Exhibit 10.11

 

TXI

ANNUAL INCENTIVE PLANS

FISCAL YEAR 2006

 

1. Purpose

 

  a) To provide shareholders of Texas Industries, Inc. (the Company or TXI) with
above-average returns.

 

  b) To encourage above-average performance and teamwork.

 

  c) To attract and retain the best employees by offering incentive awards that
are high when compared to industry standards.

 

  d) To focus employee’s work on short-term results which are key to TXI’s
long-term business success.

 

2. Administration

 

  a) The Compensation Committee of the Board of Directors approves the Plans.

 

  b) The Chief Executive Officer, Executive VP of Finance, and the VP of Human
Resources (the Incentive Plan Administrative Committee), together, have the
authority to add or delete acquired or divested operations to incentive plans
and make adjustments to reflect the spirit and objectives of the Plan. Such
changes will be reported to the Compensation Committee of the Board of
Directors.

 

  c) The Plans will be communicated to participants during the first two months
of the plan year.

 

3. Participation

 

  a) All TXI regular employees not included in another incentive plan (e.g.
Aviation, operations/production, or sales) are eligible to participate in these
incentive plans that consist of two regional plans and a TXI plan.

 

  b) Eligible participants are those continuously employed by the Company during
the performance award period or who become eligible during such period.
Employees who change incentive plan levels or eligibility during the Plan Year
will have their award prorated for the applicable amount of time.

 

  c) A participant must be classified as a regular employee on May 31, 2006.

 

  d) The Incentive Plan Administrative Committee has the authority to lower an
eligible employee’s participation in a Plan. Affected employees will be given an
explanation in writing.

 

  e) Participation in any incentive plan is not a guarantee of employment or
compensation.

 

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  f) Unless otherwise determined by the Company, these plans do not cover
employees of entities acquired during a plan year, by the Company, or employees
who are covered by collective bargaining agreements.

 

4. Return on Equity (ROE) Objective

 

The Company has established an objective of having, over time, an average return
on equity (ROE) 50% better than the U. S. manufacturing industry average. The
Company’s annual ROE objective is translated into a return-on-assets (ROA) goal
which allows employees to use the Company’s monthly accounting of operating
results to calculate progress toward goal achievement.

 

5. Minimum Award Hurdles

 

Regional plans are established for various segments of the Company. Minimum
award hurdles are set for each region. The combined result of regional
performances should produce a ROE better than the U. S. manufacturing industry
average of 12%.

 

6. ROA Calculations

 

  a) ROA minimum award hurdles for regional plans are calculated by dividing
FY2006 operating profit (earnings before corporate overhead, interest and taxes)
by the book value of the operating assets of the region. The book value of the
adjusted operating assets of a region is determined by averaging the book values
of the adjusted operating assets at the beginning of the fiscal year and the
book value of the adjusted operating assets at the end of each of the four
fiscal quarters. The addition of significant assets during the quarter will be
prorated based on the time operated during such quarter. Profits and losses
considered to be extraordinary (e.g., the sale of a major operating facility)
will not be included in the ROA calculation. The Incentive Plan Administrative
Committee will make the decision as to whether an asset is significant or
profits and losses are extraordinary at the time assets are acquired, placed in
service, or sold.

 

  b) Operating profit and assets are adjusted in order to treat assets on
operating leases as owned assets. All ROA calculations include the costs of
incentive awards. The costs for the regional plan awards will be included in
each applicable region.

 

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7. Awards

 

  a) The incentive awards will be based on a participant’s regular earnings
(including overtime and excluding earnings from incentive payments) for the plan
year.

 

  b) One region can earn an award independent of another.

 

  c) If a payment is made under any annual incentive plan, all taxes and other
deductions required by law will be withheld.

 

  d) Awards will be distributed no later than the August 15th following the
close of the fiscal year.

 

8. TXI INCENTIVE PLANS

 

a) TXI PLAN

 

The TXI plan covers Officers, Vice Presidents, and employees in staff functions
(Information Services, Legal, Environmental, Human Resources, Brookhollow,
Controller, Financial Services and Treasury, etc.).

 

b) REGIONAL PLANS

 

Regional plans cover business units that have facilities and employees whose
combined efforts will obtain the best results for the Company. Business units
are generally defined by geography or product markets. Participants include
managers of each operation/facility and the employees not included in the TXI,
Operations/Production, or Sales plans.

 

Regional Plans

 

- Central

 

  - Western

 

c) OPERATIONS/PRODUCTION PLANS

 

Operations or production plans cover individual plant and operating areas whose
performance can be more directly influenced by employees. Participation in these
plans can vary year-to-year and generally will include employees who are
directly involved in the production process with the exception of
Plant/Operation Managers.

 

Production plans’ objectives contribute to regional plan goals but are not tied
directly to their ROA achievement. These plans are tailored to local needs and
pay for improvement or above average performance. Plans may vary in goal
achievement, timing of awards (weekly, monthly, quarterly, or annually),
objectives and award amounts. Base award amounts can vary from 5% to 15%
although they are expected to average 5% over time.

 

d) SALES PLANS

 

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Sales plans cover business units where individual performance can be more
directly influenced by employees. Participation in these plans can vary
year-to-year and generally will include sales, marketing, customer relations,
and/or administrative support employees directly involved in the sales process.

 

Sales plans’ objectives contribute to Business Unit or Regional plan goals and
are tied directly to their ROA achievement. These plans are tailored to business
unit markets and pay for improvement or above average performance. Plans may
vary in goal achievement, timing of awards (quarterly, or annually), objectives
and award amounts. Base award amounts can vary from 10% to 25% depending on the
participant level similar to the TXI and Regional Plans.

 

  e) Operations/Production and Sales Plans are described in this document to
provide the authority for individual plan development that will provide all
eligible employees an opportunity to participate in an incentive plan. There are
approximately 35 such plans in any Fiscal Year.

 

 

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9. PARTICIPATION ELIGIBILITY DEFINITIONS (TXI AND REGIONAL PLANS)

 

PARTICIPANT A

 

  •   Non-exempt employees

 

PARTICIPANT B

 

  •   Exempt non-supervisory employees.

 

PARTICIPANT C

 

  •   Supervisory positions in Salary Grades 11 or below.

 

  •   Exempt employees in Salary Grades 10 or above reporting directly to a Vice
President.

 

PARTICIPANT D

 

  •   All employees in Salary Grades 12 or above.

 

PARTICIPANT E

 

  •   All officers of TXI excluding the President/CEO

 

PARTICIPANT F

 

  •   President/CEO

 

10. ANNUAL INCENTIVE PLAN AWARD SCHEDULE

 

FY 2006 - RETURN-ON-ASSETS (ROA’s)

TXI Plan and Regional AWARD SCHEDULES

 

The “Base Award Percentage” for the TXI Plan is the sum of the achieved regional
base awards pro-rated by each region’s assets as a percent of the sum of total
regional assets.

 

As of the approval date of this plan, each region’s assets as a percent of the
TXI Plan sum are estimated at 80% in the Central Region and 20% in the Western
Region.

 

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REGIONAL AWARD SCHEDULES

 

   

TXI ROA% *

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Base Award%

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Central

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Western

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6 **

  14   7

8

  15   8.5

10 ***

  16   10

12

  17   11

14

  18   12

16

  19   13

18

  20   14

20

  21   15

22

  22   16

24

  23   17

26

  24   18

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* For achievement above those listed, add 2% to the base award for each 1%
increase in a Regional ROA.

** Minimum Hurdle

*** Company Objective

 

  •   The achieved Regional ROA determines the BASE AWARD PERCENTAGE.

 

  •   A participant’s eligibility determines the award multiplier. The total
award percentage is calculated by multiplying the BASE AWARD PERCENTAGE by the
participant’s DESIGNATED AWARD MULTIPLIER.

 

Participant

Eligibility

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Award

Multiplier

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A

  1.0

B

  1.5

C

  2.0

D

  2.5

E

  3.0

F

  4.0

 

  •   The total percentage award is multiplied by the participant’s annual gross
earnings excluding incentive payments.

 

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