Exhibit 10.2

 

SEPARATION, TRANSITION AND RELEASE AGREEMENT

 

This Separation, Transition and Release Agreement (the “Agreement”) is made this
April 1, 2019, by and between GMS Inc., a Delaware corporation (the “Company”)
and G. Michael Callahan, Jr. (the “Executive”).

 

A.                                    Separation from Employment.  The Company
and the Executive agree that (i) the Executive hereby resigns from his position
of President of the Company effective May 1, 2019, (ii) the Executive hereby
resigns as Chief Executive Officer of the Company effective as of August 2, 2019
(the “Separation Date”), and his employment with the Company shall terminate on
the Separation Date.  From May 1, 2019 until the Separation Date, the Executive
shall continue his employment with the Company as Chief Executive Officer of the
Company, subject to the termination provisions of his Employment Agreement (as
defined below) and will continue to receive his current compensation and
benefits contemplated by the Employment Agreement, dated as of August 28, 2015,
as amended (the “Employment Agreement”), by and between the Executive and Gypsum
Management and Supply, Inc., a Georgia corporation and a wholly owned subsidiary
of the Company through and including the Separation Date.

 

B.                                    Compensation through Separation Date. 
Following the Separation Date, the Executive will be paid for all outstanding
wages earned since his last paycheck through and including the Separation Date,
less customary and applicable payroll deductions.  The Executive confirms and
agrees that, through the date he executes this Agreement, he has received all
wages, reimbursements, payments, or other benefits to which he is entitled as a
result of his employment with the Company, other than for outstanding wages
earned since his last paycheck and expenses incurred in the ordinary course.

 

C.                                    Separation Obligation of the Company.  In
consideration of Executive’s promises contained in this Agreement, including
without limitation, the Release in Section D below and the Supplemental Release
of Claims attached hereto as Exhibit A the Company agrees as follows:

 

1.                                      Severance Amount.  The Company will pay
to Executive the following amounts (collectively, the “Severance Amount”):

 

i.                                          A gross total amount of $1,158,768,
less customary and applicable payroll deductions (such amount, the “Severance
Payment”).  The Severance Payment will be paid over an 18 month period (the
“Severance Period”) in equal installments on the Company’s regular payroll
dates, starting on the first regular payroll date following the 30th day after
the Separation Date.

 

ii.                                       A prorated portion of the Executive’s
actual Annual Bonus, as defined under and payable in accordance with the
Employment Agreement.

 

2.                                      Benefits Continuation Payment. 
Beginning on the first regular payroll following the thirtieth (30th) day after
the Separation Date, the Company will pay to Executive a monthly payment in the
amount of $1,500 for 18 months following the Separation Date, less customary and
applicable payroll deductions (which amount represents the approximate monthly
cost to

 

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continue health and dental insurance coverage under COBRA), on an after-tax
basis (such amount, the “Benefits Continuation Payment”).

 

3.                                      Stock Options Extension.  As of the
Separation Date and assuming no exercises between the date of this Agreement and
the Separation Date, Executive will hold an aggregate of 551,970 stock options
to acquire shares of the Company’s common stock, 483,454 of which will be vested
as of the Separation Date (the “Vested Options”) and 68,516 of which will be
unvested as of the Separation Date (the “Unvested Options”), all of which have
been granted under the GMS Inc. Equity Incentive Plan (the “Equity Plan”). 
Notwithstanding anything to the contrary in the respective governing option
agreement, the Vested Options shall remain outstanding and exercisable until the
earlier of (i) the six (6) month anniversary of the Separation Date or (ii) the
normal expiration date of the Options, and the Vested Options shall otherwise
remain subject to the terms and conditions of the Equity Plan and the respective
governing award agreements.  The Unvested Options shall lapse and terminate
immediately on the Separation Date, and Executive will cease to have any rights
with respect to such terminated Unvested Options as of the Separation Date. 
Executive shall forfeit all right, title and interest in and to any unvested
restricted stock units as of the Separation Date and the unvested restricted
stock units will be reconveyed to the Company without further consideration or
any act or action by Executive.

 

The Company’s agreement to provide all of the consideration set forth in this
Section is specifically contingent upon Executive (i) executing this Agreement
and not revoking the Agreement, as set forth in Section D(6) below;
(ii) executing the Supplemental Release of Claims attached hereto as Exhibit A
within five (5) days after the Separation Date and not revoking it; and
(iii) complying with his obligations under this Agreement and any other
continuing contractual obligations he owes to the Company, including but not
limited to the obligations set forth in Section 4 of the Employment Agreement.

 

D.                                    Release of Claims.

 

1.                                      In consideration of the payment and
benefits set forth in Section C. above, the sufficiency of which the Executive
acknowledges, the Executive, with the intention of binding himself and his
heirs, executors, administrators and assigns, does hereby release, remise,
acquit and forever discharge Holdings (as defined in the Employment Agreement),
the Company and each of its and their subsidiaries and affiliates (the “Company
Affiliated Group”), their respective present and former officers, directors,
executives, shareholders, agents, attorneys, employees and employee benefit
plans (and the fiduciaries thereof), and the successors, predecessors and
assigns of each of the foregoing (collectively, the “Company Released Parties”),
of and from any and all claims, actions, causes of action, complaints, charges,
demands, rights, damages, contracts, debts, sums of money, accounts, financial
obligations, suits, expenses, attorneys’ fees and liabilities of whatever kind
or nature in law, equity or otherwise, whether accrued, absolute, contingent,
unliquidated or otherwise and whether now known or unknown, suspected or
unsuspected, which the Executive, individually or as a member of a class, now
has, owns or holds, or has at any time heretofore had, owned or held, arising on
or prior to the date hereof, against any Company Released Party that arises out
of, or relates to, the Employment Agreement, the Executive’s employment with the
Company or any of its subsidiaries and affiliates, or any termination of such
employment, including claims

 

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(i) for severance or vacation benefits, unpaid wages, salary or incentive
payments, (ii) for breach of contract, wrongful discharge, impairment of
economic opportunity, defamation, intentional infliction of emotional harm or
other tort, (iii) for any violation of applicable state and local labor and
employment laws (including, without limitation, all laws concerning unlawful and
unfair labor and employment practices) and (iv) for employment discrimination
under any applicable federal, state or local statute, provision, order or
regulation, and including, without limitation, any claim under Title VII of the
Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. § 1981, the Civil Rights Act
of 1988, the anti-retaliation provisions of the Fair Labor Standards Act, the
Americans with Disabilities Act (“ADA”), the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), the Age Discrimination in Employment Act
(“ADEA”), the Older Workers Benefit Protection Act (“OWBPA”), the Family and
Medical Leave Act, the Genetic Information Nondiscrimination Act, the
anti-retaliation provisions of the Fair Labor Standards Act, the Employee
Retirement Income Security Act, the Equal Pay Act, the Occupational Safety and
Health Act, the Worker Adjustment and Retraining Notification Act, the
Occupational Safety and Health Act, the Employee Polygraph Protection Act, the
Fair Credit Reporting Act, and any similar or analogous state statute, excepting
only:

 

(a)                     rights of the Executive arising under, or preserved by,
this Release;

 

(b)                     the right of the Executive to receive COBRA continuation
coverage in accordance with applicable law;

 

(c)                      claims for benefits under any health, disability,
retirement, life insurance  or other, similar employee benefit plan (within the
meaning of Section 3(3) of ERISA) of the Company Affiliated Group;

 

(d)                     vested rights to exercise stock options pursuant to the
terms of applicable award agreements; and

 

(e)                      rights to indemnification the Executive has or may have
under the by-laws or certificate of incorporation of any member of the Company
Affiliated Group or as an insured under any director’s and officer’s liability
insurance policy now or previously in force.

 

2.                                   The Executive acknowledges and agrees that
this Release is not to be construed in any way as an admission of any liability
whatsoever by any Company Released Party, any such liability being expressly
denied.

 

3.                                      This Release applies to any relief no
matter how called, including, without limitation, wages, back pay, front pay,
compensatory damages, liquidated damages, punitive damages, damages for pain or
suffering, costs, and attorneys’ fees and expenses.

 

4.                                      Except as expressly set forth in
Section D(10) below, Executive further hereby AGREES NOT TO FILE A LAWSUIT or
other legal claim or charge to assert against any Company Released Party any
claim released by this Agreement.

 

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5.                                      The Executive specifically acknowledges
that his acceptance of the terms of this Release is, among other things, a
specific waiver of his rights, claims and causes of action under Title VII,
ADEA, ADA and any other federal, state or local law or regulation in respect of
discrimination of any kind; provided, however, that nothing herein shall be
deemed, nor does anything contained herein purport, to be a waiver of any right
or claim or cause of action which by law the Executive is not permitted to
waive.

 

6.                                      The Executive acknowledges that he has
been given a period of at least 21 days to consider whether to execute this
Release (and if he executed the Release prior to the close of the 21-day period,
he did so voluntarily).  If the Executive accepts the terms hereof and executes
this Release, he may thereafter, for a period of seven (7) days following (and
not including) the date of execution, revoke this Release.  In order to make a
valid revocation, the Executive must deliver an explicit revocation in writing
to Craig Apolinsky, General Counsel, at 100 Crescent Centre Parkway, Suite 800,
Tucker, Georgia during the seven-day revocation period.  If no such revocation
occurs, this Release shall become irrevocable in its entirety, and binding and
enforceable against the Executive, on the day next following the day on which
the foregoing seven-day period has elapsed.  If such a revocation occurs, the
Executive shall irrevocably forfeit any right to payment of the Severance Amount
(as defined above), the Benefits Continuation Payment (as defined above), and
the Company automobile (described in Section (C)(3) above), and the Release
shall be revoked, but the remainder of the Employment Agreement shall continue
in full force.

 

7.                                      The Executive acknowledges and agrees
that he has not, with respect to any transaction or state of facts existing
prior to the date hereof, filed any complaints, charges or lawsuits against any
Company Released Party with any governmental agency, court or tribunal.

 

8.                                      The Executive is advised to consult an
attorney about this Release before signing it and Executive acknowledges that he
has been advised to seek, and has had the opportunity to seek, the advice and
assistance of an attorney with regard to this Release, and has been given a
sufficient period within which to consider this Release.

 

9.                                      The Executive acknowledges that this
Release relates only to claims based upon facts that exist or have occurred as
of the date of this Release.

 

10.                               The Executive acknowledges that the Severance
Amount he is receiving in connection with this Release and his obligations under
this Release are in addition to anything of value to which the Executive is
entitled from the Company.

 

11.                               The Executive understands that nothing
contained in this Agreement limits his ability to file a charge or complaint
with the Equal Employment Opportunity Commission, the National Labor Relations
Board, the Securities and Exchange Commission, or any other federal, state or
local governmental agency or commission (“Government Agencies”).  Executive
further understands that this Agreement does not limit his ability to
communicate with any Government Agencies or otherwise participate in any
investigation or proceeding that may be conducted by any Government Agencies in
connection with any charge or complaint, whether filed by Executive, on his
behalf, or by any other individual.  However, based on Executive’s release of
claims set forth in

 

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this Agreement, Executive understands that he is releasing all claims that he
may have, as well as, to the extent permitted by applicable law, his right to
recover monetary damages or obtain other relief that is personal to him in
connection with any claim he is releasing under this Agreement.

 

E.                                    Consulting and Cooperation.  Executive
agrees that he shall, to the extent reasonably requested in writing, (i) during
the Severance Period, provide any additional cooperation, assistance, and/or
training reasonably requested by the Company to assist in the transition of his
work and responsibilities, as and to the extent determined in the Company’s sole
discretion; and (ii) cooperate with the Company in any pending or future
litigation in which the Company is a party, and regarding which Executive, by
virtue of Executive’s employment with the Company, has factual knowledge or
information relevant to said litigation.  Executive further agrees that in any
such litigation, Executive shall, without the necessity for subpoena, provide,
in any jurisdiction in which the Company requests, truthful testimony relevant
to said litigation.  The Company will reimburse Executive for any reasonable,
out-of-pocket expenses associated with providing such consulting services and/or
cooperation.

 

F.                                     Miscellaneous Provisions.

 

1.                                      Status of Employment Agreement.  The
Company and Executive agree that the Employment Agreement is hereby terminated,
without further action by the parties, as of the Separation Date and will be of
no further force and effect, and that neither party has any further obligations
under the Employment Agreement as of the Separation Date, except that the
provisions of Section 4 of the Employment Agreement shall remain in full force
and effect in accordance with their terms, along with any other provisions of
the Employment Agreement necessary to interpret or enforce such surviving
provisions.

 

2.                                      Governing Law.  This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Georgia without giving effect to the conflicts of law principles thereof.

 

3.                                      Amendments.  This Agreement may not be
amended or modified otherwise than-by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

 

4.                                      Severability.  The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.

 

5.                                      Entire Agreement.  Except as provided
herein, this Agreement and the attached Supplemental Release of Claims
(Exhibit A) contains the entire agreement between the Company and Executive with
respect to the subject matter hereof and shall supersede any other agreement
between the parties with respect to the subject matter hereof.

 

6.                                      Successors.  This Agreement binds the
parties’ heirs, administrators, representatives, executors, successors, and
assigns, and will inure to the benefit of all Company Released Parties and their
respective heirs, administrators, representatives, executors, successors, and
assigns.

 

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7.                                      Counterparts.  This Agreement may be
executed in several counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.  Signatures delivered by facsimile shall be deemed effective for all
purposes.

 

[signature page follows]

 

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IN WITNESS WHEREOF, this Agreement has been signed by the Company and Executive
as of December 31, 2018.

 

 

GYPSUM MANAGEMENT AND SUPPLY, INC.

 

 

 

/s/ Craig D. Apolinsky

 

By:

Craig D. Apolinsky

 

Title:

General Counsel

 

 

 

EXECUTIVE

 

 

 

/s/ G. Michael Callahan, Jr.

 

G. Michael Callahan, Jr.

 

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EXHIBIT A

Supplemental Release of Claims

 

1.                                      This Supplemental Release of Claims (the
“Supplemental Release”) releases all claims against GMS Inc., a Delaware
corporation (the “Company”) and the Releasees (as defined below) based upon
facts that may have occurred or arisen between the date G. Michael Callahan, Jr.
(“Executive”) signed the Separation, Transition and Release Agreement presented
by the Company and executed by Executive on or about April 1, 2019 (the
“Executive Transition Agreement”), and Executive’s Separation Date or at any
time prior to the Separation Date.  Executive is executing this Supplemental
Release in return for, and as a perquisite to the receipt of, the Consideration
set forth in Paragraph C of the Executive Transition Agreement.  By executing
this Supplemental Release, Executive hereby UNCONDITIONALLY RELEASES AND
DISCHARGES THE COMPANY, its successors, subsidiaries, parent companies, assigns,
joint ventures, and affiliated companies and their respective agents, legal
representatives, shareholders, attorneys, employees, members, managers, officers
and directors (collectively, the “Releasees”) from ALL CLAIMS, LIABILITIES,
DEMANDS AND CAUSES OF ACTION which Executive may by law release, whether known
or unknown, that Executive may have or claim to have against any Releasee for
any reason as of the date Executive signs this Supplemental Release, including,
but not limited to any and all rights under federal, state and local employment
laws including without limitation the Age Discrimination in Employment Act, the
Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964,
42 U.S.C. § 1981, the Americans With Disabilities Act, the Family and Medical
Leave Act, the Genetic Information Nondiscrimination Act, the anti-retaliation
provisions of the Fair Labor Standards Act, the Employee Retirement Income
Security Act, the Equal Pay Act, the Occupational Safety and Health Act, the
Worker Adjustment and Retraining Notification Act, the Occupational Safety and
Health Act, the Employee Polygraph Protection Act, the Fair Credit Reporting
Act, and any and all other local, state, and federal law claims arising under
statute, contract, or common law.  Except as expressly set forth below regarding
Executive’s Protected Rights, Executive further hereby AGREES NOT TO FILE A
LAWSUIT or other legal claim or charge to assert against any of the Releasees
any claim released by this Supplemental Release, except as may be allowed
pursuant to Section 2 “Protected Rights” below.  It is agreed that this is a
general release and it is to be broadly construed as a release of all claims,
except those that cannot be released by law.  By signing this Supplemental
Release, Executive acknowledges that Executive is doing so knowingly and
voluntarily, that Executive understands that Executive may be releasing claims
Executive may not know about, and that Executive is waiving all rights he may
have had under any law that is intended to protect Executive from waiving
unknown claims.  Executive also represents and agrees that he has not
transferred or assigned, to any person or entity, any claim that he is releasing
in this Paragraph 1.

 

2.                                      Protected Rights.  Executive understands
that nothing contained in this Supplemental Release limits his ability to file a
charge or complaint with the Equal Employment Opportunity Commission, the
National Labor Relations Board, or any other federal, state or local
governmental agency or commission (“Government Agencies”).  Executive further
understands that this Supplemental Release does not limit Executive’s ability to
communicate with any Government Agencies or otherwise participate in any
investigation or proceeding that may be conducted by any Government Agencies in
connection with any charge or complaint, whether filed by Executive, on
Executive’s behalf, or by any other individual.  However, based on Executive’s
release of claims set forth in

 

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this Supplemental Release, Executive understands that Executive is releasing all
claims that Executive may have, as well as, to the extent permitted by
applicable law, Executive’s right to recover monetary damages or obtain other
relief that is personal to him in connection with any claim he is releasing
under this Supplemental Release.

 

3.                                      Executive may not sign this Supplemental
Release until, at the earliest, the Separation Date, and he has until
[          ], 2019 to sign this Supplemental Release.  If Executive does not
sign this Supplemental Release by [        ], 2019, Executive will not be
entitled to receive the Consideration set forth in the Executive Transition
Agreement.  Executive acknowledges that he has been given at least 21 calendar
days from the date he received this Supplemental Release to review and consider
this Supplemental Release before signing it.  Executive is advised to consult an
attorney about this Supplemental Release prior to executing it.  To accept this
Supplemental Release, Executive should sign this Supplemental Release and return
it to Craig Apolinsky, General Counsel, such that he receives it no later than
[    ].  After Executive signs this Supplemental Release, Executive will still
have an additional seven (7) days in which to revoke his acceptance.  To revoke,
Executive must deliver the explicit revocation in writing to Craig Apolinsky,
General Counsel by hand, overnight courier, or by certified mail, return receipt
requested, and Craig Apolinsky, General Counsel must receive such written
notification before the end of the 7-day revocation period.  Payment of the
Consideration described in Section B of the Executive Transition Agreement is
contingent on Executive signing and not revoking both the Executive Transition
Agreement and this Supplemental Release.

 

4.                                      EMPLOYEE ACKNOWLEDGES THAT HE
VOLUNTARILY ENTERS INTO THIS AGREEMENT WITH A FULL AND COMPLETE UNDERSTANDING OF
ITS TERMS AND LEGAL EFFECT.  EMPLOYEE REPRESENTS THAT HE WAS ADVISED TO CONSULT
WITH AN ATTORNEY ABOUT THE PROVISIONS OF THIS AGREEMENT BEFORE SIGNING BELOW.

 

Accepted and agreed to:

 

 

Print Name:

 

 

 

 

 

Signature:

 

 

 

 

 

Dated:

 

 

 

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