| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Information responsive to Item 5.02(e):
On May 17, 2022, the Compensation Committee approved the Eagle Materials Inc. Salaried Incentive Compensation Program for Fiscal Year 2023 (“Eagle Plan”), a copy of which is attached to this Report as Exhibit 10.1 and incorporated herein by reference. Under the terms of the Eagle Plan, a pool of 1.2% of the Company’s operating earnings for fiscal 2023 will be available to pay annual bonuses to participating officers, subject to reduction based on individual performance in fiscal 2023. The Compensation Committee also determined the applicable percentage of the bonus pool available for payment of the annual incentive bonus to the named executive officers participating in the Eagle Plan (Michael R. Haack, President and Chief Executive Officer, 28.0%; D. Craig Kesler, Executive Vice President – Finance and Administration and Chief Financial Officer, 17.5%; and Robert S. Stewart, Executive Vice President – Strategy, Corporate Development and Communications, 15.0%).
Steven L. Wentzel, President of American Gypsum Company LLC, participates in the American Gypsum Company Salaried Incentive Compensation Program for Fiscal Year 2023 (a copy which is attached to this Report as Exhibit 10.2 and incorporated herein by reference). The Compensation Committee approved the percentage of American Gypsum’s EBITDA available for payment of annual bonuses to participating American Gypsum employees (2.0%) and the percentage of such bonus pool available for payment to Mr. Wentzel at the end of fiscal 2023 (12.5%), subject to reduction based on individual performance.
The Compensation Committee also approved the Eagle Materials Inc. Special Situation Program for Fiscal Year 2023 (the “SSP”), a copy of which is attached to this Report as Exhibit 10.3 and incorporated herein by reference. Under the terms of the SSP, a pool of 0.2% of the Company’s EBITDA for fiscal 2023, plus any portions of bonus pools under the Eagle Plan, the divisional plans and subsidiary long-term compensation plans not paid out or earned, are available to pay annual bonuses to participating employees from the SSP.
Effective May 19, 2022, the Compensation Committee, as part of its annual compensation review, approved long-term incentive equity awards under the Eagle Materials Inc. Amended and Restated Incentive Plan (“Incentive Plan”) to a group of the Company’s officers, including its named executive officers. The awards are comprised of performance vesting stock options, performance vesting restricted stock, time vesting stock options and time vesting restricted stock. Each of the Company’s current named executive officers (other than Mr. Graass, who will be retiring as an officer effective on or about June 3, 2022) was granted stock options and/or restricted stock as a part of this award.
In order for the performance vesting stock options and restricted stock to be earned, the Company must achieve a performance vesting criterion based on the Company’s average return on equity measured at the end of fiscal 2023. One-fourth of any earned stock options and restricted stock will vest immediately and one-fourth on each of the next three fiscal year-ends (assuming continued service by the relevant officer). Any stock options or restricted stock that are not earned at the end of fiscal 2023 upon the determination of the achievement of the performance vesting criterion will be forfeited. The terms and conditions of the performance vesting stock options and restricted stock will be substantially the same as awards made in fiscal 2022.
The time vesting stock options and restricted stock will vest ratably over the four fiscal year-ends following the date of grant (assuming continued service by the relevant officer). The terms and conditions of the time vesting stock options and restricted stock will be substantially the same as previous time vesting equity awards.
In accordance with the terms of the Company’s Incentive Plan, the exercise price of the stock options (whether time vesting or performance vesting) is the closing price of the Company’s Common
