Exhibit 10.5


	SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Second Amended and Restated Employment Agreement 
("Agreement") made as of the 1st day of May, 1998, between David 
W. Wallace ("Executive") and Lone Star Industries, Inc., a 
Delaware corporation having its principal office at 300 First 
Stamford Place, Stamford, Connecticut 06912 and its successors 
and assigns ("Lone Star" or the "Company").
	W I T N E S S E T H :
WHEREAS, the Company and the Executive are parties to 
an Amended and Restated Employment Agreement dated as of February 
1, 1996 (the "Superseded Employment Agreement"), and desire to 
amend and restate the Superseded Employment Agreement in its 
entirety.
NOW, THEREFORE, in consideration of the mutual 
promises, agreements and covenants hereby made, the mutual 
benefits to be derived from this Agreement and for other good and 
valuable consideration, the receipt and sufficiency of which are 
hereby acknowledged, the parties hereto agree to amend and 
restate the Superseded Employment Agreement as follows:
1.	Lone Star hereby employs Executive, and Executive 
hereby accepts employment by Lone Star, on the terms and 
conditions set forth in this Agreement for an initial term of 
twenty-six (26) consecutive months commencing as of the date 
hereof and ending on June 30, 2000 (the "Initial Term"), as 
Chairman of the Board, with such duties as are specified in the 
By-Laws of Lone Star and such other duties customary to the 
position as may be assigned to Executive from time to time by the 
Board of Directors of Lone Star.  Unless terminated pursuant to 
the other terms hereof, this Agreement shall continue in full 
force and effect after the Initial Term for successive terms of 
two years (each such term, and the Initial Term, a "Term").
2.	Lone Star shall pay Executive a salary ("Salary") 
at the rate of $210,000 per annum until the effective date of 
termination of this Agreement.  Salary shall continue to be paid 
to Executive on the currently established pay periods of Lone 
Star.  The Compensation and Stock Option Committee (or such other 
Board committee as shall then be responsible for making such 
decisions or, if none, the full Board of Directors) may in its 
discretion consider increases in the Executive's Salary from time 
to time, and upon any such increase "Salary" for purposes hereof 
shall thereafter mean the Executive's salary as so increased 
notwithstanding any purported subsequent reduction thereof by any 
such committee or the Board.  In addition, the Compensation and 
Stock Option Committee (or such other Board committee as shall 
then be responsible for making such decisions, or if none, the 
full Board of Directors) may in its discretion consider granting 
to the Executive from time to time such bonuses, stock options or 
other incentive compensation as it deems appropriate.
3.	(a)	(i)	Either party, by written notice to the 
other at least six months prior to the expiration of the then 
current Term, may terminate this Agreement effective at the 
expiration of such Term.  (ii) Lone Star, by written notice which 
sets forth the effective date of termination (which shall not be 
earlier than six (6) months after receipt of the written notice), 
may terminate this Agreement at any time for reasons (including 
without limitation disability of the Executive) other than Cause 
(as hereinafter defined).
(b)	In the event that this Agreement is 
terminated by the Executive pursuant to Section 4 below or Lone 
Star terminates this Agreement pursuant to Section 3(a) above, 
Executive shall be entitled to a severance payment in an amount 
equal to the Executive's Salary for the period from the effective 
date of the termination through the date one year (18 months, in 
the case of a termination pursuant to Section 4) after the 
effective date of the termination (such period, the "Severance 
Period"). Severance shall be paid in lump sum on the effective 
date of the termination.  In addition, the Executive shall 
continue to receive life insurance and medical insurance under 
the Company's Executive Medical Plan for Active Employees (as in 
effect as of the date of this Agreement) provided pursuant to 
Sections 5 and 6 hereof during the Severance Period (which is in 
addition to, and not in lieu of, benefit continuation under the 
Consolidated Omnibus Budget Reconciliation Act of 1985 
("COBRA")).  In furtherance and not in limitation of the 
immediately preceding sentence, the Executive shall be deemed to 
have continued his employment at his Salary during the Severance 
Period for purposes of vesting, eligibility and benefit accrual 
under any applicable Company employee pension plan (subject to 
the requirements of the Internal Revenue Code of 1986, as amended 
(the "Code")).  In the event the Executive cannot receive any 
such credit under any Company employee pension plan because of 
limitations under the Code, within ninety days after the 
expiration of the Severance Period, the Executive shall receive a 
lump sum payment from the Company equal to the present value of 
any additional benefits to which the Executive would have been 
entitled under any Company employee pension plan had the 
Severance Period counted for purposes of vesting, eligibility and 
benefit accrual (discounted at 5% per annum).  Severance pay 
pursuant to this Section shall be in lieu of severance pay 
pursuant to any Lone Star policy, except severance in respect of 
service as a director.
(c)	Lone Star shall have the right to terminate 
this Agreement for Cause during the Initial Term and thereafter 
and (subject to Section 7 below) Executive shall not be entitled 
to receive severance pay pursuant to this Section or any other 
policy or agreement of Lone Star except severance in respect of 
service as a director.  Cause shall be construed to mean:
(1)  The willful and continued failure 
by the Executive to substantially perform his duties with Lone 
Star (other than any such failure resulting from his disability 
due to physical or mental illness) after a written demand for 
performance is delivered which specifically identifies the manner 
in which he has not substantially performed his duties, or
(2)	the willful engaging by Executive 
in gross misconduct materially and demonstrably injurious to the 
Company, monetarily or otherwise, or
(3)	conviction of fraud, theft or 
embezzlement.
For purposes of this Section, no act, or failure 
to act, shall be considered "willful" unless done, or omitted to 
be done, not in good faith or without reasonable belief that the 
action or omission was in the best interest of the Company.
The written demand in Section (c)(1) shall be 
delivered to the Executive by the Board of Directors and shall 
set forth a reasonable period (not shorter than 30 business days) 
in which Executive is expected to comply with said demand.  If 
Executive does not comply thereafter, Lone Star shall have the 
right to terminate this Agreement upon seven (7) days' written 
notice to Executive.
4.	(a)	Lone Star hereby agrees not to: (i) change 
the Executive's duties so that a reasonable man would interpret 
the change to be a demotion; or (ii) direct the Executive to  
relocate his office to a new location which is either in a State 
other than Connecticut or more than twenty-five (25) miles from 
Stamford, Connecticut (excluding any relocation occurring prior 
to a Change in Control, as defined below, of the Executive's 
office (A) as a result of a relocation of Lone Star's operations 
presently located in Stamford, Connecticut, and (B) applicable to 
substantially all officers of Lone Star operating out of such 
location).  In the event Lone Star breaches its obligations in 
the immediately preceding sentence, Executive, at his option (and 
without limiting his remedies), can (if such demotion or 
direction to relocate is not rescinded or corrected by the 
Company within 30 days after written notice by Executive to the 
Company, reasonably identifying, in the case of a demotion, the 
change in duties complained of) declare himself terminated for 
"Good Reason" by giving written notice to Lone Star, Lone Star 
shall pay Executive severance pay and benefits as provided in 
Section 3(b) of this Agreement.  In no event shall Executive be 
required to perform duties or to suffer relocation prohibited by 
this Section 4.
(b)	In the event of the Executive's physical or 
mental incapacity, the Executive may declare himself terminated 
for "Incapacity" by giving written notice to Lone Star, Lone Star 
shall pay Executive severance pay and benefits as provided in 
Section 3(b) of this Agreement.  "Physical or mental incapacity" 
shall mean the inability of Executive by reason of a physical or 
mental illness to perform his duties hereunder for a period of 90 
consecutive days or a total of 120 days in any twelve month 
period and such incapacity is determined by a physician selected 
by Executive (or his legal representatives) and reasonably 
acceptable to the Company to be such as prevents Executive from 
performing adequately his normal duties to the Company.  During 
any period that the Executive is unable to perform his duties by 
reason of physical or mental incapacity, Executive shall continue 
to receive his full compensation and benefits hereunder.
5.	Executive shall participate in Lone Star's 
employee benefit programs and plans in the same manner as other 
executive salaried employees of Lone Star and in accordance with 
the terms thereof.  Benefit programs and plans include, but are 
not limited to, life insurance, accidental death and 
dismemberment insurance, hospital, medical, surgical and major 
medical insurance, dental insurance, short and long-term 
disability insurance, 401(k) savings plan and pension plan for 
salaried employees and directors' and officers' liability 
insurance ("Employee Benefit Plans").  Executive shall also 
participate in Lone Star's vacation and holiday programs.  In 
addition to and not in limitation of the foregoing, and 
notwithstanding the Company's policy with respect to other 
employees, the Company shall, during their lives and whether or 
not the Executive's employment or this Agreement terminates (for 
Cause or otherwise), provide the Executive with life and medical 
insurance and the Executive's spouse with medical insurance at no 
cost to the Executive or his spouse at least equal to the life 
and medical insurance provided to senior executive officers of 
the Company; provided however, the medical benefits provided to 
the Executive and his spouse shall be at least equal to the 
medical benefits described in Exhibit A; provided further, the 
annual deductible for medical coverage described in Exhibit A is 
$750 for each individual.  The Executive and his spouse are each 
entitled to receive monthly reimbursement of Medicare Part B 
premiums.  
The Company agrees to use its best efforts to provide 
the benefits listed on Exhibit A to the Executive and his spouse 
in a manner that will not result in any income inclusion under 
federal, state or local tax law.  To the extent any such income 
inclusion results to either the Executive or his spouse, the 
Executive and his spouse (as the case may be) shall receive an 
annual payment from the Company to fully pay for the federal, 
state and local tax on such income inclusion (a "Gross-up 
Payment") as well as any income inclusion from the Gross-up 
Payment based on the highest marginal tax rate on the payment, so 
that neither the Executive nor his spouse have any tax liability 
as a result of participation in the Executive Medical Plan on 
Exhibit A.  For each year, such payment shall be made no later 
than January 31st of the following year.
The Company shall maintain an insurance policy covering 
the Executive Medical Plan to insure non-payment by the Company 
in accordance with the terms on Exhibit B.
This section shall survive any termination of this 
Agreement.
6.	To the extent Executive voluntarily terminates his 
employment at the end of any Term, he shall be entitled to 
participate in Lone Star's employee benefit plans to the full 
extent that they may be provided to other retirees (and spouses, 
if applicable) including but not limited to the Pension Plan for 
Salaried Employees, in the same manner as other salaried retirees 
of Lone Star and in accordance with the terms thereof.
7.	Following a Change in Control, as defined below, 
the Executive, on thirty days written notice (which notice must 
be delivered within twelve months after the Company gives the 
Executive notice of the Change in Control or the Executive has 
actual knowledge of such Change in Control), may terminate his 
employment with the Company.  Upon any such termination, the 
Executive shall be entitled to lump sum severance pay in an 
amount equal to thirty months' Salary.  In addition, the 
Executive shall continue to receive life insurance and medical 
insurance under the Company's Executive Medical Plan for Active 
Employees (as in effect as of the date of this Agreement) 
provided pursuant to Sections 5 and 6 hereof during the Severance 
Period (which is in addition to, and not in lieu of, benefit 
continuation under COBRA).  In furtherance and not in limitation 
of the immediately preceding sentence, the Executive shall be 
deemed to have continued his employment at his Salary during the 
Severance Period for purposes of vesting, eligibility and benefit 
accrual under any applicable employee pension plan (subject to 
the requirements of the Code).  In the event the Executive cannot 
receive any such credit under any employee pension plan because 
of limitations under the Internal Revenue Code, within ninety 
days after the expiration of the Severance Period, the Executive 
shall receive a lump sum payment from the Company equal to the 
present value of any additional benefits to which the Executive 
would have been entitled under any Company employee pension plan 
had the Severance Period counted for purposes of vesting, 
eligibility and benefit accrual (discounted at 5% per annum).  
Severance hereunder shall be paid in lump sum on the effective 
date of the termination.  Severance pay pursuant to this Section 
shall be in lieu of severance pay pursuant to any Lone Star 
policy or other agreement (except that nothing contained in this 
Agreement shall affect the Executive's rights to severance in 
respect of service as a director and rights to bonuses under the 
Company's Executive Incentive Plan, as may be in effect from time 
to time, whether as a result of a Change in Control or otherwise) 
and all other obligations of the Company for severance pay under 
this Agreement.  For purposes of this Agreement, a "Change in 
Control" shall be deemed to have occurred upon the occurrence of 
any of the following events:
(i)  Any acquisition by any individual, entity or group 
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 
Securities Exchange Act of 1934 (the "Exchange Act")) (a 
"Person") of beneficial ownership (within the meaning of Rule 
13d-3 promulgated under the Exchange Act) of shares of common 
stock of the Company (the "Common Stock") and/or other voting 
securities of the Company entitled to vote generally in the 
election of directors ("Outstanding Company Voting Securities") 
after which acquisition such individual, entity or group is the 
beneficial owner of twenty percent (20%) or more of either (A) 
(1) the then outstanding shares of Common Stock or (2) the 
Outstanding Company Voting Securities; excluding, however, the 
following:  (1) any acquisition by the Company, (2) any 
acquisition by an employee benefit plan (or related trust) 
sponsored or maintained by the Company or (3) any acquisition by 
any corporation pursuant to a reorganization, merger, 
consolidation or similar corporate transaction (in each case, a 
"Corporate Transaction"), if, pursuant to such Corporate 
Transaction, the conditions described in clauses (1), (2) and (3) 
of paragraph (iii) of this Section 7 are satisfied; or (B) any 
transaction in which the Executive and the Chief Executive 
Officer of the Company (both as of the date of this Agreement and 
subject to health related availability) (1) retain their current 
positions with the Company immediately after such transaction and 
(2) will immediately after such transaction beneficially own an 
aggregate (for both such executives), directly or indirectly 
(including, without limitation, ownership by family members, 
trusts or foundations for or controlled by family members), more 
than 5% of either (a) the then outstanding shares of common stock 
of the Company and/or (b) the other voting securities of the 
Company entitled to vote generally in the election of directors 
(any transaction under this clause (B) hereinafter referred to as 
a "Management Event").
(ii)  A change in the composition of the Board of 
Directors of the Company (other than in connection with a 
Management Event) such that the individuals who, as of the date 
hereof, comprise a class of directors of the Board (the members 
of each class of directors of the Board as of the date hereof 
shall be hereinafter referred to as an "Incumbent Class" and the 
members of all of the Incumbent Classes shall be hereinafter 
collectively referred to as the "Incumbent Board") cease for any 
reason to constitute at least a majority of the class; provided, 
however, for purposes of this subsection that any individual who 
becomes a member of an Incumbent Class subsequent to the date 
hereof whose election, or nomination for election by the 
Company's stockholders, was approved in advance or 
contemporaneously with such election by a vote of at least a 
majority of those individuals who are members of the Incumbent 
Board and a majority of those individuals who are members of such 
Incumbent Class (or deemed to be such pursuant to this proviso), 
shall be considered as though such individual were a member of 
the Incumbent Class; but, provided further, that any such 
individual whose initial assumption of office occurs as a result 
of either an actual or threatened election contest (as such terms 
are used in Rule 14a-11 of Regulation 14A promulgated under the 
Exchange Act) or other actual or threatened solicitation of 
proxies or consents by or on behalf of a Person other than the 
Board of Directors of the Company or actual or threatened tender 
offer for shares of the Company or similar transaction or other 
contest for corporate control (other than a tender offer by the 
Company) shall not be so considered as a member of the Incumbent 
Class; or
(iii)  The approval by the stockholders of the Company 
of a Corporate Transaction or, if consummation of such Corporate 
Transaction is subject, at the time of such approval by stock-
holders, to the consent of any government or governmental agency, 
the obtaining of such consent (either explicitly or implicitly); 
excluding, however, a Management Event or a Corporate Transaction 
pursuant to which (1) all or substantially all of the individuals 
and entities who are the beneficial owners, respectively, of the 
outstanding shares of Common Stock and Outstanding Company Voting 
Securities immediately prior to such Corporate Transaction will 
beneficially own, directly or indirectly, more than eighty 
percent (80%) of, respectively, the outstanding shares of common 
stock of the corporation resulting from such Corporate 
Transaction and the combined voting power of the outstanding 
voting securities of such corporation entitled to vote generally 
in the election of directors, (2) no Person (other than the 
Company, any employee benefit plan (or related trust) of the 
Company or the corporation resulting from such Corporate 
Transaction and any Person beneficially owning, immediately prior 
to such Corporate Transaction, directly or indirectly, twenty 
percent (20%) or more of the outstanding shares of Common Stock 
or Outstanding Company Voting Securities, as the case may be) 
will beneficially own, directly or indirectly, twenty percent 
(20%) or more of, respectively, the outstanding shares of common 
stock of the corporation resulting from such Corporate 
Transaction or the combined voting power of the then outstanding 
securities of such corporation entitled to vote generally in the 
election of directors and (3) individuals who were members of the 
Incumbent Board will constitute at least a majority of the 
members of board of directors of the corporation resulting from 
such Corporate Transaction; or
(iv)  The approval of the stockholders of the Company 
of (1) a complete liquidation or dissolution of the Company or 
(2) the sale or other disposition of all or substantially all of 
the assets of the Company; excluding, however, such a sale or 
other disposition to a corporation (A) in connection with a 
Management Event or (B) with respect to which following such sale 
or other disposition, (1) more than eighty percent (80%) of, 
respectively, the then outstanding shares of common stock of such 
corporation and the combined voting power of the then outstanding 
voting securities of such corporation entitled to vote generally 
in the election of directors will be then beneficially owned, 
directly or indirectly, by all or substantially all of the 
individuals and entities who were the beneficial owners, 
respectively, of the outstanding shares of Common Stock and 
Outstanding Company Voting Securities immediately prior to such 
sale or other disposition, (2) no Person (other than the Company 
and any employee benefit plan (or related trust) of the Company 
or such corporation and any Person beneficially owning, 
immediately prior to such sale or other disposition, directly or 
indirectly, twenty percent (20%) or more of the outstanding 
shares of Common Stock or Outstanding Company Voting Securities, 
as the case may be) will beneficially own, directly or 
indirectly, twenty percent (20%) or more of, respectively, the 
then outstanding shares of common stock of such corporation and 
the combined voting power of the then outstanding voting 
securities of such corporation entitled to vote generally in the 
election of directors and (3) individuals who were members of the 
Incumbent Board will constitute at least a majority of the 
members of the board of directors of such corporation.  
In the event of any conflict between this Section 7 and 
any other Section of this Agreement (other than Section 5), the 
terms of this Section 7 shall control, so that, without 
limitation, the Executive shall be entitled to the payment and 
benefits provided under this Section 7 notwithstanding any 
purported termination (whether for Cause or otherwise) and 
regardless of whether such purported termination precedes or 
follows the giving of a notice of termination by the Executive 
under this Section 7 by the Company.
8.	Immediately upon the occurrence of a Change in 
Control, the Company shall establish a grantor trust on behalf of 
the Executive, subject to the claims of the Company's creditors 
(commonly referred to as a "Rabbi Trust").  The Company shall 
contribute to the Rabbi Trust an amount sufficient to provide for 
the severance benefits and payment of all other benefits under 
this Agreement (except benefits under the Executive Medical Plan 
for Retired Employees).  Any payments made to the Executive under 
this Agreement shall be made from such Rabbi Trust.  The Rabbi 
Trust shall terminate and any remaining assets shall be returned 
to the Company no sooner than July 1, 2005, unless the Executive 
has provided written notice of an unsatisfied claim to the 
trustee of the Rabbi Trust, in which case the Rabbi Trust shall 
not terminate until such claim is resolved pursuant to 
paragraph 12.
9.	Upon presentation to Lone Star of appropriate 
documentation, Executive will be entitled to reimbursement within 
guidelines established by Lone Star for all reasonable and 
necessary business expenses incurred by him for entertainment, 
travel and similar items and for costs for operating from the 
Executive's Greenwich, Connecticut office.  However, the 
Executive shall be personally responsible for rental payments 
such office as long as he decides, in his discretion, to maintain 
such office.
10.	Executive agrees that during his period of 
employment by Lone Star and thereafter he shall hold in 
confidence and not disclose to any unauthorized person any 
knowledge or information acquired and possessed by him of a 
confidential nature or any trade secret with respect to the 
business of Lone Star, and not to disclose, publish or make use 
of the same without the prior express consent of Lone Star.  
Executive shall be free to disclose such information, knowledge 
or trade secret in the ordinary course of his carrying out his 
duties as an officer of Lone Star, and shall be free to disclose 
such information, knowledge or trade secret during his period of 
employment by Lone Star and thereafter if such matters become 
public or if compelled by legal process.
11.	Executive agrees that during the term of his 
employment he will not without the consent of Lone Star, in any 
manner, directly or indirectly, own, manage, be employed by, 
operate, join, control, participate in, be connected with, engage 
in, or become interested in any business competitive with, the 
business then carried on by Lone Star in those parts of the world 
where Lone Star does business.  Ownership of publicly traded 
securities of a business of the same or similar nature to, or 
competitive with, that carried on by Lone Star, shall not violate 
this paragraph, provided the Executive does not acquire more than 
5% of the voting stock of any such corporation.  Notwithstanding 
any other provision of this Agreement, the Executive shall not be 
required to use his full time efforts hereunder and may take on 
outside business commitments provided they do not unreasonably 
impair his ability or capacity to serve as the Chairman of the 
Board of the Company.
12.	(a)	Any dispute relating to this Agreement 
arising between the Executive and the Company shall be settled by 
arbitration in accordance with the commercial arbitration rules 
of the American Arbitration Association ("AAA").  The arbitration 
proceedings, including the rendering of an award, shall take 
place in Stamford, Connecticut (or such other location mutually 
agreed upon by the Company and the Executive), and shall be 
administered by the AAA.
(b)	The arbitral tribunal shall be appointed 
within 30 days of the notice of dispute, and shall consist of 
three arbitrators, one of which shall be appointed by the 
Company, one by the Executive, and the third by both the Company 
and the Executive jointly; provided, however, that, if the 
Company and the Executive do not select the third arbitrator 
within such 30-day period, such third arbitrator shall be chosen 
by the AAA as soon as practicable following notice to the AAA by 
the parties of their inability to choose such third arbitrator.
(c)	Decisions of such arbitral tribunal shall be 
in accordance with the laws of the State of Connecticut 
(excluding the conflicts of law rules which require the 
application of any other law).  The award of any such arbitral 
tribunal shall be final (except as otherwise provided by the laws 
of the State of Connecticut and the Federal laws of the United 
States, to the extent applicable).  Judgment upon such award may 
be entered by the prevailing party in any state or Federal court 
sitting in Connecticut or any other court having jurisdiction 
thereof, or application may be made by such party to any such 
court for judicial acceptance of such award and an order of 
enforcement.
(d)	The Company shall reimburse the Executive for 
all costs, including reasonable attorneys' fees, in connection 
with any proceeding (whether or not in arbitration) to obtain or 
enforce any right or benefit under this Agreement in which the 
Executive is the prevailing party.
Any amounts not paid by the Company under this 
Agreement within five business days after the date they are due 
shall be paid with interest from their due date at the rate 
announced from time to time by Citibank, N.A. as its prime or 
similar rate plus 3%.
13.	Nothing is this Agreement shall in any manner 
affect any benefit to which the Executive is entitled as a result 
of Executive's position as an outside director of the Company, 
and the Company hereby agrees that such benefits (including 
without limitation post-service benefits consisting of $15,000 
annual deferred compensation for ten years and continued life 
insurance coverage) have fully vested and may not hereafter be 
decreased, deleted, abridged, or in any other fashion adversely 
affected by the Company.
     14.	(a)	Anything in this Agreement to the contrary 
notwithstanding, in the event it shall be determined that any 
payment or distribution by the Company (including any made from 
plans sponsored by the Company, through annuities, Rabbi Trusts 
or otherwise) to or for the benefit of Executive, whether paid or 
payable or distributed or distributable pursuant to the terms of 
this Agreement (including this Section 14), the Company's 
Executive Incentive Plan 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 
the Executive of all Taxes (as defined in Section 14(e)) imposed 
upon all Gross-Up Payments, Executive retains an amount of such 
Gross-Up Payments equal to the Excise Tax imposed upon the 
Payments.
		(b)	Subject to the provisions of Section 14(c) and 
(d), any determination required to be made under Section 14(a) 
including whether Gross-Up Payments are required and the amount 
of such Gross-Up Payments, shall initially be made, at the 
Company's expense, by nationally recognized tax counsel retained 
to represent the Executive by the Company, such counsel to be 
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 after the termination of Executive's 
employment, if applicable, and such other time or times as is 
reasonably requested by the Company or the Executive.  If Tax 
Counsel makes the initial determination that no Excise Tax is 
payable by the Executive with respect to a Payment or Payments, 
it shall furnish the Executive with an opinion that no Excise Tax 
will be imposed with respect to any such Payment or Payments.  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, and if upon any reasonable written request 
from Executive, the Company or Tax Counsel, Tax Counsel 
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 (together with any additional Taxes 
resulting from the Payment or resulting from the underpayment of 
Excise Tax) shall be promptly paid by the Company to Executive.
		(c)	The Company shall defend (by the Tax Counsel or by 
other nationally recognized tax counsel acceptable to the 
Executive), hold harmless and indemnify the Executive on a fully 
grossed-up after Tax basis from and against any and all Excise 
Tax, other Taxes, claims, losses, liabilities, obligations, 
damages, impositions, assessments, demands, judgments, 
settlements, fines, interest, costs and expenses (including 
reasonable attorneys', accountants', and experts' fees and 
expenses) (collectively, "Costs") with respect to any claim made 
against the Executive by the Internal Revenue Service, any other 
governmental agency or any other person or entity, for any Excise 
Tax.
		(d)	Pending the outcome of any such claim, the Company 
shall advance to Executive on an interest-free basis, the total 
amount of the Excise Tax or other Taxes claimed in order for 
Executive to pay or cause to be paid the Excise Tax or other 
Taxes claimed.  Executive shall, at the Company's reasonable 
request and at the Company's sole cost and expense, file a claim 
for refund of such Excise Tax and/or other Taxes and sue for a 
refund of such Taxes 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.  Within ten (10) days after the Company is 
notified of a claim against the Executive for Excise Tax, whether 
such notice is provided by the Executive or otherwise, the 
Company (i) shall notify the Executive in writing (a "Defense 
Notice") that the Company is defending and indemnifying the 
Executive for such claim pursuant to Section 14(c), and 
thereafter (ii) shall control the defense or prosecution, at its 
sole cost, expense and risk, of such 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 claim that would adversely affect Executive, (ii) any 
request from the Company to the 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 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 claim 
and Executive shall be 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 claim, 
Executive shall provide or cause to be provided to the Company 
any information reasonably requested by the Company that relates 
to such claim, and shall otherwise cooperate (at the Company's 
sole cost and expense) with the Company and its representatives 
in good faith in order to contest effectively such claim.  The 
Company shall keep Executive informed of all developments and 
events relating to any such claim (including, without limitation, 
providing to Executive copies of all written materials pertaining 
to any such 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 claim.  If the Company fails to (i) timely deliver a 
Defense Notice or (ii) thereafter perform the obligations under 
Section 14(c) to the Executive's reasonable satisfaction, 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 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 
claim.  The Company may attend, but not participate in or 
control, any defense, prosecution, settlement or compromise of 
any claim controlled by Executive pursuant to this Section 14(d) 
and shall bear its own costs and expenses with respect thereto.  
In the case of any 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 incurred by Executive in connection 
with, or arising out of, such defense or prosecution.
		(e)	For purposes of this Section 14, the terms "Tax" 
and "Taxes" mean any and all federal, state and local taxes of 
any kind whatsoever (including, but not limited to, any and all 
Excise Tax, income taxes, FICA 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.
15.	The Company has purchased and shall maintain in 
effect, on behalf of the Executive, an insurance policy to cover 
any litigation costs of the Executive (or his spouse) associated 
with the enforcement of this Agreement against the Company in an 
amount of $250,000.  The Company shall fully reimburse the 
Executive for the federal, state and local taxes incurred by the 
Executive in connection with the purchase and maintenance of such 
policy (the "Reimbursement") and any federal, state or local 
taxes on the Reimbursement, based on the highest marginal tax 
rate in effect so that the Executive has no federal, state or 
local tax liability as a result of this section.
16.	This Agreement constitutes the entire agreement 
between the parties as to matters covered hereby and may not be 
changed or modified except by an agreement in writing signed by 
Lone Star and the Executive.  This Agreement supersedes the 
Superseded Employment Agreement.
17.	This Agreement shall be governed by and construed 
in accordance with the laws of the State of Connecticut.
18.	This Agreement shall be binding upon and inure to 
the benefit of the Company, including any purchaser of all or 
substantially all of the assets of the Company and the surviving 
entity of any merger or consolidation to which the Company is a 
party and the Executive and his heirs, executors, administrators 
and legal representatives.
19.	The Company agrees that if the Executive's 
employment with the Company is terminated pursuant to this 
Agreement during the term of this Agreement, the Executive shall 
not be required to seek other employment or to attempt in any way 
to reduce any amounts payable to the Executive by the Company 
pursuant to this Agreement.  Further, the amount of any payment 
or benefit provided for in this Agreement shall not be reduced by 
any compensation earned by the Executive or benefit provided to 
the Executive as the result of employment by another employer or 
otherwise.  Except as otherwise provided herein and apart from 
any disagreement between the Executive and the Company concerning 
interpretation of this Agreement or any term or provision hereof, 
the Company's obligations to make the payments provided for in 
this Agreement and otherwise to perform its obligations hereunder 
shall not be affected by any circumstances, including without 
limitation, any set-off, counterclaim, recoupment, defense or 
other right which the Company may have against the Executive.
20.	Except as provided herein, this Agreement cannot 
be assigned by Lone Star or Executive without prior written 
consent.

21.	All notices, communications, etc., shall be sent 
to:
(a)	Corporate Secretary
Lone Star Industries, Inc.
300 First Stamford Place
Stamford, CT  06912

(b)	David W. Wallace
Two Greenwich Place, Suite 100
Greenwich, CT  06830

                   	
David W. Wallace


LONE STAR INDUSTRIES, INC.


By:                        	
   William M. Troutman
   President and Chief 
      Executive Officer

	    - and -


	By:                               
	   Jack R. Wentworth
   Chairman of the Compensation and
   Stock Option Committee

	EXHIBIT A

	THE EXECUTIVE MEDICAL PLAN


	COVERAGE


(1)	Provides for the full payment for medical services for the 
employee and his qualified dependents which are recommended 
or performed by a legally qualified physician.

(2)	Provides for the full payment of hospital expenses.

(3)	Provides for the full payment of the charges made by a 
physician for the performance of a surgical operation.

(4)	Provides for the full payment of examinations and laboratory 
tests taken while not confined in a hospital.

(5)	Provides for the full payment of medical expenses resulting 
from an accident.

(6)	Provides for the full payment of dental expenses.

(7)	Provides for the full payment for prescription charges.

(8)	Provides for the full payment for eye examinations and eye 
glasses.

(9)	Provides for short and long term nursing care (at home or in 
nursing care facilities).

(10)	Provides for reimbursement of Medicare Part B premiums.

	EXCLUSIONS


The coverages set forth above are subject to the 
following provisions and general exclusions:

Eligible expenses under the plan shall not include 
payment of any charge as follows:

(1)	For transportation or travel other than local use 
of ambulance.

(2)	In connection with an injury or disease resulting 
from war or any act of war, whether declared or 
undeclared, which war or act of war occurs while 
an individual is insured under this coverage.

(3)	Which are incurred on account of bodily injury 
arising out of or in the course of employment by 
an employer, or disease with respect to which any 
benefits are payable under any workmen's 
compensation, occupational disease, or similar 
law.

(4)	Which is paid or payable or reimbursable by or 
through any plan or program of any government or 
any subdivision or agency thereof, other than a 
plan or program established for its civilian 
employees.

 - Lifetime Benefit

The maximum lifetime benefit under this Executive 
Medical Plan is $1,000,000 for each participant.


 - Non-Duplication of Benefits:

When benefits would be payable under another group 
plan, benefits under those plans will be coordinated to 
the extent that the total benefits under all programs 
will not exceed full reimbursement.


	EXHIBIT B

	LONE STAR INDUSTRIES
	EXECUTIVE MEDICAL AND LEGAL INSURANCE


Description:		Single Premium Insurance covering the failure or refusal of Lone 
Star Industries or successor company to pay benefits 
that are due, including failure as a result of financial insolvency.

Policy Period:	To be effective as agreed
Non-Cancelable

Coverage:		This policy will indemnify the executives for lost benefits, up to
the Limits of Liability shown above for the following classes:

A)	David Wallace and Spouse
William Troutman and Spouse

B)	Other eligible executives of Lone Star Industries, Inc. (9)

The medical portion, applicable to Class A above, provides for the full payment
of:

 - Medical services recommendation or performed by a legally qualified physician

 - Hospital expenses

 - Surgical charges

 - Out patient examinations and laboratory tests

 - Medical expenses resulting from an accident

 - Dental expenses

 - Prescription charges

 - Eye examinations and glasses

 - Short and long term nursing care, at home or in a nursing care facility, 
including room and board charges for the convalescent center

 - Reimbursement of Medicare Part B premiums

This program excludes charges for:

 - Transportation or travel other than those approved by Medicare

 - Treatment resulting from war or acts of war

 - Treatment arising out of or in the course of employment

 - Any expenses payable through any plan or program of government or any 
subdivision or agency thereof

Limits of Liability:	A)	Per Individual $1,000,000 Lifetime
Legal Expense Limit of Liability: $250,000 Each

B)	Legal Expense Limit of Liability: $100,000 Each

Premium:		$507,500 due at inception