(J) Stock Option Plans

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, 2013 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 May 2016, the Compensation Committee of the Board of Directors approved the granting of an aggregate of 91,074 performance vesting stock options pursuant to the Plan to certain officers and key employees that will be earned if certain performance conditions are satisfied (the “Fiscal 2017 Employee Performance Stock Option Grant”). The performance criterion for the Fiscal 2017 Employee Performance Stock Option Grant is based upon the achievement of certain levels of return on equity (as defined in the option agreements), ranging from 11.0% to 18.0%, for the fiscal year ending March 31, 2017. All stock options will be earned if the return on equity is 18.0% or greater, and the percentage of shares earned will be reduced proportionately to approximately 66.7% if the return on equity is 11.0%. If the Company does not achieve a return on equity of at least 11.0%, all stock options granted will be forfeited. During fiscal 2017, the return on equity was approximately 17.7%; therefore approximately 89,500 options were earned, with the remaining options forfeited. The earned stock options will lapse ratably over four years, with the first fourth lapsing promptly following the determination date, and the remaining options vesting on March 31, 2018 through 2020. The stock options have a term of ten years from the date of grant. The Compensation Committee also approved the granting of 75,896 time vesting stock options to the same officers and key employees, which vest ratably over a four year period (the “Fiscal 2017 Employee Time Vesting Stock Option Grant”). The stock options have a term of ten years from the date of grant. In August 2016, we granted 17,894 stock options to members of the Board of Directors (the “Fiscal 2017 Board of Directors Stock Option Grant”). Stock options granted under the Fiscal 2017 Board of Directors Stock Option 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 2017 Employee Performance Stock Option Grant, the Fiscal 2017 Employee Time Vesting Option Grant and Fiscal 2016 Board of Directors Stock Option Grant were valued at the grant date using the Black-Scholes option pricing model.

All stock options issued during fiscal 2017 and 2016 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 2017 and 2016 are as follows:

	2017			2016
Dividend Yield		1.3	%		2.0	%
Expected Volatility		36.5	%		36.5	%
Risk Free Interest Rate		1.40	%		1.85	%
Expected Life	6.0 years			6.0 years

Stock option expense for all outstanding stock option awards was approximately $5.3 million, $7.5 million and $6.2 million, for the years ended March 31, 2017, 2016 and 2015, respectively. At March 31, 2017, there was approximately $7.3 million of unrecognized compensation cost related to outstanding stock options which is expected to be recognized over a weighted-average period of 2.6 years.

The following table represents stock option activity for the years presented:

	For the Years Ended March 31,
	2017					2016					2015
	Number of Shares			Weighted Average Exercise Price		Number of Shares			Weighted Average Exercise Price		Number of Shares			Weighted Average Exercise Price
Outstanding Options at Beginning of Year		1,817,763		$	53.03		1,665,565		$	46.37		2,788,999		$	41.83
Granted		202,364		$	77.76		318,572		$	79.83		297,151		$	86.41
Exercised		(677,566	)	$	34.46		(137,874	)	$	27.58		(151,085	)	$	32.38
Cancelled		(19,182	)	$	70.30		(28,500	)	$	86.35		(1,269,500	)	$	47.43
Outstanding Options at End of Year		1,323,379		$	66.07		1,817,763		$	53.03		1,665,565		$	46.37
Options Exercisable at End of Year		874,116					1,285,412					1,035,166
Weighted Average Fair Value of Options Granted during the Year				$	25.22				$	24.27				$	32.31

The following table summarizes information about stock options outstanding at March 31, 2017:

	Options Outstanding						Options Exercisable
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		137,285		3.06	$	24.71		136,285	$	24.67
$33.43 - $37.34		191,627		5.21	$	33.86		185,627	$	33.80
$53.22 - $77.67		436,227		7.60	$	70.18		228,400	$	67.16
$79.73 - $106.00		558,240		7.86	$	84.09		323,804	$	84.99
		1,323,379		6.89	$	66.07		874,116	$	60.05

At March 31, 2017, the aggregate intrinsic value for outstanding and exercisable options was approximately $41.1 million and $32.4 million, respectively. The total intrinsic value of options exercised during the fiscal year ended March 31, 2017 was approximately $32.9 million.

Restricted Stock. In May 2016, the Compensation Committee approved the granting of an aggregate of 63,029 shares of performance vesting restricted stock to certain officers and key employees that will be earned if certain performance conditions are satisfied (the “Fiscal 2017 Employee Restricted Stock Performance Award”). The performance criterion for the Fiscal 2017 Employee Restricted Stock Performance Award is based upon the achievement of certain levels of return on equity (as defined in the agreement), ranging from 11.0% to 18.0%, for the fiscal year ended March 31, 2017. All restricted shares will be earned if the return on equity is 18.0% or greater, and the percentage of shares earned will be reduced proportionately to approximately 66.7% if the return on equity is 11.0%. If the Company does not achieve a return on equity of at least 11.0%, all awards will be forfeited. During fiscal 2017, the return on equity was approximately 17.7%; therefore approximately 62,000 shares were earned, with the remaining shares forfeited. Restrictions on the earned shares will lapse ratably over four years, with the first fourth lapsing promptly following the determination date and the remaining restrictions lapsing on March 31, 2018 through 2020. The Compensation Committee also approved the granting of 52,527 shares of time vesting restricted stock to the same officers and key employees, which vest ratably over four years (the “Fiscal 2017 Employee Restricted Stock Time Vesting Award). Both of the Fiscal 2017 Employee Restricted Stock Performance Award and the Fiscal 2017 Employee Restricted Stock Time Vesting Award were valued at the closing price of the stock on the date of grant, and are being expensed over a four-year period. In August 2016, we granted 11,173 shares of restricted stock to members of the Board of Directors (the “Board of Directors Fiscal 2017 Restricted Stock Award”). Awards issued under the Board of Directors Fiscal 2017 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 $6.8 million, $9.8 million and $6.8 million in fiscal years ended March 31, 2017, 2016 and 2015, respectively. At March 31, 2017, there were approximately 375,000 shares with remaining restrictions for which $16.6 million of unearned compensation, net of estimated forfeitures, will be recognized over a weighted-average period of 2.8 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 4,329,248 at March 31, 2017. Of the available shares, up to 1,386,296 can be used for future restricted stock and restricted stock unit grants.