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                                                                    EXHIBIT 10.7

                                                                       VERSION B


                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") is entered into between
Southdown, Inc., a Louisiana corporation ("Company"), and _________________, a
resident of __________________________, Texas ("Executive"), effective as of
January ___, 2000. The Company and the Executive are sometimes referred to
herein as the "Parties."


         1. Introduction. The Company believes that the assurance of the
Executive's continued employment by the Company and the benefit of his business
experience are of material importance. Therefore, the Company and the Executive
intend by this Agreement to specify the terms and conditions of the Executive's
continuing employment relationship with the Company.

         2. Employment. The Company hereby employs the Executive and the
Executive hereby accepts continuing employment with the Company upon the terms
and conditions set forth herein.

         3. Duties and Responsibilities.

            3.1. Extent of Service. The Executive shall, during the term of this
Agreement, devote such of his entire time, attention, energies and business
efforts to his duties as an executive of the Company as are reasonably necessary
to carry out his duties specified in Paragraph 3.2 below. The Executive shall
not, during the term of this Agreement, engage in any other business activity
(whether or not such business activity is pursued for gain, profit or other
pecuniary advantage) if such business activity would impair the Executive's
ability to carry out his duties hereunder. This Paragraph 3.1, however, shall
not be construed to prevent the Executive from investing his personal assets as
a passive investor in such form or manner as will not contravene the Company's
Code of Business Conduct ("Policy Statement").

            3.2. Position and Duties. Subject to the power of the Board of
Directors of the Company to elect and remove officers, the Executive shall serve
the Company as [STATE POSITION] (or in such other office of comparable or
greater responsibility as the Board of Directors of the Company may determine)
and shall perform, faithfully and diligently, the services and functions
relating to such office or otherwise reasonably incident to such office as may
be designated from time to time by the Board of Directors of the Company;
provided that all such services and functions shall be reasonable and within the
Executive's area of expertise; and provided further that the Executive shall be
physically capable of performing the essential requirements of the job with or
without reasonable accommodation.

            3.3. Place of Employment. During the term of this Agreement, the
Company shall maintain its principal executive offices in the greater Houston,
Texas area, and the Executive's primary place of employment shall be at such
principal executive offices. During the term of this Agreement, the Company will
provide the Executive with a private office, an executive secretary and other
customary staff support services, all as are commensurate with the services and
functions to be performed by him hereunder.


         4. Salary and Other Benefits. Subject to the terms and conditions of
this Agreement:


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            4.1. Salary. As compensation for his services under and during the
term of his employment under this Agreement, the Executive shall be paid an
annual salary of not less than $_______, payable in accordance with the then
current payroll policies of the Company. Such salary shall be subject to
increase by the Board of Directors of the Company (or the appropriate committee
thereof) from time to time. The annual salary payable from time to time by the
Company to the Executive pursuant to this Paragraph 4.1 is herein sometimes
referred to as his "Base Salary."

            4.2. Other Benefits. As long as the Executive is employed by the
Company, the Executive shall be entitled to receive the following benefits in
addition to his Base Salary:

                 (a) The Executive shall be entitled to participate in the
Company's discretionary bonus plan (the "Bonus Plan") for senior management of
the Company and its consolidated subsidiaries, pursuant to which he shall be
paid each year such additional compensation by way of bonus as the Board of
Directors of the Company (or the appropriate committee thereof) in its sole
discretion shall authorize or agree to pay, payable on such terms and conditions
as it shall determine.

                 (b) The Executive shall have the right to participate in all
group benefit and applicable retirement plans of the Company (including without
limitation, disability, accident, medical, life insurance, hospitalization and
pension), all in accordance with the Company's regular practices with respect to
its senior officers.

                 (c) The Executive shall be entitled to reimbursement from the
Company for reasonable out-of-pocket expenses incurred by him in the course of
the performance of his duties hereunder.

                 (d) The Company shall provide the Executive with an automobile
allowance in the amount of $1,000 per month, subject to statutory withholdings.
Executive shall bear all expenses incurred in connection with owning or
operating his personal automobile.

                 (e) In order to promote the interests of the Company, the
Company shall reimburse the Executive for the initiation fees and all annual
dues incurred by him in connection with his membership in one luncheon club and
one country club as may be agreed upon by the Executive and the Company (and the
Company agrees to post any bond required by such clubs and each such bond will
remain the property of the Company).

                 (f) The Company shall reimburse Executive an amount up to
$5,000 per year for personal financial, tax and estate planning.

                 (g) The Executive shall be entitled to such vacation, holidays
and other paid or unpaid leaves of absence as are consistent with the Company's
normal policies or as are otherwise approved by the Company's Board of Directors
(or the appropriate committee thereof).

         5. Term. The term of this Agreement shall be for one year and shall be
automatically extended one day each day, from the effective date hereof;
provided, however, that



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upon a Change in Control, the term of this Agreement shall be for two years from
the date of the Change in Control.

         6. Termination and Resignation. The Company shall have the right to
terminate the Executive's employment hereunder at any time and for any reason,
and upon any such termination the Executive shall be entitled to receive from
the Company prompt payment of the amount determined pursuant to the applicable
subparagraph of Paragraph 7 below. The Executive shall have the right to
terminate his employment hereunder at any time by resignation, and he shall
thereupon be entitled to receive from the Company prompt payment of the amount
determined pursuant to the applicable subparagraph of Paragraph 7 below.

         7. Payments Upon Termination or After Change in Control.

            7.1. Pro Rata Payment. In the event of the following:

                 (i) the Company terminates the Executive's employment for Cause
            (as defined below),

                 (ii) the Executive dies or becomes disabled (being the
            inability of the Executive to perform the essential requirements of
            the job with or without reasonable accommodation),

                 (iii) the Executive resigns prior to the occurrence of a Change
            in Control (as defined below) of the Company at a time when there is
            no uncured breach by the Company of any term of this Agreement, or

                 (iv) the Executive resigns after the occurrence of a Change in
            Control for any reason other than for Good Reason (as defined
            below);


then in each case the Executive shall be entitled to receive only his Base
Salary on a pro rata basis to the date of termination or resignation.


            7.2. Payments Upon Termination Prior to Change in Control. If prior
to the occurrence of a Change in Control (i) the Company terminates the
Executive's employment for any reason other than for Cause or the Executive's
death or disability or (ii) the Executive resigns because of the breach by the
Company of any term of this Agreement (but only if such breach is not remedied
by the Company promptly after it receives notice thereof from Executive), then
in each case the Executive shall be entitled to receive a lump sum payment equal
to his Base Salary.

            7.3. Payments Upon Termination After Change in Control. If after the
occurrence of a Change in Control of the Company, (i) the Company terminates the
Executive's employment hereunder for any reason other than for Cause, or (ii)
the Executive voluntarily resigns his employment hereunder for Good Reason (as
defined below), in each case within two years of the Change in Control, then in
each case the Company will:

                 (a) pay to the Executive within 10 days a lump sum termination
payment equal to 2.99 times the sum of his Base Salary and the greater of (i)
the most recent



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annual bonus paid to the Executive pursuant to the Company's Bonus Plan (as
defined in Paragraph 4.2(a)) prior to the Change in Control or (ii) his Target
Bonus (as defined below) (collectively, the "Lump Sum Payment"), subject to
adjustment as provided in Paragraph 9 below;

                 (b) continue to provide the Executive with medical, dental,
life insurance and disability insurance benefits for a period of three years
following the Executive's termination of employment with benefits and employee
contributions no less favorable to the Executive than those provided immediately
prior to the Change in Control; and

                 (c) provide individual outplacement services for one year
following termination of employment at Company expense in an amount not to
exceed $20,000.

            7.4. Certain Definitions.

                 (a) "Target Bonus" shall mean the target bonus for Executive
specified under the Company's Bonus Plan (as defined in Paragraph 4.2(a)) for
the year in which a Change in Control of the Company occurs.

                 (b) Termination by the Company of the Executive's employment
for "Cause" shall mean termination upon the willful misappropriation of funds or
properties of the Company or the willful contravention of the standards referred
to in the last sentence of Paragraph 10 below. For purposes of this definition,
no act, or failure to act, on the Executive's part shall be considered "willful"
unless done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive's action or omission was in the
best interest of the Company.

                 (c) A "Change in Control" shall be conclusively deemed to have
occurred if (and only if) any of the following shall have taken place: (i) a
change in control is reported by the Company in response to either Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended ("Exchange Act"), or Item 1 of Form 8-K promulgated under the
Exchange Act, or any similar reporting requirement hereafter promulgated by the
Securities and Exchange Commission; (ii) any person, entity or group (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act), other than any
employee benefit plan sponsored by the Company, is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing forty percent or more of the combined
voting power of the Company's then outstanding securities (as determined under
paragraph (d) of Rule 13d-3 promulgated under the Exchange Act, in the case of
rights to acquire common stock); or (iii) following the election or removal of
directors, a majority of the Board consists of individuals who were not members
of the Board two years before such election or removal, unless the election of
each director who was not a director at the beginning of such two-year period
has been approved in advance by directors representing at least a majority of
the directors then in office who were directors at the beginning of the two-year
period.



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                 (d) "Good Reason" shall mean, in any case only if an action or
event described in this Paragraph 7.4(d) is not remedied by the Company promptly
after it receives notice thereof from Executive,

                 (i) the assignment to the Executive of any duties substantially
            inconsistent with the Executive's position (including offices,
            titles and reporting requirements), authority, duties or
            responsibilities as contemplated by Paragraph 3.2 hereof, or the
            reduction or elimination of any duties or responsibilities
            previously assigned to the Executive;

                 (ii) the failure of the Company to comply with any of the
            provisions of Section 4 hereof or to maintain competitive total
            compensation for the Executive, including base pay, annual incentive
            and long-term incentive pay based on then-current practices of
            comparable publicly-traded U.S. companies; or

                 (iii) the Company's requiring the Executive to be based at any
            office or location other than as provided in Paragraph 3.3 hereof.

            7.5. Payments Upon a Change in Control. Within ten days following a
Change in Control, the Company shall pay the Executive a lump sum cash payment
equal to most recent annual bonus paid to the Executive pursuant to the
Company's Bonus Plan (as defined in Paragraph 4.2(a)) prior to the Change in
Control, prorated based on the number of days in the calendar year that have
elapsed prior to the Change in Control.

         8. Acceleration of Options. Contemporaneously with the occurrence of a
Change in Control of the Company, the Board of Directors of the Company (or the
appropriate committee thereof) will accelerate all outstanding options
previously granted to the Executive under any then existing Company stock
option, stock appreciation or other employee incentive plan that are not
otherwise exercisable by the Executive at the time the Change in Control of the
Company occurs.

         9. Certain Additional Payments by the Company.

                 (a) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment or distribution by the
Company or any of its affiliates to or for the benefit of Executive, whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (any such payments or distributions being individually
referred to herein as a "Payment," and any two or more of such payments or
distributions being referred to herein as "Payments"), would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended ("Code") (such excise tax, together with any interest thereon, any
penalties, additions to tax, or additional amounts with respect to such excise
tax, and any interest in respect of such penalties, additions to tax or
additional amounts, being collectively referred herein to as the "Excise Tax"),
then Executive shall be entitled to receive and the Company shall make an
additional payment or payments (individually referred to herein as a "Gross-Up
Payment," and any two or more of such additional payments being referred to
herein as "Gross-Up Payments") in an amount such that after payment by Executive
of all taxes (as defined in Paragraph 9(k) imposed upon the Gross-Up



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Payment, Executive retains an amount of such Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.

                 (b) Subject to the provisions of Paragraph 9(c) through (i),
any determination (individually, a "Determination") required to be made under
Paragraphs 9(a) or 9(b), including whether a Gross-Up Payment is required and
the amount of such Gross-Up Payment, shall initially be made, at the Company's
expense, by nationally recognized tax counsel mutually acceptable to the Company
and Executive ("Tax Counsel"). Tax Counsel shall provide detailed supporting
legal authorities, calculations, and documentation both to the Company and
Executive within 15 business days of the termination of Executive's employment,
if applicable, or such other time or times as is reasonably requested by the
Company or Executive. If Tax Counsel makes the initial Determination that no
Excise Tax is payable by Executive with respect to a Payment or Payments, it
shall furnish Executive with an opinion that no Excise Tax will be imposed with
respect to any such Payment or Payments. Executive shall have the right to
dispute any Determination (a "Dispute") within 15 business days after delivery
of Tax Counsel's opinion with respect to such Determination. The Gross-Up
Payment, if any, as determined pursuant to such Determination shall, at the
Company's expense, be paid by the Company to Executive within five business days
of Executive's receipt of such Determination. The existence of a Dispute shall
not in any way affect Executive's right to receive the Gross-Up Payment in
accordance with such Determination. If there is no Dispute, such Determination
shall be binding, final and conclusive upon the Company and Executive, subject
in all respects, however, to the provisions of Paragraph 9(c) through (i) below.
As a result of the uncertainty in the application of Sections 4999 and 280G of
the Code, it is possible that Gross-Up Payments (or portions thereof) which will
not have been made by the Company should have been made ("Underpayment"), and if
upon any reasonable written request from Executive or the Company to Tax
Counsel, or upon Tax Counsel's own initiative, Tax Counsel, at the Company's
expense, thereafter determines that Executive is required to make a payment of
any Excise Tax or any additional Excise Tax, as the case may be, Tax Counsel
shall, at the Company's expense, determine the amount of the Underpayment that
has occurred and any such Underpayment shall be promptly paid by the Company to
Executive.

                 (c) The Company shall defend, hold harmless, and indemnify
Executive on a fully grossed-up after tax basis from and against any and all
claims, losses, liabilities, obligations, damages, impositions, assessments,
demands, judgments, settlements, costs and expenses (including reasonable
attorneys', accountants', and experts' fees and expenses) with respect to any
tax liability of Executive resulting from any Final Determination (as defined in
Paragraph 9(j)) that any Payment is subject to the Excise Tax.

                 (d) If a party hereto receives any written or oral
communication with respect to any question, adjustment, assessment or pending or
threatened audit, examination, investigation or administrative, court or other
proceeding which, if pursued successfully, could result in or give rise to a
claim by Executive against the Company under this Paragraph 9(d) ("Claim"),
including, but not limited to, a claim for indemnification of Executive by the
Company under Paragraph 9(c), then such party shall promptly notify the other
party hereto in writing of such Claim ("Tax Claim Notice").



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                 (e) If a Claim is asserted against Executive ("Executive
Claim"), Executive shall take or cause to be taken such action in connection
with contesting such Executive Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as are
reasonably designated by the Company (it being understood and agreed by the
parties hereto that the terms of any such retention shall expressly provide that
the Company shall be solely responsible for the payment of any and all fees and
disbursements of such counsel and any experts) and the execution of powers of
attorney, provided that:

                 (i) within 30 calendar days after the Company receives or
            delivers, as the case may be, the Tax Claim Notice relating to such
            Executive Claim (or such earlier date that any payment of the taxes
            claimed is due from Executive, but in no event sooner than five
            calendar days after the Company receives or delivers such Tax Claim
            Notice), the Company shall have notified Executive in writing
            ("Election Notice") that the Company does not dispute its
            obligations (including, but not limited to, its indemnity
            obligations) under this Agreement and that the Company elects to
            contest, and to control the defense or prosecution of, such
            Executive Claim at the Company's sole risk and sole cost and
            expense; and

                 (ii) the Company shall have advanced to Executive on an
            interest-free basis, the total amount of the tax claimed in order
            for Executive, at the Company's request, to pay or cause to be paid
            the tax claimed, file a claim for refund of such tax and, subject to
            the provisions of the last sentence of Paragraph 9(g), sue for a
            refund of such tax if such claim for refund is disallowed by the
            appropriate taxing authority (it being understood and agreed by the
            parties hereto that the Company shall only be entitled to sue for a
            refund and the Company shall not be entitled to initiate any
            proceeding in, for example, United States Tax Court) and shall
            indemnify and hold Executive harmless, on a fully grossed-up after
            tax basis, from any tax imposed with respect to such advance or with
            respect to any imputed income with respect to such advance; and

                 (iii) the Company shall reimburse Executive for any and all
            costs and expenses resulting from any such request by the Company
            and shall indemnify and hold Executive harmless, on fully grossed-up
            after-tax basis, from any tax imposed as a result of such
            reimbursement.

                 (f) Subject to the provisions of Paragraph 9(e), hereof, the
Company shall have the right to defend or prosecute, at the sole cost, expense
and risk of the Company, such Executive Claim by all appropriate proceedings,
which proceedings shall be defended or prosecuted diligently by the Company to a
Final Determination; provided, however, that (i) the Company shall not, without
Executive's prior written consent, enter into any compromise or settlement of
such Executive Claim that would adversely affect Executive, (ii) any request
from the Company to Executive regarding any extension of the statute of
limitations relating to assessment, payment, or collection of taxes for the
taxable year of Executive with respect to which the contested issues involved
in, and amount of, the Executive Claim relate is limited solely to such
contested issues and amount, and (iii) the Company's control of any contest or
proceeding shall be limited to issues with respect to the Executive Claim and
Executive shall be



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entitled to settle or contest, in his sole and absolute discretion, any other
issue raised by the Internal Revenue Service or any other taxing authority. So
long as the Company is diligently defending or prosecuting such Executive Claim,
Executive shall provide or cause to be provided to the Company any information
reasonably requested by the Company that relates to such Executive Claim, and
shall otherwise cooperate with the Company and its representatives in good faith
in order to contest effectively such Executive Claim. The Company shall keep
Executive informed of all developments and events relating to any such Executive
Claim (including, without limitation, providing to Executive copies of all
written materials pertaining to any such Executive Claim), and Executive or his
authorized representatives shall be entitled, at Executive's expense, to
participate in all conferences, meetings and proceedings relating to any such
Executive Claim.

                 (g) If, after actual receipt by Executive of an amount of a tax
claimed (pursuant to an Executive Claim) that has been advanced by the Company
pursuant to Paragraph 9(e)(ii), hereof, the extent of the liability of the
Company hereunder with respect to such tax claimed has been established by a
Final Determination, Executive shall promptly pay or cause to be paid to the
Company any refund actually received by, or actually credited to, Executive with
respect to such tax (together with any interest paid or credited thereon by the
taxing authority and any recovery of legal fees from such taxing authority
related thereto), except to the extent that any amounts are then due and payable
by the Company to Executive, whether under the provisions of this Agreement or
otherwise. If, after the receipt by Executive of an amount advanced by the
Company pursuant to Paragraph 9(e)(ii), a determination is made by the Internal
Revenue Service or other appropriate taxing authority that Executive shall not
be entitled to any refund with respect to such tax claimed and the Company does
not notify Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of any Gross-Up
Payments and other payments required to be paid hereunder.

                 (h) With respect to any Executive Claim, if the Company fails
to deliver an Election Notice to Executive within the period provided in
Paragraph 9(e)(i), hereof or, after delivery of such Election Notice, the
Company fails to comply with the provisions of Paragraph 9(e)(ii), and (iii) and
(f) hereof, then Executive shall at any time thereafter have the right (but not
the obligation), at his election and in his sole and absolute discretion, to
defend or prosecute, at the sole cost, expense and risk of the Company, such
Executive Claim. Executive shall have full control of such defense or
prosecution and such proceedings, including any settlement or compromise
thereof. If requested by Executive, the Company shall cooperate, and shall cause
its affiliates to cooperate, in good faith with Executive and his authorized
representatives in order to contest effectively such Executive Claim. The
Company may attend, but not participate in or control, any defense, prosecution,
settlement or compromise of any Executive Claim controlled by Executive pursuant
to this Paragraph 9(h) and shall bear its own costs and expenses with respect
thereto. In the case of any Executive Claim that is defended or prosecuted by
Executive, Executive shall, from time to time, be entitled to current payment,
on a fully grossed-up after tax basis, from the Company with respect to costs
and expenses incurred by Executive in connection with such defense or
prosecution.



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                 (i) In the case of any Executive Claim that is defended or
prosecuted to a Final Determination pursuant to the terms of this Paragraph
9(i), the Company shall pay, on a fully grossed-up after tax basis, to Executive
in immediately available funds the full amount of any taxes arising or resulting
from or incurred in connection with such Executive Claim that have not
theretofore been paid by the Company to Executive, together with the costs and
expenses, on a fully grossed-up after tax basis, incurred in connection
therewith that have not theretofore been paid by the Company to Executive,
within ten calendar days after such Final Determination. In the case of any
Executive Claim not covered by the preceding sentence, the Company shall pay, on
a fully grossed-up after tax basis, to Executive in immediately available funds
the full amount of any taxes arising or resulting from or incurred in connection
with such Executive Claim at least ten calendar days before the date payment of
such taxes is due from Executive, except where payment of such taxes is sooner
required under the provisions of this Paragraph 9(i), in which case payment of
such taxes (and payment, on a fully grossed-up after tax basis, of any costs and
expenses required to be paid under this Paragraph 9(i) shall be made within the
time and in the manner otherwise provided in this Paragraph 9(i).

                 (j) For purposes of this Agreement, the term "Final
Determination" shall mean (A) a decision, judgment, decree or other order by a
court or other tribunal with appropriate jurisdiction, which has become final
and non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.

                 (k) For purposes of this Agreement, the terms "tax" and "taxes"
mean any and all taxes of any kind whatsoever (including, but not limited to,
any and all Excise Taxes, income taxes, and employment taxes), together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such taxes and any interest in respect of such penalties, additions
to tax, or additional amounts.

                 (l) For purposes of this Agreement, the terms "affiliate" and
"affiliates" mean, when used with respect to any entity, individual, or other
person, any other entity, individual, or other person which, directly or
indirectly, through one or more intermediaries controls, or is controlled by, or
is under common control with such entity, individual or person. The term
"control" and derivations thereof when used in the immediately preceding
sentence means the ownership, directly or indirectly, of 50% or more of the
voting securities of an entity or other person or possessing the power to direct
or cause the direction of the management and policies of such entity or other
person, whether through the ownership of voting securities, by contract or
otherwise.

         10. Preservation of Business; Fiduciary Responsibility. The Executive
shall use his best efforts to preserve the business and organization of the
Company and the Company's consolidated subsidiaries (collectively, the
"Consolidated Company"), to keep available to the Consolidated Company the
services of present employees and to preserve the business relations of the
Consolidated Company with suppliers, distributors, customers and others. The
Executive shall not commit any act, or in any way assist others to commit any
act, which would injure the



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Consolidated Company. So long as the Executive is employed by the Company, the
Executive shall observe and fulfill proper standards of fiduciary responsibility
attendant upon his service and office and shall comply with the terms of the
Company's Code of Business Conduct, as may be amended from time to time.

         11. Competitive Activities.

             11.1. As an independent covenant, Executive agrees to refrain for
one (1) year after the termination of his employment for any reason, without
written permission from the Company, from becoming involved in any way, within
the boundaries of the United States, in the business of manufacturing or selling
any cement or ready-mix concrete products, or other products or services
competitive at the time of the termination with those sold and furnished by the
Consolidated Company as an employee, director, officer, shareholder, consultant,
partner, proprietor, or in any other capacity, except as a shareholder owning
less than five percent of the shares of a corporation whose shares are publicly
traded.

             11.2. As an independent covenant, Executive agrees to refrain
during his employment by the Company, and in the event of the termination of his
employment for any reason, for one (1) year thereafter, without written
permission from the Company, from diverting, taking, soliciting and/or accepting
on his own behalf or on the behalf of another person, firm, or company, the
business of any customer of the Consolidated Company or any potential customer
of the Consolidated Company whose identity became known to Executive through his
employment by the Company.

             11.3. As an independent covenant, Executive agrees to refrain
during his employment by the Company, and in the event of the termination of his
employment for any reason for a period of one (1) year, thereafter, from
inducing or attempting to influence any employee of the Consolidated Company to
terminate his employment.

             11.4. Executive further agrees that these covenants are made to
protect the legitimate business interests of the Company, including interests in
the Company's "confidential information" as defined in Paragraph 12, and not to
restrict his mobility or to prevent him from utilizing his general technical
skills. Executive understands as a part of these covenants that the Company
intends to exercise whatever legal recourse against him for any breach of this
Agreement and in particular for any breach of these covenants.

         12. Non-Disclosure of Confidential Information. Executive agrees not to
make any unauthorized use, publication, or disclosure, during or subsequent to
his employment by the Company, of any confidential information, generated or
acquired by him during the course of his employment, except to the extent that
the disclosure of confidential information is necessary to fulfill his
responsibilities as an employee of the Company. Executive understands that
"confidential information" includes confidential or trade information not
generally known by or available to the public about or belonging to the
Consolidated Company or belonging to other companies to whom the Consolidated
Company may have an obligation to maintain information in confidence, and that
authorization for public disclosure may only be obtained through the Company's
written consent. Executive also understands and agrees that the information
protected by this provision includes, but is not limited to, information of a
technical and a



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business nature such as ideas, discoveries, designs, inventions, improvements,
trade secrets, know-how, manufacturing processes, product formulae, design
specifications, writings and other works of authorship, computer programs,
financial figures, marketing plans, customer lists and data, business plans or
methods and the like, which relate in any manner to the actual or anticipated
business of the Consolidated Company or related to its actual or anticipated
areas of research and development.

         13. Notice. All notices, requests, demands and other communications
given under or by reason of this Agreement shall be in writing and shall be
deemed given when delivered in person or when mailed, by certified mail (return
receipt requested), postage prepaid, addressed as follows (or to such other
address as a party may specify by notice pursuant to this provision):

                    (a)  To the Company:
                         Southdown, Inc.
                         Attention: Secretary
                         1200 Smith Street, Suite 2400
                         Houston, Texas 77002

                    (b)  To the Executive:

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

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         14. Controlling Law and Performability. The execution, validity,
interpretation and performance of this Agreement shall be governed by the law of
the State of Texas.

         15. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled by binding arbitration in
Houston, Texas by one arbitrator appointed in the manner set forth by the
American Arbitration Association. Any arbitration proceeding pursuant to this
Paragraph 15 shall be conducted in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association. Judgment may be
entered on the arbitrators' award in any court having jurisdiction.

         16. Expenses. The Company will pay or reimburse the Executive for all
costs and expenses (including arbitration and court costs and attorneys' fees)
incurred by the Executive as a result of any claim, action or proceeding arising
out of, or challenging the validity, advisability or enforceability of, this
Agreement or any provision thereof.

         17. No Obligation to Mitigate. The Executive shall not be required to
mitigate the amount of any payment provided for in Paragraph 7 by seeking other
employment or otherwise, nor shall the amount of any payment provided for in
Paragraph 7 be reduced by any compensation earned by the Executive as a result
of employment by another employer or otherwise.

         18. Additional Instruments. The Parties shall execute and deliver any
and all additional instruments and agreements that may be necessary or proper to
carry out the purposes of this Agreement.



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<PAGE>   12


         19. Entire Agreement and Amendments. This Agreement contains the entire
agreement of the Parties relating to the matters contained herein and supersedes
all prior agreements and understandings, oral or written, between the Parties
with respect to the subject matter hereof; provided, however, that nothing
herein shall affect in any respect the rights and obligations of the Company and
the Executive under any Incentive Agreements implemented prior to the date of
this Agreement and not expressly referred to herein or under any Indemnity
Agreement entered into between the Company and Executive. This Agreement may be
changed only by an agreement in writing signed by the Party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.

         20. Separability. If any provision of the Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by the decision of any arbitrator or by decree of a court
of last resort, the Parties shall promptly meet and negotiate substitute
provisions for those rendered or declared illegal or unenforceable to preserve
the original intent of this Agreement to the extent legally possible, but all
other provisions of this Agreement shall remain in full force and effect.

         21. Assignments. The Company may assign (whether by operation of law or
otherwise) this Agreement only with the written consent of the Executive, which
consent shall not be withheld unreasonably, and in the event of an assignment of
this Agreement, all covenants, conditions and provisions hereunder shall inure
to the benefit of and be enforceable against the Company's successors and
assigns. The rights and obligations of Executive under this Agreement are
personal to him, and no such rights, benefits or obligations shall be subject to
voluntary or involuntary alienation, assignment or transfer.

         22. Effect of Agreement. Subject to the provisions of Paragraph 21 with
respect to assignments, this Agreement shall be binding upon the Executive and
his heirs, executors, administrators, legal representatives and assigns and upon
the Company and its respective successors and assigns (whether direct or
indirect, by purchase, merger, consolidation or otherwise).

         23. Execution. This Agreement may be executed in multiple counterparts
each of which shall be deemed an original and all of which shall constitute one
and the same instrument.

         24. Waiver of Breach. The waiver by either Party of a breach of any
provision of the Agreement by the other Party shall not operate or be construed
as a waiver by such Party of any subsequent breach by such other Party.


                                       12
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         IN WITNESS WHEREOF, the Parties have executed this Agreement effective
as of the date first above written.

                                  "COMPANY"
                                  SOUTHDOWN, INC.

                                  By:
                                     -------------------------------------------
                                  Name:    Clarence C. Comer
                                  Title:   President and Chief Executive Officer

                                  "EXECUTIVE"

                                  ----------------------------------------------
                                  Name:
                                           -----------------------
                                  Title:
                                           -----------------------








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