Document:

TXI Annual Incentive Plans-Fiscal Year 2007

 Exhibit 10.12 
 TXI 
 ANNUAL INCENTIVE PLANS 
 FISCAL YEAR 2007 
  

	1.	Purpose 

  

	 	a)	To provide shareholders of Texas Industries, Inc. (the Company or TXI) with above-average returns. 

  

	 	b)	To encourage above-average performance and teamwork. 

  

	 	c)	To attract and retain the best employees by offering incentive awards that are high when compared to industry standards. 

  

	 	d)	To focus employee’s work on short-term results which are key to TXI’s long-term business success. 

  

	2.	Administration 

  

	 	a)	The Compensation Committee of the Board of Directors approves and interprets the Plans. 

  

	 	b)	The President and Chief Executive Officer, the Executive VP, Finance and Chief Financial Officer, the Vice President and General Counsel and the Vice Presidents of Human Resources,
Cement, Aggregates and Consumer Products, together, have the authority to add or delete acquired or divested operations to incentive plans and make adjustments to reflect the spirit and objectives of the Plan. Such changes will be reported to the
Compensation Committee of the Board of Directors. 

  

	 	c)	The Plans will be communicated to participants during the first two months of the plan year. 

  

	3.	Participation 

  

	 	a)	All TXI regular employees not included in another incentive plan (e.g. Aviation, operations/production, or sales) are eligible to participate in these incentive plans that consist
of two regional plans and a TXI plan. 

  

	 	b)	Eligible participants are those continuously employed by the Company during the performance award period or who become eligible during such period. Employees who change incentive
plan levels or eligibility during the Plan Year will have their award prorated for the applicable amount of time. 

  

	 	c)	To receive an award, a participant must be classified as a regular employee on May 31, 2007, except as noted in Section 7.d. 

  

	 	d)	The Incentive Plan Administrative Committee has the authority to lower an eligible employee’s participation in a Plan. Affected employees will be given an explanation in
writing. 

	 	e)	Participation in any incentive plan is not an employment agreement or a guarantee of employment or compensation. 

  

	 	f)	Unless otherwise determined by the Company, these plans do not cover employees of entities acquired during a plan year by the Company, or employees who are covered by collective
bargaining agreements. 

  

	4.	Return on Equity (ROE) Objective 

 The Company has
established an objective of having, over time, an average return on equity (ROE) 50% 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
employees to use the Company’s monthly accounting of operating results to calculate progress toward goal achievement. 
  

	5.	Minimum Award Hurdles 

 Regional plans are
established for various geographic regions in which the Company operates. Minimum award hurdles are set for each region. The combined result of regional performances should produce a ROE better than the U. S. manufacturing industry average of 12%.

  

	6.	ROA Calculations 

  

	 	a)	ROA award hurdles for regional plans are calculated by dividing fiscal year 2007 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. 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 fiscal year
and the end of each of the four fiscal quarters. If significant assets are added or removed during the 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 Incentive Plan Administrative Committee will make the decision as to whether an asset is
significant or profits and losses are extraordinary at the time assets are acquired, placed in service, or sold. 

  

	 	b)	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. The costs for the
regional plan awards will be included in each applicable region. 

  

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	7.	Awards 

  

	 	a)	The incentive awards will be based on a participant’s regular earnings (including overtime, but excluding earnings from incentive payments) for the fiscal year.

  

	 	b)	One region can earn an award independent of another. 

  

	 	c)	If a payment is made under any annual incentive plan, all taxes and other deductions required by law will be withheld. 

  

	 	d)	Awards will be paid if a participant in a Plan terminates employment due to death, total disability or normal retirement (age 65 or older) during the Plan year. The award will be
based upon regular earnings (as defined in paragraph (a) above) through the date of termination. 

  

	 	e)	Awards will be distributed no later than August 15th following the close of the fiscal year. 

  

	8.	TXI INCENTIVE PLANS 

  

	 	a)	TXI PLAN 

 The TXI plan covers the President and
CEO, Vice Presidents, Officers, and employees in staff functions (Information Services, Legal, Environmental, Human Resources, Brookhollow, Controller, Financial Services and Treasury, etc.) and in operating functions that cover more than one
region. 
  

	 	b)	REGIONAL PLANS 

 Regional plans cover business units
that are defined by geographic markets. Participants in a regional plan generally include managers of each operation/facility in the region and the employees in the region not included in the TXI, Operations/Production, or Sales plans. 

Regional Plans 
 -
Central   
 - Western 
  

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	 	c)	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 plans’ 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. 
  

	 	d)	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 plans’ objectives contribute to Business Unit or 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. 
  

	 	e)	Operations/Production and Sales Plans are described in this document to provide the authority for individual plan development 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. 

  

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	9.	PARTICIPATION ELIGIBILITY DEFINITIONS (TXI AND REGIONAL PLANS) 

 PARTICIPANT A 
  

	 	•	 	Non-exempt employees 

 PARTICIPANT B 
  

	 	•	 	Exempt non-supervisory employees. 

 PARTICIPANT C

  

	 	•	 	Supervisory positions in Salary Grades 11 or below. 

  

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

 PARTICIPANT D 
  

	 	•	 	All employees in Salary Grades 12 or above. 

 PARTICIPANT E 
  

	 	•	 	All officers of TXI excluding the President/CEO 

 PARTICIPANT F 
  

	 	•	 	President/CEO 

  

	10.	TXI AND REGIONAL ANNUAL INCENTIVE PLANS AWARD SCHEDULE 

 The “Base Award Percentage” for the TXI Plan is the sum of the achieved 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 6.a) as a percent of the sum of the book values of the adjusted assets of all regions. 
  

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 REGIONAL AWARD SCHEDULES 
  

					
	  
	 	 	 TXI ROA % *

	 Base Award %
	 	 Central
	 	 Western

	6 **	 	15	 	15
	8	 	16.5	 	16.5
	10 ***	 	18	 	18
	12	 	19	 	19
	14	 	20	 	20
	16	 	21	 	21
	18	 	22	 	22
	20	 	23	 	23
	22	 	24	 	24
	24	 	25	 	25
	26	 	26	 	26

	*	For achievement above those listed, add 2% to the base award percentage for each 1% increase in a Regional ROA. 

	**	Minimum Hurdle 

	***	Company Objective 

 A participant’s award amount is determined
as follows: 
  

	 	•	 	The achieved Regional ROA determines the BASE AWARD PERCENTAGE. 

  

	 	•	 	A participant’s participation eligibility (defined in Section 9) determines the AWARD MULTIPLIER shown below. The TOTAL AWARD PERCENTAGE is calculated by multiplying the
BASE AWARD PERCENTAGE by the participant’s AWARD MULTIPLIER: 

  

			
	 Participation Eligibility
	  	 Award
 Multiplier

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

  

	 	•	 	The award amount is the TOTAL AWARD PERCENTAGE multiplied by the participant’s annual regular earnings, as defined in Section 7.a. 

  

 Page 6TXI Three Year Incentive Plan, 05/31/2009

 Exhibit 10.14 
 TXI 
 THREE YEAR INCENTIVE PLAN 
 FOR THE THREE CONSECUTIVE FISCAL YEAR PERIOD 
 ENDING MAY 31, 2009

  

	1.	PURPOSE: 

 This Plan and subsequent Plans are created for
these reasons: 
  

	 	A.	To create an interest (focus) for Plan participants that mirrors the interest of the Company’s shareholders. 

  

	 	B.	Focus Plan participants on medium-term growth and profitability. 

  

	 	C.	Provide an opportunity for participants to accumulate estate building capital. 

  

	 	D.	Provide an incentive necessary to retain and recruit top-quality executives. 

  

	2.	PERFORMANCE PERIOD: 

 The three fiscal years beginning
June 1, 2006 and ending May 31, 2009. 
  

	3.	PARTICIPANTS: 

 Participants are recommended by management
and approved by the Compensation Committee of the Board of Directors. The initial participants are listed in Section 8 of this Plan document. 
  

	4.	ADMINISTRATION: 

  

	 	A.	The Compensation Committee of the Board of Directors approves and interprets this Plan. 

  

	 	B.	The President and Chief Executive Officer, the Executive Vice President, Finance and Chief Financial Officer and the Vice President of Human Resources, together, have the authority
to add or delete acquired or divested operations to incentive plans and make minor adjustments to reflect the spirit and objectives of the Plan. Such changes will be reported to the Compensation Committee of the Board of Directors.

  

	5.	MINIMUM AWARD HURDLE: 

  

	 	A.	Achievement of an award is dependent on attainment of a three (3) year consolidated average return-on-equity for the performance period (ROE) equal to or greater than fourteen
percent (14%). 

	 	B.	ROE is the average of the net income of the Company as a percentage of the average shareholders’ equity of the Company for each fiscal year in the performance period, based on
the net income and shareholders’ equity reported to shareholders in the Company’s consolidated financial statements for periods included in the performance period, rounded to the nearest one-tenth (1/10) of one percent (1%). A fiscal
year’s “average shareholders’ equity” is the average of its four (4) fiscal quarters’ shareholders’ equity. A “fiscal quarter’s shareholders’ equity” is the sum of its beginning and ending
balances divided by two. 

  

	 	C.	The minimum ROE hurdle for any future plan or performance period will be separately established by the Compensation Committee of the Board of Directors. 

  

	6.	ELIGIBILITY FOR AWARDS: 

 Awards will be paid only to
participants who meet the following eligibility requirements: 
  

	 	A.	All participants must be approved by the Compensation Committee of the Board of Directors and remain continuously employed by the Company from the time approved through the end of
the performance period. Those who are approved during the performance period will have their award pro-rated in six month increments (i. e., participation for an increment of less than six months will not be included in the calculation) for the
amount of time they participated prior to the end of the performance period, with a six (6) month minimum participation requirement for eligibility for payment of an award. 

  

	 	B.	To receive an award, a participant must be classified as a regular employee on the last day of the performance period. Participation in any incentive plan is not considered an
employment agreement or a guarantee of employment or compensation. 

  

	7.	AWARDS 

  

	 	A.	The amount of an award is based on the ROE for the Company and is calculated as a percentage of base salary on the last day of the performance period. See schedule of percentages in
Section 9. 

  

	 	B.	All taxes and other deductions required by law will be withheld. 

  

	 	C.	The Compensation Committee of the Board of Directors may elect to pay awards in cash, stock equivalent or combination of cash and stock. Notwithstanding any provision hereof to the
contrary, to the extent that Section 162(m) of the Internal Revenue Code of 1986, as amended, would limit the Company’s deduction of any portion of an award if it were paid to a participant, if such nondeductible portion exceeds $25,000,
then payment of such nondeductible portion of the award shall be deferred by the Company until 15 days after the earlier of (i) the first time the deductibility of a payment of some or all of such deferred amount will not be limited by
Section 162(m) (as reasonably determined by the Company), and (ii) the date such participant’s employment with the Company is terminated. The deferred amount will bear interest until paid at the average U.S. Treasury Bill rate for
Treasury Bills with a three month maturity (calculated as the average of such rates 

  

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 on the first day of the deferral period and at the end of each fiscal quarter during the deferral
period), and upon payment of any portion of the deferred amount the interest thereon will be paid at the same time and in the same form as the deferred amount is paid. 
  

	 	D.	No awards are earned or payments due until the awards are approved by the Compensation Committee of the Board of Directors. Awards are expected to be distributed no later
August 15 following the end of the performance period. 

  

	 	E.	Amendments and exceptions to the Plan provisions must be approved by the Compensation Committee of the Board of Directors, except as provided in Section 4.B.

  

	8.	PARTICIPANT LIST 

 The following is a list of employees
recommended and approved to participate in this Plan : 
  

			
	Mel G. Brekhus	 	President and Chief Executive Officer
	Richard M. Fowler	 	Executive VP, Finance
	Kenneth R. Allen	 	VP and Treasurer
	Frederick G. Anderson	 	VP, General Counsel & Secretary
	Barry M. Bone	 	VP, Real Estate
	J. Lynn Davis	 	VP, Cement
	William J. Durbin	 	VP, Human Resources
	George E. Eure	 	VP, Expanded Shale and Clay
	E. Leo Faciane	 	VP, Environmental Affairs
	Philip L. Gaynor	 	VP, Cement Manufacturing
	Carl Gentile	 	VP, Information Systems
	D. Randall Jones	 	VP, Communications & Governmental Affairs
	J. Michael Link	 	VP, Controller, Cement, Aggregate, & Concrete
	Stephen D. Mayfield	 	VP, Aggregates
	James R. McCraw	 	VP, Accounting & Information Services
	Michael E. Perkins	 	VP, Concrete
	Ronnie A. Pruitt	 	VP, Aggregate and Cement Marketing and Sales
	J. Barrett Reese	 	VP, Marketing, Cement, Aggregate, & Concrete
	James B. Rogers	 	VP, Consumer Products
	Thomas L. Vines	 	VP, Corporate Controller

  

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	9.	AWARD SCHEDULE 

 Three-Year Incentive Plan 
 For The Three Consecutive Fiscal Year Period 
 Ending May 31, 2009 
  

			
	 Three-Year Average ROE
	 	 Award as a % of Base Pay

	14% to less than 16%	 	50%
	16% to less than 18%	 	70%
	18% to less than 20%	 	100%
	20% and above	 	140%

 The President and Chief Executive Officer award will be double that of the
schedule’s base pay percentage. 
 Approved: 
  

					
	  
	 		  	  

	Title:	 		  	Date

  

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