Document:

exv10w3

Exhibit 10.3

EAGLE MATERIALS INC.

CONCRETE AND AGGREGATES COMPANIES

SALARIED INCENTIVE COMPENSATION PROGRAM

FOR FISCAL YEAR 2009

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 2009, 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

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

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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.

4exv10w4

Exhibit 10.4

EAGLE MATERIALS INC.

AMERICAN GYPSUM COMPANY

SALARIED INCENTIVE COMPENSATION PROGRAM

FOR FISCAL YEAR 2009

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 2009, 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
	 
	 	•	 	Turnover rate
	 
	 	•	 	Union relations

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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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