TXI THREE YEAR INCENTIVE PLAN FOR THE THREE CONSECUTIVE FISCAL YEAR PERIODS ENDING MAY 31, 2008 (amended July 12, 2006)
Exhibit 10.15
TXI
THREE YEAR INCENTIVE PLAN
FOR THE THREE CONSECUTIVE FISCAL YEAR PERIODS
ENDING MAY 31, 2008
(amended July 12, 2006)
| 1. | PURPOSE: |
This Plan and subsequent Plans are created for these reasons:
| A. | To create an interest (focus) for Plan participants that mirrors the interest of the Company’s shareholders. |
| B. | Focus Plan participants on medium-term growth and profitability. |
| C. | Provide an opportunity for participants to accumulate estate building capital. |
| D. | Provide an incentive necessary to retain and recruit top-quality executives. |
| 2. | PERFORMANCE PERIOD: |
A rolling three years beginning June 1, 2005.
| 3. | PARTICIPANTS: |
Participants are recommended by management for Board approval and listed in Section 8 of the Plan document.
| 4. | ADMINISTRATION: |
| A. | The Compensation Committee of the Board of Directors approves the Plan. |
| B. | The President and Chief Executive Officer and Chief Financial Officer, together, have the authority to add or delete acquired or divested operations to incentive plans and make minor adjustments to reflect the spirit and objectives of the Plan. Such changes will be reported to the Compensation Committee of the Board of Directors. |
| 5. | MINIMUM AWARD HURDLE: |
| A. | Achievement of an award is dependent on attainment of a three (3) year consolidated average return-on-equity (ROE) equal to or greater than twelve percent (12%). |
| B. | Average return on equity for each performance period means the average of net income of the Company as a percentage of the average shareholder’s equity of the Company reported to shareholders in the Company’s consolidated financial |
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statements of fiscal years included in a performance period, rounded to the nearest one-tenth (1/10) of one percent (1%). A fiscal year’s “average shareholder’s equity” is the average of its four (4) fiscal quarters. A “quarter’s average” is the sum of the beginning and ending balances divided by two.
| C. | The minimum ROE hurdle will be established annually, approximately in the month of June, by the Compensation Committee of the Board of Directors. |
| 6. | INDIVIDUAL PARTICIPATION: |
| A. | All participants approved by the Compensation Committee of the Board of Directors who are continuously employed by the Company during the performance period. Those who become eligible during the performance award period will have their award pro-rated for the amount of time they became eligible with a six (6) month minimum time requirement. |
| B. | Participants must be employed by the Company at time of payment which is expected to be prior to August 15 following the fiscal year end. Participation in any incentive plan is not considered a guarantee of employment or compensation. |
| 7. | AWARDS |
If a payment is made under any three-year incentive plan, it will consist of two parts: the Award Percentage and Discretionary Performance Award.
| A. | The award percentage is based on the preceding three year ROE for the Company and is calculated as a percentage of base salary at time of award. |
| B. | A discretionary award fund will be created equal to the combined awards to be paid to the participants. The President/CEO will recommend to the Compensation Committee of the Board of Directors distribution of the award fund to plan participants (excluding the President/CEO) based upon their individual and team performance for the preceding three (3) years. |
| C. | There is a requirement that all of the fund be awarded. |
| D. | All taxes and other deductions required by law will be withheld. |
| E. | The Compensation Committee of the Board of Directors may elect to pay awards in cash, stock equivalent or combination of cash and stock. Notwithstanding any provision hereof to the contrary, to the extent that Section 162(m) of the Internal Revenue Code of 1986, as amended, would limit the Company’s deduction of any portion of an award if it were paid to a participant, if such nondeductible portion exceeds $25,000, then payment of such nondeductible portion of the award shall be deferred by the Company until 15 days after the earlier of (i) the first time the deductibility of a payment of some or all of such deferred amount will not be limited by Section 162(m) (as reasonably determined by the Company), and (ii) the date such participant’s employment with the Company is terminated. The deferred amount will bear interest until paid at the average U.S. Treasury Bill rate for Treasury Bills with a three month maturity (calculated as the average of such rates |
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on the first day of the deferral period and at the end of each fiscal quarter during the deferral period), and upon payment of any portion of the deferred amount the interest thereon will be paid at the same time and in the same form as the deferred amount is paid.
| F. | All awards will be approved by the Compensation Committee of the Board of Directors. |
| G. | Amendments and exceptions to the plan provisions must be approved by the Compensation Committee of the Board of Directors. |
| 8. | PARTICIPANT LIST |
The following is a list of members recommended to participate in the Executive Three-Year Incentive Plan for the three consecutive fiscal year periods ending May 31, 2006, 2007 and 2008.
Corporate Officers:
| Mel G. Brekhus | President and Chief Executive Officer | |
| Barry M. Bone | VP, Real Estate | |
| William J. Durbin | VP, Human Resources | |
| Richard M. Fowler | Executive VP, Finance | |
| Frederick G. Anderson | VP, General Counsel & Secretary | |
| Operations & Staff Officers | ||
| Kenneth R. Allen | VP and Treasurer | |
| J. Lynn Davis | VP, Cement | |
| George E. Eure | VP, Expanded Shale and Clay | |
| E. Leo Faciane | VP, Environmental Affairs | |
| Philip L. Gaynor | VP, Cement Manufacturing | |
| D. Randall Jones | VP, Communications & Governmental Affairs | |
| J. Michael Link | VP, Controller, Cement, Aggregate, & Concrete | |
| Stephen D. Mayfield | VP, Aggregates | |
| James R. McCraw | VP, Accounting & Information Services | |
| Ronnie A. Pruitt | VP, Aggregate and Cement Marketing and Sales | |
| Michael E. Perkins | VP, Concrete | |
| J. Barrett Reese | VP, Marketing, Cement, Aggregate, & Concrete | |
| James B. Rogers | VP, Consumer Products | |
| Thomas L. Vines | VP, Corporate Controller | |
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| 9. | AWARD SCHEDULE |
Three-Year Incentive Plan
For The Three Consecutive Fiscal Year Periods
Ending May 31, 2006, 2007 & 2008
| Three-Year Average ROE | Award as a % of Base Pay * | |
| 12% to less than 14% | 25% | |
| 14% to less than 16% | 35% | |
| 16% to less than 18% | 50% | |
| 18% and above | 70% |
| * | Discretionary award fund doubles amount of individual awards. |
The President and Chief Executive Officer award will be double that of the schedule’s base pay percentage plus a discretionary amount, determined by the Board of Directors, up to the base award.
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| Approved | Date |
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