On August 3, 2023, our stockholders approved the Eagle Materials Inc. 2023 Equity Incentive Plan (the 2023 Plan), which reserves 1,425,000 shares for future grants of stock awards. Under the terms of the 2023 Plan, we can issue equity awards, including stock options, restricted stock units, restricted stock, and stock appreciation rights to employees of the Company, members of the Board of Directors, and consultants, independent contractors, and agents of the Company. The Compensation Committee of our Board of Directors (Compensation Committee) specifies grant terms for awards under the 2023 Plan.

In May 2026, the Compensation Committee awarded to certain officers and key employees an aggregate of 25,423 performance stock units and 33,536 performance stock options, which represents achievement of the target level of performance (collectively, the Performance Stock Awards or PSAs). For the Performance Stock Awards to be earned, the Company must achieve performance vesting criteria as modified based on the Company’s average absolute total stockholder return during the performance period. The performance vesting criteria are based upon certain levels of average annual return on equity (as defined in the Performance Stock Award Agreements) ranging from 10.0% to 20.0% measured at the end of fiscal 2029 (three-year performance period) as modified by total stockholder return. Performance outcomes (taking into account both criteria) will result in a threshold-vesting percentage of 50% of target, and maximum performance will result in a vesting percentage of 200% of target. If the threshold-vesting percentage is not achieved, no Performance Stock Awards will be earned.

Our Performance Stock Awards are evaluated on a quarterly basis with adjustments to compensation expense based on the likelihood of the performance targets being achieved or exceeded. The maximum expense for our outstanding Performance Stock Awards is approximately $11.3 million. Any forfeitures are recognized as a reduction to expense in the period in which they occur.

The fair value of the above Performance Stock Awards was determined using a Monte Carlo simulation. The following are key inputs in the Monte Carlo analysis for the Fiscal 2027 Employee Performance Stock Awards.


	Fiscal 2027


Measurement Period (in years)		2.86


Risk-Free Interest Rate		4.1	%


Dividend Yield		0.5	%


Volatility		32.6	%


Estimated Fair Value of Market-Based PSAs at Grant Date	$	199.13

In addition to the Performance Stock Awards discussed above, the Compensation Committee approved the granting to certain officers and key employees an aggregate of 33,536 time-vesting stock options, which vest ratably over three years (the Fiscal 2027 Employee Time-Vesting Stock Option Grant) and 25,423 shares of time-vesting restricted stock units, which vest ratably over three years (the Fiscal 2027 Employee Restricted Stock Unit Time-Vesting Award). The Fiscal 2027 Employee Restricted Stock Unit Time-Vesting Award was valued at the closing stock price on the grant date and is being expensed over a three-year period. The Fiscal 2027 Employee Time-Vesting Stock Option Grant was valued at the grant date using the Black-Scholes option pricing model, which used similar inputs as the Monte Carlo analysis shown above.

In addition to the stock awards described above, from time to time we may issue to certain employees additional equity awards, including stock options, restricted stock, and restricted stock units. Any options issued are valued using the Black-Scholes options pricing model on the grant date and expensed over the vesting period, while restricted stock and restricted stock units are valued using the closing price on the grant date and expensed over the vesting period.

Stock option expense for all outstanding stock option awards totaled approximately $0.8 million and $0.4 million for the three months ended June 30, 2026, and 2025, respectively. At June 30, 2026, there was approximately $7.9 million of unrecognized compensation cost related to outstanding stock options, which is expected to be recognized over a weighted-average period of 2.5 years.

The following table represents stock option activity for the three months ended June 30, 2026.


	Number of Shares				Weighted- Average Exercise Price


Outstanding Options at March 31, 2026		206,721		$		113.16


Granted		67,072		$		199.13


Exercised		(4,604	)	$		87.53


Cancelled		—		$		—


Outstanding Options at June 30, 2026		269,189		$		135.02


Options Exercisable at June 30, 2026		174,588


Weighted-Average Fair Value of Options Granted During the Year				$		76.16

The following table summarizes information about stock options outstanding at June 30, 2026.



	Options Outstanding						Options Exercisable


Range of Exercise Prices	Number of Shares Outstanding		Weighted- Average Remaining Contractual Life (in years)		Weighted- Average Exercise Price		Number of Shares Outstanding		Weighted- Average Exercise Price


$59.32 - $81.28		76,985		3.78	$	60.75		76,985	$	60.75


$91.21 - $100.88		32,746		2.01	$	94.94		32,746	$	94.94


$118.27 - $139.25		48,791		5.87	$	126.56		48,394	$	126.59


$143.09 - $261.76		110,667		9.24	$	202.27		16,463	$	192.40


		269,189		6.19	$	135.02		174,588	$	97.83

At June 30, 2026, the aggregate intrinsic value of the outstanding and exercisable options was approximately $24.3 million and $22.3 million, respectively. The total intrinsic value of options exercised during the three months ended June 30, 2026, was approximately $0.6 million.

The following table summarizes the activity for restricted stock units and nonvested restricted stock during the three months ended June 30, 2026.


	Number of Shares				Weighted- Average Grant Date Fair Value


Restricted Stock Units and Nonvested Restricted Stock at March 31, 2026		149,406		$		198.28


Granted		50,846		$		199.13


Vested		(34,098	)	$		179.82


Cancelled		—		$		—


Restricted Stock Units and Nonvested Restricted Stock at June 30, 2026		166,154		$		202.33

Expense related to restricted stock units and restricted stock was approximately $3.8 million and $4.5 million for the three months ended June 30, 2026, and 2025, respectively. At June 30, 2026, there was approximately $25.3 million of unearned compensation from restricted stock units and nonvested restricted shares, which will be recognized over a weighted-average period of 1.6 years.

The number of shares available for future grants of stock options, restricted stock units, stock appreciation rights, and restricted stock under the 2023 Plan was 1,096,055 at June 30, 2026.