Document:

exv10w2

 

Exhibit 10.2

EAGLE MATERIALS INC.

CEMENT COMPANIES

SALARIED INCENTIVE COMPENSATION PROGRAM

FOR FISCAL YEAR 2006

1. Bonus Pool

      To insure reasonableness and affordability the available funds for bonus payments are
determined as a percent of earnings of the applicable subsidiaries of Eagle Materials Inc. The
actual percentage may vary from year to year.

      Participants must be employed at fiscal year-end to be eligible for any bonus award. Awards
may be adjusted for partial year participation for participants added during a year.

      Eagle Materials CEO retains the final right of interpretation and administration of the plan
and to amend or terminate the plan at any time.

      Operating Company Bonus Pool: For Fiscal Year 2006 bonus pool funding from the
subsidiary companies will be 2.25% of each of the cement company’s operating profit. Executive
Vice Presidents (“EVP’s”) will be funded from operating company bonus pools.

2. Allocation of Pool

      Operating Company Pools: The subsidiary company Presidents, his/her direct reports and
safety directors will be in the plan. The subsidiary company Presidents may recommend including
additional exempt salaried employees to participate in the plan. Additional participation in the
plan beyond the subsidiary company Presidents and their direct reports will require the approval of
the Eagle Materials EVP’s and Eagle Materials CEO.

      The subsidiary company Presidents will be eligible for 20% — 30% of the pool. The subsidiary
company Presidents will recommend the distribution of the remainder of the company pool. The
participants in the plan and their percentage of the pool will require approval of the Eagle
Materials EVP’s and Eagle Materials CEO at the beginning of the fiscal year for which the bonus is
being earned. For example:

	 	 	 	 	 
	Participant	 	% of Pool Available	 
	Company President
	 	 	25	%
	Plant Manager
	 	 	14	%
	Vice President, Sales
	 	 	11	%
	Vice President, Finance
	 	 	8	%
	Production Manager
	 	 	8	%
	Maintenance Manager
	 	 	8	%
	Safety Director
	 	 	2	%
	Quality Control Manager
	 	 	2	%
	Executive Vice President
	 	 	22	%
	 
	 	 	 
	Total
	 	 	100	%

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      The subsidiary company President’s bonus opportunity will be 50% specific, objective goals and
50% discretionary. All participants in the plan must have the ability to significantly affect the
performance of the subsidiary company by achieving measurable, quantifiable, objectives. The
subsidiary company Presidents will determine the objective and discretionary balance of bonus
opportunities for the participants in their companies subject to approval by Eagle Materials EVP’s
and Eagle Materials CEO.

      Because our basic products are commodities the level of prices in a given market area are
established by supply and demand over which local management has little control. Through price
leadership, local management can affect prices in a small range around supply-demand equilibrium
and one of the performance criteria might still be pricing but this does not indicate that an
overall bad or good market is itself a performance indicator of local management.

      Fixed assets is another area over which local management exercises limited control. Each
manager basically has to work with the fixed assets he is assigned. Local management can exercise
considerable control over current assets such as receivable and inventory but, as a heavily
capitalized industry with limited transportability, local management essentially has to do the best
they can with the PP&E they are assigned.

3. Eligibility

      The subsidiary company Presidents, his/her direct reports and safety director will be in the
plan. Additional participants who have management responsibilities or are in a professional
capacity that can measurably impact earnings may be recommended by subsidiary company presidents
subject to the approval of the Eagle Materials EVP’s and Eagle Materials CEO. The addition of new
participants will not affect the total pool available but will in effect dilute the potential
bonuses of the original participants.

      Participants must be an exempt salaried manager or professional. No hourly or non-exempt
employee may participate. Participants in this plan may not participate in any other company
incentive plan with monetary awards, except for participants in the applicable company’s Long Term
Compensation Pool and Eagle Materials corporate personnel who may participate in the Eagle
Materials stock option plan. The addition of a plan participant will not affect the total pool
available to be earned as bonus but will in effect dilute the potential bonuses of the other
participants in that subsidiary company adding participants.

4. Objective Criteria

      Objective setting is essential to an effective incentive compensation plan to cause a focus on
areas that need attention. Having selected objectives, it is also important to establish a
reference point for that objective which indicates expected performance.

      In addition to consideration of the plan as a reference, we will consider historic performance
of a facility, equipment design standards, industry standards, comparable

2

 

values from other companies or like situations and any other qualified source or establishing
reference points or basis for determining performance.

5. Measuring Performance

      At the close of the fiscal year each subsidiary company President will review the performance
of the company versus the objectives submitted at the beginning of the year and recommend to Eagle
Materials EVP distribution of the pool to the participants. Distribution of the pool requires
approval of both Eagle Materials EVP and CEO.

      Any portion of the Company Operating Pool not paid out (unearned) or forfeited will be added
to the SSP at Corporate.

      Each subsidiary company President may also recommend to the Eagle Materials EVP and CEO an SSP
award to recognize outstanding individual performances.

3exv10w3

 

Exhibit 10.3

EAGLE MATERIALS INC.

CONCRETE and AGGREGATES COMPANIES

SALARIED INCENTIVE COMPENSATION PROGRAM

FOR FISCAL YEAR 2006

1. Bonus Pool

      To insure reasonableness and affordability the available funds for bonus payments are
determined as a percent of earnings of the applicable subsidiaries of Eagle Materials Inc. The
actual percentage may vary from year to year.

      Participants must be employed at fiscal year-end to be eligible for any bonus award. Awards
may be adjusted for partial year participation for participants added during a year.

      Eagle Materials CEO retains the final right of interpretation and administration of the plan
and to amend or terminate the plan at any time.

      Operating Company Bonus Pool: For Fiscal Year 2006 bonus pool funding from the
subsidiary companies will be 2.25% of each of the concrete and aggregate company’s operating
profit. Executive Vice Presidents (“EVP’s”) will be funded from operating company bonus pools.

2. Allocation of Pool

      Operating Company Pools: The subsidiary company Presidents, his/her direct reports and
safety directors will be in the plan. The subsidiary company Presidents may recommend including
additional exempt salaried employees to participate in the plan. Additional participation in the
plan beyond the subsidiary company Presidents and their direct reports will require the approval of
the Eagle Materials EVP’s and Eagle Materials CEO.

      The subsidiary company Presidents will be eligible for 20% — 30% of the pool. The subsidiary
company Presidents will recommend the distribution of the remainder of the company pool. The
participants in the plan and their percentage of the pool will require approval of the Eagle
Materials EVP’s and Eagle Materials CEO at the beginning of the fiscal year for which the bonus is
being earned. For example:

	 	 	 	 	 
	Participant	 	% of Pool Available	 
	Executive Vice President
	 	 	5	%
	Company President
	 	 	25	%
	Plant Manager, Concrete
	 	 	15	%
	Plant Manager, Aggregate
	 	 	15	%
	Vice President, Sales
	 	 	15	%
	Vice President, Finance
	 	 	10	%
	Safety Director
	 	 	7.5	%
	Quality Control Manager
	 	 	7.5	%
	 
	 	 	 
	Total
	 	 	100	%

1

 

      The subsidiary company President’s bonus opportunity will be 50% specific, objective goals and
50% discretionary. All participants in the plan must have the ability to significantly affect the
performance of the subsidiary company by achieving measurable, quantifiable, objectives. The
subsidiary company Presidents will determine the objective and discretionary balance of bonus
opportunities for the participants in their companies subject to approval by Eagle Materials EVP’s
and Eagle Materials CEO.

      Because our basic products are commodities the level of prices in a given market area are
established by supply and demand over which local management has little control. Through price
leadership, local management can affect prices in a small range around supply-demand equilibrium
and one of the performance criteria might still be pricing but this does not indicate that an
overall bad or good market is itself a performance indicator of local management.

      Fixed assets is another area over which local management exercises limited control. Each
manager basically has to work with the fixed assets he is assigned. Local management can exercise
considerable control over current assets such as receivable and inventory but, as a heavily
capitalized industry with limited transportability, local management essentially has to do the best
they can with the PP&E they are assigned.

3. Eligibility

      The subsidiary company Presidents, his/her direct reports and safety director will be in the
plan. Additional participants who have management responsibilities or are in a professional
capacity that can measurably impact earnings may be recommended by subsidiary company presidents
subject to the approval of the Eagle Materials EVP’s and Eagle Materials CEO. The addition of new
participants will not affect the total pool available but will in effect dilute the potential
bonuses of the original participants.

      Participants must be an exempt salaried manager or professional. No hourly or non-exempt
employee may participate. Participants in this plan may not participate in any other company
incentive plan with monetary awards, except for participants in the applicable company’s Long Term
Compensation Pool and Eagle Materials corporate personnel who may participate in the Eagle
Materials stock option plan. The addition of a plan participant will not affect the total pool
available to be earned as bonus but will in effect dilute the potential bonuses of the other
participants in that subsidiary company adding participants.

4. Objective Criteria

      Objective setting is essential to an effective incentive compensation plan to cause a focus on
areas that need attention. Having selected objectives, it is also important to establish a
reference point for that objective which indicates expected performance.

      In addition to consideration of the plan as a reference, we will consider historic performance
of a facility, equipment design standards, industry standards, comparable

2

 

values from other companies or like situations and any other qualified source or establishing
reference points or basis for determining performance.

5. Measuring Performance

      At the close of the fiscal year each subsidiary company President will review the performance
of the company versus the objectives submitted at the beginning of the year and recommend to Eagle
Materials EVP distribution of the pool to the participants. Distribution of the pool requires
approval of both Eagle Materials EVP and CEO.

      Any portion of the Company Operating Pool not paid out (unearned) or forfeited will be added
to the SSP at Corporate.

      Each subsidiary company President may also recommend to the Eagle Materials EVP and CEO an SSP
award to recognize outstanding individual performances.

3

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