Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Agreement, made as of the first day of June, 2004, by and between TEXAS
INDUSTRIES, INC., a Delaware corporation (hereinafter referred to as the
“Company”), and MEL G. BREKHUS (hereinafter referred to as the “Employee”).

 

WITNESSETH:

 

WHEREAS, Employee has been elected to the position of President and Chief
Executive Officer of the Company and as a member of its Board of Directors; and

 

WHEREAS, the Company is desirous of insuring the retention of Employee’s
services, on the terms and conditions herein set forth, and Employee is willing
to render such services:

 

NOW, THEREFORE, the Company and the Employee, in consideration of the premises
and promises each to the other herein contained, have agreed and do hereby agree
and covenant as follows:

 

  1. Services

 

The Company agrees to employ the Employee as an executive of the Company, during
the three (3) consecutive fiscal year periods of the Company ending May 31, 2007
(the “term” hereof), and the Employee agrees to serve the Company in such
capacity during such term. Employee agrees to devote all of his time and
attention during normal business hours during such term to the business and
affairs of the Company, its subsidiaries and affiliates; to serve as a Director
of the Company and/or one or more of its subsidiaries or affiliates if elected
as such and to hold the offices with the Company and/or its subsidiaries or
affiliates to which, from time to time, he may be elected or appointed during
said period. Employee shall have the duties and responsibilities normally
appurtenant to the office of the President and Chief Executive Officer.

 

Employee agrees not to engage in any line of work or endeavor which might
detract from his full attention to his duties hereunder, without obtaining in
any such case the prior approval of the Directors of the Company.

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

  2. Compensation

 

(a) During the term hereof, the Company agrees to compensate Employee for his
services as follows:

 

(i) Base Annual Compensation. Employee shall receive a base salary at the rate
of Five Hundred Thousand Dollars ($500,000.00) per annum payable in periodic
installments in accordance with the Company’s payment practices and procedures.

 

(ii) Incentive Compensation. Employee shall participate in the Company’s Annual
and Three-Year Incentive Plans as established from time to time by the
Compensation Committee of the Board of Directors and approved by the Board of
Directors.

 

(iii) Participation in Equity and Non-Equity Plans. Employee shall participate
in any plan established by the Company to permit employees to participate in the
appreciation in value of the common stock of the Company and will receive an
initial share appreciation right grant (SAR) in the amount of 100,000 units
pursuant to the terms of the Company’s SAR Agreement. In the event that Employee
shall cease to be an employee of the Company but continues as a Director,
Employee shall continue to participate in such equity or non-equity plan in
which Employee participates at the cessation of employment on the same terms and
conditions.

 

(iv) Deferral of Payment of Incentive-Based Compensation. In the event that
Employee’s base annual compensation and incentive compensation earned during any
one fiscal year is greater than $900,000.00, the Board of Directors may, in its
sole discretion upon recommendation by the Compensation Committee, defer payment
of such amount in excess of $900,000.00 until termination of Employee’s
employment (whether or not such termination occurs during or subsequent to the
term of this Agreement), and such excess amount shall be distributed to Employee
in three (3) equal annual installments with the first installment being made one
(1) month after such termination of employment. All amounts deferred hereunder
shall be assumed to be invested in the common stock of the Company at a price
equal to the mean between the high and low sales prices of a share of common
stock of the Company on the New York Stock Exchange (“fair market value”) during
the period the amount is deferred. During such deferral period, the account
shall be credited with all applicable stock dividends, and cash dividends shall
be credited to such account in the form of common stock of the Company at a
value equal to the fair market value of the stock on the date of payment of such
dividend. Shares of the common stock of the Company credited to the account
shall be adjusted to reflect any increase or decrease in the number of shares
outstanding as a result of stock split-ups, combination of shares,
recapitalizations, mergers or consolidations.

 

(b) Nothing in this Agreement is intended to prevent or limit the right of
Employee to participate or share in any group life, health or similar

 

2

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

insurance program or any retirement, pension plan or other benefit program
properly established for the benefit of employees of the Company. Nor shall
anything in this Agreement prevent the Company from increasing the compensation
to be paid Employee for his services hereunder in the event the Board of
Directors shall deem it advisable to do so in order to fully compensate Employee
for such services, but nothing herein contained shall obligate the Company to
make any such increases.

 

  3. Early Termination

 

(a) In the event of the consummation, during the term of this Agreement, of any
of the transactions referred to in paragraph A of Article FIFTEENTH of the
Company’s Certificate of Incorporation, which transaction was not approved by
the Board of Directors of the Company in accordance with paragraph B of said
Article FIFTEENTH, Employee may, at his sole election, terminate his service to
the Company hereunder for any reason (or for no reason) at any time after the
consummation of any such unapproved transaction by giving the Company at least
thirty (30) days prior written notice. If Employee voluntarily terminates such
service: (i) he shall be paid, upon termination, an amount equal to the total
compensation (base annual compensation and incentive compensation) earned in the
fiscal year immediately preceding the fiscal year in which such termination
occurs, times two; and (ii) all options Employee has to purchase stock under the
Company’s Stock Option Plan and to exercise SARs granted to Employee will be
immediately accelerated and vested in Employee. In addition, the Agreement Not
to Compete set forth in paragraph 4 below and any provision relating to
non-competition applicable to Employee’s right to receive retirement benefits
under the Company’s Executive Financial Security Plan shall be deemed waived by
the Company.

 

(b) In the event Employee’s service is terminated by reason other than (i)
cause, or (ii) the transactions referred to in subparagraph (a) above, Employee
shall be paid an amount equal to the total compensation earned in the fiscal
year immediately preceding the fiscal year in which such termination occurs. For
the purpose of this subparagraph (b), “cause” shall mean any action involving
willful malfeasance or gross negligence or gross non-feasance.

 

  4. Agreement Not to Compete

 

The Employee agrees that in the event his employment with the Company is
terminated for any reason whatsoever other than because of his death, or early
termination pursuant to paragraph 3(a) above, Employee shall not, for a period
of two (2) years after the date of such termination of employment, directly or
indirectly, carry on or conduct, within the States of Texas, California,
Louisiana, Oklahoma and Virginia or other trade areas in which the Company or
its subsidiaries or affiliates then operate or conduct business, in competition
with the

 

3

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

Company or its subsidiaries or affiliates, any business of the nature in which
the Company or its subsidiaries or affiliates are then engaged. Employee agrees
that he will not so conduct or engage in any such business either as an
individual on his own account or as a partner or joint venturer or as an
employee, agent, consultant or salesman for any other person or entity, or as an
officer or director of a corporation or as a shareholder in a corporation of
which he shall then own ten percent (10%) or more of any class of stock. The
provisions of this paragraph 4 shall supersede any and all non-compete
provisions contained in any and all other agreements which have been entered
into between Employee and the Company and shall survive the termination of this
Agreement.

 

The Employee agrees that in the event of a breach of the terms and conditions of
this paragraph 4 by the Employee, the Company shall be entitled, if it so
elects, to institute and prosecute proceedings, either in law or in equity,
against Employee, to obtain damages for any such breach, or to enjoin Employee
from performing services for any competitor of the Company in violation hereof
during the period for which the Employee has agreed herein not to compete with
the Company after the termination of his employment with the Company.

 

  5. Successors and Assigns: Modifications

 

The rights and obligations of the Company under this Agreement shall inure to
the benefit of and shall be binding upon the successors and assigns of the
Company. This Agreement shall not be modified, changed or in any way amended
except by instrument in writing executed by the parties hereto.

 

       

TEXAS INDUSTRIES, INC.

ATTEST:

By

 

/s/ Robert C. Moore

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

 

By

 

/s/ James M. Hoak

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

   

Secretary

     

James M. Hoak, Chairman

           

Compensation Committee of the

           

Board of Directors

       

EMPLOYEE:

       

By

 

/s/ M.G. Brekhus

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

           

Mel G. Brekhus

 

4