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exv10w6

 

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EXHIBIT 10.6

PLEASE SIGN & RETURN

EAGLE
MATERIALS INC.

INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

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

     1. Relationship to Plan.

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

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

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

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

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

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

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

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

     2. Vesting and Exercise Schedules.

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

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	3 Year Average EBIT Targets
	 	 	at FYE (in Millions)
	Vesting
Percentage	 	March 31, 2006	 	March 31, 2007	 	March 31, 2008
	    0%	 	less than $125.0	 	less than $145.0	 	less than $170.00
	50%
	 	$	125.0	 	 	$	145.0	 	 	$	170.0	 
	60%
	 	$	129.0	 	 	$	150.0	 	 	$	175.0	 
	70%
	 	$	133.0	 	 	$	155.0	 	 	$	180.0	 
	75%
	 	$	135.0	 	 	$	157.5	 	 	$	182.5	 
	80%
	 	$	137.0	 	 	$	160.0	 	 	$	185.0	 
	85%
	 	$	139.0	 	 	$	162.5	 	 	$	187.5	 
	90%
	 	$	141.0	 	 	$	165.0	 	 	$	190.0	 
	95%
	 	$	143.0	 	 	$	167.5	 	 	$	192.5	 
	100%
	 	$	145.0	 	 	$	170.0	 	 	$	195.0	 

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

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

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

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     (b) Operational
Excellence Vesting Schedule. ___ shares of Class B Common Stock covered by
this Option (the “Operational Excellence Option Shares”) shall vest on March 31, 2006 based on the
number of points achieved at the end of the 2006 fiscal year based on the Fiscal Year 2006
Operational Excellence Goals (as described in Exhibit B to this Agreement) in accordance
with the following schedule:

	 	 	 	 	 
	 	 	Percentage of Additional
	Points Achieved	 	Restricted Stock Units Vested
	100
	 	 	100	%
	94
	 	 	90	%
	88
	 	 	80	%
	82
	 	 	70	%
	76
	 	 	60	%
	70
	 	 	50	%
	64
	 	 	40	%
	58
	 	 	30	%
	52
	 	 	20	%
	46
	 	 	10	%
	40
	 	 	0	%

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

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

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

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

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

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shall become exercisable with one-third on the first anniversary of such Vesting Date and
one-third on the second anniversary of such Vesting Date.

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

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

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

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

     3. Termination of Option.

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

     (a) the seventh anniversary of the Award Date;

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

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     (c) if Optionee’s employment with the Company and its Affiliates (and service as a Director)
is terminated for any reason other than death or termination for “cause,” then the Option shall
terminate on the first business day following the expiration of the 90-day period beginning on the
date of termination of Optionee’s employment; or

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

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

     4. Exercise of Option.

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

     If the Optionee desires to pay the purchase price for the Option Shares by tendering Common Stock using the method of attestation, the Optionee may, subject to any such conditions and
in compliance with any such procedures as the Committee may adopt, do so by attesting to the
ownership of Common Stock of the requisite value, in which case the Company shall issue or
otherwise deliver to the Optionee upon such exercise a number

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of Option Shares equal to the result obtained by dividing (a) the excess of the aggregate Fair
Market Value of the total number shares of Class B Common Stock subject to the Option for which the
Option (or portion thereof) is being exercised over the purchase price payable in respect of such
exercise by (b) the Fair Market Value per Option Share subject to the Option, and the Optionee may
retain the shares of Common Stock the ownership of which is attested.

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

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

     5. Notices.

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

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

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

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

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

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

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Optionee at the address specified at the end of this Agreement or at such other address as the
Optionee hereafter designates by written notice to the Company.

     6. Assignment of Option.

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

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

     7. Stock Certificates.

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

     8. Withholding.

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

     9. Shareholder Rights.

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

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     10. Successors and Assigns.

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

     11. No Employment Guaranteed.

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

     12. Governing Law.

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

     13. Amendment.

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

	 	 	 	 	 	 	 
	 	 	 	 	EAGLE MATERIALS INC.
	 
	 	 	 	 	 	 
	Date:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Name: Steven R. Rowley
	 

	 	 	 	 	 	Title: President and CEO

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

	 	 	 	 	 
	 

	 	 	 	OPTIONEE:
	Date:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	          Optionee’s Address:
	 

	 	 	 	          Eagle Materials Inc.
	 

	 	 	 	          3811 Turtle Creek Blvd #1100
	 

	 	 	 	          Dallas, TX 75219

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Exhibit A

Change in Control

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

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

     (b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (or who is otherwise designated as a member of the
Incumbent Board by such a vote) shall be considered as though such individual were a member of the
Incumbent Board, except that any such individual shall not be considered a member of the Incumbent
Board if his or her initial assumption of office occurs as a result of either an actual or
threatened election contest (as such term is used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board;

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

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

     For purposes of the foregoing,

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

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

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

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

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

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

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

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

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

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

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Exhibit B

Summary of
Eagle Materials Inc.

FY 2006 Operational Excellence Goals

Gypsum Companies

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

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

	3.  	Goal related to combined annual plant efficiencies

	4.  	Goal related to the commencement of the Georgetown facility by fiscal year end.

	5.  	Goal related to current and potential synthetic sources for gypsum in North America.

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

	7.  	Goal related to additional gypsum reserves for the Duke facility.

 

 

Cement Companies

	8.  	Goal related to combined annual average type I/II clinker production rate.

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

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

	11.  	Goal realted to the Illinois Cement expansion project being on budget and on timeline.

	12.  	Continue to develop project echo:

	13.  	Goal related to additional limestone reserves for Illinois Cement.

Paperboard Company

14. Goal related to net winder tons/calendar day

 

 

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

	16.  	Goal related to quality returns and allowances $  per ton.

	17.  	Goal related to new boiler completion.

Concrete and Aggregates Companies

	18.  	Goal related to new mining equipment for Western
Aggregates.

	19.  	Goal related to CER proposal to increase production
capacity at Centex Materials Buda quarry.

Safety — All Companies

	20.  	Goal related to safety.exv10w2

 

Exhibit 10.2

TRANSITION AGREEMENT

     This agreement (the “Agreement”), dated as of the Effective Date specified below, is by and
between Janus Capital Group Inc., a Delaware corporation (the “Company”) and Girard C. Miller (the
“Executive”). The Company and the Executive shall sometimes be collectively referred to as the
“Parties.”

Recitals

     1. Executive has been employed by the Company pursuant to an Employment Agreement dated as of
June 30, 2003 (the “Employment Agreement”), and a Change of Control Agreement dated as of June 30,
2003 (the “Change of Control Agreement”) (collectively, the “Miller Agreements”).

     2. Executive and the Company desire to modify their relationship to provide for a transition
period and separation from the Company.

     3. Accordingly, Executive and the Company have entered into this Agreement to set forth the
terms and conditions of their relationship on and after the Effective Date, and thereby to
supersede in its entirety the Employment Agreement subject to Section 9.

Agreement

     In consideration of the following obligations, the parties agree as follows.

     1. Effective Date and Separation Date. The “Effective Date” shall mean August 5,
2005. At a time thereafter determined by the Company in its reasonable discretion, the Company
shall announce the terms of this Agreement and the Executive’s resignation from the Company
effective as of January 3, 2006, provided that such employment does not earlier terminate pursuant
to Section 4, below (the “Separation Date”).

     2. Transition Period. The Company hereby agrees to continue to employ the Executive,
and the Executive hereby agrees to continue in the employ of the Company on the terms and subject
to the conditions of this Agreement, for the period commencing on the Effective Date and ending on
the Separation Date or such earlier date as Executive’s employment is terminated as provided
herein (the “Transition Period”).

     3. Terms of Employment.

       (a) Position and Duties.

          (i) During the Transition Period: (A) the Executive shall serve as the Chief Operating
Officer of the Company, or in such other executive position as may be reasonably designated by the
Company’s Chief Executive Officer (“CEO”), with duties, authorities and

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responsibilities commensurate with such title and office and/or as may reasonably be assigned
to Executive by the CEO, consistent with Executive’s executive-level experience; and (B) the
Executive’s services shall primarily be performed in Denver, Colorado, although Executive agrees
to travel to the extent reasonably necessary to perform his duties hereunder. During the
Transition Period, and excluding any periods of disability and vacation and sick leave to which
the Executive is entitled, the Executive agrees to devote his attention and time during normal
business hours to the business and affairs of the Company as reasonably directed or specified by
the Company’s CEO, and, to the extent necessary to discharge the Executive’s responsibilities
hereunder, to use the Executive’s reasonable best efforts to perform such responsibilities,
subject to Executive’s ability to (A) serve on corporate, civic or charitable boards or
committees; provided that such service must be disclosed to and approved by the Company in
advance, pursuant to Company policy, (B) deliver lectures, fulfill speaking engagements or teach
at educational institutions; provided that such engagements must be disclosed to and approved by
the Company in advance, pursuant to Company policy and (C) manage personal investments; all so
long as such activities do not significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this Agreement, Company policies
and applicable law.

          (ii) During the Transition Period, Executive shall report to the Company’s CEO and may, at
Executive’s election, serve as a member of the Company’s Executive Committee or the successor
body, if any, thereto. During the Transition Period, Employee’s job duties shall encompass only
matters as may be reasonably assigned to him from time to time by the Company’s CEO. Executive
and the Company acknowledge and agree that, during the Transition Period, most if not all of
Executive’s principal responsibilities will be transferred to other Company executives, and that,
therefore, Executive’s day-to-day job functions will change substantially as the Transition Period
progresses. Executive and the Company also acknowledge and agree that while Executive will
throughout the Transition Period remain a member of the Company’s senior executive team and in
that capacity will be required and expected to perform only executive-level job functions, it may
be inappropriate or unnecessary to include Executive in all executive-level meetings that the
Company may conduct during the Transition Period. Notwithstanding the foregoing, the Company
agrees that during the Transition Period Executive will be assigned only executive-level
responsibilities that are consistent with his skills, experience and status within the Company,
and that the Company will not seek to hold Executive accountable for any Company-related matter
unless the Company included Executive in all material meetings and decisions concerning that
matter, or take any adverse action of any kind against Executive based upon Executive’s failure or
inability to attend any meeting, or participate in any decision, from which the Company excluded
Executive.

          (iii) As of the Separation Date, Executive shall be deemed to have resigned from all
positions with the Company and all affiliates thereof, including without limitation employment,
membership on boards of directors, and committee memberships. Thereafter, Executive shall not be
deemed an employee of the Company or any affiliate, and except as provided in Section 5(c)(ii)
shall not be entitled to participate in any employee benefit or fringe benefit program of any
kind.

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       (b) Compensation.

          (i) Base Salary. During the Transition Period, the Executive shall receive a base
salary (“Base Salary”) payable in cash at the rate of $500,000 per year. The Base Salary shall be
payable in installments, consistent with the Company’s payroll procedures in effect from time to
time, provided that such installments shall be no less frequent than monthly.

          (ii) 2005 Annual Bonus. In consideration of Executive’s work during 2005, at the
same time that the Company pays Peer Executives annual bonuses for their work in 2005, the Company
shall pay Executive a bonus calculated by multiplying Executive’s 2005 bonus target by the same
bonus multiplier used in calculating the 2005 annual bonuses of the “Comparable Executives;”
provided that in no event shall the 2005 Annual Bonus paid to Executive be less than 50% of
Executive’s 2005 annual bonus target. For purposes of this Agreement, “Comparable Executives”
shall mean participants in the Company’s 2005 Total Variable Compensation Plan excluding Gary
Black, any Company Portfolio Manager and all other executives whose employment contracts require
payment of an annual bonus in a fixed amount or pursuant to a unique calculation.

          (iii) Long-Term Incentive Compensation. Executive shall not be eligible to receive
any further awards under the Company’s Long-Term Incentive (“LTI”) Plan. All equity long-term
incentive awards or other incentive awards granted to the Executive by the Company (collectively,
“Retention and Incentive Awards”) shall remain outstanding during the Transition Period in
accordance with the terms of their respective award agreements; provided that as soon as
practicable following the Effective Date the Company and the Executive shall take the necessary
steps to cause all of Executive’s outstanding vested and unvested stock option awards to be
exchanged for Company restricted stock that imposes the same terms, restrictions and vesting
schedules as the Executive’s outstanding stock options (the “Exchange”) in an amount equal to the
fair market value of such stock options as of the date of the Exchange; and provided further that
the Company stock thus exchanged for one-half of that portion of Executive’s July 2003 stock
option award that would have vested in July 2006 shall become vested as of December 30, 2005; and
provided further that all portions of Executive’s Retention and Incentive Awards (including the
restricted stock subject to the Exchange) that are not scheduled to vest until after the
Separation Date shall remain in full force and effect according to their terms throughout the
Transition Period; and provided further that all portions of Executive’s Retention and Incentive
Awards (including the restricted stock subject to the Exchange) that have not yet vested as of the
Separation Date shall be forfeited and cancelled as of the Separation Date without any
compensation to the Executive. Fair market value of the applicable stock options shall be
determined on the Effective Date using the Black-Scholes option pricing methodology currently
applied by the Company.

          (iv) Incentive, Savings and Retirement Plans. During the Transition Period, but not
thereafter, the Executive shall be entitled to participate in all other incentive plans,
practices, policies and programs, and all savings and retirement plans, practices, policies and
programs, in each case on terms and conditions no less favorable than the terms and conditions
generally applicable to the executives who sit on the Company’s Executive Committee or, if
applicable, the successor body thereto (collectively, “Peer Executives”). Vesting of any Company
contributions to Executive’s 401(k) Plan account shall be in accordance with the terms of the

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Company’s 401(k) Plan as amended; provided that for such purposes Executive’s separation
shall be deemed to have resulted from a Job Elimination as that term is used in Section 1.33 of
the Company’s 401k Plan, as amended. In accordance with that certain Agreement between the
Executive and the Company, dated as of February 20, 2004 (the “February 2004 Agreement”), all
access restrictions applicable to the Janus mutual fund shares held in an account for Executive
under the February 2004 Agreement shall no longer apply as of the Separation Date.

          (v) Welfare Benefit Plans. During the Transition Period, but not thereafter, the
Executive and the Executive’s spouse and dependents, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company and its affiliates (including, without limitation, medical,
prescription, dental, disability, employee life, group life, accidental death and travel accident
insurance plans and programs) on terms and conditions no less favorable than the terms and
conditions generally applicable to Peer Executives. Notwithstanding the foregoing, Executive
shall be eligible, upon the terms and conditions set forth in Sections 5(c) and (d), below, to
continued participation in certain employee benefits plans following the termination of his
employment.

          (vi) Vacation. During the Transition Period, but not thereafter, the Executive shall
be entitled to paid vacation in accordance with the plans, policies, programs and practices of the
Company as in effect for the Peer Executives, but in no event less than three weeks.

          (vii) Initial Transition Payment. As soon as practicable following the Effective
Date, the Company shall pay Executive, in a lump sum cash payment, an Initial Transition Payment
in an amount equal to the sum of $250,000, less legally required withholdings

     4. Termination of Employment.

       (a) Death. The Executive’s employment shall terminate automatically upon the
Executive’s death during the Transition Period.

       (b) Cause. The Company may terminate the Executive’s employment during the
Transition Period with or without Cause. For purposes of this Agreement, “Cause” shall mean:

          (i) the willful and continued failure of the Executive to perform substantially the
Executive’s duties with the Company (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance is delivered to
the Executive by the Board or its representative, which specifically identifies the manner in
which the Board believes that the Executive has not substantially performed the Executive’s duties
and which gives the Executive a reasonable opportunity of not less than thirty (30) days to cure
the deficiency noted therein; or

          (ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company; or

4

 

          (iii) conviction of a felony (other than a traffic related felony) or guilty or nolo
contendere plea by the Executive with respect thereto; or

          (iv) a willful material breach by the Executive of any material provision of this Agreement;
or

          (v) a willful violation of any regulatory requirement, or of any material Company policy or
procedure, that is demonstrably injurious to the Company; or

          (vi) Executive’s failure to obtain or maintain, or inability to qualify for, any license
required for the performance of Executive’s material job responsibilities, or the suspension or
revocation of any such license held by the Executive.

No act or failure to act on the part of the Executive shall be considered “willful” unless it is
done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the
Executive’s act or omission was in the best interests of the Company. Any act, or failure to act,
based upon express authority given pursuant to a resolution duly adopted by the Board with respect
to such act or omission or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company.

     5. Obligations of the Company In Relation to Termination.

       (a) Upon any termination of Executive’s employment, the Company shall pay to the Executive,
in a lump sum in cash within five (5) business days after the date of termination, the Executive’s
Base Salary through the date of termination, all to the extent not yet paid as of the date of
termination.

       (b) Special Payment. If Executive remains employed by the Company on December 27,
2005, or if the Company terminates the Executive’s employment other than for Cause or death prior
to December 27, 2005, then on December 27, 2005 the Company shall pay Executive a lump sum cash
payment of $500,000 less legally required withholdings.

       (c) Severance Benefit. In addition to the “Special Payment” contemplated by Section
5(b), if the Company terminates the Executive’s employment other than for Cause or death during
the Transition Period, or if the Executive’s employment shall terminate on the Separation Date,
then conditioned upon Executive’s execution (and if applicable non-revocation) of a legal release
in the form attached hereto as Exhibit A:

          (i) within 5 business days after the date of termination or on his Separation Date, the
Company shall pay to the Executive, in a lump sum cash payment, an amount equal to $2,000,000,
less legally required withholdings.

          (ii) for the period commencing on the earlier of the date of termination of employment or the
Separation Date and ending on the third anniversary thereof, the Company shall continue to provide
the benefits described in Section 3(b)(v) to the Executive and his dependents on the same basis
such benefits were provided to the Executive immediately prior to

5

 

the Effective Date (collectively “Welfare Benefits”); provided that Executive’s right to
benefits continuation shall terminate as of the date on which he becomes eligible for
substantially similar welfare benefits under another employer’s group benefit plans; and

          (iii) any and all unvested Retention and Incentive Awards shall be forfeited and cancelled
without any compensation to the Executive;

          (iv) to the extent not theretofore paid or provided, the Company shall timely pay or provide
to the Executive any Other Benefits (as defined in Section 6).

       (d) Death. If the Executive’s employment is terminated by reason of the Executive’s
death during the Transition Period, the Company shall: (i) pay to the Executive’s estate or
beneficiaries Executive’s base salary to the extent unpaid at the time of Executive’s death, plus
$500,000, in full satisfaction of the Company’s obligations under Section 5(b), above, plus a pro
rata 2005 Annual Bonus in the amount of $1,500,000 multiplied by a fraction in which the numerator
is the number of days in 2005 that had elapsed as of the date of Executive’s death and the
denominator is 365, in full satisfaction of the Company’s obligations under Section 3(b)(ii), all
less applicable taxes (which three payments shall collectively be referred to herein as the
“Accrued Obligations”); and (ii) provide to the estate or beneficiaries the Other Benefits (as
defined in Section 6) and shall provide the Welfare Benefits to the Executive’s dependents for a
three-year period commencing as of the date of termination, and shall have no other severance
obligations under this Agreement. In addition, all equity awards shall be treated as described in
their respective award agreements. The Accrued Obligations shall be paid to the Executive’s
estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the date of
termination. With respect to the provision of the Other Benefits, the term “Other Benefits” as
utilized in this Section 5(d) shall include, and the Executive’s estate and /or beneficiaries
shall be entitled to receive, benefits at least equal to death benefits as in effect on the date
of the Executive’s death with respect to comparable executives of the Company and their
beneficiaries. In the event of Executive’s death, the Company shall be required to pay
Executive’s estate or beneficiaries only the Accrued Obligations. Without limiting the generality
of the foregoing, in the event of Executive’s death the Company shall not be required to pay
Executive or Executive’s estate any payment under Section 5(c), above.

       (e) Cause; Other than for Good Reason. If the Executive’s employment shall be
terminated for Cause or the Executive voluntarily terminates his employment during the Transition
Period, the Company shall be required only to pay to the Executive (i) his Base Salary through the
date of termination, and (ii) the Other Benefits (as defined in Section 6), in each case to the
extent theretofore unpaid.

       (f) Excise Tax. Notwithstanding any other language to the contrary in this Agreement
or in this Section 5, the Company shall not be obligated to pay and shall not pay that portion of
any payment or distribution in the nature of compensation within the meaning of Section 280G(b)(2)
of the Code to the benefit of the Executive otherwise due or payable the Executive under this
Agreement or this Section 5 if that portion would cause any excise tax imposed by Section 4999 of
the Code to become due and payable by the Executive.

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     6. Non-exclusivity of Rights. Except as otherwise specifically provided in this
Agreement, nothing in this Agreement shall prevent or limit the Executive’s continuing or future
participation in any plan, program, policy or practice provided by the Company or any affiliate
for which the Executive may qualify. Amounts that are vested benefits, which consist of any
compensation previously deferred by the Executive, or which the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or agreement with the
Company or any affiliate at or subsequent to the date of termination (“Other Benefits”) shall be
payable in accordance with such plan, policy, practice or program or contract or agreement except
as explicitly modified by this Agreement. Notwithstanding any other provision of this Agreement,
the Executive shall not be entitled to receive any payments or benefits under any severance
program other than those that are described and anticipated under this Agreement.

     7. Restrictive Covenants.

       (a) The Executive acknowledges that his employment as a senior officer of the
Company creates a relationship of confidence and trust between the Executive and the Company with
respect to confidential and proprietary information applicable to the business of the Company and
its clients. The Executive further acknowledges the highly competitive nature of the business of
the Company. Accordingly, it is agreed that the restrictions contained in this Section 7 are
reasonable and necessary for the protection of the interests of the Company and that any violation
of these restrictions would cause substantial and irreparable injury to the Company.

       (b) During the Executive’s employment with the Company, and for a period of one year
following the date of termination for any reason (the “Restricted Period”), the Executive shall
not (nor shall the Executive cause, encourage or provide assistance to, anyone else to):

          (i) Interfere with any relationship which may exist from time to time between the Company, or
any affiliate of the Company, and any of its employees, consultants, agents or representatives; or

          (ii) Employ or otherwise engage, or attempt to employ or otherwise engage, in or on behalf of
any Competitive Business, any person who is employed or engaged as an employee, consultant, agent
or representative of the Company or any affiliate of the Company, or any person who was employed
or engaged as an employee, consultant, agent or representative of the Company or any affiliate of
the Company within the two-year period immediately preceding the Executive’s termination; or

          (iii) Solicit directly or indirectly on behalf of the Executive or a Competitive Business,
the customer business or account of any investment advisory or investment management client to
which the Company or any affiliate of the Company shall have rendered service during the one-year
period immediately preceding the Executive’s termination; or

          (iv) Directly or indirectly divert or attempt to divert from the Company or any affiliate of
the Company any business in which the Company or any affiliate of the Company has been actively
engaged during the term hereof or interfere with any relationship between the Company, or any
affiliate of the Company, and any of its clients.

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Notwithstanding any of the foregoing, the Company and Executive agree that if Executive is
employed in an operational role at a Competitive Business during the Restricted Period, such
employment alone will not be interpreted to constitute a violation of this Section 7, nor shall
the actions of Executive’s employer during the Restricted Period be imputed to Executive unless
Executive caused, encouraged or provided assistance to his employer with regard to activities
that, if engaged in by Executive, would violate the restrictions contained in this Section7.

       (c) “Competitive Business” means any business that provides investment advisory or investment
management services, printing fulfillment, or related services. For the purposes of this Section
7, “affiliate” means any corporation, partnership, limited liability company, trust, or other
entity which controls, is controlled by or is under common control with the Company.

       (d) If any court shall determine that the duration, geographic limitations, subject or scope
of any restriction contained in this Section 7 is unenforceable, it is the intention of the
parties that this Section 7 shall not thereby be terminated but shall be deemed amended to the
extent required to make it valid and enforceable, such amendment to apply only with respect to the
operation of this Section 7 in the jurisdiction of the court that has made the adjudication.

       (e) The Executive acknowledges that the restrictive covenants of this Section 7 are
reasonable and that irreparable injury will result to the Company and to its business and
properties in the event of any breach by the Executive of any of those covenants, and that the
Executive’s continued employment is predicated on the commitments undertaken by the Executive
pursuant to this Section 7. In the event any of the covenants of this Section 7 are breached, the
Company shall be entitled, in addition to any other remedies and damages available, to injunctive
relief to restrain the violation of such covenants by the Executive or by any person or persons
acting for or with the Executive in any capacity whatsoever.

8

 

     8. Successors.

       (a) This Agreement is personal to the Executive and without the prior written consent of the
Company shall not be assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s
legal representatives.

       (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

       (c) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly, and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such succession had taken
place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.

     9. Prior Agreements.

       (a) Except as otherwise provided in Sections 3(b)(iv), 3(b)(v) and 6, above, and 9(b) and (c)
below, the Employment Agreement and all other agreements between Executive and the Company shall
be deemed terminated hereby and superseded by this Agreement, and shall hereafter be of no further
force or effect.

       (b) Notwithstanding any other provision of this Agreement, this Agreement shall not be deemed
to limit, release, impair or otherwise affect, in any way, Executive’s rights under Section 10 of
the Employment Agreement nor under the February 2004 Agreement.

       (c) Notwithstanding any other provision of this Agreement, Executive’s Change of Control
Agreement shall remain in effect through the Transition Period and shall expire on the Separation
Date. If during the Transition Period any event triggers a right of Executive to receive any
benefit under the Change of Control Agreement (a “Triggering Event”), then Executive shall have the
option, in his discretion, to receive the rights and benefits available to him under the Change of
Control Agreement (the “COC Benefits”), or the benefit available to him under this Agreement (the
“Transition Agreement Benefits”), but Executive may not receive benefits under both agreements.
Accordingly, within ten (10) business days after he receives notice of a Triggering Event,
Executive shall notify the Company in writing (by an “Election Notice”) whether he intends to
forsake the Transition Agreement Benefits and accept the COC Benefits, or wishes instead to forsake
the COC Benefits and accept the Transition Agreement Benefits. If Executive elects to receive the
COC Benefits, then Executive’s right to any payments or other benefits of any kind under this
Agreement shall immediately terminate and, in addition, Executive shall be required, as a condition
of receiving the COC Benefits, to execute a legal release in substantially the form attached hereto
as Exhibit A and take all actions reasonably requested by the Company to reverse all actions taken
pursuant to this Agreement, including without limitation refunding to the Company the payment
described in Section 5(b), above, to the extent paid before the Company’s receipt of

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Executive’s Election Notice; provided that in all events Executive shall be entitled to retain
the Exchange Consideration provided for in Section 3(b)(iii) of this Agreement. If Executive
elects to receive the Transition Agreement Benefits, then Executive’s rights under the Change of
Control Agreement shall be deemed terminated and that agreement shall be of no further force or
effect. In the event of any conflict between the terms of this Agreement and the terms of the
Change of Control Agreement, this Agreement shall control, and the Change of Control Agreement
shall be deemed amended to conform to the conflicting terms of this Agreement.

     10. Consulting Following Separation Date. Executive agrees that following the
Separation Date he will make himself reasonably available, at the Company’s reasonable request, to
provide information and consulting on an as-needed, as-requested basis; provided that the Company
shall exercise reasonable good faith efforts to limit the extent to which its requests for such
information and consulting interfere with Executive’s personal and business commitments; and
provided further that Executive shall exercise reasonable, good faith efforts to respond to the
Company’s requests for such information and consulting in a timely and complete fashion; and
provided further that the Company shall reimburse Executive for any expenses that are approved in
advance and incurred by him in connection with the performance of such consulting services, and
shall pay Executive a mutually agreed hourly rate for all time spent by Executive providing the
Company with consulting and information following the Separation Date, excepting only time spent
responding to de minimis periodic telephone calls seeking answers to discrete factual questions.

     11. Cooperation in Proceedings. The Company and Executive agree that they shall
fully cooperate with respect to any claim, litigation or judicial, arbitral or investigative
proceeding initiated by any private party or by any regulator, governmental entity, or
self-regulatory organization, that relates to or arises from any matter with which Executive was
involved during his employment with the Company, or that concerns any matter of which Executive
has information or knowledge (collectively, a “Proceeding”). Executive’s duty of cooperation
includes, but is not limited to: (i) meeting with the Company’s attorneys by telephone or in
person at mutually convenient times and places in order to state truthfully Executive’s
recollection of events; (ii) appearing at the Company’s request as a witness at depositions or
trials, without the necessity of a subpoena, in order to state truthfully Executive’s knowledge of
matters at issue; and (iii) signing at the Company’s request declarations or affidavits that
truthfully state matters of fact of which Executive has personal knowledge obtained during the
course of his employment at Janus; provided that this Agreement shall not be deemed to require
Executive to execute any declaration or affidavit that in his good faith opinion is inaccurate or
incomplete in any respect. The Company’s duty of cooperation includes, but is not limited to
providing Executive and his counsel access to documents, information, witnesses and the Company’s
legal counsel as is reasonably necessary to litigate on behalf of Executive in any Proceeding.
In addition, Executive agrees to notify the Company’s General Counsel promptly of any requests for
information or testimony that he receives in connection with any litigation or investigation
relating to the Company’s business, and the Company agrees to notify Executive of any requests for
information or testimony that it receives relating to Executive. Notwithstanding any other
provision of this Agreement, this Agreement shall not be construed or applied so as to require any
Party to violate any confidentiality agreement or understanding with any third party, nor shall it
be construed or applied so as to compel any Party to take any action, or omit to take any action,
requested or directed by any regulatory or law enforcement authority. The Company shall exercise
reasonable good faith efforts to minimize the

10

 

extent to which its requests for cooperation pursuant to this Section 11 conflict with
Executive’s prior professional and personal commitments, and shall reimburse Executive for the
expenses that he reasonably and necessarily incurs in honoring his duty of cooperation under this
Section 11, provided that Executive has secured the Company’s prior consent to incur such
expenses.

     12. Legal Releases.

       (a) Executive, on his own behalf and on behalf of his heirs, personal representatives,
executors, administrators and assigns, knowingly and voluntarily releases and forever discharges
the Company and its affiliates and any of their respective parents, subsidiaries and affiliates,
together with all of their respective past and present directors, members, managers, officers,
shareholders, trustees, partners, employees, agents, attorneys and servants, and each of their
affiliates, predecessors, successors and assigns (collectively, the “Company Releasees”) from any
and all claims, charges, complaints, promises, agreements, controversies, liens, demands, causes of
action, obligations, damages and liabilities of any nature whatsoever, known or unknown, suspected
or unsuspected, that Executive or his heirs, executors, administrators, or assigns ever had, now
have, or may hereafter claim to have against any of the Company Releasees by reason of any matter,
cause or thing whatsoever from the beginning of time through the Effective Date, whether or not
previously asserted before any state or federal court, agency or governmental entity or any
arbitral body. This release includes, without limitation, any rights or claims relating in any way
to Executive’s employment relationship with the Company or any of the Company Releasees, or his
resignation therefrom, or arising under any statute or regulation, including Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, Age Discrimination in Employment Act of 1967
(“ADEA”), the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act
of 1974, and the Family Medical Leave Act of 1993, each as amended, or any other federal, state or
local law, regulation, ordinance, or common law, or under any policy, agreement, understanding or
promise, written or oral, formal or informal, between Executive and the Company or any of the
Company Releasees, as well as any rights relating to any Company stock or other equity-related
incentive that had not vested by its own terms as of the Separation Date; provided, however, that
notwithstanding the foregoing or anything else contained in this Agreement, the release set forth
in this Section 12(a) shall not extend to (i) any rights arising under or recognized by this
Agreement; (ii) any rights under Section 10 of the Employment Agreement; or (iii) any claim or
claims that the Executive may have against the Company as of the Effective Date of which he is not
aware as of the Effective Date because of willful concealment by the Company. Executive further
agrees that he will not seek or be entitled to any personal recovery in any claim, charge, action
or proceeding whatsoever against the Company or any of the Company Releasees for any of the matters
released in this Section 12(a). Executive represents and warrants that as of the Effective Date he
has no knowledge of any fact willfully concealed from him by the Company within the meaning of this
Section 12(a).

       (b) The Company, on its own behalf and on behalf of its current and past parents, subsidiaries
and affiliates and each of their predecessors, successors and assigns, knowingly and voluntarily
releases and forever discharges Executive and his heirs, personal representatives, executors,
administrators and assigns, (collectively, the “Executive Releasees”) from any and all claims,
charges, complaints, promises, agreements, controversies, liens, demands, causes of action,
obligations, damages and liabilities of any nature whatsoever, known or unknown, suspected or

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unsuspected, that the Company, its current and past parents, subsidiaries and affiliates and
each of their predecessors, successors and assigns ever had, now have, or may hereafter claim to
have against any of the Executive Releasees by reason of any matter, cause or thing whatsoever from
the beginning of time through the Effective Date, whether or not previously asserted before any
state or federal court, agency or governmental entity or any arbitral body. This release includes,
without limitation, any rights or claims relating in any way to Executive’s employment relationship
with the Company, or his separation therefrom, or arising under any statute or regulation, or any
other federal, state or local law, regulation, ordinance, or common law, or under any policy,
agreement, understanding or promise, written or oral, formal or informal, between Executive and the
Company; provided, however, that notwithstanding the foregoing or anything else contained in this
Agreement, the release set forth in this Section 12(b) shall not extend to: (i) any rights arising
under this Agreement; (ii) a breach of fiduciary duty or other misconduct relating to Executive’s
employment with the Company that renders Executive ineligible for indemnification pursuant to
Section 10 of the Employment Agreement; or (iii) any claim or claims that the Company may have
against Executive as of the Effective Date of which it is not aware as of the Effective Date
because of willful concealment by Executive. The Company, on its own behalf and on behalf of its
current and past parents and subsidiaries, and each of their predecessors, successors and assigns,
represents that it has not commenced or joined in any claim, charge, action or proceeding
whatsoever against Executive arising out of or relating to any of the matters released in this
Section 12(b). The Company, on its own behalf and on behalf of its current and past parents and
subsidiaries, and each of their predecessors, successors and assigns, further agrees that it will
not seek or be entitled to any personal recovery in any claim, charge, action or proceeding
whatsoever against Executive for any of the matters released in this Section 12(b). The Company
represents and warrants that as of the Effective Date it has no knowledge of any fact willfully
concealed from it by the Executive within the meaning of this Section 12(b), or any breach of
fiduciary duty by Executive or other misconduct by Executive relating to Executive’s employment
with the Company that renders Executive ineligible for indemnification pursuant to Section 10 of
the Employment Agreement.

       (c) In order to provide a full and complete release, each of the Parties understands and
agrees that this Agreement is intended to include all claims, if any, covered under this Section 12
that such Party may have and not now know or suspect to exist in his or its favor against any other
Party and that this Agreement extinguishes such claims. Thus, each of the Parties expressly waives
all rights under any statute or common law principle in any jurisdiction that provides, in effect,
that a general release does not extend to claims which the releasing party does not know or suspect
to exist in his favor at the time of executing the release, which if known by him must have
materially affected his settlement with the party being released. Notwithstanding any other
provision of this Section 12, however, nothing in this Section 12 is intended or shall be construed
to limit or otherwise affect in any way Executive’s rights under Section 10 of the Employment
Agreement, under the February 2004 Agreement, or under this Agreement. 

       (d) Executive agrees and acknowledges that he: (i) understands the language used in this
Agreement and the Agreement’s legal effect; (ii) will receive compensation under this Agreement to
which he would not have been entitled without signing this Agreement; (iii) has been advised by the
Company to consult with an attorney before signing this Agreement; and (iv) will be given up to
twenty one (21) calendar days to consider whether to sign this Agreement. For a period of seven
days after the Effective Date, Executive may, in his sole discretion, rescind this Agreement,

12

 

by delivering a written notice of rescission to Peter Boucher. If Executive rescinds this
Agreement within seven calendar days after the Effective Date, this Agreement shall be void, all
actions taken pursuant to this Agreement shall be reversed, and neither this Agreement nor the fact
of or circumstances surrounding its execution shall be admissible for any purpose whatsoever in any
proceeding between the parties, except in connection with a claim or defense involving the validity
or effective rescission of this Agreement. If Executive does not rescind this Agreement within
seven calendar days after the Effective Date, this Agreement shall become final and binding and
shall be irrevocable.

     13. Additional Representations and Covenant.

       (a) Executive represents and warrants that as of the Effective Date he is unaware of any facts
or circumstances relating to the Company’s business that he believes suggest or support a claim of
wrongdoing or illegal conduct of any kind by the Company or any employee, officer or director
thereof, other than previously disclosed in connection with the 2003-2004 regulatory inquiries and
subsequent settlement order, or as otherwise previously disclosed by Executive. Executive
covenants that, to the extent permitted by law, following the Effective Date he will not take any
action, or encourage any other person to take any action with the intent of, calculated or known to
Executive to likely to result in the initiation or an inquiry, investigation or other action
concerning the Company by any federal, state or local governmental body or agency, and that were he
to do so he would commit a material breach and default under this Agreement, for which the Company
would be entitled to all remedies available to the Company pursuant to applicable law, including
specific performance of this covenant.

       (b) The Company represents and warrants that as of the Effective Date it is unaware of any
facts or circumstances relating to the Company’s business that it believes suggest or support a
claim of wrongdoing or illegal conduct of any kind by Executive.

     14. Miscellaneous.

       (a) This Agreement shall be governed by and construed in accordance with the laws of the
State of Colorado without reference to principles of conflict of laws, subject to the application
of the laws of the State of Delaware for Section 10 of the Employment Agreement. The captions of
this Agreement are not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

       (b) All notices and other communications hereunder shall be in writing and shall be given by
hand delivery to the other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:

If to the Executive:     At the most recent address on file at the Company, and by fax,
email and U.S. Mail to: Dean C. Heizer, Parsons, Heizer, Paul LLP, 2401
15th Street, Suite 300, Denver, CO 80202; Fax: (303) 595-4750, email:
dheizer@phplawyers.com.

13

 

	 	 	 	 	 
	 

	 	If to the Company:
	 	Janus Capital Group Inc.
	 

	 	 	 	151 Detroit Street
	 

	 	 	 	Denver, Colorado 80206
	 

	 	 	 	Attn.: General Counsel

or to such other address as either party shall have furnished to the other in writing in
accordance herewith, Notice and communications shall be effective when actually received by the
addressee. In the event that Executive becomes eligible for welfare benefits under another
employer’s group benefit plans and such benefits are substantially similar to those to be provided
to Executive under Section 5(b)(ii), above, then Executive shall notify the Company of that fact
in writing.

       (c) The invalidity or unenforceability of any provision of this Agreement shall not affect
the validity or enforceability of any other provision of this Agreement.

       (d) All payments made by the Company under this Agreement will be subject to legally required
tax and other withholdings.

       (e) The Executive’s or the Company’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Executive or the Company may
have hereunder, shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.

       (f) In the event of any dispute relating to or arising from this Agreement, Executive shall
bear all of his costs and attorney’s fees up to Ten Thousand ($10,000) and shall not be entitled
to payment or reimbursement of such fees or costs by the Company. With respect to attorneys’ fees
and costs incurred by Executive in connection with such a dispute in excess of $10,000, the
Company agrees to pay as incurred (within 15 days following the Company’s receipt of an invoice
from the Executive and proof of Executive’s payment of the foregoing $10,000 attorney’s fees and
costs), to the full extent permitted by law, all legal fees and expenses that the Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof unless the
Executive’s claim is determined by a court to have been frivolous or made in bad faith, in which
case the Executive shall make prompt reimbursement of such fees and expenses to the extent already
paid by the Company and received by the Executive) relating to the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive about the amount of any payment pursuant to
this Agreement), plus, in each case, interest on any delayed payment at the applicable federal
rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code, as amended. For purposes
of clarifying the limitations of this Section 14(f), the Executive acknowledges and agrees that he
will not be entitled to the payment of any attorneys’ fees or expenses incurred on or after the
Effective Date from any claims, disputes, rights or obligations relating to or arising from any
prior agreement or arrangement between the Company and/or its affiliates and Executive (including
without limitation the Miller Agreements), except as provided for in Section 10 of the Employment
Agreement.

       (g) All disputes relating to or arising from this agreement shall be tried only in the state
or federal courts situated in the Denver, Colorado metropolitan area.

14

 

[SIGNATURE PAGE FOLLOWS]

15

 

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization from its Board of Directors, the Company has caused these presents to be executed in
its name on its behalf, all as of the day and year first above written.

	 	 	 	 	 	 	 	 	 
	EXECUTIVE	 	 	 	JANUS CAPITAL GROUP INC.
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Girard C. Miller
	 	 	 	By:	 	/s/ Steven L. Scheid
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	August 5, 2005
	 	 	 	Date:
	 	 August 5, 2005
	 

	 	 
	 	 	 	 	 	 

16

 

EXHIBIT A

Supplemental Legal Release

     This Supplemental Legal Release (“Supplemental Release”) is between Janus Capital Group Inc.
(the “Company”) and Girard C. Miller (“Executive”) (each a “Party,” and together, the “Parties”).

Recitals

     A. Executive and the Company are parties to a Transition Agreement to which this Supplemental
Release is appended as Exhibit A (the “Transition Agreement”).

     B. Executive wishes to receive the Severance Benefit described in Section 5(c) of the
Transition Agreement.

     C. Executive and the Company wish to resolve, except as specifically set forth herein, all
claims between them arising from or relating to any act or omission predating the Final Separation
Date defined below.

Agreement

     The Parties agree as follows:

     1. Confirmation of Severance Benefit Obligation. The Company shall pay or provide to
the Executive the entire Severance Benefit, as, when and on the terms and conditions specified in
the Transition Agreement.

     2. Legal Releases

          (a) Executive, on his own behalf and on behalf of his heirs, personal representatives,
executors, administrators and assigns, knowingly and voluntarily releases and forever discharges
the Company and its affiliates and any of their respective parents, subsidiaries and affiliates,
together with all of their respective past and present directors, members, managers, officers,
shareholders, trustees, partners, employees, agents, attorneys and servants, and each of their
affiliates, predecessors, successors and assigns (collectively, the “Company Releasees”) from any
and all claims, charges, complaints, promises, agreements, controversies, liens, demands, causes of
action, obligations, damages and liabilities of any nature whatsoever, known or unknown, suspected
or unsuspected, that Executive or his heirs, executors, administrators, or assigns ever had, now
have, or may hereafter claim to have against any of the Company Releasees by reason of any matter,
cause or thing whatsoever from the beginning of time through the Separation Date, whether or not
previously asserted before any state or federal court, agency or governmental entity or any
arbitral body. This release includes, without limitation, any rights or claims relating in any way
to Executive’s employment relationship with the Company or any of the Company Releasees, or his
resignation therefrom, or arising under any statute or regulation, including Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, Age Discrimination in Employment Act of 1967
(“ADEA”), the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act
of 1974, and the Family Medical Leave Act

1

 

of 1993, each as amended, or any other federal, state or local law, regulation, ordinance, or
common law, or under any policy, agreement, understanding or promise, written or oral, formal or
informal, between Executive and the Company or any of the Company Releasees, as well as any rights
relating to any Company stock or other equity-related incentive that had not vested by its own
terms as of the Separation Date; provided, however, that notwithstanding the foregoing or anything
else contained in this Agreement, the release set forth in this Section 2(a) shall not extend to
(i) any rights arising under or recognized by this Supplemental Release or the Transition
Agreement; (ii) any rights under Section 10 of the Employment Agreement; or (iii) any claim or
claims that the Executive may have against the Company as of the Separation Date of which he is not
aware as of the Separation Date because of willful concealment by the Company. Executive further
agrees that he will not seek or be entitled to any personal recovery in any claim, charge, action
or proceeding whatsoever against the Company or any of the Company Releasees for any of the matters
released in this Section 2(a). Executive represents and warrants that as of the Separation Date he
has no knowledge of any fact willfully concealed from him by the Company within the meaning of this
Section 2(a).

          (b) The Company, on its own behalf and on behalf of its current and past parents, subsidiaries
and affiliates and each of their predecessors, successors and assigns, knowingly and voluntarily
releases and forever discharges Executive and his spouse, heirs, personal representatives,
executors, administrators and assigns, (collectively, the “Executive Releasees”) from any and all
claims, charges, complaints, promises, agreements, controversies, liens, demands, causes of action,
obligations, damages and liabilities of any nature whatsoever, known or unknown, suspected or
unsuspected, that the Company, its current and past parents, subsidiaries and affiliates and each
of their predecessors, successors and assigns ever had, now have, or may hereafter claim to have
against any of the Executive Releasees by reason of any matter, cause or thing whatsoever from the
beginning of time through the Separation Date, whether or not previously asserted before any state
or federal court, agency or governmental entity or any arbitral body. This release includes,
without limitation, any rights or claims relating in any way to Executive’s employment relationship
with the Company, or his separation therefrom, or arising under any statute or regulation, or any
other federal, state or local law, regulation, ordinance, or common law, or under any policy,
agreement, understanding or promise, written or oral, formal or informal, between Executive and the
Company; provided, however, that notwithstanding the foregoing or anything else contained in this
Supplemental Release, the release set forth in this Section 2(b) shall not extend to: (i) any
rights arising under this Supplemental Release or the Transition Agreement; (ii) a breach of
fiduciary duty or other misconduct relating to Executive’s employment with the Company that renders
Executive ineligible for indemnification pursuant to Section 10 of the Employment Agreement; or
(iii) any claim or claims that the Company may have against Executive as of the Separation Date of
which it is not aware as of the Separation Date because of willful concealment by Executive. The
Company, on its own behalf and on behalf of its current and past parents and subsidiaries, and each
of their predecessors, successors and assigns, represents that it has not commenced or joined in
any claim, charge, action or proceeding whatsoever against Executive arising out of or relating to
any of the matters released in this Section 2(b). The Company, on its own behalf and on behalf of
its current and past parents and subsidiaries, and each of their predecessors, successors and
assigns, further agrees that it will not seek or be entitled to any personal recovery in any claim,
charge, action or proceeding whatsoever against Executive for any of the matters released in this
Section 2(b). The Company represents and warrants that as of the Separation

2

 

Date it has no knowledge of any fact willfully concealed from it by the Executive within the
meaning of this Section 2(b), or any breach of fiduciary duty by Executive or other misconduct by
Executive relating to Executive’s employment with the Company that renders Executive ineligible for
indemnification pursuant to Section 10 of the Employment Agreement

          (c) In order to provide a full and complete release, each of the Parties understands and
agrees that this Supplemental Release is intended to include all claims, if any, covered under this
Paragraph 2 that such Party may have and not now know or suspect to exist in his or its favor
against any other Party and that this Supplemental Release extinguishes such claims. Thus, each of
the Parties expressly waives all rights under any statute or common law principle in any
jurisdiction that provides, in effect, that a general release does not extend to claims which the
releasing party does not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement with the party being
released.

          (d) Executive acknowledges that he consulted with an attorney of his choosing before signing
the Transition Agreement and this Supplemental Release, and that the Company provided him with no
fewer than twenty-one (21) days during which to consider the provisions of the Transition Agreement
and this Supplemental Release and, specifically the release set forth at Paragraph 2(a), above,
although Executive may sign and return the Supplemental Release sooner if he so chooses. Executive
further acknowledges that he has the right to revoke this Supplemental Release for a period of
seven (7) days after signing it and that this Supplemental Release shall not become effective until
such seven (7)-day period has expired (the “Final Separation Date”). Executive acknowledges and
agrees that if he wishes to revoke this Supplemental Release, he must do so in writing, and that
such revocation must be signed by the Executive and received by the Company in care of its Chief
Executive Officer no later than 5 p.m. (Mountain Time) on the seventh (7th) day after Executive has
signed this Supplemental Release. Executive acknowledges and agrees that, in the event that he
revokes this Supplemental Release, he shall have no right to receive the Severance Benefit.
Executive represents that he has read this Supplemental Release, including the release set forth in
Paragraph 2(a), above, affirms that this Supplemental Release and the Transition Agreement provide
him with benefits to which he would not otherwise be entitled, and understands its terms and that
he enters into this Supplemental Release freely, voluntarily, and without coercion.

     3. Executive acknowledges that he has received all compensation to which he is entitled for
his work up to his last day of employment with the Company, and that he is not entitled to any
further pay or benefit of any kind, for services rendered or any other reason, other than the
Severance Benefit.

     4. Executive agrees that the only thing of value that he will receive by signing this
Supplemental Release is the Severance Benefit.

     5. The Parties agree that their respective rights and obligations under the Transition
Agreement shall survive the execution of this Supplemental Release.

[SIGNATURES FOLLOW]

3

 

NOTE: DO NOT SIGN THIS SUPPLEMENTAL LEGAL RELEASE UNTIL AFTER

EXECUTIVE’S FINAL DAY OF EMPLOYMENT.

	 	 	 	 	 	 	 
	JANUS CAPITAL GROUP INC.	 	EXECUTIVE
	 
	By:	 	 	 	 
	 	 	 	 	Girard C. Miller
	 
	Date:

	 	 	 	Date:
	 	 

4

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