will be subject to the
        terms of the Company's LTIP Plan and your individual restricted stock
        unit agreement. These restricted stock units will be subject to
        accelerated vesting, 1/4 per year for the first four full calendar years
        following your date of employment (the first such accelerated vesting
        possibility to occur as of December 31, 2006). Such acceleration will
        occur if the price of Walter Industries, Inc. common stock has increased
        at least 12.5% from October 1, 2005 to December 31, 2006, plus 10%
        compounded annually thereafter over the average of the high and low
        price on the New York Stock Exchange on the first day of your
        employment.

        f) Within 30 days of your hire date, you will receive a one time payment
        of $400,000 in recognition of the fact that you will be forfeiting a
        bonus, repaying certain moving and temporary living expenses, incurring
        other costs and forfeiting certain other benefits in connection with
        your acceptance of this offer from the Company. This payment will not be
        grossed up for tax purposes.

        g) You will receive the following additional benefits:

        - Reimbursement for all reasonable and customary business-related travel
        and entertainment expenses, in accordance with the terms of the policy
        generally applicable to the executives in the location in which you are
        primarily based, as it may change from time to time.

        - Participation in the group life and health insurance benefit programs,
        generally applicable to Executives employed in the location in which you
        are primarily based, in accordance with their terms, as they may change
        from time to time.

        - Participation in the Retirement Savings Plan, generally applicable to
        salaried employees in the location in which you are primarily based, as
        it may change from time to time and in accordance with its terms.

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Mr. Gregory E. Hyland                                                     Page 3
September 9, 2005

        Currently, if the employee contributes 4% of base pay to the Plan, the
        company will contribute a total of 10% of base pay to the Plan. In
        addition, the Company will contribute 10% of your base pay to a
        non-qualified retirement plan for a period of up to 5 years from your
        hire date, but not beyond the date of your termination, death or
        disability. You will fully vest in benefits under both the qualified
        Retirement Savings Plan and the non-qualified supplemental plan in the
        event of your death, disability or termination other than for cause.

        - Participation in the Employee Stock Purchase Plan, generally
        applicable to salaried employees in the location in which you are
        primarily based, as it may change from time to time and in accordance
        with its terms.

        - 4 weeks of annual vacation to be used each year, without carryover of
        unused vacation days.

        - The Company will pay the dues for your membership in one country club
        and one luncheon club in the Tampa area, for the reasonable cost of
        financial and tax planning services and for an annual executive
        physical.

        - The Company will reimburse you for all out of pocket costs of your
        relocation to the Tampa area, including moving of household effects,
        temporary living expenses for up to 120 days, reasonable house hunting
        expenses for you and your spouse, transportation of your family to
        Tampa, closing costs on the sale of your home in North Carolina and
        costs associated with the purchase of another home in the Tampa area,
        and, if you choose, within 60 days of receiving an offer from the
        Company based upon appraisals, use of the Company's third party
        relocation service to sell your home in North Carolina. You will also
        receive $10,000 to cover miscellaneous expenses incurred in your move.
        In addition, you will be "grossed up" for such expenses to the extent
        they exceed allowable limits under Internal Revenue Service (IRS)
        regulations. Under the provisions of the Sarbanes-Oxley Act, the Company
        cannot extend or facilitate a loan to you in connection with your
        relocation. In addition to the above, the Company will reimburse you up
        to a maximum of $105,000 for any deposit forfeited in connection with
        the termination of your contract to purchase a home in the Miami,
        Florida area, which amount shall also be subject to the "gross-up"
        mentioned in the preceding sentence.

        You may contact the Company's General Counsel with any questions
        regarding the Company's compensation and benefit plans.

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Mr. Gregory E. Hyland                                                     Page 4
September 9, 2005

5.      You will not use any company-owned, leased or chartered aircraft for
personal travel at company expense, except in the case of a family emergency and
with the prior approval of the Chairman of the Compensation and Human Resources
Committee of the Board, or in the event of his unavailability, the Chairman of
the Corporate Governance Committee. You will not be required to reimburse the
cost of any such pre-approved emergency travel to the Company, but the value of
such travel will be taxable to you in accordance with applicable IRS
regulations.

6.      You may serve on up to two other public company boards of directors and
up to 2 boards of directors of charitable and non-profit organizations in the
Tampa area with the prior consent of the Board, but you shall serve on no public
company boards other than the board of Walter Industries, Inc. during your first
12 months with the Company.

7.      The Company desires to have you, as the chief executive of the Company,
make a meaningful investment in the Company. In this regard, as soon as
practicable, but within the next 12 months you shall invest at least $150,000 in
the Company's common stock. This investment should be made in consultation with
the Company's General Counsel in order to avoid any concerns regarding insider
information concerning the Company and its businesses.

8.      In the event of your involuntary termination, other than for "cause", or
your resignation following a significant diminution in pay or responsibilities,
you will be eligible for the following severance benefits:

        a) i) Twenty four months of base salary continuation at the rate in
        effect at the date of termination, plus (ii) a pro-rata bonus for the
        portion of the current year actually worked computed in accordance with
        plan terms to the date of termination, plus (iii) 12 months of
        additional bonus computed at the target level at the date of
        termination.

        b) Continuing fringe benefits for the duration of your base salary
        payments (24 months) and participation in the Company's group life and
        health programs to the extent such plans permit continuing
        participation. In any event, health and life insurance will continue for
        the period of your contractual salary severance payments, but not beyond
        the availability of such insurance from a subsequent employer. The COBRA
        election period will not commence until the expiration of coverage under
        the Walter Industries plans.

9.      You agree that all inventions, improvements, trade secrets, reports,
manuals, computer programs, systems, tapes and other ideas and materials
developed or invented by you during the period of your employment with Walter
Industries, either solely or in collaboration with others, which relate to the
actual or anticipated business or research of the Company, result from or are
suggested by any work you may do for the Company, or which result from use of
the Company's premises or the Company's or its customers' property
(collectively, the "Developments") shall be the sole and exclusive property of
the Company.

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Mr. Gregory E. Hyland                                                     Page 5
September 9, 2005

You hereby assign to the Company your entire right and interest it any such
Development, and will hereafter execute any documents in connection therewith
that the company may reasonably request. This section does not apply to any
inventions that you made prior to your employment by the Company, or to any
inventions that you develop entirely on your own time without using any of the
Company's equipment, supplies, facilities or the Company's or its customers'
confidential information and which do not relate to the Company's business,
anticipated research and development, the work you have performed for the
Company.

10.     As an inducement to Walter Industries to make this offer to you, you
represent and warrant that you are not a party to any agreement or obligation
for personal services, and that there exists no impediment or restraint,
contractual or otherwise on your power, right or ability to accept this offer
and to perform the duties and obligations specified herein.

11.     You acknowledge and agree that you will respect and safeguard Walter
Industries property, trade secrets and confidential information. You acknowledge
that the Company's electronic communication systems (such as email and
voicemail) are maintained to assist in the conduct of the Company's business and
that such systems and data exchanged or stored thereon are Company property. In
the event that you leave the employ of the Company, will not disclose any trade
secrets or confidential information you acquired while an employee of the
Company to any other person or entity, including, without limitation, a
subsequent employer, or use such information in any manner.

12.     During the term of your employment and for a period of twelve (12)
months after termination of your employment, you shall not: (i) directly or
indirectly act in concert or conspire with any person employed by the Company in
order to engage in or prepare to engage in or to have a financial or other
interest in any business or any activity which you knows (or reasonably should
have known) to be directly competitive with the business of the Company as then
being carried on; or (ii) serve as an employee, agent, partner, shareholder,
director or consultant for, or in any other capacity participate, engage, or
have a financial or other interest in any business or any activity which you
know (or reasonably should have known) to be directly competitive with the
business of the Company as then being carried on (provided, however, that
notwithstanding anything to the contrary contained in this Agreement, you may
own up to two percent (2%) of the outstanding shares of the capital stock of a
company whose securities are registered under Section 12 of the Securities
Exchange Act of 1934).

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Mr. Gregory E. Hyland                                                     Page 6
September 9, 2005

13.     Definitions

        (a) "Cause" shall mean your (i) conviction or guilty plea of a felony
        involving fraud or dishonesty, (ii) theft or embezzlement of property
        from the company (iii) willful and continued refusal to perform the
        duties of your position (other than any such failure resulting from your
        incapacity due to physical or mental illness) or (iv) fraudulent
        preparation of financial information of the Company.

        (b) For purposes of this agreement, a significant diminution in pay or
        responsibilities shall not have occurred if (i) the amount of your bonus
        or equity opportunity fluctuates due to performance considerations under
        the company's bonus and long term incentive plans in effect from time to
        time, or (ii) 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 you remain the chairman and chief executive
        officer of a newly formed or surviving publicly traded company with the
        same compensation arrangements that existed prior to such strategic
        realignment.

14.     It is agreed and understood that this offer letter, if and when
accepted, shall constitute our entire agreement with respect to the subject
matter hereof and shall supersede all prior agreements, discussions,
understandings and proposals (written or oral) relating to your employment with
the Company.

Greg, let us assure you that the entire Board of Directors is delighted at the
prospects of your joining Walter Industries, Inc. and we look forward to working
with you. If you are in agreement, please sign and return one copy of this
letter, and retain one for your records.

Very truly yours,

/s/Donald N. Boyce
--------------------------
Donald N. Boyce
For the Board of Directors

Agreed and Accepted:

/s/Gregory E. Hyland
--------------------------
Gregory E. Hyland

September 9, 2005
DateExhibit 10.23

                    EXECUTIVE CHANGE-IN-CONTROL
                    SEVERANCE AGREEMENT FOR GREGORY E. HYLAND

                    Walter Industries, Inc.

                    September 2005

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CONTENTS

--------------------------------------------------------------------------------

Article 1.        Definitions..................................................1

Article 2.        Severance Benefits...........................................5

Article 3.        Form and Timing of Severance Benefits........................9

Article 4.        Noncompetition and Confidentiality...........................9

Article 5.        Excise Tax Equalization Payment.............................10

Article 6.        The Company's Payment Obligation............................11

Article 7.        Term of Agreement...........................................11

Article 8.        Legal Remedies..............................................12

Article 9.        Successors..................................................12

Article 10.       Miscellaneous...............................................12

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WALTER INDUSTRIES, INC.
EXECUTIVE CHANGE-IN-CONTROL SEVERANCE AGREEMENT

         THIS EXECUTIVE CHANGE-IN-CONTROL SEVERANCE AGREEMENT is made, entered
into, and is effective this 16th day of September, 2005 (hereinafter referred to
as the "Effective Date"), by and between Walter Industries, Inc. (the
"Company"), a Delaware corporation, and Gregory E. Hyland (the "Executive").

         WHEREAS, the Executive is being employed by the Company; and

         WHEREAS, the Company is desirous of assuring insofar as possible, that
it will continue to have the benefit of the Executive's services; and the
Executive is desirous of having such assurances; and

         WHEREAS, the Company recognizes that circumstances may arise in which a
Change in Control of the Company occurs, through acquisition or otherwise,
thereby causing uncertainty of employment without regard to the Executive's
competence or past contributions. Such uncertainty may result in the loss of the
valuable services of the Executive to the detriment of the Company and its
shareholders; and

         WHEREAS, both the Company and the Executive are desirous that any
proposal for a Change in Control or acquisition will be considered by the
Executive objectively and with reference only to the business interests of the
Company and its shareholders; and

         WHEREAS, the Executive will be in a better position to consider the
Company's best interests if the Executive is afforded reasonable security, as
provided in this Agreement, against altered conditions of employment which could
result from any such Change in Control or acquisition.

         NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Agreement, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

ARTICLE 1.        DEFINITIONS

         Wherever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized:

         (a)      "Agreement" means this Executive Change-in-Control Severance
                  Agreement.

         (b)      "Base Salary" means, at any time, the then regular annual rate
                  of pay which the Executive is receiving as annual salary,
                  excluding amounts: (i) received under short-term or long-term
                  incentive or other bonus plans, regardless of whether or not
                  the amounts are deferred, or (ii) designated by the Company as
                  payment toward reimbursement of expenses.

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                                                                               2

         (c)      "Beneficial Owner" shall have the meaning ascribed to such
                  term in Rule 13d-3 of the General Rules and Regulations under
                  the Exchange Act.

         (d)      "Board" means the Board of Directors of the Company.

         (e)      "Cause" shall be determined solely by the Committee in the
                  exercise of good faith and reasonable judgment, and shall mean
                  the occurrence of any one or more of the following:

                  (i)      The Executive's willful and continued failure to
                           substantially perform his duties with the Company
                           (other than any such failure resulting from the
                           Executive's Disability), after a written demand for
                           substantial performance is delivered to the Executive
                           that specifically identifies the manner in which the
                           Committee believes that the Executive has not
                           substantially performed his duties, and the Executive
                           has failed to remedy the situation within fifteen
                           (15) business days of such written notice from the
                           Company; or

                  (ii)     The Executive's conviction of a felony; or

                  (iii)    The Executive's willful engaging in conduct that is
                           demonstrably and materially injurious to the Company,
                           monetarily or otherwise. However, no act or failure
                           to act on the Executive's part shall be deemed
                           "willful" unless done, or omitted to be done, by the
                           Executive not in good faith and without reasonable
                           belief that the action or omission was in the best
                           interests of the Company.

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

                  (i)      Any Person (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), is or becomes the
                           Beneficial Owner, directly or indirectly, of
                           securities of the Company representing more than
                           thirty percent (30%) of the combined voting power of
                           the Company's then outstanding securities;

                  (ii)     During any period of not more than thirty-six (36)
                           consecutive months, individuals who at the beginning
                           of such period constitute the Board of Directors of
                           the Company, and any new director whose election by
                           the Board or nomination for election by the Company's
                           stockholders was approved by a vote of at least a
                           majority (rounded up to the nearest whole number) of
                           the directors then still in office who either were
                           directors at the beginning of the period or whose
                           election or nomination for election was previously so
                           approved, cease for any reason to constitute at least
                           a majority thereof;

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                                                                               3

                  (iii)    The consummation of a merger or consolidation of the
                           Company with any other corporation, other than: (i) 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 sixty-six and two-thirds percent
                           (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; or (ii) a merger or consolidation
                           effected to implement a recapitalization of the
                           Company (or similar transaction) in which no Person
                           acquires more than thirty percent (30%) of the
                           combined voting power of the Company's then
                           outstanding securities; or

                  (iv)     The Company's stockholders approve a plan or an
                           agreement for the sale or disposition by the Company
                           of all or substantially all of the Company's assets
                           (or any transaction or series of transactions having
                           a similar effect).

                  Notwithstanding the foregoing, no Change in Control of the
                  Company shall 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, and the Executive remains the chairman and
                  chief executive officer of a newly formed or surviving
                  publicly traded company with the same compensation
                  arrangements that existed prior to such strategic realignment.

         (g)      "Code" means the Internal Revenue Code of 1986, as amended.

         (h)      "Committee" means the Compensation Committee of the Board of
                  Directors of the Company, or, if no Compensation Committee
                  exists, then the full Board of Directors of the Company, or a
                  committee of Board members, as appointed by the full Board to
                  administer this Agreement.

         (i)      "Company" means Walter Industries, Inc., a Delaware
                  corporation (including any and all subsidiaries), or any
                  successor thereto as provided in Article 9 herein.

         (j)      "Disability" or "Disabled" shall have the meaning ascribed to
                  such term in the Executive's governing long-term disability
                  plan, or if no such plan exists, at the discretion of the
                  Board.

         (k)      "Effective Date" means the date this Agreement is approved by
                  the Board, or such other date as the Board shall designate in
                  its resolution approving this Agreement, and as specified in
                  the opening sentence of this Agreement.

         (l)      "Effective Date of Termination" means the date on which a
                  Qualifying Termination occurs, as provided in Section 2.2
                  herein, which triggers the payment of Severance Benefits
                  hereunder.

         (m)      "Exchange Act" means the Securities Exchange Act of 1934, as
                  amended.

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                                                                               4

         (n)      "Good Reason" means, without the Executive's express written
                  consent, the occurrence after a Change in Control of the
                  Company of any one (1) or more of the following:

                  (i)      The assignment of the Executive to duties materially
                           inconsistent with the Executive's authorities,
                           duties, responsibilities, and status (including
                           offices, titles, and reporting requirements) as an
                           executive and/or officer of the Company, or a
                           material reduction or alteration in the nature or
                           status of the Executive's authorities, duties, or
                           responsibilities from those in effect as of ninety
                           (90) calendar days prior to the Change in Control,
                           other than an insubstantial and inadvertent act that
                           is remedied by the Company promptly after receipt of
                           notice thereof given by the Executive;

                  (ii)     The Company's requiring the Executive to be based at
                           a location in excess of fifty (50) miles from the
                           location of the Executive's principal job location or
                           office immediately prior to the Change in Control;
                           except for required travel on the Company's business
                           to an extent substantially consistent with the
                           Executive's then present business travel obligations;

                  (iii)    A reduction by the Company of the Executive's Base
                           Salary in effect on the Effective Date hereof, or as
                           the same shall be increased from time to time;

                  (iv)     The failure of the Company to continue in effect any
                           of the Company's short- and long-term incentive
                           compensation plans, or employee benefit or retirement
                           plans, policies, practices, or other compensation
                           arrangements in which the Executive participates
                           unless such failure to continue the plan, policy,
                           practice, or arrangement pertains to all plan
                           participants generally; or the failure by the Company
                           to continue the Executive's participation therein on
                           substantially the same basis, both in terms of the
                           amount of benefits provided and the level of the
                           Executive's participation relative to other
                           participants, as existed immediately prior to the
                           Change in Control of the Company;

                  (v)      The failure of the Company to obtain a satisfactory
                           agreement from any successor to the Company to assume
                           and agree to perform the Company's obligations under
                           this Agreement, as contemplated in Article 9 herein;
                           and

                  (vi)     A material breach of this Agreement by the Company
                           which is not remedied by the Company within ten (10)
                           business days of receipt of written notice of such
                           breach delivered by the Executive to the Company.

                  Unless the Executive becomes Disabled, the Executive's right
                  to terminate employment for Good Reason shall not be affected
                  by the Executive's incapacity due to physical or mental
                  illness. The Executive's continued employment shall not
                  constitute consent to, or a waiver of rights with respect to,
                  any circumstance constituting Good Reason herein.

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                                                                               5

         (o)      "Notice of Termination" shall mean a written notice which
                  shall indicate the specific termination provision in this
                  Agreement relied upon, and shall set forth in reasonable
                  detail the facts and circumstances claimed to provide a basis
                  for termination of the Executive's employment under the
                  provision so indicated.

         (p)      "Person" shall have the meaning ascribed to such term in
                  Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
                  and 14(d) thereof, including a "group" as defined in Section
                  13(d).

         (q)      "Qualifying Termination" means any of the events described in
                  Section 2.2 herein, the occurrence of which triggers the
                  payment of Severance Benefits hereunder.

         (r)      "Severance Benefits" mean the payment of severance
                  compensation as provided in Section 2.3 herein.

ARTICLE 2.        SEVERANCE BENEFITS

         2.1      Right to Severance Benefits. The Executive shall be entitled
to receive from the Company Severance Benefits as described in Section 2.3
herein, if there has been a Change in Control of the Company and if, within
twenty-four (24) calendar months thereafter, the Executive's employment with the
Company shall end for any reason specified in Section 2.2 herein as being a
Qualifying Termination.

         The Executive shall not be entitled to receive Severance Benefits if he
is terminated for Cause, or if his employment with the Company ends due to
death, Disability, voluntary normal retirement (as defined under the then
established rules of the Company's tax-qualified retirement plan), or due to a
voluntary termination of employment for reasons other than as specified in
Section 2.2(b) herein.

         The Executive shall not be entitled to receive duplicative severance
benefits under any other Company-related plans or programs (including, without
limitation, the Executive's employment agreement dated as of August 25, 2005
(the Employment Agreement)) if benefits are triggered hereunder. In the event
that a termination of the Executive's employment could be deemed both to
constitute a Qualifying Termination under this Agreement and to give rise to a
severance obligation of the Company under paragraph 8 of the Employment
Agreement, the aggregate cash amount payable to the Executive as a consequence
of such termination in respect of base pay, bonus and consideration for
non-compete obligations shall be the greater of (a) the amount calculated
pursuant to paragraph 8(a) or 8(b) of the Employment Agreement, as applicable,
or (b) the amount calculated pursuant to Section 2.3(a), (b), (c) and (d) of
this Agreement. 25% of such amount shall be in consideration for the Executive
entering into a non-compete agreement as described in Article 4 herein.

         2.2      Qualifying Termination. The occurrence of any one of the
following events within twenty-four (24) calendar months after a Change in
Control of the Company shall trigger the payment of Severance Benefits to the
Executive under this Agreement:

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                                                                               6

         (a)      The Company's involuntary termination of the Executive's
                  employment without Cause; and

         (b)      The Executive's voluntary employment termination for Good
                  Reason.

         For purposes of this Agreement, a Qualifying Termination shall not
include a termination of employment by reason of death, Disability, or voluntary
normal retirement (as such term is defined under the then established rules of
the Company's tax-qualified retirement plan), the Executive's voluntary
termination for reasons other than as specified in Section 2.2(b) herein, or the
Company's involuntary termination for Cause.

         2.3      Description of Severance Benefits. In the event the Executive
becomes entitled to receive Severance Benefits, as provided in Sections 2.1 and
2.2 herein, the Company shall pay to the Executive and provide him with the
following Severance Benefits:

         (a)      A lump-sum amount equal to the Executive's unpaid Base Salary,
                  accrued vacation pay, unreimbursed business expenses, and all
                  other items earned by and owed to the Executive through and
                  including the Effective Date of Termination.

         (b)      A lump-sum amount equal to the Executive's annual bonus award
                  earned as of the Effective Date of Termination, based on
                  actual year-to-date performance, as determined at the
                  Committee's discretion (excluding any special bonus payments).
                  This payment will be in lieu of any other payment to be made
                  to the Executive under the annual bonus plan in which the
                  Executive is then participating for the plan year.

         (c)      A lump-sum amount equal to one and one-half (1.5) multiplied
                  by the sum of the following: (i) the higher of: (A) the
                  Executive's annual rate of Base Salary in effect upon the
                  Effective Date of Termination, or (B) the Executive's annual
                  rate of Base Salary in effect on the date of the Change in
                  Control; and (ii) the average of the actual annual bonus
                  earned (whether or not deferred) by the Executive under the
                  annual bonus plan (excluding any special bonus payments) in
                  which the Executive participated in the three (3) years
                  preceding the year in which the Executive's Effective Date of
                  Termination occurs. If the Executive has less than three (3)
                  years of annual bonus participation preceding the year in
                  which the Executive's Effective Date of Termination occurs,
                  then the Executive's annual target bonus established under the
                  annual bonus plan in which the Executive is then participating
                  for the bonus plan year in which the Executive's Effective
                  Date of Termination occurs shall be used for each year that
                  the Executive did not participate in the annual bonus plan, up
                  to a maximum of three (3) years, to calculate the three (3)
                  year average bonus payment.

<PAGE>

                                                                               7

         (d)      A lump-sum amount equal to one-half (.5) multiplied by the sum
                  of the following: (i) the higher of: (A) the Executive's
                  annual rate of Base Salary in effect upon the Effective Date
                  of Termination, or (B) the Executive's annual rate of Base
                  Salary in effect on the date of the Change in Control; and
                  (ii) the average of the actual annual bonus earned (whether or
                  not deferred) by the Executive under the annual bonus plan
                  (excluding any special bonus payments) in which the Executive
                  participated in the three (3) years preceding the year in
                  which the Executive's Effective Date of Termination occurs. If
                  the Executive has less than three (3) years of annual bonus
                  participation preceding the year in which the Executive's
                  Effective Date of Termination occurs, then the Executive's
                  annual target bonus established under the annual bonus plan in
                  which the Executive is then participating for the bonus plan
                  year in which the Executive's Effective Date of Termination
                  occurs shall be used for each year that the Executive did not
                  participate in the annual bonus plan, up to a maximum of three
                  (3) years, to calculate the three (3) year average bonus
                  payment. Such amount shall be in consideration for the
                  Executive entering into a noncompete agreement as described in
                  Article 4 herein.

         (e)      Upon a Qualifying Termination, vesting and cash-out of any and
                  all outstanding cash-based long-term incentive awards held by
                  the Executive, as granted to the Executive by the Company as a
                  component of the Executive's compensation. The cash-out shall
                  be in a lump-sum amount equal to the target award level
                  established for each award, multiplied by a fraction the
                  numerator of which is the full number of completed days in the
                  preestablished performance period as of the Effective Date of
                  termination, and the denominator of which is the full number
                  of days in the entire performance period (i.e., typically
                  thirty-six (36) months). This payment will be in lieu of any
                  other payment to be made to the Executive under these
                  long-term performance-based award plans.

         (f)      Upon the occurrence of a change in control, an immediate full
                  vesting and lapse of all restrictions on any and all
                  outstanding equity-based long-term incentives, including but
                  not limited to stock options and restricted stock awards held
                  by the Executive. This provision shall override any
                  conflicting language contained in the Executive's respective
                  Award Agreements.

         (g)      Retirement benefits under the Walter Industries, Inc.
                  Retirement Savings Plan will become immediately fully vested,
                  to the extent not already fully vested, upon a Qualifying
                  Termination.

         (h)      Continuation for twenty-four (24) months of the Executive's
                  medical insurance and life insurance coverage. These benefits
                  shall be provided by the Company to the Executive beginning
                  immediately upon the Effective Date of Termination. Such
                  benefits shall be provided to the Executive at the same
                  coverage level and cost to the Executive as in effect
                  immediately prior to the Executive's Effective Date of
                  Termination.

                  The Executive shall qualify for full COBRA health benefit
                  continuation coverage beginning upon the expiration of the
                  aforementioned twenty-four (24) month period.

<PAGE>

                                                                               8

                  Notwithstanding the above, these medical and life insurance
                  benefits shall be discontinued prior to the end of the stated
                  continuation period in the event the Executive receives
                  substantially similar benefits from a subsequent employer, as
                  determined solely by the Committee in good faith. For purposes
                  of enforcing this offset provision, the Executive shall be
                  deemed to have a duty to keep the Company informed as to the
                  terms and conditions of any subsequent employment and the
                  corresponding benefits earned from such employment, and shall
                  provide, or cause to provide, to the Company in writing
                  correct, complete, and timely information concerning the same.

         (i)      For a period of up to twenty-four (24) months following a
                  Qualifying Termination, the Executive shall be entitled, at
                  the expense of the Company, to receive standard outplacement
                  services from a nationally recognized outplacement firm of the
                  Executive's selection. However, the Company's total obligation
                  shall not exceed thirty-five percent (35%) of the Executive's
                  final annual rate of Base Salary with the Company, and such
                  Company obligation shall end prior to the end of the
                  twenty-four (24) month period upon the Executive becoming
                  employed by a subsequent employer.

         (j)      For a period of twenty-four (24) months following a Qualifying
                  Termination, the Executive shall be entitled to fringe
                  benefits in effect prior to the Qualifying Termination,
                  including, without limitation, financial and tax planning and
                  payment of club membership dues. These benefits shall be
                  provided by the Company to the Executive beginning immediately
                  upon the Effective Date of Termination. Such benefits shall be
                  provided to the Executive at the same cost and benefit level
                  as in effect immediately prior to the Executive's Effective
                  Date of Termination.

         2.4      Termination for Total and Permanent Disability. Following a
Change in Control, if the Executive's employment is terminated with the Company
due to Disability, the Executive's benefits shall be determined in accordance
with the Company's retirement, insurance, and other applicable plans and
programs then in effect.

         2.5      Termination for Retirement or Death. Following a Change in
Control, if the Executive's employment with the Company is terminated by reason
of his voluntary normal retirement (as defined under the then established rules
of the Company's tax-qualified retirement plan), or death, the Executive's
benefits shall be determined in accordance with the Company's retirement,
survivor's benefits, insurance, and other applicable programs then in effect.

         2.6      Termination for Cause or by the Executive Other Than for Good
Reason. Following a Change in Control, if the Executive's employment is
terminated either: (i) by the Company for Cause; or (ii) voluntarily by the
Executive for reasons other than as specified in Section 2.2(b) herein, the
Company shall pay the Executive his full Base Salary at the rate then in effect,
accrued vacation, and other items earned by and owed to the Executive through
the Effective Date of Termination, plus all other amounts to which the Executive
is entitled under any compensation plans of the Company at the time such
payments are due, and the Company shall have no further obligations to the
Executive under this Agreement.

<PAGE>

                                                                               9

         2.7      Notice of Termination. Any termination of the Executive's
employment by the Company for Cause or by the Executive for Good Reason shall be
communicated by Notice of Termination to the other party.

ARTICLE 3.        FORM AND TIMING OF SEVERANCE BENEFITS

         3.1      Form and Timing of Severance Benefits. The Severance Benefits
described in Sections 2.3(a), 2.3(b), 2.3(c), and 2.3(d) herein shall be paid in
cash to the Executive in a single lump sum as soon as practicable following the
Effective Date of Termination, but in no event beyond ten (10) calendar days
from such date.

         3.2      Withholding of Taxes. The Company shall withhold from any
amounts payable under this Agreement all federal, state, city, or other taxes as
legally shall be required.

ARTICLE 4.        NONCOMPETITION AND CONFIDENTIALITY

         In the event the Executive becomes entitled to receive Severance
Benefits as provided in Section 2.3 herein, the following shall apply:

         (a)      Noncompetition. During the term of employment and for a period
                  of twelve (12) months after the Effective Date of Termination,
                  the Executive shall not: (i) directly or indirectly act in
                  concert or conspire with any person employed by the Company in
                  order to engage in or prepare to engage in or to have a
                  financial or other interest in any business or any activity
                  which he knows (or reasonably should have known) to be
                  directly competitive with the business of the Company as then
                  being carried on; or (ii) serve as an employee, agent,
                  partner, shareholder, director or consultant for, or in any
                  other capacity participate, engage, or have a financial or
                  other interest in any business or any activity which he knows
                  (or reasonably should have known) to be directly competitive
                  with the business of the Company as then being carried on
                  (provided, however, that notwithstanding anything to the
                  contrary contained in this Agreement, the Executive may own up
                  to two percent (2%) of the outstanding shares of the capital
                  stock of a company whose securities are registered under
                  Section 12 of the Securities Exchange Act of 1934).

         (b)      Confidentiality. The Company has advised the Executive and the
                  Executive acknowledges that it is the policy of the Company to
                  maintain as secret and confidential all Protected Information
                  (as defined below), and that Protected Information has been
                  and will be developed at substantial cost and effort to the
                  Company. All Protected Information shall remain confidential
                  permanently and no Executive shall at any time, directly or
                  indirectly, divulge, furnish, or make accessible to any
                  person, firm, corporation, association, or other entity
                  (otherwise than as may be required in the regular course of
                  the Executive's employment with the Company), nor use in any
                  manner, either during the term of employment or after
                  termination, at any time, for any reason, any Protected
                  Information, or cause any such information of the Company to
                  enter the public domain.

<PAGE>

                                                                              10

                  For purposes of this Agreement, "Protected Information" means
                  trade secrets, confidential and proprietary business
                  information of the Company, and any other information of the
                  Company, including, but not limited to, customer lists
                  (including potential customers), sources of supply, processes,
                  plans, materials, pricing information, internal memoranda,
                  marketing plans, internal policies, and products and services
                  which may be developed from time to time by the Company and
                  its agents or employees, including the Executive; provided,
                  however, that information that is in the public domain (other
                  than as a result of a breach of this Agreement), approved for
                  release by the Company or lawfully obtained from third parties
                  who are not bound by a confidentiality agreement with the
                  Company, is not Protected Information.

         (c)      Nonsolicitation. During the term of employment and for a
                  period of twelve (12) months after the Effective Date of
                  Termination, the Executive shall not employ or retain or
                  solicit for employment or arrange to have any other person,
                  firm, or other entity employ or retain or solicit for
                  employment or otherwise participate in the employment or
                  retention of any person who is an employee or consultant of
                  the Company.

         (d)      Cooperation. Executive agrees to cooperate with the Company
                  and its attorneys in connection with any and all lawsuits,
                  claims, investigations, or similar proceedings that have been
                  or could be asserted at any time arising out of or related in
                  any way to Executive's employment by the Company or any of its
                  subsidiaries.

         (e)      Nondisparagement. At all times, the Executive agrees not to
                  disparage the Company or otherwise make comments harmful to
                  the Company's reputation.

ARTICLE 5.        EXCISE TAX EQUALIZATION PAYMENT

         5.1      Excise Tax Equalization Payment. If any portion of the
Severance Benefits or any other payment under this Agreement, or under any other
agreement with, or plan of the Company (in the aggregate, "Total Payments")
would constitute an "excess parachute payment," such that a golden parachute
excise tax is due, the Company shall provide to the Executive, in cash, an
additional payment in an amount sufficient to cover the full cost of any excise
tax and all of the Executive's additional federal, state, and local income,
excise, and employment taxes that arise on this additional payment
(cumulatively, the "Full Gross-Up Payment"), such that the Executive is in the
same after-tax position as if he had not been subject to the excise tax. For
this purpose, the Executive shall be deemed to be in the highest marginal rate
of federal, state, and local income taxes in the state and locality of the
Executive's residence on the Effective Date of Termination. This payment shall
be made as soon as possible following the date of the Executive's Qualifying
Termination, but in no event later than ten (10) calendar days from such date.

         For purposes of this Agreement, the term "excess parachute payment"
shall have the meaning assigned to such term in Section 280G of the Internal
Revenue Code, as amended (the "Code"), and the term "excise tax" shall mean the
tax imposed on such excess parachute payment pursuant to Sections 280G and 4999
of the Code.

<PAGE>

                                                                              11

         5.2      Subsequent Recalculation. In the event the Internal Revenue
Service subsequently adjusts the excise tax computation herein described, the
Company shall reimburse the Executive for the full amount necessary to make the
Executive whole on an after-tax basis (less any amounts received by the
Executive that the Executive would not have received had the computations
initially been computed as subsequently adjusted), including the value of any
underpaid excise tax, and any related interest and/or penalties due to the
Internal Revenue Service.

ARTICLE 6.        THE COMPANY'S PAYMENT OBLIGATION

         6.1      Payment Obligations Absolute. The Company's obligation to make
the payments and the arrangements provided for herein shall be absolute and
unconditional, and shall not be affected by any circumstances including, without
limitation, any offset, counterclaim, recoupment, defense, or other right which
the Company may have against the Executive or anyone else. All amounts payable
by the Company hereunder shall be paid without notice or demand. Each and every
payment made hereunder by the Company shall be final, and the Company shall not
seek to recover all or any part of such payment from the Executive or from
whomsoever may be entitled thereto, for any reasons whatsoever.

         The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in Sections 2.3(g) and 2.3(h) herein.

         6.2      Contractual Rights to Benefits. This Agreement establishes and
vests in the Executive a contractual right to the benefits to which he is
entitled hereunder. However, nothing herein contained shall require or be deemed
to require, or prohibit or be deemed to prohibit, the Company to segregate,
earmark, or otherwise set aside any funds or other assets, in trust or
otherwise, to provide for any payments to be made or required hereunder.

ARTICLE 7.        TERM OF AGREEMENT

         This Agreement will commence on the Effective Date and shall continue
in effect for two (2) full years. However, at the end of such two (2) year
period and, if extended, at the end of each additional year thereafter, the term
of this Agreement shall be extended automatically for one (1) additional year,
unless either party delivers written notice six (6) months prior to the end of
such term, or extended term, stating that the Agreement will not be extended. In
such case, the Agreement will terminate at the end of the term, or extended
term, then in progress.

         However, in the event of a Change in Control of the Company, the term
of this Agreement shall automatically be extended for two (2) years from the
date of the Change in Control.

<PAGE>

                                                                              12

ARTICLE 8.        LEGAL REMEDIES

         8.1      Dispute Resolution. The Executive shall have the right and
option to elect to have any good faith dispute or controversy arising under or
in connection with this Agreement settled by litigation or arbitration. If
arbitration is selected, such proceeding shall be conducted by final and binding
arbitration before a panel of three (3) arbitrators in accordance with the laws
then in effect and under the administration of the American Arbitration
Association.

         8.2      Payment of Legal Fees. In the event that it shall be necessary
or desirable for the Executive to retain legal counsel and/or to incur other
costs and expenses in connection with the enforcement of any or all of his
rights under this Agreement, the Company shall pay (or the Executive shall be
entitled to recover from the Company) the Executive's attorneys' fees, costs,
and expenses in connection with the enforcement of his rights including the
enforcement of any arbitration award. This shall include, without limitation,
court costs and attorneys' fees incurred by the Executive as a result of any
claim, action, or proceeding, including any such action against the Company
arising out of, or challenging the validity or enforceability of, this Agreement
or any provision hereof.

ARTICLE 9.        SUCCESSORS

         9.1      Successors to the Company. The Company shall require any
successor (whether direct or indirect, by purchase, merger, reorganization,
consolidation, acquisition of property or stock, liquidation, or otherwise) of
all or a significant portion of the assets of the Company by agreement, in form
and substance satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
Regardless of whether such agreement is executed, this Agreement shall be
binding upon any successor in accordance with the operation of law and such
successor shall be deemed the "Company" for purposes of this Agreement.

         9.2      Assignment by the Executive. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. If the Executive dies while any amount would still be
payable to him hereunder had he continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's devisee, legatee, or other designee, or if there is
no such designee, to the Executive's estate.

ARTICLE 10.       MISCELLANEOUS

         10.1     Employment Status. This Agreement is not, and nothing herein
shall be deemed to create, an employment contract between the Executive and the
Company or any of its subsidiaries. The Executive acknowledges that the rights
of the Company remain wholly intact to change or reduce at any time and from
time to time his compensation, title, responsibilities, location, and all other
aspects of the employment relationship, or to discharge him prior to a Change in
Control (subject to such discharge possibly being considered a Qualifying
Termination pursuant to Section 2.2).

<PAGE>

                                                                              13

         10.2     Entire Agreement. This Agreement contains the entire
understanding of the Company and the Executive with respect to the subject
matter hereof. In addition, the payments provided for under this Agreement in
the event of the Executive's termination of employment shall be in lieu of any
severance benefits payable under any severance plan, program, or policy of the
Company to which he might otherwise be entitled.

         10.3     Notices. All notices, requests, demands, and other
communications hereunder shall be sufficient if in writing and shall be deemed
to have been duly given if delivered by hand or if sent by registered or
certified mail to the Executive at the last address he has filed in writing with
the Company or, in the case of the Company, at its principal offices.

         10.4     Execution in Counterparts. This Agreement may be executed by
the parties hereto in counterparts, each of which shall be deemed to be
original, but all such counterparts shall constitute one and the same
instrument, and all signatures need not appear on any one counterpart.

         10.5     Conflicting Agreements. The Executive hereby represents and
warrants to the Company that his entering into this Agreement, and the
obligations and duties undertaken by him hereunder, will not conflict with,
constitute a breach of, or otherwise violate the terms of, any other employment
or other agreement to which he is a party, except to the extent any such
conflict, breach, or violation under any such agreement has been disclosed to
the Board in writing in advance of the signing of this Agreement.

         Notwithstanding any other provisions of this Agreement to the contrary,
if there is any inconsistency between the terms and provisions of this Agreement
and the terms and provisions of Company-sponsored compensation and welfare plans
and programs, the Agreement's terms and provisions shall completely supersede
and replace the conflicting terms of the Company-sponsored compensation and
welfare plans and programs, where applicable.

         10.6     Severability. In the event any provision of this Agreement
shall be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Agreement, and the Agreement shall
be construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.

         Notwithstanding any other provisions of this Agreement to the contrary,
the Company shall have no obligation to make any payment to the Executive
hereunder to the extent, but only to the extent, that such payment is prohibited
by the terms of any final order of a federal or state court or regulatory agency
of competent jurisdiction; provided, however, that such an order shall not
affect, impair, or invalidate any provision of this Agreement not expressly
subject to such order.

         10.7     Modification. No provision of this Agreement may be modified,
waived, or discharged unless such modification, waiver, or discharge is agreed
to in writing and signed by the Executive and by a member of the Board, as
applicable, or by the respective parties' legal representatives or successors.

<PAGE>

                                                                              14

         10.8     Applicable Law. To the extent not preempted by the laws of the
United States, the laws of Delaware shall be the controlling law in all matters
relating to this Agreement without giving effect to principles of conflicts of
laws.

<PAGE>

                                                                              15

         IN WITNESS WHEREOF, the parties have executed this Agreement on this
16th day of September, 2005.

         ATTEST

         Walter Industries, Inc.

         -----------------------------
         By: Donald Boyce, Chairman,
         Compensation Committee of the
         Board Directors

         -----------------------------
         Gregory E. Hyland

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