MATERIAL SCIENCES CORPORATION FISCAL YEAR 2006 LONG-TERM INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS

Exhibit 10.1

MATERIAL SCIENCES CORPORATION

FISCAL YEAR 2006 LONG-TERM INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS

ARTICLE I

BACKGROUND AND PURPOSE OF THE PLAN

1.1 Plan Adoption and Name. This plan was adopted by the Board of Directors of Material Sciences Corporation (the “Company”) to be effective March 1, 2005 and shall be known as the Material Sciences Corporation Fiscal Year 2006 Long-Term Incentive Plan for Non-Employee Directors (the “Plan”).

1.2 Purpose. The purpose of this Plan is (i) to advance the best interests of the Company by providing directors of the Company who are not officers or employees of the Company or its subsidiaries (“Non-Employee Directors”) with additional incentives to contribute to the financial success of the Company and (ii) to provide incentives which may be used to induce able persons to serve, or continue to serve, as Non-Employee Directors of the Company.

ARTICLE II

DEFINITIONS

For purposes of this Plan, the following terms shall have the meanings set forth below:

“Board” shall mean the Board of Directors of the Company.

Cause” means (i) the willful and continued failure by a Non-Employee Director to perform substantially his or her duties as a director of the Company; or (ii) the willful misconduct by the Non-Employee Director in the performance of his or her duties as a director or the willful engaging by the Non-Employee Director in conduct which, in either case, is illegal or materially injurious to the Company monetarily or otherwise.

“Company” is defined in Article I hereof.

“Code” means the Internal Revenue Code

“Fair Market Value of one share of Common Stock” on a particular day shall mean the closing sales price of the Company’s Common Stock on the New York Stock Exchange on that day.

“Grant” is defined in Article V hereof.

“Grant Agreement” is defined in Article VI hereof.

“Grant Date” is defined in Article V hereof.

“Non-Employee Director” is defined in Article I hereof.

“Payout Amount” equals (i) the average of the Fair Market Value of one share of the Common Stock for the 30 consecutive Trading Days ending on the Redemption Date plus (ii) the aggregate amount of dividends declared on one share of Common Stock on or after the Grant Date and prior to the Redemption Date (but only for dividends as to which the “ex-dividend” Trading Dates are on or after the Grant Date and prior to the Redemption Date); provided, however, that if a Non-Employee Director’s service terminates due to a Sale of the Company as provided for in Section 5.4(a) below, the “Payout Amount” equals the (i) per share value that the Company’s shareowners receive in such transaction plus (ii) the aggregate amount of dividends declared on one share of Common Stock on or after the Grant Date and prior to the Redemption Date (but only for dividends as to which the “ex-dividend” Trading Dates are on or after the Grant Date and prior to the Redemption Date).

“Permitted Transfer” is defined in Article VI hereof.

“Person” shall mean an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.