BUILDING MATERIALS HOLDING CORPORATION MANAGEMENT RETENTION UNIT AGREEMENT
Exhibit
10.95
This
Management
Retention Unit Agreement (this “Agreement”) is granted on the 19th day of
February, 2008 (the “Date of Grant”) by Building Materials Holding Corporation,
a Delaware corporation (the “Company”) to Xxxxxx X. Xxxxxx (“Grantee”).
1. GRANT
OF
MANAGEMENT RETENTION UNITS.
(a) The
Company hereby,
as of the Date of Grant, grants to Grantee an award of 150,000 management
retention units (the “MRUs”). Each MRU represents Grantee’s right to receive a
cash settlement, upon vesting, equal to the Fair Market Value of one share
of
the Company’s common stock, par value $.001 per share (the “Common Stock”), on
the vesting date. For purposes of this Agreement, “Fair Market Value” means the
average closing price of Common Stock over the five trading days before the
applicable measurement date.
(b) MRUs
granted to
Grantee will be credited to a Management Retention Unit Account, or “MRA,” which
is a hypothetical account designated under Grantee’s name used solely for the
purpose of tracking the value to be paid to Grantee upon the MRUs’ vesting
dates.
2. CERTAIN
DEFINITIONS.
As
used in this Agreement, the following terms shall have the meanings set forth
below:
(a) “Affiliate”
shall
mean a corporation or other entity controlled by, controlling or under common
control with the Company.
(b) “Business
Unit”
shall mean an entity, whether or not incorporated, more than fifty percent
(50%)
of the outstanding ownership interests of which are owned by the Company,
directly or indirectly through one or more ownership chains where each link
in
the chain owns more than fifty percent (50%) of the outstanding ownership
interests of the next link (either alone or together with other links in
the
same chain or another chain).
(c) “Cause”
shall
mean
(1) “Cause” pursuant to any individual employment agreement with the
Company to which Grantee is a party that is then in effect, or (2) if there
is
no such individual employment agreement or if it does not define Cause,
termination of Grantee’s employment by the Company or any of its Affiliates
because of (A) conviction of or a plea of nolo
contendre
to a felony
involving moral turpitude; (B) misappropriating any significant amount of
funds
or property of the Company; (C) attempting to obtain any significant personal
profit from any transaction in which Grantee has an interest which is adverse
to
the interest of the Company, unless Grantee has first obtained consent from
an
officer of the Company; or (D) a pattern of gross dereliction of duty. The
Compensation Committee (the “Committee”) of the Board of Directors (the “Board”)
of the Company shall, unless otherwise provided in an individual employment
agreement with Grantee, have the sole discretion to determine whether “Cause”
exists and its determination shall be final.
Exhibit
A to
Restricted Stock Agreement
Restricted Stock Agreement
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(d) “Change
of Control”
shall mean the occurrence of any of the following events:
(1) Forty
percent
(40%) of the Company’s Common Stock Acquired by an Outsider.
Any “person” (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of
1934, as amended (the “Exchange Act”), other than (A) the Company or any of its
Affiliates, (B) any trustee or other fiduciary holding stock under an employee
benefit plan of the Company or any of its Affiliates, and (C) any corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of the Company’s stock)
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of more than forty percent (40%) of the Company’s
then outstanding shares of Common Stock;
(2) Members
of the
Board as of February 19, 2008 cease to constitute a majority of
Directors.
The following
individuals cease for any reason to constitute a majority of the number of
directors then serving on Board: individuals who, on February 19, 2008,
constituted the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to
the
election of directors of the Company) whose appointment or election by the
Board
or nomination for election by the Company’s stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then
still
in office who either were directors on February 19, 2008 or whose appointment,
election or nomination for election was previously so approved or
recommended;
(3) Merger
or
Consolidation.
There is
consummated a merger or consolidation of the Company or any of its Affiliates
with any other corporation or other entity in which the Company is not the
continuing or surviving corporation or pursuant to which the Company’s Common
Stock would be converted into cash or stock; provided, however, that the
holders
of the Company’s Common Stock immediately prior to the merger do not have the
same proportionate ownership of the common stock of the surviving corporation
immediately after such merger or consolidation;
(4) Complete
Liquidation or Disposition of more than 75% of the Company’s
Assets.
The stockholders
of the Company approve a plan of complete liquidation of the Company or there
is
consummated an agreement for the sale or disposition by the Company of assets
having an aggregate book value at the time of such sale or disposition of
more
than seventy-five percent (75%) of the total book value of the Company’s assets
on a consolidated basis (or any transaction having a similar effect), other
than
any such sale or disposition by the Company (including by way of spin-off
or
other distribution) to an entity, at least fifty percent (50%) of the combined
voting power of the voting securities of which are owned immediately following
such sale or disposition by stockholders of the Company in substantially
the
same proportions as their ownership of the Company immediately prior to such
sale or disposition; or
(5) Disposition
of
a Business Unit.
There is
consummated the Disposition of a Business Unit; provided, however, that this
clause (5) shall apply only to a Grantee who (A) immediately prior to the
Disposition of a Business Unit were employed by (and on the payroll of) the
Business Unit that was the subject of the Disposition of a Business
Unit.
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(e) “Disposition
of a
Business Unit” means a sale or other disposition, however effected, of a
Business Unit which is either:
(1) A
sale by the
Company or any of its Affiliates of the then outstanding ownership interests
of
the Business Unit having more than 50% of the then existing voting power
of all
outstanding ownership interests of the Business Unit, whether by merger,
consolidation or otherwise, unless after the sale the Company, any of its
Affiliates, or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, the Business Unit or any Affiliate,
individually or collectively, directly or indirectly, owns the then outstanding
ownership interests of the Business Unit having 50% or more of the then existing
voting power of all outstanding ownership interests of the Business
Unit;
(2) The
sale of all or
substantially all of the assets of the Business Unit as a going concern;
or
(3) Any
other
transaction or course of action engaged in, directly or indirectly, by the
Company, the Business Unit or any Affiliate, that has a substantially similar
effect as the transactions of the type referred to in clause (1) or (2)
above.
(f) “Disability”
shall
mean either (1) Grantee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (2) Grantee is, by reason
of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of
not
less than 12 months, receiving income replacement benefits for a period of
not
less than 3 months under an accident and health plan covering employees of
the
Company.
(g) “Good
Reason” shall
mean, without Grantee’s consent, the occurrence of any of the following
circumstances unless such circumstances are fully corrected prior to the
expiration of the thirty day period following delivery to the Company of
Grantee’s notice of intention to terminate his or her employment for Good Reason
describing the circumstances in reasonable detail:
(1) A
material
diminution in Grantee’s base compensation;
(2) A
material
diminution in Grantee’s authority, duties, or responsibilities;
(3) A
material
diminution in the authority, duties, or responsibilities of the supervisor
to
whom Grantee is required to report, including a requirement that Grantee
report
to a corporate officer or employee instead of reporting directly to the
Board;
(4) A
material
diminution in the budget over which Grantee retains authority;
(5) A
material change
in the geographic location at which Grantee must perform the services;
or
(6) Any
other action or
inaction that constitutes a material breach by the Company of its employment
agreement with Grantee.
Grantee
shall be
deemed to have waived his rights to terminate his or her employment with
the
Company for circumstances constituting Good Reason if s/he shall not have
provided to the Company a notice of termination within ninety days immediately
following his or her knowledge of the circumstances constituting Good
Reason.
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3. VESTING
AND
SETTLEMENT.
MRUs
shall fully
vest on the second anniversary of the Date of Grant, so long as Grantee has
continuously performed service (whether as an employee, director or consultant
for the Company or any of its Affiliates) (“Service”) from the Date of Grant to
the vesting date. MRUs shall be settled in cash by the Company no later than
60
days after the applicable vesting date, provided, however, that if Grantee
is
deemed on the date of termination to be a “specified employee” within the
meaning of that term under Section 409A(a)(2)(B) of the Internal Revenue
Code of
1986, as amended (the “Code”), then with regard to any payment or the provision
of any benefit that is considered deferred compensation under Section 409A
of
the Code payable on account of a “separation from service,” such payment or
benefit shall be made or provided at the date which is the earlier of (i)
the
expiration of the six (6)-month period measured from the date of such
“separation from service” of Grantee, and (ii) the date of Grantee’s death.
Grantee shall be entitled, at his or her election, to defer the cash settlement
of MRUs into the Company’s Deferred Compensation Plan, pursuant to the terms and
conditions of such plan and provided that Grantee is eligible to participate
in
such plan.
The
Company may
withhold from any amounts payable under this Agreement such Federal, state
and
local taxes as may be required to be withheld pursuant to any applicable
law or
regulation.
4. TERMINATION
EVENTS.
The
following
provisions shall apply to all MRUs granted hereunder upon termination of
Grantee’s Service:
(a) If
Grantee’s
Service is terminated due to Grantee’s death or Disability, all MRUs credited to
Grantee’s MRA shall become immediately vested and settled in accordance with
Section 3.
(b) If
the Company
terminates Grantee’s Service without Cause, all unvested MRUs shall become
immediately vested and settled in accordance with Section 3.
(c) If
Grantee
voluntarily terminates Service under any circumstances, except as provided
in
Sections 4(a) or (d), or Grantee’s Service is terminated for Cause, all MRUs,
whether vested or unvested, shall be immediately forfeited without settlement
or
payment of value.
(d) If,
in connection
with or at any time following the occurrence of a Change in Control, Grantee
is
terminated without Cause or resigns for Good Reason, all unvested MRUs shall
become immediately vested and settled in accordance with Section 3. In the
event
the Common Stock is no longer publicly traded as of the date Grantee is
terminated or resigns pursuant to this Section 4(d), the “Fair Market Value”
attributable to each MRU shall be determined by a nationally recognized
valuation or investment banking firm selected by the board of directors (or
similar governing body) of the Company or its successor.
5. ADJUSTMENT
OF
MRUs.
Upon
the occurrence
of a reorganization, merger, consolidation, recapitalization, reclassification,
stock split, reverse stock split, spin-off, repurchase, share exchange, dividend
or distribution of stock, property or cash (other than regular, quarterly
cash
dividends), or any other event or transaction that affects the number or
kind of
shares of Common Stock outstanding, the Committee shall make appropriate,
equitable adjustments in the value of the MRUs described herein in order
to
prevent the dilution or enlargement of either Grantee’s rights hereunder or the
value of the MRUs (determined immediately before and after such adjustment);
provided, however, that no such adjustment shall be made to the extent that
the
Committee determines that such adjustment would result in the disallowance
of a
federal income tax deduction for compensation attributable to the MRUs under
Section 162(m) of the Code, if applicable.
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6. UNFUNDED
STATUS
OF MRUs.
MRUs
are an
unfunded obligation of the Company to pay compensation in the future. Neither
the grant nor vesting of MRUs hereunder, nor the taking of any other action
in
respect of MRUs, shall give Grantee rights that are greater than those of
a
general creditor of the Company; provided, however, that the Company may
create
a trust or make other arrangements to meet its obligations in respect of
MRUs,
which trusts or other arrangements shall be consistent with the status of
MRUs
as an unfunded obligation, unless the Committee otherwise determines with
the
consent of Grantee.
7. CLAIMS;
NOTICES.
(a) Any
claim that
Grantee makes for benefits relating to MRUs shall be filed in writing with
the
Committee. Written notice of the disposition of the claim shall be delivered
to
Grantee within 60 days after filing. If the claim is denied, the reasons
shall
be set forth in a statement delivered to Grantee. The filing of a claim in
accordance with this Section 7 shall be a condition precedent to the initiation
of any legal proceeding with respect to such claim.
(b) All
notices or
other communications made or given in respect off MRUs shall be in writing
and
shall be sufficiently made or given if hand-delivered or mailed by certified
mail addressed to Grantee at the address contained in the records of the
Company, or to the Company attention of the Committee at the Company’s principal
office.
8. ENTIRE
AGREEMENT.
This
Agreement
constitutes the entire agreement between Grantee and the Company relating
to
this subject matter. No other prior or contemporaneous agreements, promises,
representations, covenants, warranties, or any other undertaking whatsoever
respecting such matters shall be deemed in any way to exist or to bind any
of
the parties. Grantee acknowledges and agrees that s/he has not executed this
Agreement in reliance on any such other agreement, promise, representation,
covenant, warranty, or undertaking. The Agreement may not be orally modified.
All modifications must be agreed to in writing and signed by both
parties.
9. SETOFF.
The
Company may, to
the extent permitted by law, deduct from and set off against its obligations
to
Grantee from time to time, (including without limitation amounts payable
in
connection with settlement of MRUs, as wages or benefits or other form of
compensation), any amounts that Grantee owes to the Company or any of its
Affiliates for any reason whatsoever. Grantee shall remain liable for any
portion of Grantee’s obligation not satisfied by such setoff. By accepting the
MRUs granted hereunder, Grantee agrees to any deduction or setoff under this
Section 9.
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10. TRANSFERABILITY
AND ALIENATION.
Except
insofar as
may otherwise be required by law or Section 9 above, no amount payable at
any
time pursuant to this award of MRUs shall be subject in any manner to alienation
by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment,
charge, or encumbrance of any kind, nor in any manner be subject to the debts
or
liabilities of any person, and any attempt to so alienate or subject any
such
amount, whether presently or thereafter payable, shall be void. If any person
shall attempt to, or shall, alienate, sell, transfer, assign, pledge, attach,
charge, or otherwise encumber any amount payable pursuant to this award of
MRUs,
or any part thereof, or if by reason of his or her bankruptcy or other event
happening at any such time such amount would be made subject to his or her
debts
or liabilities or would otherwise not be enjoyed by him or her, then the
Company, if it so elects, may direct that such amount be withheld and that
the
same or any part thereof be paid or applied to or for the benefit of such
person, his or her spouse, children or other dependents, or any of Grantee’s
heirs, in such manner and proportion as the Company may deem
proper.
11. NO
EMPLOYMENT,
CONTINUED SERVICE OR EQUITYHOLDER RIGHTS.
This
Agreement
shall not give Grantee any right to remain employed by the Company or any
of its
Affiliates, nor shall it provide Grantee with any rights to any other form
of
service (such as a consultant or director) with any of the foregoing entities.
The Company reserves the right to terminate the employment or service of
Grantee
at any time, and for any reason or no reason, subject to applicable laws
and any
employment or other agreement. Grantee shall not have the rights of an
equityholder of the Company as a result of the grant or vesting of
MRUs.
12. COMMITTEE
AUTHORITY
The
Agreement shall
be administered by the Committee. The Committee shall be authorized and
empowered to do all things necessary or desirable in connection with the
administration of this Agreement, including, without limitation, the following:
(a) accelerate the exercisability of the MRUs, (b) determine whether,
and the extent to which, adjustments are required pursuant to Section 5,
(c) verify the extent of satisfaction of any conditions applicable to the
vesting of the MRUs, (d) interpret and construe the terms and conditions of
the award of MRUs hereunder, and to make exceptions to any such provisions
in
good faith and for the benefit of the Company and (e) to make all other
determinations deemed necessary or advisable for the administration of the
award
of MRUs hereunder. All decisions, determinations and interpretations by the
Committee regarding the terms and conditions of or operation of the award
of
MRUs hereunder shall be final and binding on Grantee and his or her
beneficiaries, heirs, assigns or other persons holding or claiming rights
under
the MRUs. The Committee shall consider such factors as it deems relevant,
in its
sole and absolute discretion, to making such decisions, determinations and
interpretations, including, without limitation, the recommendations or advice
of
any officer or other employee of the Company and such attorneys, consultants
and
accountants as the Committee may select. The Committee shall not be liable
for
any determination or action taken in good faith with respect to the MRUs
granted
hereunder. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in this Agreement in the manner and to the extent
it
shall deem desirable to effectuate the purposes of this Agreement. The Committee
may delegate any or all aspects of the day-to-day administration of the
Agreement to one or more officers or employees of the Company or any Affiliate,
and/or to one or more agents.
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IN
WITNESS WHEREOF, the Company has caused this Management Retention Unit Agreement
to be duly executed by its officers thereunto duly authorized, and Grantee
has
hereunto set his or her hand as of the date first above written.
| BUILDING MATERIALS HOLDING CORPORATION | ||
| |
|
|
| By: | ||
| Name: |
R. Xxxxx Xxxxxxxx, Jr. |
|
| Title: | Chairman, Compensation Committee | |
| Acknowledged receipt of and agreement with the terms of the grant of Management Retention Units as set forth above. | ||
| GRANTEE: | ||
| Signed: | ||
|
Xxxxxx X. Xxxxxx |
||
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