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Exhibit 10.12  


 
 

TEXAS INDUSTRIES, INC.    
    
    ANNUAL INCENTIVE PLAN
  adopted pursuant to the
  Master Performance-Based Incentive Plan    
    


This
Annual Incentive Plan is adopted by the Compensation Committee of the Board of Directors pursuant to the Texas Industries, Inc. Master Performance-Based Incentive Plan ("Master Incentive
Plan"). This Annual Incentive Plan is subject to all of the terms and conditions of the Master Incentive Plan. Terms not defined in this Annual Incentive Plan have the same meanings as in the Master
Incentive Plan. Amendments and exceptions to this Annual Incentive Plan may be made only in the manner provided in the Master Incentive Plan. 


A.    Performance Period  



Fiscal
year 2008. 




B.    Component Plans and Participants  



This
Annual Incentive Plan is comprised of the following component plans: 



Regional
Plans: 



Central
Region Plan—Participants are managers of each facility or operation in the region comprised of Texas, Oklahoma, Louisiana and any state other than those in the Western Region, and
other Employees in such region who are not included in the TXI Plan or another incentive plan (such as an operations/production plan or a sales plan). 



Western
Region Plan—Participants are managers of each facility or operation in the region comprised of California and Colorado, and other Employees in such region who are not included in
the TXI Plan or another incentive plan (such as an operations/production plan or a sales plan). 




TXI
Plan: 



Participants
are the President and CEO, Vice Presidents, other Officers, Employees in staff functions (Information Services, Legal, Environmental, Human Resources, Real Estate (i.e., Brookhollow
entities), Controller, Financial Services, Treasury, etc.) and Employees in operating functions that cover more than one region. 





One
region can earn an Award independent of another. 




C.    Return on Equity Objective  



The
Company has established an objective of having, over time, an average return on equity ("ROE") at least 25% better than the U. S. manufacturing industry average. The Company's annual ROE objective
is translated into a return-on-assets ("ROA") goal, which allows Participants to use the Company's monthly accounting of operating results to calculate progress toward goal
achievement. 




D.    ROA Goals  



ROA
goals are set for each region, including minimum and target goals. The combined result of regional performances meeting the minimum goals should produce a ROE better than the U.S. manufacturing
industry annual average of 12%. 








 

E.    ROA Calculations  



ROA
for a region is calculated by dividing Performance Period operating profit for the region (earnings before corporate overhead, interest and taxes) by the average book value of the adjusted
operating assets of the region (which is then expressed as a percentage by multiplying the result by 100). 


The
average book value of the adjusted operating assets of a region is determined by averaging the book values of the adjusted operating assets at the beginning of the Performance Period and the end
of each fiscal quarter in the Performance Period. If significant assets are added or removed during a quarter, the book value at the end of such quarter will be adjusted by prorating the new or
removed assets based on the time operated during such quarter. 


Profits
and losses considered to be extraordinary (e.g., the sale of a major operating facility) will not be included in the ROA calculation. The Administrative Committee will make the decision
whether an asset is significant or profits and losses are extraordinary. 


Operating
profit and assets are adjusted in order to treat assets on operating leases as owned assets. All ROA calculations include the costs of incentive Awards (i.e., the Award costs for a region
will be included in the ROA calculation for that region). 




F.     Participant Eligibility Levels  



PARTICIPANT
ELIGIBILITY LEVEL A 



	•
	Non-exempt
employees 





PARTICIPANT
ELIGIBILITY LEVEL B 



	•
	Exempt
non-supervisory employees. 




PARTICIPANT
ELIGIBILITY LEVEL C 



	•
	Supervisory
positions in Salary Grades 11 or below.



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





PARTICIPANT
ELIGIBILITY LEVEL D 



	•
	All
employees in Salary Grades 12 or above. 




PARTICIPANT
ELIGIBILITY LEVEL E 



	•
	All
officers of TXI excluding the President/CEO 





PARTICIPANT
ELIGIBILITY LEVEL F 



	•
	President/CEO





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G.    Base Award Percentage Schedule  



The
ROA achieved by a region determines the BASE AWARD PERCENTAGE for Participants in that region: 



 
 

BASE AWARD PERCENTAGE SCHEDULE    
    



	 
	 	REGIONAL ROA %*

	BASE AWARD PERCENTAGE
 
	 	Central Region
	 	Western Region

	6**	 	17.0	 	7
	8	 	18.5	 	7.5
	10***	 	20.0	 	8
	12	 	21.0	 	9
	14	 	22.0	 	10
	16	 	23.0	 	11
	18	 	24.0	 	12
	20	 	25.0	 	13
	22	 	26.0	 	14
	24	 	27.0	 	15
	26	 	28.0	 	16







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



	**
	Minimum
Goal



	***
	Company
Objective 



The
"BASE AWARD PERCENTAGE" for the TXI Plan is the sum of the achieved weighted regional BASE AWARD PERCENTAGES, where each regional BASE AWARD PERCENTAGE is pro-rated by the book value
of such region's adjusted assets (as calculated in Section E) as a percent of the sum of the book values of the adjusted assets of all regions. 




H.    Award Calculation  



A
Participant's Award amount is determined as follows: 


	•
	A
Participant's eligibility level (defined in Section F) determines the AWARD MULTIPLIER shown below: 







	Participant

Eligibility Level
 
	 	AWARD

MULTIPLIER

	A	 	1.0
	B	 	1.5
	C	 	2.0
	D	 	2.5
	E	 	3.0
	F	 	4.0






	•
	The
TOTAL AWARD PERCENTAGE is calculated by multiplying the Participant's BASE AWARD PERCENTAGE (defined in Section G) by the his or her AWARD MULTIPLIER 



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	•
	The
Award amount is the TOTAL AWARD PERCENTAGE multiplied by the Participant's regular earnings (including overtime, but excluding earnings from incentive payments and
Awards) for the Performance Period. 




I.     Other Incentive Plans  



Operations/Production
Plans and Sales Plans are described in this document to provide the authority for management to develop individual incentive plans that will provide all eligible employees an
opportunity to participate in an incentive plan. There are approximately 25 such plans in any Fiscal Year. The specific terms of such plans are contained in separate documents, but generally have the
following characteristics. 


 OPERATIONS/PRODUCTION PLANS  


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


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


 SALES PLANS  


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


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



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TEXAS INDUSTRIES, INC. ANNUAL INCENTIVE PLAN adopted pursuant to the Master Performance-Based Incentive Plan

BASE AWARD PERCENTAGE SCHEDULE