Employment Agreement
Exhibit 10.1
Agreement made as of February 23, 2010, by and between Builders FirstSource, Inc., a
Delaware corporation (the “Company”), and M. Xxxx Xxxx (the “Executive”).
Whereas, the Company desires that Executive serve as the Senior Vice President and
Chief Financial Officer of the Company, and Executive desires to hold such positions under the
terms and conditions of this Agreement; and
Whereas, the Board of Directors of the Company (the “Company Board”) has approved and
authorized the Company to enter into this Agreement with Executive.
Now, therefore, in consideration of the mutual covenants and agreements set forth
herein, and intending to be legally bound hereby, the parties agree as follows:
1. Employment. The Company hereby employs Executive, and Executive hereby accepts
employment with the Company, upon the terms and subject to the conditions set forth herein.
2. Term.
(a) Subject to Section 2(b) hereof, the term of employment by the Company of Executive
pursuant to this Agreement (as the same may be extended, the “Term”) shall commence on February
23, 2010 (the “Effective Date”), and terminate on the first anniversary thereof.
(b) Commencing on the first anniversary of the Effective Date and on each subsequent
anniversary thereof, the Term shall automatically be extended for one (1) additional year unless,
not later than ninety days (90) prior to any such anniversary date, either party hereto shall have
notified the other party hereto in writing that such extension shall not take effect.
3. Position. During the Term, Executive shall serve as the Senior Vice President and
Chief Financial Officer of the Company, supervising the financial operations and affairs of the
Company and performing such other duties as the Company Board shall determine.
4. Duties. During the Term, Executive shall devote his full time and attention during
normal business hours to the business and affairs of the Company, except vacations in accordance
with the Company’s policies and for illness or incapacity, in accordance with Section 6 hereof.
5. Salary and Bonus.
(a) During the Term, the Company shall pay to Executive a base salary at the rate of $350,000
per year (the “Base Salary”), subject to adjustments pursuant to the terms of Section 5(b) hereof.
(b) On or prior to each anniversary hereof during the Term (assuming the Term of the Agreement
is extended pursuant to Section 2(b) hereof), the Company Board or the Compensation Committee of
the Company Board (the “Compensation Committee”) shall review the Base Salary and may, in its sole
discretion, increase the Base Salary based upon performance and merit. Executive’s Base Salary
shall not be decreased below the amount set forth in Section 5(a) hereof. The Base Salary shall be
payable to Executive in substantially equal installments in accordance with the Company’s normal
payroll practices, but in no event less often than semi-monthly.
(c) For each fiscal year during the Term hereof, Executive shall be eligible to receive an
annual cash bonus equal to the amount provided for in the Company’s Annual Cash Incentive Plan
(“Annual Incentive Plan”) (which generally provides for a target bonus percentage of 100% of
Executive’s Base Salary), which Annual Incentive Plan is approved by the Company Board or the
Compensation Committee thereof. Executive’s target bonus percentage under the Annual Incentive
Plan shall not be reduced below 100% of his Base Salary. Annual cash bonuses shall be paid in the
calendar year following the year to which the bonus relates, and not later than March 15 of such
year.
6. Vacation, Holidays and Sick Leave. During the Term, Executive shall be entitled to
paid vacation, paid holidays and sick leave in accordance with the Company’s standard policies for
its senior executive officers.
7. Business Expenses. During the Term, Executive shall be reimbursed for all
reasonable and necessary business expenses incurred by him in connection with his employment,
including, without limitation, expenses for travel and entertainment incurred in conducting or
promoting business for the Company upon timely submission by Executive of receipts and other
documentation as required by the Internal Revenue Code of 1986, as amended (the “Code”), and in
accordance with the Company’s normal expense reimbursement policies. With respect to Executive’s
rights under this Section 7, (i) the amount reimbursable in any one calendar year shall not affect
the amount reimbursable in any other calendar year, (ii) the reimbursement of an eligible business
expense must be made no later than December 31 of the year after the year in which the business
expense was incurred, and (iii) such rights shall not be subject to liquidation or exchange for
another benefit.
8. Health, Welfare and Related Benefits. During the Term, Executive and eligible
members of his family shall be eligible to participate fully in all (a) health and dental benefits
and insurance programs; (b) life and short- and long-term disability benefits and insurance
programs; and (c) defined contribution and equity compensation programs, all as available to senior
executive officers of the Company generally.
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9. Confidentiality, Non-Competition.
(a) Executive acknowledges that: (i) the Executive has, and his employment hereunder will
require that Executive continue to have, access to and knowledge of Confidential Information (as
hereinafter defined); (ii) the direct and indirect disclosure of any such Confidential Information
to existing or potential competitors of the Company or its subsidiaries would place the Company at
a competitive disadvantage and would do damage, monetary or
otherwise, to the Company’s businesses; and (iii) the engaging by Executive in any of the
activities prohibited by this Section 9 may constitute improper appropriation and/or use of such
Confidential Information. Executive expressly acknowledges that the Confidential Information
constitutes a protectable business interest of the Company. As used herein, the term “Confidential
Information” shall mean information of any kind, nature or description which is disclosed to or
otherwise known to the Executive as a direct or indirect consequence of his association with the
Company, which information is not generally known to the public or in the businesses in which such
entities are engaged or which information relates to specific investment opportunities within the
scope of their business which were considered by the Company during the Term; provided,
however, that “Confidential Information” shall not be deemed to include information which
(i) is or becomes generally available to the public other than as a result of a disclosure by the
Executive, (ii) becomes available to the Executive on a non-confidential basis from a source other
than the Company, provided that such source is not bound by any contractual, legal or fiduciary
obligation with respect to such information or (iii) was in the Executive’s possession prior to
being furnished by the Company.
(b) During the Term of this Agreement and for a period of one year after the termination of
Executive’s employment hereunder (upon expiration of the Term or otherwise), Executive shall not,
directly or indirectly, whether individually, as a director, stockholder, owner, manager, member,
partner, employee, consultant, principal or agent of any business, or in any other capacity, use
for his own account, utilize or make known, disclose, furnish or make available to any person, firm
or corporation any of the Confidential Information, other than to authorized officers, directors
and employees of the Company in the proper performance of the duties contemplated herein, or as
required by a court of competent jurisdiction or other administrative or legislative body;
provided that, prior to disclosing any of the Confidential Information to a court
or other administrative or legislative body, Executive shall promptly notify the Company so that
the Company may seek a protective order or other appropriate remedy. Executive agrees to return
all Confidential Information, including all photocopies, extracts and summaries thereof, and any
such information stored electronically on tapes, computer disks or in any other manner to the
Company at any time upon request by the Company and upon the termination of his employment for any
reason.
(c) During the Term of this Agreement and for a period of one year after termination of
Executive’s employment hereunder (upon expiration of the Term or otherwise), Executive shall not,
directly or indirectly, own any interest in, operate, join, control or participate as a partner,
member, director, manager, principal, officer, or agent of, enter into the employment of, act as a
consultant or advisor to, or perform any services for, any entity (in those geographic areas in
which the Company or any of its subsidiaries, as of the date of termination of the Executive’s
employment hereunder, have material operations) which entity is engaged in competition with the
Company or any of its subsidiaries. An entity shall be deemed to be engaged in competition with
the Company or its subsidiaries if it engages in a business which is the same as or substantially
similar to any business engaged in by the Company or such subsidiary during the Term.
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(d) During the Term of this Agreement and for a period of two years after termination of
Executive’s employment hereunder (upon expiration of the Term or otherwise), Executive shall not,
directly or indirectly, hire, solicit or recruit for hire any employee of the
Company or any of its subsidiaries or encourage any employee of the Company or any of its
subsidiaries to terminate his or her employment in order to obtain employment by any other person,
firm or corporation.
(e) Executive acknowledges that (A) in connection with rendering the services to be rendered
by Executive hereunder, Executive will have access to and knowledge of Confidential Information,
the disclosure of which would place the Company or its subsidiaries at a competitive disadvantage,
causing irreparable injury, and (B) the services to be rendered by Executive hereunder are of a
special and unique character, which gives this Agreement a peculiar value to the Company, the loss
of which may not be reasonably or adequately compensated for by damages in an action at law, and
that a material breach or threatened breach by Executive of any of the provisions contained in this
Section 9 will cause the Company irreparable injury. Executive, therefore, agrees that the Company
shall be entitled, in addition to any other right or remedy, to a temporary, preliminary and
permanent injunction, without the necessity of proving the inadequacy of monetary damages or the
posting of any bond or security, enjoining or restraining Executive from any such violation or
threatened violations.
(f) Executive further acknowledges and agrees that due to the uniqueness of his services and
confidential nature of the information he will possess, the covenants set forth herein are
reasonable and necessary for the protection of the business and goodwill of the Company; and it is
the intent of the parties hereto that if, in the opinion of any court of competent jurisdiction,
any provision set forth in this Section 9 is not reasonable in any respect, such court shall have
the right, power and authority to modify any and all such provisions in such a manner as to such
court shall appear not unreasonable and to enforce the remainder of this Section 9 as so modified.
10. Termination of Agreement. The employment by the Company of Executive pursuant to
this Agreement shall not be terminated prior to the end of the Term, except as set forth in this
Section 10.
(a) By Mutual Consent.
(i) The employment by the Company of Executive pursuant to this Agreement may
be terminated at any time by the mutual written agreement of the Company and
Executive.
(ii) In the event that (i) Executive’s employment is terminated by mutual
consent pursuant to this Section 10(a), and (ii) Executive and the Company determine
at that time that it is in their mutual best interest for Executive to continue to
be bound after his termination by the provisions of Section 9 of this Agreement for
the periods set forth therein, then the parties may enter into an agreement to that
effect, in exchange for which Executive would be entitled to the compensation
provided for in Section 10(e) hereof.
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(b) Death. The employment by the Company of Executive pursuant to this Agreement
shall be terminated upon the death of Executive, in which event Executive’s spouse or heirs shall
receive the following: (i) Executive’s Base Salary and benefits to be paid or
provided to Executive under this Agreement through the Date of Termination (“Accrued
Obligations”), payable no later than thirty (30) days after the Date of Termination, (ii)
continuation of Executive’s Base Salary for a period of one (1) year after the Date of Termination,
and (iii) continuation of the health benefits provided for pursuant to Section 8(a) hereof (“Health
Benefits”) and welfare benefits provided for pursuant to Section 8(b) hereof (“Welfare Benefits”)
for a period of one (1) year after the Date of Termination.
(c) Disability. The employment by the Company of Executive pursuant to this Agreement
may be terminated by written notice to Executive at the option of the Company in the event that as
a result of the Executive’s incapacity due to physical or mental illness (which physical or mental
illness shall be confirmed in writing by a physician or other medical expert acceptable to both
parties), the Executive is unable to perform his duties, services and responsibilities hereunder or
shall have been absent from his duties hereunder on a full-time basis for ninety (90) consecutive
days or for an aggregate of ninety (90) days or more in any six (6) month period, and within thirty
(30) days after notice is given by the Company (which notice may be delivered no earlier than
thirty days prior to the expiration of such ninety (90) consecutive days or six month period, as
the case may be), the Executive shall not have returned to the performance of his duties hereunder
on a full-time basis. In the event the employment by the Company of Executive is terminated
pursuant to this Section 10(c), Executive shall be entitled to receive the following: (i) the
Accrued Obligations, payable no later than thirty (30) days after the Date of Termination, (ii)
subject to Section 24 hereof, continuation of his Base Salary for a period of one (1) year after
the Date of Termination, (iii) continuation of Health Benefits for a period of one (1) year after
the Date of Termination, and (iv) subject to Section 24 hereof, continuation of Welfare Benefits
for a period of one (1) year after the Date of Termination; provided, however, that amounts payable
to Executive under this Section 10(c) shall be reduced by the proceeds of any short- and/or
long-term disability payments under the Company plans referred to in Section 8 hereof to which
Executive may be entitled during such period.
(d) By the Company for Cause. The employment of Executive pursuant to this Agreement
may be terminated by the Company by written notice to Executive (“Notice of Termination”) for Cause
(as hereafter defined). In the event the employment by the Company of Executive is terminated
pursuant to this Section 10(d), Executive shall be entitled to receive all Base Salary and benefits
to be paid or provided to Executive under this Agreement through the Date of Termination and no
more.
(e) By the Company Without Cause. The employment by the Company of Executive pursuant
to this Agreement may be terminated by the Company at any time without Cause by delivery of a
Notice of Termination to Executive. In the event the employment by the Company of Executive is
terminated pursuant to this Section 10(e), Executive shall be entitled to receive the following:
(i) the Accrued Obligations, payable no later than thirty (30) days after the Date of Termination,
(ii) subject to Section 24 hereof, continuation of his Base Salary for a period of one (1) year
after the Date of Termination, (iii) continuation of Health Benefits for a period of one (1) year
after the Date of Termination, (iv) subject to Section 24 hereof, continuation of Welfare Benefits
for a period of one (1) year after the Date of Termination, and (v) subject to Section 24 hereof,
an amount equal to his Average Bonus Compensation (as hereafter defined), payable in accordance
with Section 10(j).
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(f) By Executive. The employment of Executive by the Company pursuant to this
Agreement may be terminated by Executive by written notice to the Company of his resignation (a
“Notice of Resignation”) at any time. In the event the employment by the Company of Executive is
terminated pursuant to this Section 10(f), Executive shall be entitled to receive all Base Salary
and benefits to be paid or provided to Executive under this Agreement through the Date of
Termination and no more; provided, however, that if Executive terminates his employment due to (i)
a material adverse diminution of Executive’s job title or responsibilities from those currently in
effect; or (ii) a relocation of Executive’s principal place of employment more than 100 miles from
its current location without his consent, then Executive shall instead be entitled to the
compensation provided for in Section 10(e) hereof.
(g) Non-Renewal. In the event that at any time during the Term (as it may be
extended) the Company notifies Executive of its intent not to renew this Agreement pursuant to
Section 2(b) hereof, and Executive then delivers a Notice of Resignation to the Company within
ninety (90) days of receipt of such notice of non-renewal, Executive shall be entitled to receive
the following: (i) the Accrued Obligations, payable no later than thirty (30) days after the Date
of Termination, (ii) subject to Section 24 hereof, continuation of his Base Salary for a period of
one (1) year after the Date of Termination, (iii) continuation of Health Benefits for a period of
one (1) year after the Date of Termination, (iv) subject to Section 24 hereof, continuation of
Welfare Benefits for a period of one (1) year after the Date of Termination, and (iv) subject to
Section 24 hereof, an amount equal to his Average Bonus Compensation (as hereafter defined),
payable in accordance with Section 10(j).
(h) Previously Earned Bonus. Notwithstanding any other provision of this Section 10,
in the event that Executive’s employment pursuant to this Agreement is terminated at a time when
Executive shall have earned a bonus under the Annual Incentive Plan for performance during the
prior fiscal year which has not yet been paid, Executive shall be paid such bonus in addition to
the amounts otherwise provided for in this Section 10. Such bonus shall be paid in the fiscal year
following the fiscal year for which it is earned, and not later than March 15 of such year, in
accordance with the Company’s normal practices.
(i) Date of Termination. Executive’s Date of Termination shall be: (i) if the parties
hereto mutually agree to terminate this Agreement pursuant to Section 10(a) hereof, the date
designated by the parties in such agreement; (ii) if Executive’s employment by the Company is
terminated pursuant to Section 10(b), the date of Executive’s death; (iii) if Executive’s
employment by the Company is terminated pursuant to Section 10(c), the last day of the applicable
period referred to in Section 10(c) hereof; (iv) if Executive’s employment by the Company is
terminated pursuant to Section 10(d), the date on which a Notice of Termination is given; and (v)
if Executive’s employment by the Company is terminated pursuant to Sections 10(e), 10(f) or 10(g),
the date the Notice of Termination or Notice of Resignation, as the case may be, is given.
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(j) Payment of Post-Termination Compensation. After Executive’s Date of Termination,
all payments of Base Salary and Average Bonus Compensation to Executive pursuant to this Section 10
shall be paid in accordance with the Company’s normal payroll practices, but in no event less often
than semi-monthly. In the event of a breach by Executive of Section 9 of this Agreement during the
applicable period following his Date of Termination,
Executive agrees (i) that the Company shall have no further obligation to make any payments to
Executive under Section 10 of the Agreement and (ii) that any payments of Base Salary or Average
Bonus Compensation previously made to Executive after his Date of Termination shall be returned to
the Company.
(k) Continuation of Welfare Benefits. With respect to Executive’s rights to
continuation of Welfare Benefits provided for in Sections 10(b), (c), (e) and (g), (i) the benefits
provided in any one calendar year shall not affect the benefits provided in any other calendar
year, (ii) the reimbursement of an eligible expense must be made no later than December 31 of the
year after the year in which the business expense was incurred, and (iii) such rights shall not be
subject to liquidation or exchange for another benefit.
11. Representations.
(a) The Company represents and warrants that this Agreement has been authorized by all
necessary corporate action of the Company and is a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms.
(b) Executive represents and warrants that he is not a party to any agreement or instrument
which would prevent him from entering into or performing his duties in any way under this Agreement
and that this Agreement is a valid and binding agreement of Executive enforceable against Executive
in accordance with its terms.
12. Successors. This Agreement is a personal contract and the rights and interests of
Executive hereunder may not be sold, transferred, assigned, pledged, encumbered, or hypothecated by
him, except as otherwise expressly permitted by the provisions of this Agreement. This Agreement
shall inure to the benefit of and be enforceable by Executive and his personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
If Executive should die while any amount would still be payable to him hereunder had Executive
continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to his devisee, legatee or other designee or, if there is no such
designee, to his estate.
13. Entire Agreement. This Agreement contains all the understandings between the
parties hereto pertaining to the matters referred to herein, and supersedes any other undertakings
and agreements (other than any stock option or restricted stock agreement between Executive and the
Company), whether oral or in writing, previously entered into by them with respect thereto.
Executive represents that, in executing this Agreement, he does not rely and has not relied upon
any representation or statement made by the Company not set forth herein with regard to the subject
matter or effect of this Agreement or otherwise.
14. Termination; Amendment or Modification; Waiver.
(a) This Agreement may be terminated at any time by mutual written consent of the Company and
Executive.
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(b) No provision of this Agreement may be amended or waived unless such amendment or waiver is
agreed to in writing, signed by Executive and by a duly authorized
officer of the Company. No waiver by any party hereto of any breach by another party hereto
of any condition or provision of this Agreement to be performed by such other party shall be deemed
a waiver of a similar or dissimilar condition or provision at the same time, any prior time or any
subsequent time.
15. Notices. All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be (i) delivered by hand, (ii) delivered by a nationally
recognized commercial overnight delivery service, (iii) mailed postage prepaid by first class mail
or (iv) transmitted by facsimile transmitted to the party concerned at the address or telecopier
number set forth below:
To Executive at:
Builders FirstSource, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: M. Xxxx Xxxx
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: M. Xxxx Xxxx
To the Company at:
Builders FirstSource, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
with copies to:
JLL Partners
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx
Xxxxxxx Xxxxxx LLC
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile (000) 000-0000
Attention: Xxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile (000) 000-0000
Attention: Xxxxx Xxxxx
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
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Such notices shall be effective: (i) in the case of hand deliveries when received; (ii) in the
case of an overnight delivery service, on the next business day after being placed in the
possession of such delivery service, with delivery charges prepaid; (iii) in the case of mail,
seven (7) days after deposit in the postal system, first class mail, postage prepaid; and (iv) in
the case of facsimile notices, when electronic confirmation of receipt is received by the sender.
Any party may change its address and telecopy number by written notice to the other given in
accordance with this Section 15; provided, however, that such change shall be
effective when received.
16. Severability. If any provision or clause of this Agreement or the application of
any such provision or clause to any party or circumstances shall be determined by any court of
competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this
Agreement or the application of such provision or clause to such person or circumstances other than
those to which it is so determined to be invalid and unenforceable, shall not be affected thereby,
and each provision or clause hereof shall be validated and shall be enforced to the fullest extent
permitted by law.
17. Survivorship. The respective rights and obligations of the parties hereunder
shall survive any termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.
18. Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of Delaware, without regard to its conflicts of law principles.
19. Headings. All descriptive headings of sections and paragraphs in this Agreement
are intended solely for convenience, and no provision of this Agreement is to be construed by
reference to the heading of any section or paragraph.
20. Withholding. All payments to Executive under this Agreement shall be reduced by
all applicable withholding required by federal, state or local law.
21. Specific Performance. Each party hereto acknowledges that money damages would be
both incalculable and an insufficient remedy for any breach of this Agreement by such party and
that any such breach would cause the other parties, irreparable harm. Accordingly, each party
hereto also agrees that, in the event of any breach or threatened breach of the provisions of this
Agreement by such party, the other parties shall be entitled to equitable relief without the
requirement of posting a bond or other security, including in the form of injunctions and orders
for specific performance, in addition to all other remedies available to such other parties at law
or in equity.
22. Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument.
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23. Definitions.
(a) “Cause” means the determination, in good faith, by the Company Board, after notice to
Executive that one or more of the following events has occurred: (i) any act of
gross negligence, fraud, willful misconduct or moral turpitude by Executive materially
injuring the interest, business or reputation of the Company, or any of its parents, subsidiaries
or affiliates; (ii) Executive’s conviction of any felony; (iii) violation by Executive of the
Company’s Drug Policy; (iv) any misappropriation or embezzlement of the property of the Company, or
any of its parents, subsidiaries or affiliates; or (v) any material breach by Executive of this
Agreement, including, without limitation, a material breach of Section 9 hereof, which breach, to
the extent it is capable of being cured, remains uncorrected for a period of thirty (30) days after
receipt by Executive of written notice from the Company setting forth such breach.
(b) “Average Bonus Compensation” shall mean an amount equal to the average of the
annual bonus amounts earned by Executive under the Company’s Annual Incentive Plan during the two
most recent fiscal years ended prior to Executive’s Date of Termination.
24. Code Section 409A.
(a) Notwithstanding anything in this Agreement to the contrary, to the extent that any amount
or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of
the Code would otherwise be payable or distributable hereunder by reason of the occurrence of
Executive’s separation from service, such amount or benefit will not be payable or distributable to
Executive by reason of such separation from service unless (i) the circumstances giving rise to
such separation from service meet any description or definition of “separation from service” in
Section 409A of the Code and applicable regulations (without giving effect to any elective
provisions that may be available under such definition), or (ii) the payment or distribution of
such amount or benefit would be exempt from the application of Section 409A of the Code by reason
of the short-term deferral exemption or otherwise. This provision does not prohibit the vesting of
any amount upon a separation from service, however defined. If this provision prevents the payment
or distribution of any amount or benefit, such payment or distribution shall be made on the date,
if any, on which an event occurs that constitutes a Section 409A-compliant “separation from
service.”
(b) Notwithstanding anything in this Agreement to the contrary, if any amount or benefit
specified herein as “subject to Section 24 hereof,” or any other amount or benefit that would
otherwise constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code
would otherwise be payable or distributable under this Agreement by reason of the Executive’s
separation from service during a period in which he is a Specified Employee (as defined below),
then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section
1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi)
(payment of employment taxes):
(i) if the payment or distribution is payable in a lump sum, Executive’s right to
receive payment or distribution of such non-exempt deferred compensation will be delayed
until the earlier of Executive’s death or the first day of the seventh month following
Executive’s separation from service (the “Delay Period”); and
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(ii) if the payment or distribution is payable over time, the amount of such
non-exempt deferred compensation that would otherwise be payable during the six-month
period immediately following Executive’s separation from service will be accumulated
and Executive’s right to receive payment or distribution of such accumulated amount will be
delayed until the earlier of Executive’s death or the end of the Delay Period, whereupon the
accumulated amount will be paid or distributed to Executive and the normal payment or
distribution schedule for any remaining payments or distributions will resume; and
(iii) to the extent that this Section 24(b) applies to the provision of Welfare
Benefits, Executive shall be entitled to pay the full cost of premiums to maintain the
Welfare Benefits during the Delay Period, and the Company shall pay to Executive an amount
equal to the amount of such premiums promptly following the end of the Delay Period.
For purposes of this Agreement, the term “Specified Employee” has the meaning given such term
in Code Section 409A and the final regulations thereunder.”
[Signature Page Follows]
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In witness whereof, the parties hereto have executed and delivered this Employment
Agreement as of the date first above written.
| Builders FirstSource, Inc. |
||||
| By: | /s/ Xxxxx Xxxxxxx | |||
| Xxxxx Xxxxxxx | ||||
| Chief Executive Officer | ||||
| Executive |
||||
| /s/ M. Xxxx Xxxx | ||||
| M. Xxxx Xxxx | ||||
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