Exhibit
10.1
EAGLE MATERIALS
INC.
INCENTIVE
PLAN
NON-QUALIFIED STOCK OPTION
AGREEMENT
This option agreement (the
“Option Agreement” or “Agreement”) entered
into between E AGLE
M ATERIALS I NC
., 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 (the “Plan”), on August 21, 2008,
(the “Award Date”) to purchase from the Company up to
but not exceeding in the aggregate
shares of the Company’s common stock, par value $0.01 per
share (the “Common Stock”), at a price of $26.695 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:
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) “ ARFR ”
means the Company’s Accidents Recordable Frequency Rate, as
certified by the Committee consistent with OSHA/MSHA definitions of
such term.
(b) “ Disability
” shall have the meaning assigned to such term under the
Plan, however, in the case of a Director, for purposes of this
Agreement, Disability shall be determined by the
Committee.
(c) “ EBITDA ”
means the Company’s earnings before interest, taxes,
depreciation and amortization, as certified by the
Committee.
(d) “ Option Shares
” means the EBITDA Option Shares (as defined below) and the
ARFR Option Shares (as defined below).
(e) “ Vesting Date
” means March 31, 2009.
(f) “ Vesting Period
” means the period commencing on July 1, 2008 and ending
on March 31, 2009.
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2.
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Vesting
and Exercise Schedules.
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(a) EBITDA Vesting
Schedule .
shares of the Common Stock covered by this Option (the
“EBITDA Option Shares”) shall vest in accordance with
the schedule attached to this Agreement as Exhibit A
.
At the end of the Vesting Period, if
any EBITDA Option Shares remain unvested, such EBITDA 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 EBITDA Option Shares to vest as provided in this
Section 2(a).
(b) ARFR Vesting Schedule
.
shares of the Common Stock covered by this Option (the “ARFR
Option Shares”) shall vest in accordance with the schedule
attached to this Agreement as Exhibit B .
At the end of the Vesting Period, if
any ARFR Option Shares remain unvested, such ARFR 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 ARFR Option Shares to vest as provided in this
Section 2(b).
(c) Exercisability .
The Option Shares that vest in accordance with the provisions of
Section 2(a) or 2(b) shall become exercisable as soon as
administratively practicable following the Vesting Date. In the
event Optionee’s employment and service as a Director
terminates by reason of death or Disability, the then exercisable
Option Shares shall continue to be exercisable as if the Optionee
had remained employed or continued to serve as a Director for a
period of two years following the Optionee’s death or
Disability. All remaining Option Shares will 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.
(d) Calculations . The
Committee shall have the sole authority to approve the calculation
of EBITDA and ARFR for purposes of vesting, and its approval of
such calculations shall be final, conclusive, and binding on all
parties.
(e) Change in Control
. This Option shall become fully vested and exercisable,
without regard to the limitations set forth in
subparagraph (a) or (b) 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 C
to this Agreement), 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 (e). 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
Common Stock on the settlement date and the Exercise Price for the
Option, multiplied by the number of shares then subject to the
Option.
(f) Business
Acquisitions . In the event the Company makes an
acquisition or disposition (e.g. assets, stock or other equity
interest), then the Compensation Committee may, in its discretion,
make any adjustments to: (1) the method of calculating EBITDA
and/or ARFR; or (2) the structure of vesting tables, as it
deems appropriate to fulfill the intents and purposes of the
vesting criteria, taking into consideration the effect of the
acquisition or disposition on vesting opportunities.
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3.
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Termination of Option.
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The Option hereby granted shall
terminate and be of no force and effect with respect to any shares
of 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;
(c) if Optionee’s employment
with the Company and its Affiliates and service as a Director is
terminated for any reason other than death, Disability 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 and service as a Director;
or
(d) if Optionee’s employment
with the Company and its Affiliates and service as a Director is
terminated due to the death or Disability of the Optionee at any
time after the Award Date and while in the employ of the Company or
its Affiliates or service as Director, or within 90 days after
termination of such employment or service for reasons other than
“cause”, then the Option shall terminate on the first
business day following the expiration of the two-year period which
began on the date of Optionee’s death or
Disability.
In the event the Option remains
exercisable for a period of time following the date of termination
of Optionee’s employment and service as a Director, 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 and service as a
Director.
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 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 Optionee resulting from such exercise
(or instructions to satisfy such withholding obligation by
withholding Option Shares in accordance with
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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 of
Option Shares equal to the
