SHARE-BASED EMPLOYEE COMPENSATION

6 Months Ended

Sep. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

SHARE-BASED EMPLOYEE COMPENSATION

(H) SHARE-BASED EMPLOYEE COMPENSATION

On August 7, 2013 our stockholders approved the Eagle Materials Inc. Amended and Restated Incentive Plan (the “Plan”), which increased the shares we are authorized to issue as awards by 3,000,000 (1,500,000 of which may be stock awards). Under the terms of the Plan, we can issue equity awards, including stock options, restricted stock units (“RSUs”), restricted stock and stock appreciation rights to employees of the Company and members of the Board of Directors. Awards that were already outstanding prior to the approval of the Plan on August 7 remain outstanding. The Compensation Committee of our Board of Directors specifies the terms for grants of equity awards under the Plan.

Long-Term Compensation Plans -

Options. In August 2013, the Compensation Committee of the Board of Directors approved an incentive equity award of an aggregate of 206,914 stock options pursuant to the Plan to certain individuals that vest ratably over a three year period (the “Fiscal 2014 Employee Stock Option Grant”). The options have a term of ten years from the date of grant. In August 2013, we granted 30,075 options to members of the Board of Directors (the “Fiscal 2014 Board of Directors Grant”). Options granted under the Fiscal 2014 Board of Directors Grant vest immediately and can be exercised from the date of grant until their expiration on the tenth anniversary of the date of grant. The Fiscal 2014 Employee Stock Option Grant and Fiscal 2014 Board of Directors Grant were valued at the grant date using the Black-Scholes option pricing model.

The weighted-average assumptions used in the Black-Scholes model to value the option awards in fiscal 2014 are as follows:

	Fiscal 2014
Dividend Yield		2.0	%
Expected Volatility		44.6	%
Risk Free Interest Rate		2.0	%
Expected Life		7.0 years

Stock option expense for all outstanding stock option awards totaled approximately $1.9 million and $2.7 million for the three and six month periods ended September 30, 2013, respectively, and $1.3 million and $1.8 million for the three and six month periods ended September 30, 2012, respectively. At September 30, 2013, there was approximately $10.3 million of unrecognized compensation cost related to outstanding stock options, net of estimated forfeitures, which is expected to be recognized over a weighted-average period of 2.4 years.

The following table represents stock option activity for the six month period ended September 30, 2013:

	Number of Shares			Weighted- Average Exercise Price
Outstanding Options at Beginning of Period		3,022,592		$	37.83
Granted		236,989		$	67.21
Exercised		(70,837	)	$	33.19
Cancelled		(5,000	)	$	53.22
Outstanding Options at End of Period		3,183,744		$	40.10
Options Exercisable at End of Period		1,230,175		$	30.68
Weighted-Average Fair Value of Options Granted during the Period	$	26.04

The following table summarizes information about stock options outstanding at September 30, 2013:

	Outstanding Options						Exercisable Options
Range of Exercise Prices	Number of Shares Outstanding		Weighted  - Average Remaining Contractual Life		Weighted - Average Exercise Price		Number of Shares Outstanding		Weighted - Average Exercise Price
$23.17 - $ 30.74		1,006,370		4.98	$	26.74		886,941	$	26.62
$33.08 - $ 40.78		626,719		7.45	$	34.57		274,993	$	35.34
$47.53 - $ 70.30		1,550,655		2.26	$	51.01		68,241	$	64.76
		3,183,744		4.14	$	40.10		1,230,175	$	30.68

At September 30, 2013, the aggregate intrinsic value for outstanding and exercisable options was approximately $103.3 million and $37.7 million, respectively. The total intrinsic value of options exercised during the six month period ended September 30, 2013 was approximately $2.9 million.

Restricted Stock Units. There was no expense related to RSUs for the three and six month periods ended September 30, 2013, respectively, and $0.4 million and $0.8 million for the three and six month periods ended September 30, 2012, respectively.

Restricted Stock. In August 2013, the Compensation Committee also approved the granting of an aggregate of 93,186 shares of restricted stock to certain key employees at both the corporate and subsidiary level (the “Fiscal 2014 Employee Restricted Stock Award”) that will be earned if our ten year return on equity is at least 15% at March 31, 2014. If this criterion is not met, all of the shares will be forfeited. If the criterion is met, the award may be reduced by the Compensation Committee based on individual performance goals. Following any such reduction, the earned shares will lapse ratably over five years, with the first fifth lapsing promptly following the vesting determination date, and the remaining restrictions lapsing on March 31, 2015 through 2018. The value of the Fiscal 2014 Employee Restricted Stock Award, net of estimated forfeitures, is being expensed over a five year period. In August 2013, we granted 5,761 shares of restricted stock to members of the Board of Directors (the “Board of Directors Fiscal 2014 Restricted Stock Award”). Awards issued under the Board of Directors Fiscal 2014 Restricted Stock Award do not fully vest until the retirement of each director, in accordance with the Company’s director retirement policy.

Expense related to restricted shares was approximately $1.2 million and $2.1 million for the three and six month periods ended September 30, 2013, respectively, and $0.9 million and $1.6 million for the three and six month periods ended September 30, 2012, respectively. At September 30, 2013, there was approximately $17.7 million of unearned compensation from restricted stock, net of estimated forfeitures, which will be recognized over a weighted-average period of 3.7 years.

The number of shares available for future grants of stock options, restricted stock units, stock appreciation rights and restricted stock under the Plan was 3,973,459 at September 30, 2013.