Document:

exv10w1

Exhibit 10.1

EAGLE MATERIALS INC.

SALARIED INCENTIVE COMPENSATION PROGRAM

FOR FISCAL YEAR 2009

1. Purpose

     The purpose of the Eagle Materials Inc. Salaried Incentive Compensation Program for Fiscal
Year 2009 (the “Plan”) is to establish an incentive bonus program which: (i) focuses on the
performance of Eagle Materials Inc. (the “Company”) as well as individual performance; and (ii)
aligns the interest of participants with those of the Company’s shareholders. The Plan is adopted
by the Compensation Committee of the Board of Directors (the “Committee”) under the structure of
the Company’s Incentive Plan, as amended, (the “Incentive Plan”) and is subject to all the terms
and conditions of such Incentive Plan, including, without limitation the limits set forth in
Section 8 of the Plan. The Plan shall be in effect for the fiscal year ending March 31, 2009.

2. Eligibility

     The Company’s Chief Executive Officer (the “CEO”) and his direct reports are eligible to
participate in the Plan. The CEO may also include in the Plan additional exempt salaried employees
at the corporate level of the Company.

     Participants must be an exempt salaried manager or professional. No hourly or non-exempt
employee may participate. Participants in the Plan may not participate in any other Company
incentive plan providing for monetary awards, except for the Eagle Materials Long Term Compensation
Program and the Eagle Materials Special Situation Program.

3. Bonus Pool

     To ensure reasonableness and affordability, available funds for bonus payments under the Plan
are to be determined as a percentage of earnings before interest and taxes (“EBIT”) of the Company.
The actual percentage may vary from year to year as recommend by the CEO and approved by the
Committee. For Fiscal Year 2009, 1.2% of the Company’s EBIT will fund the corporate bonus pool.

     Participants must be employed on March 31, 2009 to be eligible for any bonus award. Awards
may be adjusted for partial year participation for participants who enter the program after April
1, 2008.

4. Allocation of Corporate Pool

     At the beginning of the fiscal year goals and objectives shall be established for each
participant. The actual bonus award paid at the end of the fiscal year shall be based on the
individual participant’s performance relative to the previously established goals and objectives.
Except with respect to the CEO, each participant’s allocated percentage of the corporate pool,
his/her goals and objectives and his/her individual performance relative to the goals and
objectives (and bonus award) shall be recommended by the CEO and approved and certified by the
Committee. The CEO’s allocated percentage of the corporate pool, his/her goals and

 

 

objectives and his/her individual performance (and bonus award) shall be approved and certified by
the Committee. For each participant, the maximum annual bonus award opportunity is represented by
the percentage of the corporate pool assigned to such participant.

5. Goals and Objectives 

     The goals and objectives to be used for participants in the Plan may be comprised of objective
and subjective criteria and should generally have a broader scope than the goals and objectives for
subsidiary companies. However, at the same time the goals must also contain specific criteria
regarding execution that links subsidiary company performance to corporate performance. By way of
example and not limitation, these goals and objectives could focus on operational criteria, the
interaction between corporate and subsidiaries as a way of gauging the successful execution of
business plans, strategic execution criteria, criteria relating to shareholder alignment and
investor relations, interaction and communication with the board, performance relative to the
responsibilities associated with being publicly traded company, organizational development and
leadership skills.

6. Plan Administration

     The Plan shall be administered by the Committee, which shall have full and exclusive power to
interpret this Plan and to adopt such rules, regulations and guidelines for carrying out this Plan
as it may deem necessary or appropriate in its sole discretion. All decisions of the Committee
shall be binding and conclusive on the participants. The Committee shall determine all terms and
conditions of the bonus awards.

     No member of the Committee shall be liable for anything done or omitted to be done by him or
by any member of the Committee in connection with the performance of any duties under this Plan,
except for his own willful misconduct or as expressly provided by statute.

7. No Employment Guaranteed

     No provision of this Plan hereunder shall confer any right upon any executive officer to
continued employment.

8. Governing Law

     This Plan and all determinations made and actions taken pursuant hereto, shall be governed by
and construed in accordance with the laws of the State of Texas, without reference to any conflicts
of law principles thereof that would require the application of the laws of another jurisdiction.

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Exhibit 10.2

EAGLE MATERIALS INC.

CEMENT COMPANIES

SALARIED INCENTIVE COMPENSATION PROGRAM

FOR FISCAL YEAR 2009

1. Bonus Pool

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

     For
Fiscal Year 2009, the bonus pool for each subsidiary cement company will be equal to 2.25%
of each company’s operating profit.

     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.

2. Eligibility

     The Eagle Materials Cement EVP, the subsidiary cement company Presidents, and his/her direct
reports will be participants 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 cement company presidents subject to the approval of the Eagle Materials
Cement EVP and the 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.

     A participant 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 the Cement Companies Long Term Compensation
program, the Eagle Materials Long Term Compensation Program and the Eagle Materials Special
Situation Program.

3. Allocation of Pool

     The subsidiary cement company Presidents will be eligible for 20% — 30% of the pool funded
from their respective subsidiary company. The subsidiary cement company Presidents will recommend
the distribution of the remainder of their subsidiary company pool. The participants in the plan
and their percentage of the pool will require approval

 

 

of the Eagle Materials Cement EVP 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
	 	27	%
	Plant Manager
	 	15	%
	Vice President, Sales
	 	13	%
	Vice President, Finance
	 	9	%
	Production Manager
	 	7	%
	Maintenance Manager
	 	7	%
	Executive Vice President
	 	22	%
	 
		 	
	 
	 	 	
	Total
	 	100	%

     The subsidiary cement company President’s bonus opportunity will be 50% specific, objective
goals and 50% discretionary as determined by Eagle Materials Cement EVP taking into consideration
overall job performance and compliance with Eagle Materials Policies and Code of Ethics. 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 cement
company Presidents will determine the objective and discretionary balance of bonus opportunities
for the participants in their companies, subject to approval by Eagle Materials Cement EVP and
Eagle Materials CEO.

4. Objective Criteria

     Objective setting is essential to an effective incentive compensation plan and should be
measurable and focus on areas that have meaningful impact on our operational performance. 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 budget plan as a reference, we will consider historic
performance of a facility, equipment design standards, industry standards, comparable values from
other companies or like situations and any other qualified source or established reference points
or basis for determining performance.

     To illustrate the need for the selection of an objective, the reference point and how
performance deviation from the reference point is judged, take safety, for example. Let’s suppose
a company plans 0 lost time accidents, which is reasonable to plan. If they have 1 lost time
accident, is the performance a total failure, poor, fair or reasonable? If they have 2 lost time
accidents, is the performance unacceptable, poor, fair or reasonable? From this information it
would be difficult to assess their overall safety performance. We could give consideration to the
number of incidents requiring doctor’s treatment. We could include an evaluation of worker’s
compensation claims or dollars spent. As an alternative to these, we could use industry statistics
available from an authoritative source such as MSHA or PCA which show accident frequency and
severity ratio for comparable facilities. We could establish a mean or average as our reference
point, based on accident

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frequency and severity, and agree to a bonus adjustment according to our
percentile ranking with comparable industry.

     Another example might be the case of a kiln chain system that is allowed to deteriorate. This
would tend to lower thermal efficiency and clinker production rate, but could increase kiln
available hours because we didn’t take the necessary down time to repair the chain system. A plan
built on this premise might have TPH clinker production and BTU per ton statistics lower
than historical performance but kiln up time shown as higher. Rather than using plan as the
reference point for these criteria, we might use historical performance for TPH clinker, BTU/ton
and a combination of historical and industry average for kiln up time. The intent would be to
cause a focus on the issue of not deferring maintenance.

     Because our basic products are commodities, the level of prices in a given market area is
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.
Accordingly, 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. For
bonus purposes, they should neither be penalized nor rewarded for the general economic conditions.

     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 receivables 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.

     Typical examples for consideration:

	 	•	 	Sales

	 	•	 	Volumes, tons
	 
	 	•	 	Mill nets

	 	•	 	Gross Margins
	 
	 	•	 	Accuracy of monthly reprojections
	 
	 	•	 	Production costs
	 
	 	•	 	Terminal Expenses
	 
	 	•	 	Controlling capital projects
	 
	 	•	 	Safety
	 
	 	•	 	Housekeeping & Appearance
	 
	 	•	 	Production — Efficiency

	 	•	 	Clinker tons per hour

	 	•	 	

Cement tons per hour
	 
	 	•	 	BTU’s per ton of clinker
	 
	 	•	 	% utilization on kiln

	 	•	 	Productivity

	 	•	 	Clinker tons per year
	 
	 	•	 	Cement tons per year

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	 	•	 	Overhead Cost

	 	•	 	T & E
	 
	 	•	 	Bad debt expense

	 	•	 	Working capital —

	 	•	 	Reducing spare parts inventory
	 
	 	•	 	Receivables — stated as DSO
	 
	 	•	 	Inventory R&O, raw materials, fuel, payables or process

	 	•	 	Quality —

	 	•	 	Cement uniformity, specific product application
	 
	 	•	 	Clinker standard deviation

	 	•	 	Long-term planning

	 	•	 	Reserves
	 
	 	•	 	Environmental compliance
	 
	 	•	 	Maintenance — protection of assets

	 	•	 	Personnel

	 	•	 	Organization
	 
	 	•	 	Training
	 
	 	•	 	Replacement
	 
	 	•	 	Union relations

	 	•	 	Other profits

	 	•	 	Sale of surplus assets
	 
	 	•	 	Lease or rental income

5. Measuring Performance

     At the close of the fiscal year, each subsidiary cement company President will review the
performance of their subsidiary company versus the objectives submitted at the beginning of the
year and recommend to Eagle Materials Cement EVP distribution of the bonus pool to the
participants. Distribution of the bonus 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 Special Situation Program (the “SSP”) at Corporate.

     At any time during the fiscal year each cement company President may also recommend to the
Eagle Materials Cement EVP and CEO an SSP award to recognize outstanding individual performances.

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