Document:

Eagle Materials Inc.Concrete&Aggregates Salaried Incentive Compensation Program

 Exhibit 10.3 
 EAGLE MATERIALS INC. 
 CONCRETE AND AGGREGATES COMPANIES 
 SALARIED INCENTIVE COMPENSATION PROGRAM 
 FOR FISCAL YEAR 2010 
 1. Bonus Pool 
 To insure reasonableness and affordability the available funds for bonus payments are determined as a percent of earnings of Eagle Materials Inc.’s concrete and aggregate companies. The actual percentage may vary
from year to year. 
 For Fiscal Year 2010, the bonus pool for each concrete and aggregate company shall be equal to 2.25% of each
company’s operating profit. 
 Participants must be employed at fiscal year-end to be eligible for any bonus award. Awards may be
adjusted for partial year participation for participants added during a year. 
 Eagle Materials CEO retains the final right of
interpretation and administration of the plan and to amend or terminate the plan at any time. 
 2. Eligibility 
 The Eagle Materials Concrete and Aggregate EVP, the subsidiary concrete/aggregates company Presidents, V.P. Sales and Plant Managers will be in the plan.
Additional participants who have management responsibilities or are in a professional capacity that can measurably impact earnings may be recommended by subsidiary company presidents subject to the approval of the Eagle Materials Concrete and
Aggregate EVP and Eagle Materials CEO. The addition of new participants will not affect the total pool available but will in effect dilute the potential bonuses of the original participants. 
 A participant must be an exempt salaried manager or professional. No hourly or non-exempt employee may participate. Participants in this plan may not
participate in any other company incentive plan with monetary awards, except for the Concrete and Aggregate Companies’ Long-Term Compensation Program, the Eagle Materials Long- Term Compensation Program and the Eagle Materials Special Situation
Program. 
 3. Allocation of Pool 
 The subsidiary concrete/aggregates company Presidents will each be eligible for 20%—40% of the pool funded from their respective subsidiary company. The subsidiary concrete/aggregates company Presidents will recommend the distribution
of the remainder of their subsidiary company pool. The participants in the plan and their percentage of the pool will require approval of the Eagle Materials Concrete and Aggregate EVP and Eagle Materials CEO at the beginning of the fiscal year for
which the bonus is being earned. 

 The subsidiary concrete/aggregates company President’s bonus opportunity will be 50% specific,
objective goals and 50% discretionary as determined by Eagle Materials Concrete and Aggregate EVP taking into consideration overall job performance and compliance with Eagle Materials Policies and Code of Ethics. All participants in the plan must
have the ability to significantly affect the performance of the subsidiary company by achieving measurable, quantifiable, objectives. The subsidiary company Presidents will determine the objective and discretionary balance of bonus opportunities for
the participants in their companies subject to approval by Eagle Materials Concrete and Aggregate EVP and Eagle Materials CEO. 
 4. Objective Criteria
 
 Objective setting is essential to an effective incentive compensation plan and should be measurable and focus on areas that have
meaningful impact on our operational performance. Having selected objectives, it is also important to establish a reference point for that objective which indicates expected performance. 
 In addition to consideration of the budget plan as a reference, we will consider historic performance of a facility, equipment design standards, industry
standards, comparable values from other companies or like situations and any other qualified source or established reference points or basis for determining performance. 
 To illustrate the need for the selection of an objective, the reference point and how performance deviation from the reference is judged, let’s look at safety as an example. Let’s suppose a company plans 0
lost time accidents, which is reasonable to plan. If they have 1 lost time accidents, is the performance a total failure, poor, fair or reasonable? If they have 2 lost time accidents, is the performance unacceptable, poor, fair or reasonable? From
this information it would be difficult to assess their overall safety performance. We could give consideration to the number of incidents requiring doctor’s treatment. We could include an evaluation of worker’s compensation claims or
dollars spent. As an alternative to these, we could use industry statistics available from an authoritative source such as MSHA or OSHA which show accident frequency and severity ratio for comparable facilities. We could establish a mean or average
as our reference point, based on accident frequency and severity, and agree to a bonus adjustment according to our percentile ranking with comparable industry. 
 Because our basic products are commodities the level of prices in a given market area are established by supply and demand over which local management has little control. Through price leadership, local management can
affect prices in a small range around supply-demand equilibrium. Accordingly, one of the performance criteria might still be pricing but this does not indicate that an overall bad or good market is itself a performance indicator of local management.
For bonus purposes, they should neither be penalized nor rewarded for the general economic conditions. 
 Fixed assets is another area over
which local management exercises limited control. Each manager basically has to work with the fixed assets he is assigned. Local management can exercise considerable control over current assets such as receivable and inventory but, as a heavily
capitalized industry with limited transportability, local management essentially has to do the best they can with the PP&E they are assigned. 
  

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 Typical examples for consideration: 
  

	 	•	 	 Sales 

  

	 	•	 	 Volumes - cubic yards, tons 

  

	 	•	 	 Price - cubic yards, tons 

  

	 	•	 	 Costs 

  

	 	•	 	 Per yard of dry materials 

  

	 	•	 	 Per ton of aggregates (produced) 

  

	 	•	 	 Maintenance per cubic yard 

  

	 	•	 	 Delivery per cubic yard 

  

	 	•	 	 Gross margins 

  

	 	•	 	 Accuracy of monthly reprojections 

  

	 	•	 	 Safety 

  

	 	•	 	 Housekeeping & Appearance Production - Efficiency 

  

	 	•	 	 Concrete yards per truck 

  

	 	•	 	 Concrete yards per batch plant 

  

	 	•	 	 % utilization of dry/wet plants 

  

	 	•	 	 Productivity 

  

	 	•	 	 Man hours per concrete yard - plant 

  

	 	•	 	 Man hours per concrete yard - delivery 

  

	 	•	 	 Aggregates - TPH 

  

	 	•	 	 Overhead Cost 

  

	 	•	 	 T & E 

  

	 	•	 	 Bad debt expense 

  

	 	•	 	 Working capital - 

  

	 	•	 	 Receivables - stated as DSO 

  

	 	•	 	 Inventory R&O, raw materials, fuel, payables or process 

  

	 	•	 	 Quality - Uniformity, specific product application 

  

	 	•	 	 Long-term planning 

  

	 	•	 	 Reserves 

  

	 	•	 	 Environmental compliance 

  

	 	•	 	 Maintenance - protection of assets 

  

	 	•	 	 Personnel 

  

	 	•	 	 Organization 

  

	 	•	 	 Training 

  

	 	•	 	 Union relations 

  

	 	•	 	 Other profits 

  

	 	•	 	 Associated business lines 

  

	 	•	 	 Sale of surplus assets 

  

	 	•	 	 Lease or rental income 

  

 3 

 5. Measuring Performance 
 At the close of the fiscal year each subsidiary concrete/aggregates company President will review the performance of their respective subsidiary company versus the objectives submitted at the beginning of the year and
recommend to Eagle Materials Concrete and Aggregate EVP distribution of the pool to the participants. Distribution of the pool requires approval of both Eagle Materials Concrete and Aggregate EVP and Eagle Materials CEO. 
 Any portion of the Company Operating Pool not paid out (unearned) or forfeited will be added to the Special Situation Program (the “SSP”) at
Corporate. 
 At anytime during the fiscal year each concrete and aggregate company President may also recommend to the Eagle
Materials Concrete and Aggregate EVP and CEO an SSP award to recognize outstanding individual performances. 
  

 4Eagle Materials Inc. American Gypsum Company Salaried Incentive Compensation

 Exhibit 10.4 
 EAGLE MATERIALS INC. 
 AMERICAN GYPSUM COMPANY 
 SALARIED INCENTIVE COMPENSATION PROGRAM 
 FOR FISCAL YEAR 2010 
 1. Bonus Pool 
 To insure reasonableness and affordability the available funds for bonus payments are determined as a percent of earnings of American Gypsum Company (the “Company”). The actual percentage may vary from year
to year. 
 For Fiscal Year 2010, the bonus pool will be equal to 2.25% of American Gypsum Company’s operating profit. 
 Participants must be employed at fiscal year-end to be eligible for any bonus award. Awards may be adjusted for partial year participation for
participants added during a year. 
 Eagle Materials CEO retains the final right of interpretation and administration of the plan and to
amend or terminate the plan at any time. 
 2. Eligibility 
 The American Gypsum Company President, Vice Presidents and Plant Managers will be participants in the plan. Additional participants who have management responsibilities or are in a professional capacity that can
measurably impact earnings may be recommended by American Gypsum Company President subject to the approval of the Eagle Materials CEO. The addition of new plan participants will not affect the total pool available but will in effect dilute the
potential bonuses of the original participants. 
 A participant must be an exempt salaried manager or professional. No hourly or non-exempt
employee may participate. Participants in this plan may not participate in any other company incentive plan with monetary awards, except for American Gypsum Company’s Long-Term Compensation Program, the Eagle Materials Long-Term Compensation
Program and the Eagle Materials Special Situation Program. 
 3. Allocation of Pool 
 The American Gypsum Company President will be eligible for 20%—25% of the pool. The American Gypsum Company President will recommend the distribution
of the remainder of the company pool. The participants in the plan and their percentage of the pool will be approved by the Eagle Materials CEO at the beginning of the fiscal year for which the bonus is being earned. For example: 
  

				
	 Participant
	  	% of Pool Available	 
	 Company President
	  	22	%
	 Vice Presidents
	  	34	%
	 Plant Managers
	  	20	%
	 Other Participants (Directors, Superintendents)
	  	24	%
		  	 	 
	 Total
	  	100	%

 The American Gypsum Company President’s bonus opportunity will be 50% objective goals and 50%
discretionary as determined by Eagle Materials CEO taking into consideration overall job performance and compliance with Eagle Materials Policies and Code of Ethics. All participants in the plan must have the ability to significantly affect the
performance of the subsidiary company by achieving measurable, quantifiable objectives. The American Gypsum Company President will determine the objective and discretionary balance of bonus opportunities for the other participants in this program,
subject to approval by the Eagle Materials CEO. 
 4. Objective Criteria  
 Objective setting is essential to an effective incentive compensation plan. Objectives should be measurable and focus on areas that have meaningful impact
on our operational performance. Having selected objectives, it is also important to establish a reference point for that objective which indicates expected performance. 
 In addition to consideration of the budget plan as a reference, we will consider historic performance of a facility, equipment design standards, industry standards, comparable values from other companies or like
situations and any other qualified source or establishing reference points or basis for determining performance. 
 To illustrate the need
for the selection of an objective, the reference point and how performance deviation from the reference is judged, let’s look at safety as an example. Let’s suppose a company plans 0 lost time accidents, which is reasonable to plan. If
they have 1 lost time accident, is the performance a total failure, poor, fair or reasonable? If they have 2 lost time accidents, is the performance unacceptable, poor, fair or reasonable? From this information it would be difficult to assess their
overall safety performance. We could give consideration to the number of incidents requiring doctor’s treatment. We could include an evaluation of worker’s compensation claims or dollars spent. As an alternative to these, we could use
industry statistics available from an authoritative source such as OSHA or GA which show accident frequency and severity ratio for comparable facilities. We could establish a mean or average as our reference point, based on accident frequency and
severity, and agree to a bonus adjustment according to our percentile ranking with comparable industry. 
 Another example might be the case
of a dryer system that is allowed to deteriorate. This would tend to lower thermal efficiency and line speed, but could increase available hours because we didn’t take the necessary down time to repair the dryer system. A plan built on this
premise might have production and BTU per MSF statistics lower than historical performance but up time shown as higher. Rather than 

  

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using plan as the reference point for these criteria, we might use historical performance for line speed, BTU/msf and a combination of historical and
industry average for up time. The intent would be to cause a focus on the issue of not deferring maintenance. 
 Because our basic
products are commodities the level of prices in a given market area are established by supply and demand over which local management has little control. Through price leadership, local management can affect prices in a small range around
supply-demand equilibrium. Accordingly, one of the performance criteria might still be pricing but this does not indicate that an overall bad or good market is itself a performance indicator of local management. For bonus purposes, they should
neither be penalized nor rewarded for the general economic conditions. 
 Fixed assets is another area over which local management exercises
limited control. Each manager basically has to work with the fixed assets he is assigned. Local management can exercise considerable control over current assets such as receivable and inventory but, as a heavily capitalized industry with limited
transportability, local management essentially has to do the best they can with the PP&E they are assigned. 
 Typical objectives that
impact earnings include: 
  

	 	•	 	 Sales 

  

	 	•	 	 Volume (total or specific product) 

  

	 	•	 	 Price 

  

	 	•	 	 Market share 

  

	 	•	 	 Plant Efficiencies 

  

	 	•	 	 Waste 

  

	 	•	 	 Speed 

  

	 	•	 	 Delay 

  

	 	•	 	 Fuel usage/msf 

  

	 	•	 	 Contribution/machine hour 

  

	 	•	 	 Production 

  

	 	•	 	 Volume 

  

	 	•	 	 Cost (total or specific component) 

  

	 	•	 	 Quality Rating 

  

	 	•	 	 Environmental Compliance 

  

	 	•	 	 Managing Capital Projects 

  

	 	•	 	 Overhead Reduction 

  

	 	•	 	 Working Capital 

  

	 	•	 	 Inventory turns 

  

	 	•	 	 Receivables 

  

	 	•	 	 Long Term Planning 

  

	 	•	 	 Gypsum reserves 

  

	 	•	 	 Maintenance - protection of assets 

  

	 	•	 	 Personnel 

  

	 	•	 	 Training and development 

  

 -3- 

	 	•	 	 Turnover rate 

  

	 	•	 	 Union relations 

 5. Measuring Performance

 At the close of the fiscal year the American Gypsum Company President will review the performance of the company versus the objectives
submitted at the beginning of the year and recommend the distribution of the pool to the participants. Distribution of the pool requires approval of the Eagle Materials CEO. 
 Any portion of the Company Operating Pool not paid out (unearned) or forfeited will be added to the Special Situation Program (the “SSP”) at
Corporate. 
 At anytime during the fiscal year the American Gypsum Company President may also recommend to the Eagle Materials CEO an
SSP award to recognize outstanding individual performances that dramatically improved the Company’s profitability or long term value. 
  

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