Document:

exv10w1

 

Exhibit 10.1

PLEASE SIGN & RETURN

EAGLE MATERIALS INC.

INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

          This option agreement (the “Option Agreement” or “Agreement”) entered into between Eagle
Materials Inc., a Delaware corporation (the
“Company”), and
                                         (the
“Optionee”), an employee of the Company or its Affiliates, with respect to a right (the “Option”)
awarded to the Optionee under the Eagle Materials Inc. Incentive Plan, as amended and restated as
of July 27, 2004 (the “Plan”), on June 9, 2005 (the “Award Date”) to purchase from the Company up
to but not exceeding in the aggregate
                     shares of Class B Common Stock (as defined in the Plan)
at a price of $87.23 per share (the “Exercise Price”), such number of shares and such price per
share being subject to adjustment as provided in the Plan, and further subject to the following
terms and conditions:

          1. Relationship to Plan.

          This Option is subject to all of the terms, conditions and provisions of the Plan and
administrative interpretations thereunder, if any, which have been adopted by the Company’s
Compensation Committee (“Committee”) and are in effect on the date hereof. Except as defined
herein, capitalized terms shall have the same meanings ascribed to them under the Plan. For
purposes of this Option Agreement:

          (a) “Capitalization” means stockholders’ equity (as such term is reported by the Company in
its annual report to stockholders for the fiscal year ended March 31, 2006) plus Net Debt.

          (b) “Net Debt-to-Capitalization Ratio” means the ratio of: (i) Net Debt; over (ii)
Capitalization, as adjusted by the Committee in its reasonable discretion to take into account
events and circumstances not contemplated at the time of this Award.

          (c) “EBIT” for any fiscal year means the Company’s earnings before interest and taxes as
reported by the Company in its annual report to stockholders for such fiscal year, as adjusted by
the Committee in its reasonable discretion to take into account events and circumstances not
contemplated at the time of this Award.

          (d) “Net Debt” means notes payable, plus long term debt, minus cash and cash equivalents (as
such terms are reported by the Company in its annual report to stockholders for the fiscal year
ended March 31, 2006).

          (e) “Option Shares” means EBIT Option Shares (as defined below), Operational Excellence Option
Shares (as defined below), and/or Balance Sheet Improvement Option Shares, as appropriate.

1

 

          (f) “Vesting Date” means for the EBIT Option Shares (as defined below) March 31 of any given
fiscal year in which the EBIT Option Shares (as defined below) vest, if any, in accordance with
Section 2(a) and for the portion of the Option Shares subject to Sections 2(b) and 2(c), March 31,
2006.

          (g) “Vesting Period” means the period commencing on the Award Date and ending on March 31,
2008 for the portion of the Option Shares subject to Section 2(a) and March 31, 2006 for the
portion of the Option Shares subject to Sections 2(b) and 2(c).

          2. Vesting and Exercise Schedules.

          (a) EBIT Vesting Schedule.                      of the shares of Class B Common Stock covered by this Option
(the “EBIT Options Shares”) shall vest based on the trailing three year average EBIT for the three
consecutive fiscal years ending with the applicable fiscal year in accordance with the following
schedule:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	3 Year Average EBIT Targets
	 	 	at FYE (in Millions)
	Vesting	 	 	 	 	 	 
	Percentage	 	March 31, 2006	 	March 31, 2007	 	March 31, 2008
	0%
	 	less than $150.0	 	less than $180.0	 	less than $210.0
	50%
	 	$	150.0	 	 	$	180.0	 	 	$	210.0	 
	60%
	 	$	153.0	 	 	$	183.0	 	 	$	213.0	 
	70%
	 	$	156.0	 	 	$	186.0	 	 	$	216.0	 
	75%
	 	$	160.0	 	 	$	190.0	 	 	$	220.0	 
	80%
	 	$	163.0	 	 	$	193.0	 	 	$	223.0	 
	90%
	 	$	166.0	 	 	$	196.0	 	 	$	226.0	 
	100%
	 	$	170.0	 	 	$	200.0	 	 	$	230.0	 

          The exact vesting percentage attained from the vesting schedule above shall be calculated
based on straight-line interpolation between the percentages shown in the vesting schedule above
with fractional percentages rounded to the nearest tenth of one percent; provided, however, in no
event shall the EBIT Option Shares vest below fifty percent.

          If the three year average EBIT for any fiscal year subsequent to the initial fiscal year
within the Vesting Period results in a vesting percentage, the applicable percentage of EBIT Option
Shares which shall vest on the applicable Vesting Date shall equal (i) the vesting percentage
derived from the vesting schedule above for the given fiscal year end less (ii) the vesting
percentage previously attained in prior fiscal year(s), if any. At the end of the Vesting Period,
if any EBIT Option Shares remain unvested, such EBIT Option Shares shall be forfeited.

          The Optionee must be in continuous employment with the Company or any of its Affiliates or
serve as a Director from the Award Date through the Vesting Date in order for the EBIT Option
Shares to vest as provided in this Section 2(a).

          (b) Operational Excellence Vesting Schedule.                     shares of Class B Common Stock covered by
this Option (the “Operational Excellence Option Shares”)
shall vest

2

 

on March 31, 2006 based on the number of points achieved at the end of the Fiscal Year 2006
based on the Fiscal Year 2006 Operational Excellence Goals (as described in Exhibit B to
this Agreement) in accordance with the following schedule:

	 	 	 	 	 
	 	 	Percentage of Operational
	Points Achieved	 	Excellence Option Shares Vested
	100
	 	 	100	%
	94
	 	 	90	%
	88
	 	 	80	%
	82
	 	 	70	%
	76
	 	 	60	%
	70
	 	 	50	%
	64
	 	 	40	%
	58
	 	 	30	%
	52
	 	 	20	%
	46
	 	 	10	%
	40
	 	 	0	%

          The determination of the number of points achieved shall be made and approved by the
Committee. The Committee shall have the sole authority to determine the number of points achieved
for purposes of this schedule, and its determination shall be final, conclusive and binding on all
parties. The exact vesting percentage attained from the schedule shall be calculated based on
straight-line interpolation between the percentages shown in the schedule with fractional
percentages rounded to the nearest tenth of one percent. At the end of the Vesting Period, if any
Operational Excellence Option Shares remain unvested, such Operational Excellence Option Shares
shall be forfeited.

          The Optionee must be in continuous employment with the Company or any of its Affiliates or
serve as a Director from the Award Date through the Vesting Date in order for the Operational
Excellence Option Shares to vest as provided in this Section 2(b).

          (c) Balance Sheet Improvement Vesting. ___shares of the Class B Common Stock covered by
this Option (the “Balance Sheet Improvement Option Shares”) shall fully vest on March 31, 2006 if
the Company achieves a Net Debt-to-Capitalization Ratio between 0.2 and 0.45 as of March 31, 2006.
At the end of the Vesting Period, if any Balance Sheet Improvement Option Shares remain unvested,
such Balance Sheet Improvement Option Shares shall be forfeited.

          The Optionee must be in continuous employment with the Company or any of its Affiliates or
serve as a Director from the Award Date through the Vesting Date in order for the Balance Sheet
Improvement Option Shares to vest as provided in this Section 2(c).

          (d) Exercisability. One-third of the Option Shares that vest in accordance with the
provisions of Section 2(a), 2(b) or 2(c) shall become exercisable as soon as administratively
practicable following the applicable Vesting Date. The remaining two-thirds shall become
exercisable with one-third on the first anniversary of such Vesting Date and one-third on the
second anniversary of such Vesting Date.

3

 

          The Optionee must be in continuous employment with the Company or any of its Affiliates or
serve as a Director from the Award Date through the date the portion of the Option Shares would
otherwise become exercisable in order for the Option to become exercisable with respect to
additional Option Shares, otherwise such Option Shares shall be forfeited.

          To the extent the Option becomes exercisable, such Option may be exercised in whole or in part
(at any time or from time to time, except as otherwise provided herein) until expiration of the
Option pursuant to the terms of this Agreement or the Plan.

          (e) Calculations. Calculations of EBIT, the points achieved under the Operational Excellence
Goals and the Balance Sheet Improvement criteria shall be made and approved by the Committee. The
Committee shall have the sole authority to approve the calculations for purposes of the vesting
schedules, and its approval of such calculations shall be final, conclusive, and binding on all
parties.

          (f) Change in Control. This Option shall become fully vested and exercisable, without regard
to the limitations set forth in subparagraph (a), (b), (c), or (d) above, provided that the
Optionee has been in continuous employment with the Company or any of its Affiliates or served as a
Director since the Award Date, upon the occurrence of a Change in Control (as defined in
Exhibit A to this Agreement), and fully exercisable (without regard to the limitations set
forth in subparagraph (d) above) upon a Change in Control with respect to any Option Shares which
have not been theretofore forfeited, unless either (i) the Committee determines that the terms of
the transaction giving rise to the Change in Control provide that the Option is to be replaced
within a reasonable time after the Change in Control with an option of equivalent value to purchase
shares of the surviving parent corporation or (ii) the Option is to be settled in cash in
accordance with the last sentence of this subparagraph (f). Upon a Change in Control, pursuant to
Section 16 of the Plan, the Company may, in its discretion, settle the Option by a cash payment
equal to the difference between the Fair Market Value per share of Class B Common Stock on the
settlement date and the Exercise Price for the Option, multiplied by the number of shares then
subject to the Option.

          3. Termination of Option.

          The Option hereby granted shall terminate and be of no force and effect with respect to any
shares of Class B Common Stock not previously purchased by the Optionee at the earliest time
specified below:

          (a) the seventh anniversary of the Award Date;

          (b) if Optionee’s employment with the Company and its Affiliates (and service as a Director)
is terminated by the Company or a Subsidiary for “cause” (as determined by the Committee) at any
time after the Award Date, then the Option shall terminate immediately upon such termination of
Optionee’s employment;

          (c) if Optionee’s employment with the Company and its Affiliates (and service as a Director)
is terminated for any reason other than death or termination for
“cause,”

4

 

then the Option shall terminate on the first business day following the expiration of the
90-day period beginning on the date of termination of Optionee’s employment; or

          (d) if Optionee’s employment with the Company and its Affiliates (and service as a Director)
is terminated due to the death of the Optionee at any time after the Award Date and while in the
employ of the Company or its Affiliates or within 90 days after termination of such employment then
the Option shall terminate on the first business day following the expiration of the one-year
period which began on the date of Optionee’s death.

          In the event the Option remains exercisable for a period of time following the date of
termination of Optionee’s employment, the Option may be exercised during such period of time only
to the extent it was exercisable as provided in Section 2 on such date of termination of Optionee’s
employment. The portion of the Option not exercisable upon termination shall terminate and be of
no force and effect upon the date of the Optionee’s termination of employment.

          4. Exercise of Option.

          Subject to the limitations set forth herein and in the Plan, this Option may be exercised by
notice provided to the Company as set forth in Section 5. The payment of the Exercise Price for
the Class B Common Stock being purchased pursuant to the Option shall be made (a) in cash, by check
or cash equivalent, (b) by tender to the Company, or attestation to the ownership, of Common Stock
owned by the Optionee having a Fair Market Value (as determined by the Company without regard to
any restrictions on transferability applicable to such Common Stock by reason of federal or state
securities laws or agreements with an underwriter for the Company) not less than the Exercise
Price, (c) by delivery of a properly executed notice together with irrevocable instructions to a
broker providing for the assignment to the Company of the proceeds of a sale or loan with respect
to some or all of the shares being acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of Regulation T as promulgated from
time to time by the Board of Governors of the Federal Reserve System), (d) by such other
consideration as may be approved by the Board from time to time to the extent permitted by
applicable law, or (e) by any combination thereof. Such notice shall be accompanied by cash or
Common Stock in the full amount of all federal and state withholding or other employment taxes
applicable to the taxable income of such Participant resulting from such exercise (or instructions
to satisfy such withholding obligation by withholding Option Shares in accordance with Section 8).
For the purpose of determining the amount, if any, of the purchase price satisfied by payment in
Common Stock, such Common Stock shall be valued at its Fair Market Value on the date of exercise.

          If the Optionee desires to pay the purchase price for the Option Shares by tendering Common
Stock using the method of attestation, the Optionee may, subject to any such conditions and in
compliance with any such procedures as the Committee may adopt, do so by attesting to the ownership
of Common Stock of the requisite value, in which case the Company shall issue or otherwise deliver
to the Optionee upon such exercise a number of Option Shares equal to the result obtained by
dividing (a) the excess of the aggregate Fair Market Value of the total number shares of Class B
Common Stock subject to the Option for which the Option (or

5

 

portion thereof) is being exercised over the purchase price payable in respect of such
exercise by (b) the Fair Market Value per Option Share subject to the Option, and the Optionee may
retain the shares of Common Stock the ownership of which is attested.

          Notwithstanding anything to the contrary contained herein, the Optionee agrees that he will
not exercise the Option granted pursuant hereto, and the Company will not be obligated to issue any
Option Shares pursuant to this Option Agreement, if the exercise of the Option or the issuance of
such shares would constitute a violation by the Optionee or by the Company of any provision of any
law or regulation of any governmental authority or any stock exchange or transaction quotation
system. The Optionee agrees that, unless the options and shares covered by the Plan have been
registered pursuant to the Securities Act of 1933, as amended (the “Act”), the Company may, at its
election, require the Optionee to give a representation in writing in form and substance
satisfactory to the Company to the effect that he is acquiring such shares for his own account for
investment and not with a view to, or for sale in connection with, the distribution of such shares
or any part thereof.

          If any law or regulation requires the Company to take any action with respect to the shares
specified in such notice, the time for delivery thereof, which would otherwise be as promptly as
reasonably practicable, shall be postponed for the period of time necessary to take such action.

          5. Notices.

          Notice of exercise of the Option must be made in the following manner, using such forms as the
Company may from time to time provide:

          (a) by electronic means as designated by the Committee, in which case the date of exercise
shall be the date when receipt is acknowledged by the Company;

          (b) by registered or certified United States mail, postage prepaid, to Eagle Materials Inc.,
Attention: Secretary, 3811 Turtle Creek, Suite 1100, Dallas, Texas 75219, in which case the date of
exercise shall be the date of mailing; or

          (c) by hand delivery or otherwise to Eagle Materials Inc., Attention: Secretary, 3811 Turtle
Creek, Suite 1100, Dallas, Texas 75219, in which case the date of exercise shall be the date when
receipt is acknowledged by the Company.

          Notwithstanding the foregoing, in the event that the address of the Company is changed prior
to the date of any exercise of this Option, notice of exercise shall instead be made pursuant to
the foregoing provisions at the Company’s current address.

          Any other notices provided for in this Agreement or in the Plan shall be given in writing or
by such electronic means, as permitted by the Committee, and shall be deemed effectively delivered
or given upon receipt or, in the case of notices delivered by the Company to the Optionee, five
days after deposit in the United States mail, postage prepaid, addressed to the Optionee at the
address specified at the end of this Agreement or at such other address as the Optionee hereafter
designates by written notice to the Company.

6

 

          6. Assignment of Option.

          Except as otherwise permitted by the Committee, the rights of the Optionee under the Plan and
this Award Agreement are personal; no assignment or transfer of the Optionee’s rights under and
interest in this Option may be made by the Optionee otherwise than by will, by beneficiary
designation, by the laws of descent and distribution or by a qualified domestic relations order;
and this Option is exercisable during his lifetime only by the Optionee.

          After the death of the Optionee, exercise of the Option shall be permitted only by the
Optionee’s executor or the personal representative of the Optionee’s estate (or by his assignee, in
the event of a permitted assignment) and only to the extent that the Option was exercisable on the
date of the Optionee’s death.

          7. Stock Certificates.

          Certificates representing the Class B Common Stock issued pursuant to the exercise of the
Option will bear all legends required by law and necessary or advisable to effectuate the
provisions of the Plan and this Option. The Company may place a “stop transfer” order against
shares of the Class B Common Stock issued pursuant to the exercise of this Option until all
restrictions and conditions set forth in the Plan or this Agreement and in the legends referred to
in this Section 7 have been complied with.

          8. Withholding.

          No certificates representing shares of Class B Common Stock purchased hereunder shall be
delivered to or in respect of an Optionee unless the amount of all federal, state and other
governmental withholding tax requirements imposed upon the Company with respect to the issuance of
such shares of Class B Common Stock has been remitted to the Company or unless provisions to pay
such withholding requirements have been made to the satisfaction of the Committee. The Committee
may make such provisions as it may deem appropriate for the withholding of any taxes which it
determines is required in connection with this Option. The Optionee may pay all or any portion of
the taxes required to be withheld by the Company or paid by the Optionee in connection with the
exercise of all or any portion of this Option by delivering cash, or, with the Committee’s
approval, by electing to have the Company withhold shares of Class B Common Stock, or by delivering
previously owned shares of Common Stock, having a Fair Market Value equal to the amount required to
be withheld or paid. The Optionee must make the foregoing election on or before the date that the
amount of tax to be withheld is determined.

          9. Shareholder Rights.

          The Optionee shall have no rights of a shareholder with respect to shares of Class B Common
Stock subject to the Option unless and until such time as the Option has been exercised and
ownership of such shares of Class B Common Stock has been transferred to the Optionee.

7

 

          10. Successors and Assigns.

          This Agreement shall bind and inure to the benefit of and be enforceable by the Optionee, the
Company and their respective permitted successors and assigns (including personal representatives,
heirs and legatees), except that the Optionee may not assign any rights or obligations under this
Agreement except to the extent and in the manner expressly permitted herein.

          11. No Employment Guaranteed.

          No provision of this Option Agreement shall confer any right upon the Optionee to continued
employment with the Company or any Subsidiary.

          12. Governing Law.

          This Option Agreement shall be governed by, construed and enforced in accordance with the laws
of the State of Texas.

          13. Amendment.

          This Agreement cannot be modified, altered or amended except by an agreement, in writing,
signed by both the Company and the Optionee.

	 	 	 	 	 	 	 
	 	 	 	 	EAGLE MATERIALS INC.
	 
	Date:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	Name:
	 	Steven R. Rowley
	 

	 	 	 	Title:
	 	President and CEO

          The Optionee hereby accepts the foregoing Option Agreement, subject to the terms and
provisions of the Plan and administrative interpretations thereof referred to above.

	 	 	 	 	 
	 

	 	 	 	OPTIONEE:
	Date:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Optionee’s Address:
	 

	 	 	 	Eagle Materials Inc.
	 

	 	 	 	3811 Turtle Creek Blvd #1100
	 

	 	 	 	Dallas, TX 75219

8

 

Exhibit A

Change in Control

          For the purpose of this Agreement, a “Change of Control” shall mean the occurrence of any of
the following events:

          (a) The acquisition by any Person of beneficial ownership of securities of the Company
(including any such acquisition of beneficial ownership deemed to have occurred pursuant to Rule
13d-5 under the Exchange Act) if, immediately thereafter, such Person is the beneficial owner of
(i) 50% or more of the total number of outstanding shares of any single class of Company Common
Stock or (ii) 40% or more of the total number of outstanding shares of all classes of Company
Common Stock, unless such acquisition is made (a) directly from the Company in a transaction
approved by a majority of the members of the Incumbent Board or (b) by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation controlled by the
Company;

          (b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (or who is otherwise designated as a member of the
Incumbent Board by such a vote) shall be considered as though such individual were a member of the
Incumbent Board, except that any such individual shall not be considered a member of the Incumbent
Board if his or her initial assumption of office occurs as a result of either an actual or
threatened election contest (as such term is 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;

          (c) The consummation of a Business Combination, unless, immediately following such Business
Combination, (i) more than 50% of both the total number of then outstanding shares of common stock
of the parent corporation resulting from such Business Combination and the combined voting power of
the then outstanding voting securities of such parent corporation entitled to vote generally in the
election of directors will be (or is) then beneficially owned, directly or indirectly, by all or
substantially all of the Persons who were the beneficial owners, respectively, of the outstanding
shares of Company Common Stock immediately prior to such Business Combination in substantially the
same proportions as their ownership immediately prior to such Business Combination of the
outstanding shares of Company Common Stock, (ii) no Person (other than any employee benefit plan
(or related trust) of the Company or any corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 40% or more of the total number of then outstanding
shares of common stock of the corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such corporation entitled to vote
generally in the election of directors and (iii) at least a majority of the members of the board of
directors of the parent corporation resulting from such Business Combination were members of the
Incumbent Board immediately prior to the consummation of such Business Combination; or

1

 

          (d) Approval by the Board and the shareholders of the Company of (i) a complete liquidation or
dissolution of the Company or (ii) a Major Asset Disposition (or, if there is no such approval by
shareholders, consummation of such Major Asset Disposition) unless, immediately following such
Major Asset Disposition, (A) Persons that were beneficial owners of the outstanding shares of
Company Common Stock immediately prior to such Major Asset Disposition beneficially own, directly
or indirectly, more than 50% of the total number of then outstanding shares of common stock and the
combined voting power of the then outstanding shares of voting stock of the Company (if it
continues to exist) and of the Acquiring Entity in substantially the same proportions as their
ownership immediately prior to such Major Asset Disposition of the outstanding shares of Company
Common Stock; (B) no Person (other than any employee benefit plan (or related trust) of the Company
or such entity) beneficially owns, directly or indirectly, 40% or more of the then outstanding
shares of common stock or the combined voting power of the then outstanding voting securities of
the Company (if it continues to exist) and of the Acquiring Entity entitled to vote generally in
the election of directors and (C) at least a majority of the members of the Board of the Company
(if it continues to exist) and of the Acquiring Entity were members of the Incumbent Board at the
time of the execution of the initial agreement or action of the Board providing for such Major
Asset Disposition.

          For purposes of the foregoing,

     (i) the term “Person” means an individual, entity or group;

     (ii) the term “group” is used as it is defined for purposes of Section
13(d)(3) of the Exchange Act;

     (iii) the terms “beneficial owner”, “beneficially ownership” and
“beneficially own” are used as defined for purposes of Rule 13d-3 under the
Exchange Act;

     (iv) the term “Business Combination” means (x) a merger, consolidation
or share exchange involving the Company or its stock or (y) an acquisition
by the Company, directly or through one or more subsidiaries, of another
entity or its stock or assets;

     (v) the term “Company Common Stock” shall mean the Common Stock, par
value $.01 per share, of the Company and the Class B Common Stock, par value
$.01 per share, of the Company (or, if the context requires, shall mean
either such class);

     (vi) the term “Exchange Act” means the Securities Exchange Act of 1934,
as amended.

     (vii) the phrase “parent corporation resulting from a Business
Combination” means the Company if its stock is not acquired or converted in
the Business Combination and otherwise means the entity which as a result of
such Business Combination owns the Company or all or substantially all of
the Company’s assets either directly or through one or more subsidiaries;

2

 

     (viii) the term “Major Asset Disposition” means the sale or other
disposition in one transaction or a series of related transactions of 50% or
more of the assets of the Company and its subsidiaries on a consolidated
basis; and any specified percentage or portion of the assets of the Company
shall be based on fair market value, as determined by a majority of the
members of the Incumbent Board;

     (ix) the term “Acquiring Entity” means the entity that acquires the
largest portion of the assets sold or otherwise disposed of in a Major Asset
Disposition (or the entity, if any, that owns a majority of the outstanding
voting stock of such acquiring entity entitled to vote generally in the
election of directors or members of a comparable governing body); and

     (x) the phrase “substantially the same proportions,” when used with
reference to ownership interests in the parent corporation resulting from a
Business Combination or in an Acquiring Entity, means substantially in
proportion to the number of shares of Company Common Stock beneficially
owned by the applicable Persons immediately prior to the Business
Combination or Major Asset Disposition, but is not to be construed in such a
manner as to require that the same ratio or number of shares of such parent
corporation or Acquiring Entity be issued, paid or delivered in exchange for
or in respect of the shares of each class of Company Common Stock.

3

 

Exhibit B

Eagle Materials Inc.

FY 2006 Operational Excellence Goals

Gypsum Companies

	1.  	(20 pts) Goal related to combined annual average 1/2” Eagleroc (#1 MSF/Net hour)

	2.  	(20 pts) Goal related to combined annual average 5/8” Firebloc (#1 MSF/Net hour)

	3.  	(15 pts) Goal related to combined annual plant efficiencies

	4.  	(20 pts) Goal related to the commencement of the Georgetown facility by fiscal year end.

	5.  	(10 pts) Goal related to current and potential synthetic sources for gypsum in North America.

	6.  	(5 pts) Develop a plan to maximize the payload on all outbound trucks and rail cars of gypsum
wallboard.

	7.  	(5 pts) Goal related to additional gypsum reserves for the Duke facility.

Cement Companies

	8.  	(20 pts) Goal related to combined annual average type I/II clinker production rate.

	9.  	(15 pts) Goal related to combined annual average kiln utilization (based on 8760 available hours).

	10.  	(10 pts) Goal related to timely completion of construction of the 80,000 ton dome for the Illinois Cement
expansion project within budget.

	11.  	(20 pts) Goal realted to the Illinois Cement expansion project being on budget and on timeline.

	12.  	(10 pts) Continue to develop project echo:

	13.  	(5 pts) Goal related to additional limestone reserves for Illinois Cement.

Paperboard Company

14. (15 pts) Goal related to net winder tons/calendar day

	15.  	(15 pts) Goal related to annual 54” gypsum facing paper sales.

	16.  	(10 pts) Goal related to quality returns and allowances $  per ton.

	17.  	(5 pts) Goal related to new boiler completion.

Concrete and Aggregates Companies

	18.  	(10 pts) Goal related to new mining equipment for Western
Aggregates.

	19.  	(10 pts) Goal related to CER proposal to increase production
capacity at Centex Materials Buda quarry.

Safety — All Companies

	20.  	(20 pts) Goal related to safety.

Total 260 pts

The number of points to be used in Section 2(b) to determine the vesting percentage shall be the
total number of points achieved under this Exhibit B (as determined by the Committee in accordance
of this Agreement with Section 2(b) hereof) divided by 2.6.

1exv10w2

 

Exhibit 10.2

PLEASE SIGN & RETURN

EAGLE MATERIALS INC.

INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

          This restricted stock unit agreement (the “Restricted Stock Unit Agreement” or “Agreement”)
entered into between Eagle Materials Inc., a Delaware corporation (the “Company”), and
                                        
(the “Grantee”), an employee of the Company or its Affiliates, with respect to a
right (the “Award”) of
                     restricted stock units (“Restricted Stock Units”) representing
shares of Class B Common Stock (as defined in the Eagle Materials Inc. Incentive Plan, as amended
and restated as of July 27, 2004 (the “Plan”)) granted to the Grantee under the Plan on June 9,
2005 (the “Award Date”), such number of units subject to adjustment as provided in the Plan, and
further subject to the following terms and conditions:

          1. Relationship to Plan.

          This Award is subject to all of the terms, conditions and provisions of the Plan and
administrative interpretations thereunder, if any, which have been adopted by the Company’s
Compensation Committee (“Committee”) and are in effect on the date hereof. Except as defined
herein, capitalized terms shall have the same meanings ascribed to them under the Plan. For the
purposes of this Restricted Stock Unit Agreement:

          (a) “Capitalization” means stockholders’ equity (as such term is reported by the Company in
its annual report to stockholders for the fiscal year ended March 31, 2006) plus Net Debt.

          (b) “Net Debt-to-Capitalization Ratio” means the ratio of: (i) Net Debt; over (ii)
Capitalization, as adjusted by the Committee in its reasonable discretion to take into account
events and circumstances not contemplated at the time of this Award.

          (c) “EBIT” for any fiscal year means the Company’s earnings before interest and taxes as
reported by the Company in its annual report to stockholders for such fiscal year, as adjusted by
the Committee in its reasonable discretion to take into account events and circumstances not
contemplated at the time of this Award.

          (d) “Net Debt” means notes payable, plus long term debt, minus cash and cash equivalents (as
such terms are reported by the Company in its annual report to stockholders for the fiscal year
ended March 31, 2006).

          (e) “Vesting Date” means for EBIT RSUs March 31 of any given fiscal year in which EBIT RSUs
(as defined below) vest, if any, in accordance with Section 2(a) and, for Operational Excellence
RSUs (as defined below) and Balance Sheet Improvement RSUs (as defined below), March 31, 2006.

1

 

          (f) “Vesting Period” means the period commencing on the Award Date and ending on March 31,
2008 for the portion of the Award subject to Section 2(a) and March 31, 2006 for the portions of
the Award subject to Sections 2(b) and 2(c).

          2. Vesting and Payment.

          (a)
EBIT Vesting Schedule.                      Restricted Stock Units of the Award (the “EBIT RSUs”) shall
vest based on the trailing three year average EBIT for the three consecutive fiscal years ending
with the applicable fiscal year in accordance with the following schedule:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	3 Year Average EBIT Targets
	 	 	at FYE (in Millions)
	Vesting	 	 	 	 	 	 
	Percentage	 	March 31, 2006	 	March 31, 2007	 	March 31, 2008
	0%
	 	less than $150.0	 	less than $180.0	 	less than $210.0
	50%
	 	$	150.0	 	 	$	180.0	 	 	$	210.0	 
	60%
	 	$	153.0	 	 	$	183.0	 	 	$	213.0	 
	70%
	 	$	156.0	 	 	$	186.0	 	 	$	216.0	 
	75%
	 	$	160.0	 	 	$	190.0	 	 	$	220.0	 
	80%
	 	$	163.0	 	 	$	193.0	 	 	$	223.0	 
	90%
	 	$	166.0	 	 	$	196.0	 	 	$	226.0	 
	100%
	 	$	170.0	 	 	$	200.0	 	 	$	230.0	 

          The exact vesting percentage attained from the vesting schedule above shall be calculated
based on straight-line interpolation between the percentages shown in the vesting schedule above
with fractional percentages rounded to the nearest tenth of one percent; provided, however, in no
event shall the EBIT RSUs vest below fifty percent.

          If the three year average EBIT for any fiscal year subsequent to the initial fiscal year
within the Vesting Period results in a vesting percentage, the applicable percentage of EBIT RSUs
which shall vest on the applicable Vesting Date shall equal (i) the vesting percentage derived from
the vesting schedule above for the given fiscal year end less (ii) the vesting percentage
previously attained in prior fiscal year(s), if any. At the end of the Vesting Period, if any EBIT
RSUs remain unvested, such EBIT RSUs shall be forfeited.

          The Grantee must be in continuous employment with the Company or any of its Affiliates or
serve as a Director from the Award Date through the Vesting Date in order for the EBIT RSUs to vest
as provided in this Section 2(a).

          (b)
Operational Excellence Vesting Schedule. ___ Restricted Stock Units of the Award (the
“Operational Excellence RSUs”) shall vest on the Vesting Date based on the number of points
achieved at the end of Fiscal Year 2006 based on the Fiscal Year 2006 Operational Excellence Goals
(as described in Exhibit B to this Agreement) in accordance with the following schedule:

2

 

	 	 	 	 	 
	Points	 	Percentage of Operational
	Achieved	 	Excellence RSUs Vested
	100
	 	 	100	%
	94
	 	 	90	%
	88
	 	 	80	%
	82
	 	 	70	%
	76
	 	 	60	%
	70
	 	 	50	%
	64
	 	 	40	%
	58
	 	 	30	%
	52
	 	 	20	%
	46
	 	 	10	%
	40
	 	 	0	%

          The determination of the number of points achieved shall be made and approved by the
Committee. The Committee shall have the sole authority to determine the number of points achieved
for purposes of this schedule, and its determination shall be final, conclusive and binding on all
parties. The exact vesting percentage attained from the schedule shall be calculated based on
straight-line interpolation between the percentages shown in the schedule with fractional
percentages rounded to the nearest tenth of one percent. At the end of the Vesting Period, if any
Operational Excellence RSUs remain unvested, such Operational Excellence RSUs shall be forfeited.

          The Grantee must be in continuous employment with the Company or any of its Affiliates or
serve as a Director from the Award Date through the Vesting Date in order for the Operational
Excellence RSUs to vest as provided in this Section 2(b).

          (c)
Balance Sheet Improvement Vesting. ___ Restricted Stock Units (the “Balance Sheet
Improvement RSUs”) shall fully vest on March 31, 2006 if the Company achieves a Net
Debt-to-Capitalization Ratio between 0.2 and 0.45 as of March 31, 2006. At the end of the Vesting
Period, if any Balance Sheet Improvement RSUs remain unvested, such Balance Sheet Improvement RSUs
shall be forfeited.

          The Grantee must be in continuous employment with the Company or any of its Affiliates or
serve as a Director from the Award Date through the Vesting Date in order for the Balance Sheet
Improvement RSUs to vest as provided this Section 2(c).

          (d) Payment. One-third of the Restricted Stock Units that vest in accordance with the
provisions of Section 2(a), 2(b) or 2(c) shall become payable as soon as administratively
practicable following the applicable Vesting Date. The remaining two-thirds shall become payable
one-third on the first anniversary of such Vesting Date and one-third on the second anniversary of
such Vesting Date.

          The Grantee must be in continuous employment with the Company or any of its Affiliates or
serve as a Director from the Award Date through the date the portion of the Award would otherwise
become payable in order for the portion of the Award to become
payable with

3

 

respect to additional Restricted Stock Units, otherwise such portion of the Award shall be
forfeited.

          (e) Calculations. Calculations of EBIT, the points achieved under the Operational Excellence
Goals and the Balance Sheet Improvement criteria shall be made and approved by the Committee. The
Committee shall have the sole authority to approve the calculations for purposes of the vesting
schedules, and its approval of such calculations shall be final, conclusive, and binding on all
parties.

          (f) Change in Control. This Award shall become fully vested and payable without regard to the
limitations set forth in subparagraph (a), (b), (c) or (d) above, provided that the Grantee has
been in continuous employment with the Company or any of its Affiliates or served as a Director
since the Award Date, upon the occurrence of a Change in Control (as defined in Exhibit A
to this Agreement), and fully payable (without regard to the limitations set forth in subparagraph
(d) above or any elections made pursuant to Section 5 below) upon a Change in Control with respect
to any Restricted Stock Units which have not been theretofore forfeited, unless either (i) the
Committee determines that the terms of the transaction giving rise to the Change in Control provide
that the Award is to be replaced within a reasonable time after the Change in Control with an award
of equivalent value of shares of the surviving parent corporation or (ii) the Award is to be
settled in cash in accordance with the last sentence of this subparagraph (f). Upon a Change in
Control, pursuant to Section 16 of the Plan, the Company may, in its discretion, settle the Award
by a cash payment that the Committee shall determine in its sole discretion is equal to the fair
market value of the Award on the date of such event.

          3. Forfeiture of Award.

          Except as provided in any other agreement between the Grantee and the Company, if the
Grantee’s employment terminates, all unvested and vested (but not yet payable) Restricted Stock
Units, and all Dividend Equivalent Amounts (as defined in Section 4) attributable thereto, as of
the termination date shall be forfeited.

          4. Dividend Equivalent Payments.

          During the period of time between the Award Date and the earlier of the date the Restricted
Stock Units are paid or settled, the Restricted Stock Units will be evidenced by book entry
registration. As of each date that dividends are paid with respect to Class B Common Stock after
the end of the applicable Vesting Period, the Grantee shall have a number of additional Restricted
Stock Units credited to his or her account with respect to such dividends. The additional
Restricted Stock Units credited with respect to such dividends shall be equal to: (i) the amount of
the dividend paid per share of Class B Common Stock as of such dividend payment date multiplied by
the number of Restricted Stock Units credited to the Grantee’s account immediately prior to such
dividend payment date; divided by (ii) the Fair Market Value of the Class B Common Stock on such
dividend payment date.

          5. Timing and Form of Payment.

          The Grantee may elect on or before September 30, 2005 to receive the Award at a time permitted
in and pursuant to an election form, subject to such terms and conditions set forth

4

 

in such form, as prescribed by the Committee (“Election Form”). The Grantee may timely elect
to further defer receipt of the Award in such time and manner, if any, as prescribed by the
Committee in its sole and absolute discretion.

          Notwithstanding anything herein to the contrary including the Grantee’s election pursuant to
the Election Form, the Company reserves the right to pay the value of the vested Restricted Stock
Units, to the extent not yet paid, to the Grantee in the form of shares of Class B Common Stock or
an equivalent cash payment at any time following vesting of the Award.

          6. Delivery of Shares.

          The Company shall not be obligated to deliver any shares of Class B Common Stock if counsel to
the Company determines that such sale or delivery would violate any applicable law or any rule or
regulations of any governmental authority or any rule or regulation of, or agreement of the Company
with, any securities exchange or association upon which the Class B Common Stock is listed or
quoted. The Company shall in no event be obligated to take any affirmative action in order to
cause the delivery of shares of Class B Common Stock to comply with any such law, rule, regulations
or agreement.

          7. Notices.

          Notice or other communication to the Company with respect to this Award must be made in the
following manner, using such forms as the Company may from time to time provide:

          (a) by electronic means as designated by the Committee;

          (b) by registered or certified United States mail, postage prepaid, to Eagle Materials Inc.,
Attention: Secretary, 3811 Turtle Creek Blvd, Suite 1100, Dallas, Texas 75219; or

          (c) by hand delivery or otherwise to Eagle Materials Inc., Attention: Secretary, 3811 Turtle
Creek Blvd, Suite 1100, Dallas, Texas 75219.

          Notwithstanding the foregoing, in the event that the address of the Company is changed, any
such notice shall instead be made pursuant to the foregoing provisions at the Company’s current
address.

          Any notices provided for in this Restricted Stock Unit Agreement or in the Plan shall be given
in writing or by such electronic means, as permitted by the Committee, and shall be deemed
effectively delivered or given upon receipt or, in the case of notices delivered by the Company to
the Grantee, five days after deposit in the United States mail, postage prepaid, addressed to the
Grantee at the address specified at the end of this Agreement or at such other address as the
Grantee hereafter designates by written notice to the Company.

5

 

          8. Assignment of Award.

          Except as otherwise permitted by the Committee, the Grantee’s rights under the Plan and this
Restricted Stock Unit Agreement are personal; no assignment or transfer of the Grantee’s rights
under and interest in this Award may be made by the Grantee other than by will, by beneficiary
designation, by the laws of descent and distribution or by a qualified domestic relations order;
and this Award is payable only to the Grantee during his lifetime.

          After the death of the Grantee, payment of the Award shall be permitted only to the Grantee’s
executor or the personal representative of the Grantee’s estate (or by his assignee, in the event
of a permitted assignment) and only to the extent that the Award was payable on the date of the
Grantee’s death.

          9. Stock Certificates.

          Certificates representing the Class B Common Stock issued pursuant to the Award will bear all
legends required by law and necessary or advisable to effectuate the provisions of the Plan and
this Award. The Company may place a “stop transfer” order against shares of the Class B Common
Stock issued pursuant to this Award until all restrictions and conditions set forth in the Plan or
this Agreement and in the legends referred to in this Section 9 have been complied with.

          10. Withholding.

          No certificates representing shares of Class B Common Stock awarded hereunder shall be
delivered to or in respect of an Grantee unless the amount of all federal, state and other
governmental withholding tax requirements imposed upon the Company with respect to the issuance of
such shares of Class B Common Stock has been remitted to the Company or unless provisions to pay
such withholding requirements have been made to the satisfaction of the Committee. The Committee
may make such provisions as it may deem appropriate for the withholding of any taxes which it
determines is required in connection with this Award. The Grantee may pay all or any portion of
the taxes required to be withheld by the Company or paid by the Grantee in connection with this
Award by delivering cash, or, with the Committee’s approval, by electing to have the Company
withhold shares of Class B Common Stock, or by delivering previously owned shares of Common Stock,
having a Fair Market Value equal to the amount required to be withheld or paid. The Grantee must
make the foregoing election on or before the date that the amount of tax to be withheld is
determined.

          11. Shareholder Rights.

          The Grantee shall have no rights of a shareholder with respect to shares of Class B Common
Stock subject to the Award unless and until such time as the Award has been paid pursuant to
Section 5 and shares of Class B Common Stock have been transferred to the Grantee.

          12. Successors and Assigns.

          This Agreement shall bind and inure to the benefit of and be enforceable by the Grantee, the
Company and their respective permitted successors and assigns (including personal

6

 

representatives, heirs and legatees), except that the Grantee may not assign any rights or
obligations under this Agreement except to the extent and in the manner expressly permitted herein.

          13. No Employment Guaranteed.

          No provision of this Restricted Stock Unit Agreement shall confer any right upon the Grantee
to continued employment with the Company or any Affiliate.

          14. Governing Law.

          This Restricted Stock Unit Agreement shall be governed by, construed, and enforced in
accordance with the laws of the State of Texas.

          15. Amendment.

          This Agreement cannot be modified, altered or amended except by an agreement, in writing,
signed by both the Company and the Grantee.

	 	 	 	 	 	 	 
	 	 	 	 	EAGLE MATERIALS INC.
	 
	Date:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	Name:
	 	Steven R. Rowley
	 

	 	 	 	Title:
	 	President and CEO

          The Grantee hereby accepts the foregoing Restricted Stock Unit Agreement, subject to the terms
and provisions of the Plan and administrative interpretations thereof referred to above.

	 	 	 	 	 
	 

	 	 	 	GRANTEE:
	Date:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Grantee’s Address:
	 

	 	 	 	Eagle Materials Inc.
	 

	 	 	 	3811 Turtle Creek Blvd. #1100
	 

	 	 	 	Dallas, TX 75219

7

 

Exhibit A

Change in Control

          For the purpose of this Agreement, a “Change of Control” shall mean the occurrence of any of
the following events:

          (a) The acquisition by any Person of beneficial ownership of securities of the Company
(including any such acquisition of beneficial ownership deemed to have occurred pursuant to Rule
13d-5 under the Exchange Act) if, immediately thereafter, such Person is the beneficial owner of
(i) 50% or more of the total number of outstanding shares of any single class of Company Common
Stock or (ii) 40% or more of the total number of outstanding shares of all classes of Company
Common Stock, unless such acquisition is made (a) directly from the Company in a transaction
approved by a majority of the members of the Incumbent Board or (b) by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation controlled by the
Company;

          (b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (or who is otherwise designated as a member of the
Incumbent Board by such a vote) shall be considered as though such individual were a member of the
Incumbent Board, except that any such individual shall not be considered a member of the Incumbent
Board if his or her initial assumption of office occurs as a result of either an actual or
threatened election contest (as such term is 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;

          (c) The consummation of a Business Combination, unless, immediately following such Business
Combination, (i) more than 50% of both the total number of then outstanding shares of common stock
of the parent corporation resulting from such Business Combination and the combined voting power of
the then outstanding voting securities of such parent corporation entitled to vote generally in the
election of directors will be (or is) then beneficially owned, directly or indirectly, by all or
substantially all of the Persons who were the beneficial owners, respectively, of the outstanding
shares of Company Common Stock immediately prior to such Business Combination in substantially the
same proportions as their ownership immediately prior to such Business Combination of the
outstanding shares of Company Common Stock, (ii) no Person (other than any employee benefit plan
(or related trust) of the Company or any corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 40% or more of the total number of then outstanding
shares of common stock of the corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such corporation entitled to vote
generally in the election of directors and (iii) at least a majority of the members of the board of
directors of the parent corporation resulting from such Business Combination

1

 

were members of the Incumbent Board immediately prior to the consummation of such Business
Combination; or

          (d) Approval by the Board and the shareholders of the Company of (i) a complete liquidation or
dissolution of the Company or (ii) a Major Asset Disposition (or, if there is no such approval by
shareholders, consummation of such Major Asset Disposition) unless, immediately following such
Major Asset Disposition, (A) Persons that were beneficial owners of the outstanding shares of
Company Common Stock immediately prior to such Major Asset Disposition beneficially own, directly
or indirectly, more than 50% of the total number of then outstanding shares of common stock and the
combined voting power of the then outstanding shares of voting stock of the Company (if it
continues to exist) and of the Acquiring Entity in substantially the same proportions as their
ownership immediately prior to such Major Asset Disposition of the outstanding shares of Company
Common Stock; (B) no Person (other than any employee benefit plan (or related trust) of the Company
or such entity) beneficially owns, directly or indirectly, 40% or more of the then outstanding
shares of common stock or the combined voting power of the then outstanding voting securities of
the Company (if it continues to exist) and of the Acquiring Entity entitled to vote generally in
the election of directors and (C) at least a majority of the members of the Board of the Company
(if it continues to exist) and of the Acquiring Entity were members of the Incumbent Board at the
time of the execution of the initial agreement or action of the Board providing for such Major
Asset Disposition.

          For purposes of the foregoing,

     (i) the term “Person” means an individual, entity or group;

     (ii) the term “group” is used as it is defined for purposes of
Section 13(d)(3) of the Exchange Act;

     (iii) the terms “beneficial owner”, “beneficially ownership” and
“beneficially own” are used as defined for purposes of Rule 13d-3 under
the Exchange Act;

     (iv) the term “Business Combination” means (x) a merger,
consolidation or share exchange involving the Company or its stock or (y)
an acquisition by the Company, directly or through one or more
subsidiaries, of another entity or its stock or assets;

     (v) the term “Company Common Stock” shall mean the Common Stock, par
value $.01 per share, of the Company and the Class B Common Stock, par
value $.01 per share, of the Company (or, if the context requires, shall
mean either such class);

     (vi) the term “Exchange Act” means the Securities Exchange Act of
1934, as amended.

2

 

     (vii) the phrase “parent corporation resulting from a Business
Combination” means the Company if its stock is not acquired or converted
in the Business Combination and otherwise means the entity which as a
result of such Business Combination owns the Company or all or
substantially all of the Company’s assets either directly or through one
or more subsidiaries;

     (viii) the term “Major Asset Disposition” means the sale or other
disposition in one transaction or a series of related transactions of 50%
or more of the assets of the Company and its subsidiaries on a
consolidated basis; and any specified percentage or portion of the assets
of the Company shall be based on fair market value, as determined by a
majority of the members of the Incumbent Board;

     (ix) the term “Acquiring Entity” means the entity that acquires the
largest portion of the assets sold or otherwise disposed of in a Major
Asset Disposition (or the entity, if any, that owns a majority of the
outstanding voting stock of such acquiring entity entitled to vote
generally in the election of directors or members of a comparable
governing body); and

     (x) the phrase “substantially the same proportions,” when used with
reference to ownership interests in the parent corporation resulting from
a Business Combination or in an Acquiring Entity, means substantially in
proportion to the number of shares of Company Common Stock beneficially
owned by the applicable Persons immediately prior to the Business
Combination or Major Asset Disposition, but is not to be construed in such
a manner as to require that the same ratio or number of shares of such
parent corporation or Acquiring Entity be issued, paid or delivered in
exchange for or in respect of the shares of each class of Company Common
Stock.

3

 

Exhibit B

Eagle Materials Inc.

FY 2006 Operational Excellence Goals

Gypsum Companies

	1.  	(20 pts) Goal related to combined annual average 1/2” Eagleroc (#1 MSF/Net hour)

	2.  	(20 pts) Goal related to combined annual average 5/8” Firebloc (#1 MSF/Net hour)

	3.  	(15 pts) Goal related to combined annual plant efficiencies

	4.  	(20 pts) Goal related to the commencement of the Georgetown facility by fiscal year end.

	5.  	(10 pts) Goal related to current and potential synthetic sources for gypsum in North America.

	6.  	(5 pts) Develop a plan to maximize the payload on all outbound trucks and rail cars of gypsum
wallboard.

	7.  	(5 pts) Goal related to additional gypsum reserves for the Duke facility.

Cement Companies

	8.  	(20 pts) Goal related to combined annual average type I/II clinker production rate.

	9.  	(15 pts) Goal related to combined annual average kiln utilization (based on 8760 available hours).

	10.  	(10 pts) Goal related to timely completion of construction of the 80,000 ton dome for the Illinois Cement
expansion project within budget.

	11.  	(20 pts) Goal realted to the Illinois Cement expansion project being on budget and on timeline.

	12.  	(10 pts) Continue to develop project echo:

	13.  	(5 pts) Goal related to additional limestone reserves for Illinois Cement.

Paperboard Company

14. (15 pts) Goal related to net winder tons/calendar day

	15.  	(15 pts) Goal related to annual 54” gypsum facing paper sales.

	16.  	(10 pts) Goal related to quality returns and allowances $  per ton.

	17.  	(5 pts) Goal related to new boiler completion.

Concrete and Aggregates Companies

	18.  	(10 pts) Goal related to new mining equipment for Western
Aggregates.

	19.  	(10 pts) Goal related to CER proposal to increase production
capacity at Centex Materials Buda quarry.

Safety — All Companies

	20.  	(20 pts) Goal related to safety.

Total 260 pts

The number of points to be used in Section 2(b) of this Agreement to determine the vesting
percentage shall be the total number of points achieved under this Exhibit B (as determined by this
Committee in accordance with Section 2(b) hereof) divided by 2.6.

1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}]]