Document:

exv10w20

 

Exhibit 10.20

STOCKHOLDERS AGREEMENT

OF

STANDARD AERO ACQUISITION HOLDINGS, INC.

          THIS STOCKHOLDERS AGREEMENT (this “Agreement”) is entered into as of this 22nd day of
December, 2004, by and among Standard Aero Acquisition Holdings, Inc., a Delaware corporation (the
“Company”), Carlyle Partners III, L.P., a Delaware limited partnership (the “Principal
Stockholder”), the Persons listed on Exhibit A hereto (each individually, a
“Management Stockholder,” and collectively, the “Management Stockholders”). These
parties are sometimes referred to herein individually by name or as a “Party” and together
as the “Parties”. The Principal Stockholder, together with (i) any Affiliate (as defined
below) of the Principal Stockholder that is a subsequent transferee of any shares of common stock,
par value $0.01 per share, of the Company (“Common Stock”) and (ii) any Affiliates of the
Principal Stockholder to which the Company may hereafter issue shares of Common Stock, in each
case, that executes a copy of this Agreement are sometimes collectively referred to herein as the
“Acquiring Stockholder”. For purposes of this Agreement, “Affiliate” shall mean,
with respect to any individual, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature (each, a “Person”), any other Person directly
or indirectly controlling, controlled by, or under common control with, such Person where “control”
shall have the meaning given such term under Rule 405 of the Securities Act of 1933, as amended
(the “Act”), “Operating Affiliate” shall mean any Affiliate of the Principal
Stockholder which is an operating company.

RECITALS

          WHEREAS, each of the Management Stockholders is an employee, executive officer or director of
the Company or one or more subsidiaries of the Company;

          WHEREAS, the Company has issued (or may hereafter issue) to each Management Stockholder shares
of Common Stock as a result of (i) the exercise by the Management Stockholder of vested options to
purchase shares of Common Stock, which options may be issued to the Management Stockholder on or
after the date hereof pursuant to the Stock Option and Purchase Plan of Standard Aero Acquisition
Holdings, Inc. (“Stock Option Plan”); and any Stock Option Agreement (as such term is
defined in the Stock Option Plan) granted thereunder (any such options, the “Options”) (ii)
the purchase of shares of Common Stock by the Management Stockholders on or around the date hereof
at a per share purchase price equal to U.S. $100.00 (the “Initial Investment Price”)
pursuant to the Stock Option Plan and any Subscription and Purchase Agreement entered into by and
between the Company and any Management Stockholder (a “Subscription Agreement”); or (iii)
any other purchase of Common Stock by any Management Stockholder; and

          WHEREAS, the Company, the Principal Stockholder and the Management Stockholders desire to
enter into this Agreement to provide for certain matters with respect to the ownership and transfer
by the Management Stockholders of the shares of Common Stock now or hereafter issued or sold to any
Management Stockholders as a result of the (i) the purchase of Common Stock by the Management
Stockholders from the Company or any Acquiring Stockholder; (ii) the exercise of Options; or (iii)
any other issuance of Common Stock to the

 

 

Management Stockholders (collectively, the “Restricted Shares”). Any terms not
otherwise defined herein shall have the meaning set forth in the Stock Option Plan.

AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing and the mutual agreements set forth herein,
and other good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:

     Section 1. Restrictions on Transfers.

          (a) Except as otherwise expressly permitted by Section 1(b) or otherwise under this Agreement,
the Management Stockholders shall not sell, assign, transfer, convey, pledge or otherwise dispose
of (collectively, “Transfer”) any Restricted Shares. Any purported Transfer in violation
of the provisions of this Section 1 shall be null and void and shall have no force or effect.

          (b) Nothing in Section 1(a) shall prevent the Transfer of any Restricted Shares by any
Management Stockholder who is not established, resident or domiciled in The Netherlands to any of
that Management Stockholder’s spouse, children or trusts for their benefit provided the Management
Stockholder retains the sole and exclusive right to vote and dispose of any Restricted Shares
transferred to the family member or trust; or (ii) by any Management Stockholder, upon a Management
Stockholder’s death, to the Management Stockholder’s executors, administrators, testamentary
trustees, legatees and beneficiaries; or (iii) by any Management Stockholder to any other
Management Stockholder; provided, however, that any Transfer of Restricted Shares pursuant to this
Section 1(b)(iii) shall be subject to the provisions of Section 1(d).

          (c) Each Management Stockholder agrees that, as a condition precedent to any transfer
described in Section 1(b), each transferee described in Section 1(b) (other than the Company, the
Principal Stockholder or any Affiliate of each) shall deliver to the Company a copy of this
Agreement signed by such transferee together with such other documentation as may be reasonably
requested by the Company.

          (d) Prior to a Transfer of Restricted Shares pursuant to Section 1(b)(iii), the Management
Stockholder transferring the Restricted Shares (the
“Management Transferor”) shall give
written notice thereof (the “Offering Notice”) to the Principal Stockholder, setting forth
the number and type of Restricted Shares it desires to sell (the “Offered Shares”) and the
price and the other terms and conditions relating to such proposed sale. The Principal Stockholder
shall have the right, within the twenty (20) business day period following the date on which the
Offering Notice shall have been given (the “Option Period”), to purchase all of the Offered
Shares at the price and on the other terms and conditions as set forth in the Offering Notice. In
the event the Principal Stockholder elects not to purchase the Offered Shares, upon the expiration
of the Option Period, the Management Transferor may Transfer the Offered Shares to any other
Management Stockholder at the price and on the other terms and conditions as set forth in the
Offering Notice. For the avoidance of doubt, in no event shall the Principal

D-2

 

Stockholder be permitted to pay a price that is greater than the Fair Market Value of the
Offered Shares.

     Section 2. Bring-Along Rights.

          (a) If any Acquiring Stockholder at any time, or from time to time, in one transaction or a
series of related transactions, proposes to Transfer shares of Common Stock to one or more Persons
that is (i) not an Affiliate of such Acquiring Stockholder or (ii) is an Operating Affiliate (for
such purposes an Operating Affiliate will not be deemed to be an Affiliate) (both (i) and (ii)
being a “Third Party Purchaser”), then the Acquiring Stockholder(s) shall have the right (a
“Bring-Along Right”), but not the obligation, and subject to the provision of Section 2(e)
below, to require each Management Stockholder to tender for purchase to the Third Party Purchaser,
on the same terms and conditions as apply to the selling Acquiring Stockholder(s), all or any
portion of a number of shares of Common Stock and Options (including any Options that vest as a
result of the consummation of the Transfer to the Third Party Purchaser) that, in the aggregate,
equal the lesser of (A) the number derived by multiplying (1) the total number of shares of Common
Stock owned by the Management Stockholder (including shares of Common Stock issuable in respect of
all Options held by any Management Stockholder, whether or not exercised, and including any Options
that vest as a result of the consummation of the Transfer to the Third Party Purchaser); by (2) a
fraction, the numerator of which is the total number of shares of Common Stock to be sold by the
Acquiring Stockholder(s) in connection with the transaction or series of related transactions and
the denominator of which is the total number of the then outstanding shares of Common Stock held by
all Acquiring Stockholder(s); or (B) the number of shares of Common Stock as the Acquiring
Stockholder(s) shall designate in the Bring-Along Notice (as defined below); provided, however, all
Bring-Along Rights will be exercised on a pro rata basis among the Management Stockholders based
upon their relative holdings of Common Stock and Options.

          (b) If any Acquiring Stockholder elects to exercise its Bring-Along Right under this Section 2
with respect to the Restricted Shares held by the Management Stockholders and/or Options held by
the Management Stockholders, the Acquiring Stockholder shall notify each Management Stockholder in
writing (collectively, the “Bring-Along Notices”). Each Bring-Along Notice shall set
forth: (i) the name of the Third Party Purchaser(s) and the number of shares of Common Stock
proposed to be sold by the Acquiring Stockholder to the Third Party Purchaser(s); (ii) the proposed
amount and form of consideration and terms and conditions of payment offered by the Third Party
Purchaser(s) and a summary of any other material terms pertaining to the Transfer (“Third
Party Terms”); and (iii) the number of shares of Common Stock and Options that the
Acquiring Stockholder elects each Management Stockholder to sell in the Transfer. The Bring-Along
Notices shall be given at least five (5) days before the closing of the proposed Transfer.

          (c) Upon the giving of a Bring-Along Notice, each Management Stockholder shall be obligated to
sell the number of shares of Common Stock and Options set forth in each Management Stockholder’s
Bring-Along Notice on the Third Party Terms.

          (d) At the closing of the Transfer to any Third Party Purchaser(s) pursuant to this Section 2,
the Third Party Purchaser(s) shall remit to the Management Stockholder the consideration for the
Common Stock and Options held by the Management Stockholder sold

D-3

 

pursuant hereto minus any consideration to be escrowed or otherwise held back in
accordance with the Third Party Terms, and minus the aggregate exercise price of any
Options being Transferred by the Management Stockholder to the Third Party Purchaser(s), against
delivery by the Management Stockholder of certificates for Common Stock, duly endorsed for Transfer
or with duly executed stock powers and an instrument evidencing the transfer or the cancellation of
the Options subject to the Bring-Along Right reasonably acceptable to the Company, and the
compliance by the Management Stockholder with any other conditions to closing generally applicable
to the Acquiring Stockholder(s) and all other holders of Common Stock selling shares in such
transaction.

          (e) Notwithstanding any of the foregoing, if the Management Stockholder is established,
resident or domiciled in The Netherlands (a “Netherlands Management Stockholder”), neither
the Common Stock nor Options held by any such Management Stockholder shall be subject to the
Bring-Along Right set forth in this Section 2 unless and until the Third Party Purchaser holds,
directly or indirectly, at least a majority of the equity ownership and the voting rights of the
Common Stock.

     Section 3. Tag-Along Rights.

          (a) In the event that, at any time prior to the date on which the Company consummates a sale
of shares of Common Stock in an initial public offering of shares of Common Stock registered
pursuant to the Securities Act of 1933, as amended, the Acquiring Stockholder proposes to Transfer
shares of Common Stock to a Third Party Purchaser, in a single Transfer or a series of related
Transfers constituting a Company Sale (as defined in Section 3(f) below) then each Management
Stockholder shall have the right, subject to Section 3(e) below (the “Tag-Along Right”) to
require that the proposed Third Party Purchaser purchase from such Management Stockholder up to the
number of whole shares of Common Stock (including any Restricted Shares issuable upon the exercise
of Options that are vested as of the date of such Transfer, including any Options that vest as a
result of the consummation of the Transfer to the Third Party Purchaser (collectively, the
“Vested Options”)) equal to the number derived by multiplying (x) the total number of
shares of Common Stock that the proposed Third Party Purchaser has agreed or committed to purchase,
by (y) a fraction, the numerator of which is the total number of shares of Common Stock
(including shares of Common Stock issuable upon exercise of Vested Options) owned by the
Management Stockholder, and the denominator of which is the aggregate number of shares of Common
Stock owned by all Acquiring Stockholders, the Management Stockholder and all other holders of
Common Stock or Options (whether or not vested). The intent of this computation is to accord to
the Management Stockholder the right to sell the same percentage of its holdings of Common Stock as
the Acquiring Stockholder are entitled to sell in such a transaction. Any shares of Common Stock
and Options purchased from the Management Stockholder pursuant to this Section 3(a) shall be
purchased upon the same terms and conditions as such proposed Transfer by the selling Acquiring
Stockholder(s).

          (b) The Acquiring Stockholder(s) shall notify each Management Stockholder in writing in the
event such Acquiring Stockholder(s) propose to make a Transfer or series of Transfers giving rise
to the Tag-Along Right at least ten (10) business days prior to the date on which such Acquiring
Stockholder(s) expect to consummate such Transfer (the “Sale Notice”) which notice shall specify
the number of shares of Common Stock which the Third Party

D-4

 

Purchaser intends to purchase in such Transfer. The Tag-Along Right may be exercised by any
Management Stockholder by delivery of a written notice to the Acquiring Stockholder proposing to
sell Restricted Shares (the “Tag-Along Notice”) within ten (10) business days following
receipt of the Sale Notice from such Acquiring Stockholder(s). The Tag-Along Notice shall state
the number of shares of Common Stock and Options that the Management Stockholder proposes to
include in such Transfer to the proposed Third Party Purchaser (not to exceed the number as
determined above). In the event that the proposed Third Party Purchaser does not purchase the
specified number of shares of Common Stock and Options from the Management Stockholder on the same
terms and conditions as specified in the Sale Notice, then the Acquiring Stockholder(s) shall not
be permitted to sell any shares of Common Stock to the proposed Third Party Purchaser unless the
Acquiring Stockholder(s) purchase from the Management Stockholder such specified number of
Restricted Shares and Options on the same terms and conditions as specified in such Sale Notice.

          (c) At the closing of the Transfer to any Third Party Purchaser pursuant to this Section 3,
the Third Party Purchaser shall remit to each Management Stockholder who exercised his Tag-Along
Right the consideration for the Common Stock and Vested Options held by the Management Stockholder
and sold pursuant hereto minus any consideration to be escrowed or otherwise held back in
accordance with the Third Party Terms, and minus the aggregate exercise price of such
Vested Options, against delivery by the Management Stockholder of certificates for Common Stock,
duly endorsed for Transfer or with duly executed stock powers and an instrument evidencing the
transfer or the cancellation of the Options subject to the Tag-Along Right reasonably acceptable to
the Company, and the compliance by the Management Stockholder with any other conditions to closing
generally applicable to the Acquiring Stockholder(s) and all other holders of Common Stock selling
shares in such transaction.

          (d) At the closing of the Transfer to any Third Party Purchaser pursuant to this Section 3,
any amounts remitted to each Management Stockholder in respect of his Vested Options and/or Common
Stock, as applicable, shall be net of any withholding and employment taxes required by such
payments.

          (e) Notwithstanding any of the foregoing, if the Management Stockholder is a Netherlands
Management Stockholder, such Management Stockholder shall not be permitted to exercise any of the
rights set forth in this Section 3 unless and until the Third Party Purchaser holds, directly or
indirectly, at least a majority of the equity ownership and the voting rights of the Common Stock.

          (f) “Company Sale” shall mean (i) the consummation of any transaction or series of
transactions pursuant to which one or more persons or entities or group of persons or entities
(other than the Principal Stockholder, Acquiring Stockholder, or any transfer thereto as a result
of any liquidation or dissolution of any Principal Stockholder) acquires capital stock of the
Company (or its successors) possessing the voting power sufficient to elect a majority of the
members of the Board of Directors of the Company or its successor(s) (whether such transaction is
effected by merger, consolidation, recapitalization, sale or transfer of the Company’s capital
stock or otherwise) or (ii) any Liquidity Event (as such term is defined in the Stock Option Plan).

D-5

 

     Section 4. Rights to Repurchase Shares of Management Stockholders.

          (a) Following the Termination of Employment or the Termination of Directorship of any
Management Stockholder, the Company may elect, but shall not be required, to repurchase or (for
Management Stockholders other than Netherlands Management Stockholders only, to require a designee)
to purchase all or any portion of (i) the Options held by any Management Stockholders that are not
Canadian Management Stockholders (as such term is defined below) that are vested as of the date of
such termination or that are otherwise subject to vesting after such termination and/or (ii) shares
of Common Stock acquired upon the exercise of any Options or otherwise pursuant to the execution of
a Subscription Agreement (the Options and shares described in clauses (i) and (ii) herein,
collectively, the “Repurchased Securities”) held by such Management Stockholder or his or
her successor in interest thereunder (“Call Right”). In accordance with the terms of each
Stock Option Agreement, any Options that are not vested or not subject to vesting after the date of
any Termination of Employment or Termination of Directorship shall then terminate without payment
for such Options. For purposes of this Agreement, the term “Canadian Management
Stockholder” shall mean an Management Stockholder that is established, resident or domiciled in
Canada or who otherwise pays income taxes under the laws of Canada.

          (b) The Company may exercise its Call Right for a period of six (6) months following the later
of (i) the Termination of Employment or the Termination of Directorship or (ii) with respect to
Options that vest after the date of Termination of Employment or Termination of Directorship the
date on which such Options vest. Any Call Right as described herein shall be exercised by written
notice (“Call Notice”) to the Management Stockholder given in accordance with Section 9(g) of this
Agreement on or prior to the last date on which the Call Right may be exercised by the Company.
Notwithstanding the foregoing, there shall be no right to repurchase a Management Stockholder’s
Repurchased Securities if there occurs a Termination of Directorship but such holder continues to
be employed by the Company.

          (c) The repurchase price payable by the Company or (for Management Stockholders who are not
Netherlands Management Stockholders) its designee upon exercise of the Call Right (the
“Repurchase Price”) shall be as follows:

          (i) in the event of any Termination of Employment or Termination of Directorship by the
Company or any of its Subsidiaries, as applicable, other than for Cause (as such term is
defined in the Stock Option Agreement of the Management Stockholder) or due to the
Management Stockholder’s death or Disability (as such term is defined in the Stock Option
Agreement of the Management Stockholder), (x) for any Repurchased Securities that are shares
of Common Stock, the Fair Market Value (as such term is defined in Section 4(f) below) of
such shares on the date the Call Notice is issued and (y) for any Repurchased Securities
that are Options, the excess, if any, of the Fair Market Value of the shares of Common Stock
subject to such Options over the aggregate Option Price (as such term is defined in the
Stock Option Agreement of the Management Stockholder) of such Options; and

          (ii) in the event of any Termination of Employment or Termination of Directorship by
the Company or any of its Subsidiaries, as applicable, for Cause or by the Management
Stockholder for any reason other than due to his or her death or Disability,

D-6

 

(x) for any Repurchased Securities that are shares of Common Stock, the lesser of (A)
the Fair Market Value of such shares on the date the Call Notice is issued and (B) the
aggregate price paid for such shares by the Management Stockholder (whether based on the
Option Price or the Initial Investment Price, as applicable), and (y) for any Repurchased
Securities that are Options, to the extent such Options are not exercised by the Management
Stockholder within the period of exercisability provided in the Stock Option Agreement, the
repurchase price shall be zero and such Options shall automatically terminate without
payment by the Company or its designee therefor.

Any amounts paid to the Management Stockholder hereunder in respect of any Repurchased Securities
that are Options shall be net of any withholding and employment taxes applicable to such payments.

          (d) The repurchase of Repurchased Securities pursuant to the exercise of a Call Right shall
take place on the later of (i) the date specified by the Company which shall in no event be later
than sixty (60) days following the date of the Call Notice and (ii) within ten (10) days following
the receipt by the Company of all necessary governmental approvals. On such date, the Management
Stockholder shall transfer or cancel the Option and transfer the shares of Common Stock subject to
the Call Notice to the Company or (for Management Stockholders who are not Netherlands Management
Stockholders) its designee, free and clear of all liens and encumbrances, by delivering to the
Company an instrument evidencing the transfer or cancellation of the Options subject to the Call
Notice and the certificates representing the shares of Common Stock to be purchased, duly endorsed
for transfer to the Company or (for Management Stockholders who are not Netherlands Management
Stockholders) its designee or accompanied by a stock power duly executed in blank, the Company or
(for Management Stockholders who are not Netherlands Management Stockholders) its designee shall
pay to the Management Stockholder the Repurchase Price, and, in the event of a purchase by a
designee of the Company (for Management Stockholders who are not Netherlands Management
Stockholders), the designee shall pay the Company the aggregate exercise price of any Options
purchased upon the exercise thereof. The Company and the Management Stockholder each shall use
his, her or its reasonable efforts to expedite all proceedings contemplated hereunder to obtain a
determination of the Repurchase Price of the Repurchased Securities at the earliest practicable
date.

          (e) (i) In the case of any transfer of title or beneficial ownership of the Repurchased
Securities upon default, foreclosure, forfeit, divorce, court order or otherwise, other than by a
voluntary decision on the part of a Management Stockholder (each, an “Involuntary
Transfer”), the Management Stockholder shall promptly (but in no event later than two (2) days
after the Involuntary Transfer) furnish written notice (the “Involuntary Transfer Notice”) to the
Company indicating that the Involuntary Transfer has occurred, specifying the name of the person to
whom the Repurchased Securities were transferred (the “Involuntary Transferee”), giving a
detailed description of the circumstances giving rise to, and stating the legal basis for, the
Involuntary Transfer.

               (ii) Upon the receipt of the Involuntary Transfer Notice, and for sixty (60) days thereafter,
the Company shall have the right to elect to repurchase or to cause (for Management Stockholders
who are not Netherlands Management Stockholders) its designee to purchase, and the Involuntary
Transferee shall have the obligation to sell, all (but not less than

D-7

 

all) of the Repurchased Securities acquired by the Involuntary Transferee for a repurchase
price equal to the sum of the Fair Market Value of shares of Common Stock as of the date of the
Involuntary Transfer and the Fair Market Value, as of the date of the Involuntary Transfer, of the
Common Stock issuable upon the exercise of the Options acquired by the Involuntary Transferee
reduced by the aggregate exercise price of such Options (the “Involuntary Transfer Repurchase
Price” and such right, the “Involuntary Transfer Repurchase Right”). The Involuntary
Transfer Repurchase Right shall be exercised by written notice (the “Involuntary Transfer
Repurchase Notice”) to the Involuntary Transferee given in accordance with Section 9(g) of this
Agreement on or prior to the last date on which the Involuntary Transfer Repurchase Right may be
exercised by the Company.

               (ii) The repurchase of the Repurchased Securities pursuant to the exercise of the Involuntary
Transfer Repurchase Right shall take place on the later of (i) the date specified by the Company
which shall in no event be later than sixty (60) days following the date of the Involuntary
Transfer Repurchase Notice and (ii) within ten (10) days following the receipt by the Company of
all necessary governmental approvals. On such date, the Involuntary Transferee shall cancel or
transfer the Options acquired by the Involuntary Transferee and transfer the Shares of Common Stock
subject to the Involuntary Transfer Repurchase Notice to the Company or (for Management
Stockholders who are not Netherlands Management Stockholders) its designee, free and clear of all
liens and encumbrances, by delivering to the Company an instrument evidencing the transfer or
cancellation of the Options subject to the Involuntary Transfer Repurchase Notice and the
certificates representing the Shares to be purchased, duly endorsed for transfer to the Company or
(for Management Stockholders who are not Netherlands Management Stockholders) its designee or
accompanied by a stock power duly executed in blank, the Company or (for Management Stockholders
who are not Netherlands Management Stockholders) its designee shall pay to the Involuntary
Transferee the Involuntary Transfer Repurchase Price, and, in the event of a purchase by a (for
Management Stockholders who are not Netherlands Management Stockholders) designee of the Company,
the designee shall pay the Company the aggregate exercise price of any Options purchased upon the
exercise thereof. The Company and the Involuntary Transferee each shall use his, her or its
reasonable efforts to expedite all proceedings contemplated hereunder to obtain a determination of
the Involuntary Transfer Repurchase Price of the Restricted Shares at the earliest practicable
date.

          (f) The Fair Market Value of Common Stock shall be determined by the Board as set forth in
Section 4.3(a) of the Stock Option Plan, as follows:

          (i) if the Common Stock is listed on one or more National Securities Exchanges (within
the meaning of the Securities Exchange Act of 1934, as amended), each share of Common Stock
to be repurchased shall be valued at the average closing price of a share of such class of
Common Stock on the principal exchange on which the Restricted Shares are then trading, on
the twenty (20) trading days immediately preceding such date;

          (ii) if the Common Stock is not traded on a National Securities Exchange but is quoted
on the NASDAQ Stock Market or a successor quotation system and the Common Stock is listed as
a National Market Issue under the NASD National Market System, each share of Common Stock to
be repurchased shall be valued at the average of the last sales price on each of the twenty
(20) trading days immediately

D-8

 

preceding such date as reported by the NASDAQ Stock Market or such successor quotation
system; or

          (iii) if the Common Stock is not publicly traded on a National Securities Exchange and
is not quoted on the NASDAQ Stock Market or a successor quotation system, the Fair Market
Value of the Common Stock to be repurchased shall be determined in good faith by the
compensation committee of the Board, subject to approval of such determination by the Board
in good faith.

     Section 5. Cooperation with Company Sale.

          (a) In the event that (i) the Board approves any transaction that constitutes a Company Sale
or (ii) one or more Acquiring Stockholders notify the Management Stockholders that one or more
Acquiring Stockholder intends to effect a transaction that constitutes a Company Sale through the
exercise of the rights set forth in Section 2 or 3 hereof, each Management Stockholder shall, to
the extent the Acquiring Stockholder is exercising Bring-Along Rights or the Management Stockholder
is exercising Tag-Along Rights, consent to and raise no objections in respect of such transaction,
and if such transaction is structured as a sale of stock, each Management Stockholder shall take
all actions that the Board of Directors or the Acquiring Stockholder reasonably deem necessary or
desirable in connection with the consummation of such transaction. Without limiting the generality
of the foregoing, each Management Stockholder agrees to (A) consent to and raise no objections
against such transaction; (B) execute any purchase agreement, merger agreement or other agreement
entered into with the Third Party Purchaser with respect to such transaction setting forth the
Third Party Terms and any ancillary agreement with respect thereto; (C) vote the Common Stock held
by the Management Stockholder in favor of such transaction; and (D) refrain from the exercise of
dissenters’ appraisal rights with respect to such transaction.

          (b) If the Company or the holders of the Company’s securities enter into any negotiation or
transaction for which Rule 506 (or any similar rule then in effect) promulgated under the Act, may
be available with respect to the negotiation or transaction (including a merger, consolidation, or
other reorganization), each Management Stockholder shall, if requested by the Company, appoint a
purchaser representative (as defined in Rule 501 of the Act) reasonably acceptable to the Company.
If the purchaser representative is designated by the Company, the Company shall pay the fees of the
purchaser representative, but if any Management Stockholder appoints another purchaser
representative, the Management Stockholder shall be responsible for the fees of the purchaser
representative so appointed.

          (c) Upon the exercise of its Tag-Along Rights, each Management Stockholder shall bear its
pro-rata share of the costs of any transaction in which it sells Restricted Shares or Options
(based upon the number of Restricted Shares and Options held by the Management Stockholder that are
sold in such transaction) to the extent such costs are incurred for the benefit of all holders of
Common Stock and Options and are not otherwise paid by the Company or the acquiring party.

          (d) Notwithstanding any of the foregoing, if the Management Stockholder is a Netherlands
Management Stockholder, such Management Stockholder shall not be required to take any of the
actions set forth in this Section 5 unless and until the earlier of (i) the date the

D-9

 

Third Party Purchaser holds, directly or indirectly, at least a majority of the equity
ownership and the voting rights of the Common Stock or (ii) the date that the Company’s Netherlands
legal counsel advises is permissible under applicable securities laws.

     Section 6. Confidentiality Provisions.

          (a) Each Management Stockholder acknowledges, represents, and agrees that: (i) the Company’s
financial statements and any other Confidential Information (as defined below) that the Company
may, in its sole discretion, furnish to the Stockholders contain confidential, proprietary, and
material nonpublic information about the Company; (ii) it shall keep the Confidential Information
and all information therein secret and confidential; (iii) it shall hold same in accordance with
its customary procedures, if any, for handling confidential information on investments; (iv) it
shall not disclose the Confidential Information or any information therein to anyone except (A) to
its Affiliates (that do not compete with, or engage in any of the same businesses as, the Company),
officers, directors, employees, agents or advisors, who are directly involved in the administration
of its stockholding in the Company, all of whom must be advised of and agree to adhere to the terms
of this Section 6, (B) as required by law, or (C) as requested or required by any provincial,
state, federal, national or foreign authority or examiner regulating banks or banking or claiming
to have the authority to regulate banks or banking; (v) it shall be responsible for any breach of
the terms of this Section 6 committed to anyone to whom it disclosed the Confidential Information
or any information therein; (vi) it shall not use the Confidential Information or any information
therein for any purpose other than for appropriate purposes in connection with its stockholding in
the Company; and (vii) in the event of any breach of the terms of this Section 6, the Company shall
be entitled to specific performance and/or injunctive relief (without bond) as a remedy for any
such breach, in addition to all other remedies available at law or in equity, and shall be entitled
to reimbursement of all legal fees and litigation expenses incurred in enforcing the terms of this
Section 6.

          (b) Definitions. For purposes of this Agreement, the term “Confidential
Information” shall mean all non-public information concerning trade secret, know-how, software,
developments, inventions, processes, technology, designs, the financial data, strategic business
plans or any proprietary or confidential information, documents or materials in any form or media,
including any of the foregoing relating to research, operations, finances, current and proposed
products and services, vendors, customers, advertising and marketing, and other non-public,
proprietary, and confidential information of the Restricted Group, and the term “Restricted
Group” shall mean, collectively, the Company, its Subsidiaries, CP III, the Principal
Stockholders, the members of the Principal Stockholders, and their respective Affiliates.

     Section 7. Termination. This Agreement shall terminate immediately following the
consummation of the first occurrence of a Liquidity Event.

     Section 8. Restrictive Covenants.

          (a) Restrictive Covenants. Unless the Management Stockholder is subject to covenants,
which are similar nature to the covenants set forth below in this Section 8(a), pursuant to any
employment agreement entered into by and between the Management Stockholder and any of the Company
or its Subsidiaries (in which case such covenants shall apply and this Section 8(a) shall not
apply), then the Management Stockholder shall be subject to the following:

D-10

 

          (i) Non-Competition. In consideration of the Company entering into this
Agreement with the Management Stockholder, the Management Stockholder hereby agrees
effective as of the date of this Agreement, without the Company’s prior written consent, the
Management Stockholder shall not, directly or indirectly, at any time during the Management
Stockholder’s employment with the Company or its Subsidiaries and for one year thereafter,
directly or indirectly be engaged in or have financial interest (other than an ownership
position of less than 5% in any company whose shares are publicly traded or any non-voting
non-convertible debt securities in any company) in any business which competes with any
business of the Company or any of its Subsidiaries and in any geographical location in which
the Company or any of its Subsidiaries conducts business or, to the Management Stockholder’s
best knowledge, has taken concrete steps towards conducting such business.

          (ii) Non-Solicitation. In consideration of the Company entering into this
Agreement with the Management Stockholder, the Management Stockholder hereby agrees
effective as of the date of this Agreement, without the Company’s prior written consent, the
Management Stockholder shall not, directly or indirectly, at any time during the Management
Stockholder’s employment with the Company or its Subsidiaries and for one year thereafter,
directly or indirectly (i) solicit customers or clients of the Company or any of its
Subsidiaries to terminate their relationship with the Company or any of its Subsidiaries or
otherwise solicit such customers or clients to compete with any business of the Company or
any of its Subsidiaries or (ii) solicit or offer employment to any person who has been
employed by the Company or any of its Subsidiaries at any time during the twelve months
immediately preceding the termination of the Management Stockholder’s employment.

          (b) Enforceability of Restrictive Covenants. Notwithstanding above, if at any time a
court holds that the restrictions stated in Section 6 or Section 8(a) are unreasonable or otherwise
unenforceable under circumstances then existing, the parties hereto agree that the maximum period,
scope or geographic area determined to be reasonable under such circumstances by such court will be
substituted for the stated period, scope or area. Because the Management Stockholder’s services
are unique and because the Management Stockholder has had access to Confidential Information, the
parties hereto agree that money damages will be an inadequate remedy for any breach of this
Agreement. In the event of a breach or threatened breach of this Agreement, the Company or its
successors or assigns may, in addition to other rights and remedies existing in their favor, apply
to any court of competent jurisdiction for specific performance and/or injunctive relief in order
to enforce, or prevent any violations of, the provisions hereof (without the posting of a bond or
other security).

     Section 9. Miscellaneous.

          (a) Legends. Each certificate representing the Restricted Shares shall bear the
following legends:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES
LAWS OF ANY STATE, PROVINCE OR OTHER JURISDICTION AND MAY NOT BE

D-11

 

SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND/OR SAID LAWS OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS THEREOF.”

“THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN THE STOCKHOLDERS
AGREEMENT BETWEEN THE ISSUER, CARLYLE PARTNERS III, L.P., THE INITIAL HOLDER
HEREOF AND OTHER PARTIES THERETO DATED AS OF DECEMBER 22, 2004. A COPY OF
SUCH AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER
HEREOF UPON WRITTEN REQUEST.”

          (b) Successors, Assigns and Transferees. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective legal representatives, heirs,
legatees, successors, and assigns and any other transferee of the Restricted Shares and shall also
apply to any Restricted Shares acquired by any Management Stockholder after the date hereof.

          (c) Management Stockholder Representation. The Management Stockholder hereby
represents that (i) the Management Stockholder’s execution of this Agreement and participation in
the Plan is voluntary and the Management Stockholder has in no way been induced to enter into this
Agreement in exchange for or as a requirement of the expectation of employment or continued
employment with the Company or any of its Subsidiaries and (ii) the Management Stockholder is not
an “investor relations person” within the meaning of the Multilateral-Instrument 45-105 (“MI
45-105”) of Manitoba, Canada which, as of the date hereof, is defined as the following (as the same
is set forth in MI 45-105):

“a person or company that is a registrant under Canadian securities laws or provides
services that include any activities or communications, by or on behalf of the issuer or a
security holder of the issuer, that promote or could reasonably be expected to promote the
purchase or sale of securities of the issuer, excluding: (A) the dissemination of
information or preparation of records in the ordinary course of the business of the issuer
(I) to promote the sale of products or services of the issuer; or (II) to raise public
awareness of the issuer; that cannot reasonably be considered to promote the purchase or
sale of securities of the issuer; or (B) activities or communications necessary to comply
with the requirements of (I) securities legislation or securities directions of any
jurisdiction of Canada or the securities laws of any foreign jurisdiction governing the
issuer; or (II) any exchange or market on which the issuer’s securities trade.”

          (d) Specific Performance, Etc. Each Party, in addition to being entitled to exercise
all rights provided herein or granted by law, including recovery of damages, shall be entitled to
specific performance of the Party’s rights under this Agreement. Each Party agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a breach by the Party
of the provisions of this Agreement and each Party hereby agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate.

D-12

 

          (e) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.

          (f) Interpretation. The headings of the Sections contained in this Agreement are
solely for the purpose of reference, are not part of the agreement of the Parties and shall not
affect the meaning or interpretation of this Agreement.

          (g) Notices. All notices and other communications provided for or permitted hereunder
shall be in writing and shall be deemed to have been duly given and received when delivered by
overnight courier or hand delivery, when sent by telecopy, or five (5) days after mailing if sent
by registered or certified mail (return receipt requested) postage prepaid, to the Parties at the
following addresses (or at such other address for any Party as shall be specified by like notices,
provided that notices of a change of address shall be effective only upon receipt thereof).

(i) If to the Company at:

Standard Aero Acquisition Holdings, Inc.

c/o Standard Aero, Ltd.

500-1780 Wellington Avenue

Winnipeg, Manitoba

R3H 1B3 Canada

Attention: Senior Vice President of Human Resources

Facsimile: 204-786-8610

with copies to the Acquiring Stockholder at the address listed below

and:

Latham & Watkins LLP

555 Eleventh Street, N.W.

Tenth Floor

Washington, D.C. 20004

Attention: Daniel Lennon

Facsimile: 202-637-2201

(ii) If to the Acquiring Stockholder at:

c/o TC Group, LLC

1001 Pennsylvania Avenue, N.W.

220-South

Washington, D.C. 20004

Attention: David Waxman

Facsimile: 202-347-9250

with a copy to Latham & Watkins LLP, at the address given above.

D-13

 

          (iii) If to a Management Stockholder, to the address set forth on the Management
Stockholder’s signature page hereto.

          (h) Recapitalization, Exchange, Etc. Affecting the Company’s Stock. The provisions of
this Agreement shall apply, to the full extent set forth herein, with respect to any and all shares
of Common Stock, Options, and all of the shares of capital stock of the Company or any successor or
assign of the Company (whether by merger, consolidation, sale of assets, or otherwise) that may be
issued in respect of, in exchange for, or in substitution of such Common Stock and Options and
shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations, and the like occurring after the date hereof.

          (i) Counterparts. This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed to be an original and all of which together shall be deemed to
constitute one and the same agreement.

          (j) Severability. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid, illegal, or unenforceable
in any respect for any reason, the validity, legality, and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not be in any way
impaired thereby.

          (k) Amendment. This Agreement may be amended by resolution of the Board of Directors
provided the amendment has been approved by the Principal Stockholder, provided that any amendment
adverse to a Management Stockholder shall not be effective against such Management Stockholder
unless agreed to by it. At any time hereafter, additional Management Stockholders may be made
parties hereto by executing a signature page in the form attached as Exhibit B hereto,
which signature page shall be countersigned by the Company and shall be attached to this Agreement
and become a part hereof without any further action of any other Party hereto.

          (l) Tax Withholding. The Company or any Subsidiary, as applicable, shall be entitled
to require payment in cash or deduction from other compensation payable to any Management
Stockholder of any sums required to be withheld by all applicable tax, social security premium,
national insurance or other applicable withholding laws with respect to the issuance, vesting,
exercise, repurchase, or cancellation of any Restricted Share or any Option to purchase Restricted
Shares.

          (m) No Additional Rights. Nothing contained in this Agreement (i) obligates the
Company or any Affiliate of the Company to employ any Management Stockholder in any capacity
whatsoever; (ii) confers upon any Management Stockholder the right to continue to serve as a
Director, (iii) prohibits or restricts the Company or any Affiliate of the Company from terminating
the employment, if any, of any Management Stockholder at any time or for any reason whatsoever,
with or without cause; or (iv) restricts in any way the rights of the stockholders of the Company
or any of its subsidiaries, to remove any Management Stockholder as a Director at any time for any
reason whatsoever. Each Management Stockholder hereby acknowledges and agrees that neither the
Company nor any other person has made any representations or promises whatsoever concerning his or
her employment or directorship, or continued employment by the Company or any Affiliate of the
Company, except pursuant to any

D-14

 

employment agreement by and between the Management Stockholder and the Company or any
Affiliate of the Company in effect from time to time for so long as this Agreement remains in
effect.

          (n) Offsets. The Company shall be permitted to offset and reduce from any amounts
payable to a Management Stockholder the amount of any indebtedness or other obligation or payment
owing to the Company by the Management Stockholder.

          (o) Entire Agreement. This writing constitutes the entire agreement of the Parties
with respect to the subject matter hereof.

[signature pages follow]

D-15

 

          IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date first written
above.

	 	 	 	 	 	 	 
	 	 	STANDARD AERO ACQUISITION HOLDINGS, INC.
	 
	 	 	 	 	 	 
	

	 	By:	 	/s/ David Shaw	 	 
	

	 	 	 	 	 	 
	

	 	Name:
	 	David Shaw	 	 
	

	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CARLYLE PARTNERS III, L.P.
	 
	 	 	 	 	 	 
	

	 	By:
	 	TC Group III, L.P.	 	 
	

	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	

	 	By:
	 	TC Group III, L.L.C.	 	 
	

	 	 	 	its general partner	 	 
	 
	 	 	 	 	 	 
	

	 	By:
	 	TC Group, L.L.C.	 	 
	

	 	 	 	its managing member	 	 
	 
	 	 	 	 	 	 
	

	 	By:
	 	TCG Holdings, L.L.C.	 	 
	

	 	 	 	its managing member	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	/s/ Peter J. Clare	 	 
	

	 	 	 	 	 	 
	

	 	 	 	Name:	 	 
	

	 	 	 	Title:   Managing Director	 	 
	 
	 	 	 	 	 	 
	 	 	MANAGEMENT STOCKHOLDER
	 
	 	 	 	 	 	 
	

	 	By:	 	/s/ Edward Richmond	 	 
	

	 	 	 	 	 	 
	

	 	Name:	 	Edward Richmond	 	 

          Each Management Stockholder has agreed to be bound by the terms of this Agreement by
execution and delivery of the signature page set forth as Exhibit B hereto.

D-16

 

EXHIBIT A

          List of Management Stockholders on file with management of Standard Aero Acquisition Holdings,
Inc.

D-17

 

EXHIBIT B

SIGNATURE PAGE

TO

STOCKHOLDERS AGREEMENT OF

STANDARD AERO ACQUISITION HOLDINGS, INC.

          By execution of this signature page, Edward Richmond hereby agrees to become a party (as a
Management Stockholder) to, be bound by the obligations of, and receive the benefits of, that
certain Stockholders Agreement of Standard Aero Acquisition Holdings, Inc. dated as of December 22,
2004, by and among Standard Aero Acquisition Holdings, Inc., Carlyle Partners III, L.P., and
certain other parties named therein, as amended from time to time thereafter.

	 	 	 	 	 
	 	 	 
	 	  	/s/
Edward Richmond	 
	 	 	Edward Richmond
 	 
	 	 	67 Farmingdale Boulevard

Winnipeg, Manitoba

R3P 2G3 Canada 	 
	 

	 	 	 	 	 
	Accepted:	 	 
	 
	 	 	 	 
	Standard Aero Acquisition Holdings, Inc.	 	 
	 
	 	 	 	 
	By:
	 	/s/ David Shaw	 	 
	

	 	 	 	 
	Name:

	 	David Shaw	 	 
	Title:

	 	Chief Executive Officer	 	 
	 
	 	 	 	 
	Carlyle Partners III, L.P.	 	 
	 
	 	 	 	 
	By:

	 	TC Group III, L.P.	 	 
	

	 	its general partner	 	 
	 
	 	 	 	 
	By:

	 	TC Group III, L.L.C.	 	 
	

	 	its general partner	 	 
	 
	 	 	 	 
	By:

	 	TC Group, L.L.C.	 	 
	

	 	its managing member	 	 
	 
	 	 	 	 
	By:

	 	TCG Holdings, L.L.C.	 	 
	

	 	its managing member	 	 
	 
	 	 	 	 
	By:
	 	/s/ Peter J. Clare	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	Title: Managing Director	 	 

D-18exv4w1

 

Exhibit 4.1

LAFARGE NORTH AMERICA INC.

2005 STOCK INCENTIVE PLAN

1. Purpose

The purpose of the Lafarge North America Inc. 2005 Stock Incentive Plan (the “Plan”) is to provide
designated employees of Lafarge North America Inc. and its subsidiaries (collectively the
“Company”) and non-employee members of the Board of Directors of the Company with the opportunity
to receive equity incentive compensation. The Company believes that the Plan will (i) help closely
align the interests of Plan participants with Company stockholders to generate a strong incentive
to contribute to the Company’s future success and prosperity, thus enhancing the value of the
Company for the benefit of its stockholders; (ii) provide participants with a proprietary ownership
interest in the Company commensurate with Company performance, as reflected in increased
stockholder value; (iii) maintain competitive compensation levels, thereby attracting and retaining
highly competent and talented employees and directors; and (iv) provide an incentive to employees
and directors for continued service with the Company. The Plan will be effective as of the date
adopted by the Board of Directors, subject to approval by the stockholders of the Company. Upon the
Effective Date of the Plan, the authority to grant new awards under the Company’s 2002 Stock Option
Plan shall terminate.

2. Definitions

Whenever used in this Plan, the following terms will have the respective meanings set forth below:

(a) “Award” means an Option, Stock Appreciation Right, Stock Unit, Stock Award, Bonus Shares,
Dividend Equivalent or Other Stock-Based Award or Cash Bonus Award granted under the Plan.

(b) “Award Agreement” means either (i) a written agreement entered into by the Company and a
Participant setting forth the terms and provisions applicable to an Award granted under this Plan,
or (ii) a written or electronic statement issued by the Company to a Participant describing the
terms and provisions of such an Award.

(c) “Board” means the Company’s Board of Directors.

(d) “Bonus Shares” means a grant of shares of Stock described in Section 13.

(e) “Cash Bonus Award” means a grant described in Section 13A.

(f) “Change in Control” shall be deemed to have occurred if:

	 	(i)  	at the end of any 12-month period, “Continuing Directors” no longer
constitute a majority of the Board; the term “Continuing Director” means any
individual who is a member of the Board on the date hereof or was nominated for
election as a director by, or whose nomination as a director was approved by, the
Board with the affirmative vote of a majority of the Continuing Directors;
	 
	 	(ii)  	any person or group of persons (as defined in Rule 13d-5 under the Exchange
Act) together with such person’s or its affiliates, acquires (or has acquired during
the 12-month period ending on the date of the most recent acquisition by such person
or persons) ownership, directly or indirectly, of 35% or more of the voting power of
the Company’s then outstanding securities entitled generally to vote for the election
of the Company’s directors;
	 
	 	(iii)  	any person or group of persons (as defined in Rule 13d-5 under the Exchange
Act) together with such person’s or its affiliates, becomes the owner, directly or
indirectly, of 50% or more of the total fair market value or total voting power of
the Company; provided that if one or more person acting as a group is considered to
own more than 50% of the Company, the acquisition of additional stock by the same
person or persons is not considered to cause a Change in Control;
	 
	 	(iv)  	any person or group of persons (as defined in Rule 13d-5 under the Exchange
Act) together with such person’s or its affiliates, acquires (or has acquired during
the 12-month period

 

 

	 	   	ending on the date of the most recent acquisition by such person or persons) assets
of the Company that have a “Gross Fair Market Value equal to or more than 40% of the
total “gross fair market value” of all of the assets of the Company immediately
prior to such acquisition or acquisitions; the term “Gross Fair Market Value” means
the value of the assets of the Company or the value of the assets disposed of,
without regard to any liabilities associated with such assets. all or substantially
all of the assets of the Company or the liquidation or dissolution of the Company.

(g) “Code” means the Internal Revenue Code of 1986, as amended.

(h) “Committee” means (i) with respect to Awards to Employees, the Management Development and
Compensation Committee of the Board, a subcommittee thereof, or another committee appointed by the
Board to administer the Plan, or its delegate, and (ii) with respect to Awards made to Non-Employee
Directors, the Board Governance Committee of the Board, a subcommittee thereof, or another
committee appointed by the Board to administer the Plan with respect to Non-Employee Directors, or
its delegate.

(i) “Company” means Lafarge North America Inc. and its subsidiaries.

(j) “Competitive Activity” means (i) engaging directly or indirectly, alone or as a shareholder,
partner, director, officer, member, manager, employee of or consultant to any other business
organization, in any business activities in North America that relate to the manufacture, sale,
marketing or distribution of cement, ready-mixed concrete, other concrete products, asphalt,
construction materials, aggregates, gypsum wallboard or related products or any other products that
may be manufactured, sold, marketed or distributed by the Company or its affiliates at the time of
termination of the Employee’s employment (the “Designated Industry”); (ii) directly or indirectly
soliciting or encouraging any customer of the Company or its affiliates to divert its business to
any competitor of the Company; (iii) directly or indirectly soliciting or encouraging any director,
officer, employee of or consultant to the Company or its affiliates to end his or her relationship
with the Company or an affiliate or to commence any such relationship with any competitor of the
Company; or (iv) divulging to any person or entity other than the Company and its affiliates any
proprietary or confidential information of the Company and its affiliates without the prior written
permission of the Company. “Competitive Activity” shall not include the ownership of less than
five percent of the common stock of a publicly traded corporation conducting business activities in
the Designated Industry.

(k) “Dividend Equivalent” means an Award described in Section 12.

(l) “Effective Date” of the Plan means the date the Plan is approved by the stockholders of the
Company.

(m) “Employee” means an employee of the Company (including an officer or director who is also an
employee).

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

(o) “Exercise Price” means the per share price at which shares of Stock may be purchased under an
Option, as designated by the Committee.

(p) “Fair Market Value” of Stock means, unless the Committee determines otherwise with respect to a
particular Award, the closing sales price on the date of the Award or on the next business day, if
such day is not a business day, or if no trading occurred on such day, then on the first day
preceding such day on which trading occurred, of a share of Stock traded on the New York Stock
Exchange, or any other public securities market selected by the Committee; provided,
however, that, if shares of Stock shall not have been traded on the New York Stock Exchange or
other public securities market for more than 10 days immediately preceding such date or if deemed
appropriate by the Committee for any other reason, the Fair Market Value of shares of Stock shall
be as determined by the Committee in such other manner as it may deem appropriate. In no event
shall the Fair Market Value of any share of Stock be less than its par value.

(q) “Full Value Award” means an Award other than an Incentive Stock Option, Nonqualified Stock
Option, a Stock Appreciation Right settled in cash, or an Award for which the Participant pays at
least the

2

 

Fair Market Value for the shares of Stock subject thereto, determined on the date of grant of the
Award (in cash or other consideration designated as acceptable by the Committee).

(r) “Incentive Stock Option” means an Option that is intended to meet the requirements of an
incentive stock option under Section 422 of the Code.

(s) “Non-Employee Director” means a member of the Board who is not an employee of the Company.

(t) “Nonqualified Stock Option” means an Option that is not intended to meet the requirements of an
incentive stock option under Section 422 of the Code.

(u) “Option” means an Award to purchase shares of Stock described in Section 7.

(v) “Other Stock-Based Award” means any Award based on, measured by or payable in Stock (other than
an Award described in Section 7, 8, 9, 10, 11, or 12 of the Plan) described in Section 13.

(w) “Participant” means an Employee or Non-Employee Director designated by the Committee to
participate in the Plan.

(x) “Plan” means this Lafarge North America Inc. 2005 Stock Incentive Plan, as in effect from time
to time.

(y) “Stock” means the common stock of the Company or any successor security.

(z) “Stock Appreciation Right” means an Award described in Section 8.

(aa) “Stock Award” means an Award of Stock described in Section 10 and may be in the form of
performance shares that vest based on performance or restricted shares that vest over time.

(bb) “Stock Unit” means an Award of a unit representing a share of Stock described in Section 9 and
may be in the form of phantom units that vest based on performance or that vest over time.

3. Administration

(a) Committee. The Plan shall be administered and interpreted by the Management Development
and Compensation Committee with respect to Awards to Employees. The Plan shall be administered and
interpreted by the Board Governance Committee with respect to Awards to Non-Employee Directors. The
Committee, as applicable, that has authority with respect to a specific Award shall be referred to
as the “Committee” with respect to that Award. Ministerial functions under the Plan may be
performed by officers or other Employees, subject to such terms as the Committee may determine.

(b) Committee Authority. The Committee shall have the full power and express authority to
(i) administer and interpret the Plan, (ii) make factual determinations, (iii) adopt or amend such
rules, regulations, agreements and instruments for implementing the Plan and for the conduct of its
business, (iv) determine the Participants to whom Awards shall be made under the Plan, (v)
determine the type, size and terms and other conditions of the Awards to be made to each such
Participant, (vi) determine the time when the Awards will be made and the duration of any
applicable exercise or restriction period, including the criteria for exercisability and the
acceleration of exercisability, (vii) amend the terms and conditions of any previously issued
Award, subject to the provisions of Section 21, and (viii) deal with any other matters arising
under the Plan.

(c) Committee Determinations. The Committee’s interpretations of the Plan and all
determinations made by the Committee pursuant to the powers vested in it hereunder shall be final,
conclusive, and binding on all persons having any interest in the Plan or in any Awards granted
hereunder. All powers of the Committee shall be executed in its sole discretion, in the best
interest of the Company, not as a fiduciary, in keeping with the objectives of the Plan, and need
not be uniform as to similarly situated Participants.

3

 

(d) Limitation of Liability. Each member of the Committee shall be entitled to, in good
faith, rely or act upon any report or other information furnished to him or her by any officer of
the Company or other Employee, the Company’s independent certified public accountants, or any
executive compensation consultant, legal counsel, or other professional retained by the Company to
assist in the administration of the Plan. No member of the Committee, nor any officer or Employee
acting on behalf of the Committee, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan or any Award, and all members
of the Committee and any Senior Officer or other Employee acting on behalf of the Committee shall,
to the extent permitted by law, be fully indemnified and protected by the Company with respect to
any such action, determination, or interpretation.

4. Awards

(a) Types of Awards. Awards under the Plan may consist of Options described in Section 7,
Stock Appreciation Rights described in Section 8, Stock Units described in Section 9, Stock Awards
described in Section 10, Bonus Shares described in Section 11, Dividend Equivalents described in
Section 12, Other Stock-Based Awards described in Section 13 and Cash Bonus Awards described in
Section 13A. All Awards shall be subject to such terms and conditions as the Committee may
determine and as are specified in writing by the Committee in the Award Agreement.

(b) Award Agreements. All Awards shall be evidenced by Award Agreements. All Awards shall
be conditional upon the Participant’s acknowledgement, in writing or by acceptance of the Award,
that all decisions and determinations of the Committee shall be final, conclusive, and binding on
the Participant, his or her beneficiaries and any other person having or claiming an interest under
such Award.

(c) Minimum Vesting Provisions. Except with respect to a maximum of five percent (5%) of
the shares of Stock authorized in Section 5(a), any Full Value Awards which vest on the basis of
the Participant’s continued employment with or provision of service to the Company shall not
provide for vesting which is any more rapid than annual pro rata vesting over a three (3) year
period and any Full Value Awards which vest upon the attainment of performance goals shall provide
for a performance period of at least twelve (12) months.

5. Shares Subject to the Plan

(a) Shares Authorized. Subject to adjustment, the total number of shares of Stock that may
be granted pursuant to Awards shall not in the aggregate exceed 7,000,000 shares of Stock. All
shares of Stock that may be granted under the Plan may be issued in the form of Incentive Stock
Options.

(b) Limit on Full Value Awards. Within the aggregate limit described in subsection (a), the
maximum number of shares of Stock that may be granted as Full Value Awards under the Plan is
1,400,000 shares, subject to adjustment.

(c) Source of Shares. Shares issued under the Plan may be authorized but unissued shares of
Stock or shares purchased by the Company on the open market for purposes of the Plan or otherwise.

(d) Share Counting. For administrative purposes, when the Committee makes an Award that may
be payable in Stock, the Committee shall reserve shares equal to the maximum number of shares that
may be issued under the Award. Any shares of Stock related to Awards which (i) terminate by
expiration, forfeiture, cancellation, or otherwise without the issuance of such shares, (ii) are
settled in cash in lieu of shares, or (iii) are exchanged prior to the issuance of shares for
Awards not settled in shares, shall not reduce or otherwise count against the share limits set
forth above.

(e) Individual Limits. All Awards under the Plan, other than Dividend Equivalents, shall be
expressed in shares of Stock or share equivalents, or valued by reference to shares of Stock.
Unless and until the Committee determines that an Award shall not be designed to qualify as
“qualified performance-based compensation” under Section 162(m) of the Code, the maximum aggregate
number of shares of Stock with respect to which each type of Award grantable under the Plan may be
granted to any one Participant during any calendar year shall be 100,000 shares, subject to
adjustment (the “Individual Award Annual Limit”), plus the amount of the Participant’s unused
Individual Award Annual Limit for the type of Award in

4

 

question as of the close of the previous calendar year. The maximum aggregate number of shares of
Stock with respect to which all Awards may be granted under the Plan to any one Participant during
any calendar year shall be 200,000 shares, subject to adjustment. A Participant may not accrue
Dividend Equivalents during any calendar year in excess of the amount of dividends actually
declared with respect to 100,000 shares, subject to adjustment. The maximum aggregate number of
shares of Stock with respect to which Awards may be granted to any individual Non-Employee Director
upon election or appointment to the Company’s Board of Directors shall be 10,000 shares, subject to
adjustment. The maximum aggregate number of shares of Stock with respect to which Awards may be
granted to any individual Non-Employee Director during any calendar year (other than Awards granted
upon election or appointment to the Company’s Board of Directors) shall be 3,000 shares, subject to
adjustment. The individual limits of this subsection (e) shall apply without regard to whether the
Awards are to be paid in Stock or cash. All cash payments (other than with respect to Dividend
Equivalents) shall equal the Fair Market Value of the shares of Stock to which the cash payments
relate.

(f) Adjustments. Subject to Section 19, if there is any change in the number or kind of
shares of Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock
split, or combination or exchange of shares, (ii) by reason of a merger, reorganization, or
consolidation, (iii) by reason of a reclassification or change in par value, or (iv) by reason of
any other extraordinary or unusual event affecting the outstanding Stock as a class without the
Company’s receipt of consideration, or if the value of outstanding shares of Stock is reduced as a
result of a spinoff or the Company’s payment of an extraordinary cash dividend, or distribution or
dividend or distribution consisting of any assets of the Company other than cash, the maximum
number and kind of shares of Stock available for issuance under the Plan, the maximum number and
kind of shares of Stock available for issuance of Full Value Awards, the maximum number and kind of
shares of Stock for which any individual may receive Awards or Dividend Equivalents in any year,
the number and kind of shares of Stock covered by outstanding Awards, and the price per share or
the applicable market value or performance target of such Awards may be appropriately adjusted by
the Committee to reflect any increase or decrease in the number of, or change in the kind or value
of, issued shares of Stock to preclude, to the extent practicable, the enlargement or dilution of
rights under such Awards; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated.

6. Eligibility for Participation

(a) Eligible Persons. Employees and Non-Employee Directors shall be eligible to participate
in the Plan.

(b) Selection of Participants. The Committee shall select the Employees and Non-Employee
Directors to receive Awards.

(c) Special Rules for Non-Employee Director Awards. Non-Employee Directors may only be granted
Awards under the Plan in accordance with this Section 6(c) and such Awards shall not be subject to
the Committee’s discretion. From time to time, the Board shall set the amount(s) and type(s) of
Awards that shall be granted to all Non-Employee Directors on a periodic, nondiscriminatory basis
pursuant to the Plan, as well as any additional amount(s), if any, to be awarded, also on a
periodic, nondiscriminatory basis, based on each of the following: the number of committees of the
Board on which a Non-Employee Director serves, service of a Non-Employee Director as the chair of a
Committee of the Board, service of a Non-Employee Director as Chairman of the Board, or the first
election or appointment of an individual to the Board as a Non-Employee Director. Subject to the
limits set forth in 5(e) and the foregoing, the Board shall grant such Awards to Non-Employee
Directors and grant new Non-Employee Director Awards, as it shall from time to time determine.

7. Options

(a) General Requirements. The Committee may grant Options to an Employee or Non-Employee
Director upon such terms and conditions as the Committee may determine under this Section 7. The
Committee shall determine the number of shares of Stock that will be subject to each grant of
Options. The Committee may grant Dividend Equivalents with respect to Options.

(b) Type of Option, Price, and Term.

5

 

	 	(i)  	The Committee may grant Incentive Stock Options or Nonqualified Stock Options
or any combination of the two, all in accordance with the terms and conditions set
forth herein. Incentive Stock Options may be granted only to Employees of Lafarge
North America Inc. or its subsidiaries, as defined in Section 424 of the Code.
Nonqualified Stock Options may be granted to Employees or Non-Employee Directors.
	 
	 	(ii)  	The Exercise Price of an Option shall be determined by the Committee and
shall be equal to or greater than the Fair Market Value of a share of Stock on the
date the Option is granted; provided, however, that an Incentive Stock Option
may not be granted to an Employee who, at the time of grant, owns stock possessing
more than 10 percent of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary, as defined in section 424 of the Code, unless the
Exercise Price is not less than 110% of the Fair Market Value of the Stock on the date
of grant.
	 
	 	(iii)  	The Committee shall determine the term of each Option, which shall not
exceed ten years from the date of grant. However, an Incentive Stock Option that is
granted to an Employee who, at the time of grant, owns stock possessing more than 10
percent of the total combined voting power of all classes of stock of the Company or
any parent or subsidiary, as defined in section 424 of the Code, may not have a term
that exceeds five (5) years from the date of grant.

(c) Exercisability of Options. Options shall become exercisable in accordance with such
terms and conditions as may be determined by the Committee. The Committee may accelerate the
exercisability of any or all outstanding Options at any time for any reason.

(d) Exercise of Options. A Participant may exercise an Option that has become exercisable,
in whole or in part, by delivering a notice of exercise to the Company. The Participant shall pay
the Exercise Price for the Option (i) in cash, (ii) by delivering shares of Stock owned by the
Participant and having a Fair Market Value on the date of exercise equal to the Exercise Price or
by attestation to ownership of shares of Stock having an aggregate Fair Market Value on the date of
exercise equal to the Exercise Price, (iii) by payment through broker-assisted cashless exercise
arrangements, or (iv) by such other method as the Committee may approve. Shares of Stock used to
exercise an Option shall have been held by the Participant for the requisite period of time, if
any, to avoid adverse accounting consequences to the Company with respect to the Option, which
determination shall be made by the Company in its sole discretion. Payment for shares of Stock to
be issued pursuant to the exercise of an Option, and any required withholding taxes, must be
received by the Company by the time specified by the Committee depending on the type of payment
being made, but in all cases prior to the issuance of the shares.

(e) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide that, if
the aggregate Fair Market Value of the Stock on the date of grant of Incentive Stock Options which
first become exercisable by a Participant during any calendar year, under the Plan or any other
plan of the Company or a parent or subsidiary, as defined in section 424 of the Code, exceeds
$100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock Option.

8. Stock Appreciation Rights

(a) General Requirements. The Committee may grant Stock Appreciation Rights (“SARs”) to an
Employee or a Non-Employee Director upon such terms and conditions as the Committee may determine
under this Section 8. An SAR shall confer on the Participant to whom it is granted a right to
receive, upon exercise thereof, in cash, Stock or a combination of the two, the excess of (i) the
Fair Market Value of a share of Stock on the date of exercise, over (ii) the grant price of the SAR
as determined by the Committee as of the date of grant of the SAR, which shall be equal to or
greater than the Fair Market Value of a share of Stock on the date the SAR is granted.

(b) Terms of SARs. The Committee shall determine the time or times when an SAR may be
exercised in whole or in part, the method of exercise, method of settlement, whether cash, Stock,
or a combination of the two shall be payable to the Participant upon exercise, the method by which
Stock will be delivered or

6

 

deemed to be delivered to Participants, whether a SAR shall be in tandem with any other Award, and
any other terms and conditions of a SAR.

9. Stock Units

(a) General Requirements. The Committee may grant Stock Units to an Employee or a
Non-Employee Director upon such terms and conditions as the Committee may determine under this
Section 9. Each Stock Unit shall represent the right of the Participant to receive a share of Stock
or an amount of cash based upon the value of a share of Stock. All Stock Units shall be recorded in
memo bookkeeping accounts for purposes of the Plan.

(b) Terms of Stock Units. The Committee may grant Stock Units that are payable on terms and
conditions determined by the Committee. Stock Units may be paid at the end of a specified vesting
or performance period. The Committee shall determine the number of Stock Units to be granted and
the requirements applicable to such Stock Units. The Committee may grant Dividend Equivalents with
respect to Stock Units.

(c) Payment with Respect to Stock Units. Payment with respect to Stock Units shall be made
in cash, Stock, or a combination of the two, as determined by the Committee.

10. Stock Awards

(a) General Requirements. The Committee may issue shares of Stock to an Employee or a
Non-Employee Director under a Stock Award upon such terms and conditions as the Committee may
determine under this Section 10, subject to restrictions or no restrictions, as determined by the
Committee. Shares of Stock issued pursuant to Stock Awards may be issued for cash consideration or
for no cash consideration. The Committee may establish conditions under which restrictions on Stock
Awards shall lapse over a period of time or according to such other criteria, including performance
criteria, as the Committee may determine. The Committee shall determine the number of shares of
Stock to be issued pursuant to a Stock Award.

(b) Restrictions on Transfer. While shares of Stock subject to a Stock Award are subject to
restrictions on transferability, a Participant may not sell, assign, transfer, pledge, or otherwise
dispose of such shares except upon death as described in Section 17(a). Each certificate for a
share of Stock subject to a Stock Award shall contain a legend giving appropriate notice of the
restrictions in the Award. The Participant shall be entitled to have the legend removed when all
restrictions on such shares have lapsed. The Company may retain possession of any certificates for
shares of Stock subject to a Stock Award until all restrictions on such shares have lapsed. If
non-certificated shares representing the Stock subject to a Stock Award are registered in the name
of the Participant, such shares shall be maintained in a separate restricted share account subject
to terms, conditions and restrictions of like effect.

(c) Right to Vote and to Receive Dividends. Once shares of Stock subject to a Stock Award
have been registered in the name of a Participant, the Participant shall have the right to vote
such shares of Stock and to receive any dividends or other distributions paid on such shares during
the restriction period. Dividends paid on Stock Awards are not considered Dividend Equivalents.

11. Bonus Shares and Awards in Lieu of Other Cash Obligations

The Committee may grant shares of Stock as a bonus, or grant shares of Stock or other Awards in
lieu of Company obligations to pay cash or grant awards under other plans or compensatory
arrangements. Stock or Awards granted hereunder shall be subject to such other terms as shall be
determined by the Committee.

12. Dividend Equivalents.

(a) General Requirements. When the Committee makes an Award, the Committee may grant
Dividend Equivalents in connection with the Award, under such terms and conditions as the Committee
may determine under this Section 12. Dividend Equivalents may be accrued as a cash obligation, or
may be converted to Stock Units, and deferred Dividend Equivalents may accrue interest, all as
determined by the Committee. The amount to be paid under a Dividend Equivalent shall be determined
by multiplying the

7

 

number of shares of Stock subject to an Award by the per-share cash dividend, or the per-share fair
market value (as determined by the Committee) of any dividend in consideration other than cash,
paid by the Company on its Stock.

(b) Payment with Respect to Dividend Equivalents. Dividend Equivalents may be payable in
cash, Stock, or a combination of the two, as determined by the Committee.

13. Other Stock-Based Awards

The Committee may grant other Awards not specified in Sections 7, 8, 9, 10, 11 and 12 that are
based on, measured by, or payable in Stock to Employees or Non-Employee Directors on such terms and
conditions as the Committee may determine under this Section 13. Other Stock-Based Awards may be
payable in cash, Stock, or a combination of the two, as determined by the Committee. The Committee
may grant Dividend Equivalents with respect to Other Stock-Based Awards.

13A. Cash Bonus Awards

The Committee may grant Awards entitling a Participant to receive cash based upon performance by
any of the Company, specified subsidiaries, the Participant, or any other factors designated by the
Committee. The Committee shall determine the terms and conditions of such Awards.

14. Qualified Performance-Based Awards

(a) Designation as Qualified Performance-Based Awards. The Committee may determine that
Options, SARs, Stock Units, Stock Awards, Dividend Equivalents, or Other Stock-Based Awards granted
to an Employee shall be considered “qualified performance-based compensation” under Section 162(m)
of the Code, in which case the provisions of this Section 14 shall apply to such Awards.

(b) Performance Goals. When Awards are made under this Section 14, the Committee shall
establish in writing (i) the objective performance goals that must be met, (ii) the period during
which performance will be measured, (iii) the maximum number of shares of Stock or amount of cash
that may be paid if the performance goals are met, and (iv) any other conditions that the Committee
deems appropriate and consistent with the requirements of Section 162(m) of the Code for “qualified
performance-based compensation.” The performance goals shall satisfy the requirements for
“qualified performance-based compensation.” The Committee shall not have discretion to increase the
amount of compensation that is payable, but may reduce the amount of compensation that is payable,
pursuant to Awards identified by the Committee as “qualified performance-based compensation.”

(c) Business Criteria Used for Objective Performance Goals. The Committee shall use
objectively determinable performance goals based on one or more of the following business criteria:
market price of the Stock; cash flow; reserve value; net asset value; earnings; net income (before
or after taxes); operating income; cash flows from operations; revenue; gross or operating margins;
earnings before or after interest, taxes, depreciation and/or amortization; net capital employed;
return on assets; economic value added; stockholder return; earnings per share; reserve
replacement; return on equity; return on capital employed; production; assets; unit volume; sales;
market share; finding and development costs; overhead costs; general and administration expense;
net sales or revenue growth; return on sales or revenue; cash flow return on equity; productivity
ratios; expense targets; operating efficiency; customer satisfaction; working capital targets; or
strategic business criteria consisting of one or more objectives based on meeting specified goals
relating to acquisitions or divestitures. The targeted level or levels of performance with respect
to such goals may be established at such levels and in such terms as the Committee may determine,
including in absolute terms or per share terms, as a goal relative to performance in prior periods,
or as a goal compared to the performance of one or more comparable companies or an index covering
multiple companies. The performance goals may relate to one or more regions or districts or may
relate to the performance of the Company as a whole, individual performance, or any combination of
the foregoing. Performance goals need not be uniform as among Participants.

(d) Timing of Establishment of Goals. The Committee shall establish the performance goals
in writing either before the beginning of the performance period or during a period ending no later
than the earlier of

8

 

(i) 90 days after the beginning of the performance period or (ii) the date on which 25% of the
performance period has been completed, or such other date as may be required or permitted under
applicable regulations under Section 162(m) of the Code.

(e) Certification of Results. The Committee shall certify the performance results for the
performance period for the Award after the performance period ends. The Committee shall determine
the amount, if any, to be paid pursuant to each Award based on the achievement of the performance
goals and the satisfaction of all other terms of the Award. Certification by the Committee is not
required for compensation that is attributable solely to the increase in the value of the Stock.

(f) Death, Disability or Other Circumstances. The Committee may provide that Awards under
this Section 14 shall be payable, in whole or in part, in the event of the Participant’s death or
disability, a Change in Control, or under other circumstances consistent with the applicable
regulations under Section 162(m) of the Code.

15. Deferrals

The Committee may permit or require a Participant to defer receipt of the payment of cash or the
delivery of shares of Stock that would otherwise be due to the Participant in connection with any
Award. Awards that are not paid currently shall be recorded as payable on the Company’s records for
the Plan.

16. Withholding of Taxes

(a) Required Withholding. All Awards under the Plan shall be subject to applicable federal
(including FICA), state, and local tax withholding requirements. The Company may require that the
Participant or other person receiving or exercising Awards pay to the Company the amount of any
federal, state, or local taxes that the Company is required to withhold with respect to such
Awards, or the Company may deduct from wages or other amounts payable by the Company the amount of
any withholding taxes due with respect to such Awards.

(b) Election to Withhold Shares. If the Committee so permits, a Participant may elect to
satisfy the Company’s tax withholding obligation with respect to Awards paid in Stock by having
shares withheld at the time such Awards become taxable. Shares may not be withheld in an amount
that would result in additional compensation being recorded by the Company in its financial
statements. The election must be in a form and manner prescribed by the Committee.

17. Transferability of Awards

(a) Restrictions on Transfer. Except as described in subsection (b) and (c) of this Section
17, only the Participant is entitled to any rights under an Award during the Participant’s
lifetime, and a Participant may not transfer those rights except by will or by the laws of descent
and distribution. When a Participant dies, the personal representative, beneficiary, or other
person entitled to succeed to the rights of the Participant may acquire the rights under an Award.
Any such successor must furnish proof satisfactory to the Company of the successor’s entitlement to
receive the rights under an Award under the Participant’s will or under the applicable laws of
descent and distribution.

(b) Transfer Incident to Divorce. Incident to a Participant’s divorce, the Participant may
request that the Company agree to observe the terms of a domestic relations order which may or may
not be part of a qualified domestic relations order (as defined in Code section 414(p)) with
respect to all or a part of one or more Awards made to the Participant under the Plan to the
Participant’s alternate payee. The Company’s decision regarding such a request shall be made by
the Committee, in its sole and absolute discretion, based upon the best interests of the Company.
The Committee’s decision need not be uniform among Participants. As a condition of participation,
a Participant agrees to hold the Company harmless from any claim that may arise out of the
Company’s observance of the terms of any such domestic relations order.

(c) Transfer of Nonqualified Stock Options to or for Family Members. Notwithstanding the
foregoing, the Committee may provide that a Participant may transfer Nonqualified Stock Options to
family members, or one or more trusts or other entities for the benefit of or owned by family
members, consistent with the

9

 

applicable securities laws, according to such terms as the Committee may determine; provided,
however, that the Participant receives no consideration for the transfer of the Options and the
transferred Options shall continue to be subject to the same terms and conditions as were
applicable to the Options immediately before the transfer.

18. Death, Disability, Retirement, and Other Termination of Employment or Service

Unless otherwise determined by the Committee:

(a) Death of Employee or Non-Employee Director Upon the death of an Employee or
Non-Employee Director, any Option or SAR granted to such Employee or Non-Employee Director shall
vest immediately on the date of death and may be exercised by such individual’s estate, or by a
person who acquires the right to exercise such Option or SAR by bequest or inheritance or by reason
of the death of such individual; provided, however, that such exercise occurs within both
(x) the remaining term of the Option or SAR and (y) one year after such death. The provisions of
this Section shall apply notwithstanding that the Employee’s employment or Non-Employee Director’s
service may have terminated prior to death, but the Options and SARs shall only be exercisable to
the extent any rights exercisable on the date of termination of the Employee’s employment or
Non-Employee Director’s service remained exercisable on the date of death. Upon the death of an
Employee or Non-Employee Director, all Stock Units, Stock Awards, Dividend Equivalents, Other
Stock-Based Awards and Cash Bonus Awards not previously canceled shall vest immediately.

(b) Disability, Retirement and Other Termination of Employment or Service of Employee or
Non-Employee Director

	 	(i)  	Employees – Options and SARs The otherwise unexpired portion of any Option
or SAR granted to an Employee shall expire and become null and void no later than upon the
first to occur of (i) the expiration of ten years from the date such Option or SAR was
granted, (ii) the expiration of three months from the date of the termination of the
Employee’s employment with the Company or any parent or subsidiary corporation of the
Company (an “Affiliate”) within the meaning of Section 424(e) and (f) of the Code for any
reason other than disability or retirement under the normal or early retirement provisions
of a pension or retirement plan maintained by the Company or an Affiliate, or (iii) the
expiration of the remaining term of the Option or SAR from the date of the termination of
the Employee’s employment with the Company or an Affiliate by reason of disability or
retirement under the normal or early retirement provisions of a pension or retirement plan
maintained by the Company or an Affiliate. Following termination of an Employee’s
employment, his or her Options and SARs shall be exercisable during the applicable period
described in clause (ii) or (iii) of the preceding sentence to the extent such Options or
SARs were exercisable on the date of termination, except that if an Employee has completed
at least ten years of continuous service as an Employee of the Company and its Affiliates
at the time of termination of the Employee’s employment with the Company or any Affiliate
by reason of disability or retirement as described in clause (iii) of the preceding
sentence, all Options held by such Employee (or his or her permitted transferees as
contemplated elsewhere in this Plan) shall continue to vest during the remaining term of
the Option or SAR in accordance with their terms, unless thereafter terminated in
accordance with any other provision of the Plan or the applicable Award Agreement;
provided, however, that if the Employee engages in any Competitive Activity during such
period, such Employee’s Options and SARs shall cease vesting on the date immediately
preceding the commencement of the Competitive Activity. Transfer of employment without
interruption of service between or among the Company and its Affiliates shall not be
considered to be a termination of employment for purposes of the Plan. The foregoing
provisions of this subsection and any other provision of the Plan to the contrary
notwithstanding, the otherwise unexpired portion of any Option or SAR granted to an
Employee granted hereunder shall expire and become null and void immediately upon an
Employee’s termination of employment with the Company or an Affiliate by reason of such
optionee’s fraud, dishonesty, intentional misrepresentation, embezzlement,
misappropriation or conversion of assets or opportunities of the Company or any Affiliate,
or performance of other acts detrimental to the Company or an Affiliate. Nothing in this
paragraph or in any

10

 

	 	  	other provision of the Plan shall cause the period during which an Option or SAR
granted to an Employee may be exercised to be extended beyond the remaining term of the
Option or SAR.
	 
	 	(ii)  	Non-Employee Directors – Options and SARs. The otherwise unexpired portion
of any Option or SAR granted to a Non-Employee Director shall expire and become null and
void no later than upon the first to occur of (i) the expiration of ten years from the
date such Option or SAR was granted, (ii) the expiration of three months from the date of
the termination of the Non-Employee Director’s service on the Board for any reason other
than retirement under the normal or early retirement provisions of any retirement plan
maintained by the Company for Non-Employee Directors or (iii) the expiration of the
remaining term of the Option or SAR from the date of the termination of the Non-Employee
Director’s service on the Board by reason of death or retirement under the normal or early
retirement provisions of any retirement plan maintained by the Company for Non-Employee
Directors. Following termination of a Non-Employee Director’s service on the Board, his
or her Options and SARs shall be exercisable during the applicable period described in
clause (ii) or (iii) of the preceding sentence to the extent such Options and SARs were
exercisable on the date of termination. The foregoing provisions of this subsection and
any other provision of this Plan to the contrary notwithstanding, the otherwise unexpired
portion of any Option or SAR granted to a Non-Employee Director granted hereunder shall
expire and become null and void immediately upon termination of the Non-Employee
Director’s service on the Board if such termination occurs by reason of such Non-Employee
Director’s fraud, dishonesty, intentional misrepresentation, embezzlement,
misappropriation or conversion of assets or opportunities of the Company or any Affiliate,
or performance of other acts detrimental to the Company or an Affiliate. Nothing in this
paragraph or in any other provision of the Plan shall cause the period during which an
Option or SAR granted to a Non-Employee Director may be exercised to be extended beyond
the remaining term of the Option or SAR.
	 
	 	(iii)  	Employees and Non-Employee Directors — Stock Units, Stock Awards, Dividend
Equivalents, Other Stock-Based Awards and Cash Bonus Awards Unless the Award provides
for vesting upon disability, retirement, or other termination of employment or service,
upon any such termination of employment or service of an Employee or a Non-Employee
Director prior to vesting of Stock Units, Stock Awards, Dividend Equivalents, Other
Stock-Based Awards and Cash Bonus Awards, all such outstanding and unvested Awards to the
Participant shall be canceled, shall not vest, and shall be returned to the Company.

19. Consequences of a Change in Control

(a) Vesting of Awards. Upon a Change in Control, all outstanding Options and SARs shall be
fully exercisable, and restrictions on outstanding Stock Units, Stock Awards, Dividend Equivalents,
and Other Stock-Based Awards shall lapse. Such acceleration or lapse shall take place as of the
date of the Change in Control or such other date as the Committee may specify.

(b) Assumption of Awards. Upon a Change in Control where the Company is not the surviving
corporation (or survives only as a subsidiary of another corporation), all outstanding Options and
SARs that are not exercised prior to the Change in Control shall be assumed by, or replaced with
comparable awards by, the surviving corporation (or a parent or subsidiary of the surviving
corporation), and other Awards shall remain outstanding after the Change in Control and be
converted to comparable awards of the surviving corporation (or a parent or subsidiary of the
surviving corporation). Such assumption or replacement shall take place as of the date of the
Change in Control or such other date as the Committee may specify.

(c) Other Alternatives. Notwithstanding the foregoing, in the event of a Change in Control,
the Committee may take any of the following actions with respect to any or all outstanding Awards,
without the consent of any Participant: (i) the Committee may require that Participants surrender
their outstanding Options and SARs in exchange for payment by the Company, in cash, Stock, or a
combination of the two, as determined by the Committee, in an amount equal to the amount, if any,
by which the then Fair Market Value of the shares of Stock subject to the Participant’s unexercised
Options and SARs exceeds the Exercise Price or

11

 

grant price, and (ii) with respect to Participants holding Stock Units, Stock Awards, Dividend
Equivalents, or Other Stock-Based Awards, the Committee may determine that such Participants shall
receive payment in settlement of such Stock Units, Stock Awards, Dividend Equivalents, or Other
Stock-Based Awards, in such amount and form and on such terms as may be determined by the
Committee. Such surrender or settlement shall take place as of the date of the Change in Control or
such other date as the Committee may specify.

(d) Other Transactions. The Committee may provide in an Award that a sale or other
transaction involving a subsidiary or other business unit of the Company shall be considered a
Change in Control for purposes of the Award, or the Committee may establish other provisions that
shall be applicable in the event of a specified transaction.

(e) Committee. The Committee making the determinations under this Section 19 following a
Change in Control must be composed of the same members as those of the Committee immediately before
the Change in Control. If the Committee members do not meet this requirement, the automatic
provision of subsections (a) and (b) shall apply, and the Committee shall not have discretion to
vary them.

20. Requirements for Issuance of Shares

No shares of Stock shall be issued in connection with any Award unless and until all legal and
stock exchange requirements applicable to the issuance of such shares have been complied with to
the satisfaction of the Committee. The Committee shall have the right to condition any Award made
on the Participant’s undertaking in writing to comply with such restrictions on the Participant’s
subsequent disposition of such shares as the Committee shall determine, and certificates
representing such shares may be legended to reflect any such restrictions. Certificates
representing shares of Stock issued under the Plan shall be subject to such stop-transfer orders
and other restrictions as may be required by applicable laws, regulations and interpretations,
including any requirement that a legend be placed thereon.

21. Amendment and Termination of the Plan

Amendment. The Board may amend or terminate the Plan at any time; provided,
however, that the Board shall not amend the Plan without approval of the stockholders of the
Company if such approval is required in order to comply with the Code or applicable laws or stock
exchange requirements. No amendment or termination of the Plan shall, without the consent of the
Participant, materially impair any rights or obligations under any Award previously made to the
Participant, unless such right has been reserved in the Plan or the Award, or except as provided in
Section 22(b). An amendment to the Plan shall not require stockholder approval if it curtails
rather than expands the scope of the Plan, nor if it is made to conform the Plan to new statutory
or regulatory requirements that arise after submission of the Plan to stockholders for their
approval, such as, without limitation, changes to section 409A of the Code, or regulations issued
thereunder.

(a) No Repricing Without Stockholder Approval. Notwithstanding anything in the Plan to the
contrary, the Committee may not reprice Options or SARs, nor may the Board amend the Plan to permit
such repricing, unless the stockholders of the Company provide prior approval for such repricing.
The term “repricing” shall have the meaning given that term in Section 303A(8) of the New York
Stock Exchange Listed Company Manual, as in effect from time to time.

(b) Termination of the Plan. No Awards shall be made after the tenth anniversary of the
date upon which stockholders of the Company have approved the Plan. The Plan shall remain in effect
thereafter in accordance with its terms until such time as the Company has no further rights or
obligations under the Plan with respect to outstanding Awards, unless the Plan is earlier
terminated by the Board.

(c) Termination of the Lafarge North America Inc, 2002 Stock Option Plan. Upon the
Effective Date of the Plan, the authority to grant new awards under the Company’s 2002 Stock Option
Plan shall terminate. In other respects, the Company’s 2002 Stock Option Plan will remain in effect
in accordance with its terms with respect to outstanding awards.

12

 

22. Miscellaneous

(a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards may be granted either
alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any
award granted under another plan of the Company or any business entity to be acquired by the
Company, or any other right of a Participant to receive payment from the Company. Such additional,
tandem, and substituted or exchanged Awards may be granted at any time. The Committee may determine
that, in granting a new Award, the intrinsic value of any surrendered Awards or awards under
another plan or issued by a business entity being acquired may be applied to reduce the Exercise
Price of any Option, grant price of any SAR, or purchase price of any other Award. “Substitute
Awards” shall mean Awards granted or shares of Stock issued by the Company in assumption of, or in
substitution or exchange for, awards previously granted, or the right or obligation to make future
awards, by a company acquired by the Company or with which the Company combines.

(b) Compliance with Law and Stock Exchange Requirements. The Plan, the exercise of Options
and SARs, and the obligations of the Company to issue or transfer shares of Stock under Awards
shall be subject to all applicable laws and stock exchange requirements and to approvals by any
governmental or regulatory agency or stock exchange as may be required. With respect to persons
subject to Section 16 of the Exchange Act, it is the intent of the Company that the Plan and all
transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors
under the Exchange Act. In addition, it is the intent of the Company that Options designated
Incentive Stock Options comply with the applicable provisions of Section 422 of the Code, and that
Awards intended to constitute “qualified performance-based awards” comply with the applicable
provisions of Section 162(m) of the Code and that any deferral of the receipt of the payment of
cash or the delivery of shares of Stock that the Committee may permit or require, and any Award
granted that is subject to Section 409A of the Code, comply with the requirements of Section 409A
of the Code. To the extent that any legal requirement of Section 16 of the Exchange Act or Sections
422, 162(m) or 409A of the Code as set forth in the Plan ceases to be required under Section 16 of
the Exchange Act or Sections 422, 162(m) or 409A of the Code, that Plan provision shall cease to
apply. The Committee may revoke any Award if it is contrary to law, governmental regulation, or
stock exchange requirements or modify an Award to bring it into compliance with any government
regulation or stock exchange requirements. The Committee may agree to limit its authority under
this Section.

(c) Enforceability. The Plan shall be binding upon and enforceable against the Company and
its successors and assigns.

(d) Unfunded Status of the Plan; Limitation on Rights. This Plan shall be unfunded. The
Company shall not be required to establish any special or separate fund or to make any other
segregation of assets to ensure the payment of any Awards. Nothing contained in the Plan and no
action taken pursuant hereto shall create or be construed to create a fiduciary relationship
between the Company, the Board, or the Committee and any Participant or any other person. No
Participant or any other person shall under any circumstances acquire any property interest in any
specific assets of the Company. To the extent that any person acquires a right to receive payment
from the Company hereunder, such right shall be no greater than the right of any unsecured general
creditor of the Company.

(e) Rights of Participants. Nothing in this Plan shall entitle any Employee, Non Employee
Director or other person to claim a right to receive an Award. Neither this Plan nor any action
taken hereunder shall be construed as giving any individual any rights to be retained by or in the
employment or service of the Company.

(f) No Fractional Shares. No fractional shares of Stock shall be issued or delivered
pursuant to any Award. The Committee shall determine whether cash, other Awards, or other property
shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.

(g) Governing Law. The validity, construction, interpretation, and effect of the Plan and
Award Agreements shall be governed and construed by and determined in accordance with the laws of
the State of Maryland, without giving effect to the conflict of laws provisions thereof.

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]