Exhibit 10.60.1

 

 
 
Building Materials Holding Corporation
 
Executives’ Supplemental
Retirement Income Plan
 
(Effective as of January 1, 2005)
 
 
 
 
 

--------------------------------------------------------------------------------

 
Table of Contents
Page

ARTICLE 1. DEFINITIONS
114
1.1
Account
114
1.2
Base Salary
114
1.3
Beneficiary
114
1.4
Board of Directors
114
1.5
Change in Control
114
1.6
Code
115
1.7
Committee
115
1.8
Company
115
1.9
Company Contributions
115
1.10
Disability
116
1.11
Early Retirement Date
116
1.12
Effective Date
116
1.13
Executive
116
1.14
Fiscal Year
116
1.15
Hardship
116
1.16
Interest Credit
117
1.17
Key Employee
117
1.18
Normal Retirement Date
117
1.19
Participant
117
1.20
Participant
117
1.21
Plan
117
1.22
Regulations
117
1.23
Separation from Service
117
1.24
Service
117
1.25
Trust or Trust Agreement
117
1.26
Trust Fund
118
1.27
Trustee
118
1.28
Year of Service
118
     
ARTICLE 2. ELIGIBILITY
118
2.1
Eligibility Requirements
118
2.2
Non-Competition Requirement
118
     
ARTICLE 3. DEFERRED COMPENSATION
118
3.1
Company Contributions
118
3.2
Interest Credits
119
3.3
Election of Payment Terms
121
     
ARTICLE 4. PAYMENT OF BENEFITS
122
4.1
Payment upon Distribution Event
122
4.2
Conditions on Payment
123
4.3
Withdrawal for Hardship
123
4.4
Payment Following a Change in Control
123
4.5
Payment upon Disability
124
4.6
Payment upon Death
124
4.7
Designation of Beneficiary
124
4.8
Administration of Payments
125

 

--------------------------------------------------------------------------------

 
4.9
Permitted Acceleration of Payments
125
4.10
Permitted Delay of Payments
125
     
ARTICLE 5. TRUST
126
5.1
Accounts
126
5.2
Participants’ Rights Unsecured
126
5.3
Trust Agreement
126
     
ARTICLE 6. AMENDMENT AND TERMINATION
127
     
ARTICLE 7. ADMINISTRATION
127
7.1
Administration
127
7.2
Applying for Benefits
127
7.3
Liability of Committee; Indemnification
133
7.4
Expenses
133
     
ARTICLE 8. GENERAL AND MISCELLANEOUS
133
8.1
Rights Against Company
133
8.2
Assignment or Transfer
134
8.3
Severability
134
8.4
Construction
134
8.5
Governing Law
134
8.6
Payment Due to Incompetence
134
8.7
Taxes
134
8.8
Insurance
135
8.9
Attorney’s Fees
135
8.10
Plan Binding on Successors and Assignees
135

 
 
 

--------------------------------------------------------------------------------

BUILDING MATERIALS HOLDING CORPORATION
2005 EXECUTIVES’ SUPPLEMENTAL RETIREMENT INCOME PLAN
 
Building Materials Holding Corporation, a Delaware corporation (the “Company”)
hereby establishes an unfunded “supplemental executive retirement plan” (“SERP”)
for the purpose of providing deferred compensation for a select group of
management and highly compensated employees in compliance with Section 409A of
the Internal Revenue Code, as amended (the “Code”).

RECITALS
 
WHEREAS, the Participants identified by the Compensation Committee of the Board
of Directors of the Company, or any other committee designated by the Board of
Directors of the Company to administer the Plan in accordance with Article 8 of
the Plan (the “Committee”), as eligible to participate in the Plan (each a
“Participant,” or collectively the “Participants”) provide services to the
Company; and

WHEREAS, the Company desires to establish an unfunded deferred compensation plan
in accordance with Code Section 409A and related Regulations and the
Participants desire the Company to pay certain deferred compensation and/or
related benefits to or for the benefit of the Participants, or a designated
Beneficiary, or both;

NOW, THEREFORE, the Company hereby establishes this supplemental executive
retirement plan to take the place of the prior Executives’ Supplemental
Retirement Income Plan with respect to any compensation earned on or after
January 1, 2005.

ARTICLE 1.  DEFINITIONS
 
1.1
Account. means the separate account established under the Plan and the Trust for
each participating Participant comprised of Company Contributions to the Plan
plus Interest Credits.  Interest Credits are applied to the Account before
adding the Company Contributions for the current year.

 
1.2
Base Salary. means a Participant’s regular annual compensation for a Plan Year,
determined as of the first day of that year, excluding bonuses, commissions,
overtime, incentive payments, non-monetary awards, and other special
compensation, before reduction for compensation deferred pursuant to all
qualified and non-qualified plans of the Company.  For any Participant whose
compensation is composed of a Base Salary plus commissions, and whose Base
Salary is less than $50,000, the Participant’s Base Salary will be deemed to
equal $50,000.

 
1.3
Beneficiary. means the beneficiary designated by the Participant to receive the
Participant’s deferred compensation benefits in the event of his or her death.

 
1.4
Board of Directors. means the Board of Directors of the Company.

 
1.5
Change in Control. means the occurrence of any of the following, limited to the
extent any such occurrence is consistent with the definition of a “change in
control” or similar event described in Code Section 409A or related Regulations:

 

--------------------------------------------------------------------------------

 

 
(a)
when any “person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 as amended (“Exchange Act”) (other than the
Company, a Subsidiary or a Company benefit plan, including any trustee of such
plan acting as trustee) is or becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the combined voting power of
the Company’s then outstanding securities, where such person’s beneficial
ownership of the Company’s securities was not initiated by the Company or
approved by the Company’s Board of Directors; or

 

 
(b)
the occurrence of a transaction requiring shareholder approval, and involving
the sale of all or substantially all of the assets of the Company or the merger
of the Company with or into another corporation, where such merger was not
initiated by the Company and in which Company is not the surviving parent
entity; or

 

 
(c)
a change in the composition of the Board of Directors of the Company in any
12-month period, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” means directors who are elected, or
nominated for election, to the Board of Directors of the Company with the
affirmative votes of at least a majority of the Incumbent Directors at the time
of such election or nomination (but shall not include an individual whose
election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Company); or

 

 
(d)
any liquidation or dissolution of the Company.

 
1.6
Code. means the Internal Revenue Code of 1986, as amended from time to
time.  Reference to any Code section shall include any successor or comparable
provision of the Code or application Regulations.

 
1.7
Committee. means the Compensation Committee of the Board of Directors of the
Company or any other committee designated by the Board of Directors of the
Company to administer the Plan in accordance with Article 8.

 
1.8
Company. means Building Materials Holding Corporation, a Delaware Corporation,
any successor organization thereto, and any corporation or other entity that
must be aggregated with Building Materials Holding Corporation pursuant to the
Code or Regulations.

 
1.9
Company Contributions. means the Company’s contribution to a Participant’s
Account as determined in accordance with Section 3.1.

 

--------------------------------------------------------------------------------

 
1.10
Disability. means—

 

   
the condition of being unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or

 

   
by reason of suffering from any medically determinable physical or mental
impairment that is 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.

 
1.11
Early Retirement Date. means the date on which a Participant attains age 60 with
at least 15 Years of Service or attains age 55 with at least 25 Years of
Service.

 
1.12
Effective Date. means January 1, 2005.

 
1.13
Executive. means an Executive or highly compensated individual of the Company or
of any division, subsidiary or affiliate of the Company who is eligible to
become a Participant in the Plan under Section 3.1.

 
1.14
Fiscal Year. means the fiscal year of the Company as established from time to
time.

 
1.15
Hardship. refers to a distribution made on account of an unforeseeable immediate
and heavy financial need of the Participant and that is necessary to satisfy
that financial need in accordance with Code Section 409A and the related
Regulations.

 

 
(a)
Amount.  The amounts distributed with respect to an emergency cannot exceed the
amounts necessary to satisfy such emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of the distribution, after taking into
account the extent to which such hardship is or may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant’s assets (to the extent the liquidation of such assets would not
itself cause severe financial hardship).

 

 
(b)
Circumstances.  Whether a Participant has an immediate and heavy financial need
shall be determined by the Committee based on all relevant facts and
circumstances, and shall refer to a severe financial hardship to the Participant
resulting from an illness or accident of the Participant, the Participant’s
spouse, or a dependent (as defined in Code Section 152(a)) of the Participant;
loss of the Participant’s property due to casualty; or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant.

 

--------------------------------------------------------------------------------

 
1.16
Interest Credit. means earnings credited to a Participant’s Account as
determined in accordance with Section 3.2.

 
1.17
Key Employee. means—

 

 
(a)
an officer of the Company having an annual compensation greater than $130,000
(as adjusted),

 

 
(b)
a 5% owner of the Company, or

 

 
(c)
a 1% owner of the Company having annual compensation from the Company of more
than $150,000.

 
For purposes of subsection (a), no more than 50 employees (or, if lesser, the
greater of 3 employees or 10% of the employees) shall be treated as officers
 
1.18
Normal Retirement Date. means the date on which the Participant attains age 65
or the date specified in his or her Participation Agreement.

 
1.19
Participant. means a person who is selected to participate in the Plan and has
satisfied the conditions of Section 2.1.

 
1.20
Participation Agreement. means the election to participate in the Plan under
certain terms as completed by a Participant.

 
1.21
Plan. means the Executives’ Supplemental Retirement Income Plan of Building
Materials Holding Corporation, as amended from time to time.

 
1.22
Regulations. means the rules, regulations, interpretations and procedures
promulgated under the Code, as modified from time to time.

 
1.23
Separation from Service. means the termination of the Participant’s Service
prior to his Normal Retirement Date.  A Participant who is on temporary leave of
absence, whether with or without pay, shall not be deemed to have terminated
Service.  “Separation from Service” shall be interpreted in accordance with the
meaning of “separation from service” or similar term under Code Section 409A and
related Regulations.

 
1.24
Service. means the Participant’s service with the Company that is not
interrupted or terminated.  The Committee, in its sole discretion, may determine
whether Service shall be considered interrupted or terminated in any
circumstance, including (but not limited to) in the case of any leave of absence
approved by the Company, including sick leave, military leave or any other
personal leave.

 
1.25
Trust or Trust Agreement. means the Trust Agreement applicable to the Plan, as
amended from time to time, entered into between the Company and the Trustee to
carry out the provisions of the Plan.

 

--------------------------------------------------------------------------------

 
1.26
Trust Fund. means the cash and other assets and/or properties held and
administered by Trustee pursuant to the Trust to carry out the provisions of the
Plan.

 
1.27
Trustee. means the designated Trustee acting at any time under the Trust.  

 
1.28
Year of Service. means any 12-consecutive-month period in which a Participant is
in Service, commencing with the Participant’s date of hire, as determined by the
Committee in its sole discretion.

 
ARTICLE 2.  ELIGIBILITY
 
2.1
Eligibility Requirements.  In order to participate in the Plan, the Executives
of the Company selected to participate by the Company must—

 

   
belong to a select group of highly compensated or management employees within
the meaning of ERISA and related Regulations;

 

   
execute a Participation Agreement in the form provided by the Committee; and

 

   
if the Company desires to purchase key man life insurance on the Participant’s
life for its sole benefit, cooperate so that the Company may obtain a valid
insurance contract.

 

2.2
Non-Competition Requirement.  If a Participant has a Separation from Service
with the Company and, without the specific written consent of the Company,
accepts a position of employment with a competitor of the Company within 12
months of Separation from Service, Plan benefits will be limited to the lesser
of (a) the Retirement Account Balance at the date of termination, and (b) the
sum of Company Contributions attributable to the Participant without interest or
other appreciation.  If, in the sole discretion of the Committee, conditions
warrant, the Committee may grant permission in the form of a general waiver
rather than applied to a specific position.

 
ARTICLE 3.  DEFERRED COMPENSATION
 
3.1
Company Contributions.  

 

 
(a)
Allocation to Plan.  The Company Contributions allocated to the Plan shall be
determined as follows:

 

 
(1)
Subject to subsection (b), the Company shall allocate a portion of a percentage
of after-tax earnings of the Company, as determined from time to time by the
Board of Directors in its sole discretion.  As of the Effective Date, this
amount is 65% of 5.5% of after-tax earnings.

 

--------------------------------------------------------------------------------

 

 
(2)
The amounts to be allocated to the Plan may be changed by the Board of Directors
at any time.  The method of allocation of the funds among Participant Accounts
may be changed as deemed necessary to maintain equity among Participants, as
determined by the Committee with the approval of the Board of
Directors.  Participants will be notified of changes as soon as practicable
after the change is adopted.

 

 
(b)
Allocation Among Participants.  The benefit allocation to each Participant’s
Account in accordance with the following calculation:

 

 
(1)
The portion of the Base Salary of each Participant that is in excess of $40,000
will be added to obtain the total of all Participants’ Base Salaries, each only
with respect to the portion in excess of $40,000, which shall be the
denominator.

 

 
(2)
The portion of the Base Salary of each Participant that is in excess of $40,000
will be divided by the denominator calculated in subsection (b)(1) to obtain a
percentage, calculated to the nearest one-hundred thousandth.

 

 
(3)
A Participant’s allocation to the Plan shall equal the percentage obtained in
subsection (b) multiplied by the Company Contributions determined in Section
3.1, up to a maximum of 30% of the Participant’s Base Salary, or such other
percentage as determined by the Committee from time to time.

 
3.2
Interest Credits and Method of Payment.  Subject to Article 4, Interest Credits
shall be determined according to the Participant’s Years of Service and the
applicable method of payment, as determined under this section.

 

 
(a)
Prior to Commencement of Payment.  The Company shall credit each Participant’s
Account with a simple interest rate, expressed as an annual rate, as of January
1 of each year, which rate may be changed by the Committee from time to
time.  As of the Effective Date, with respect to Accounts that have not yet
commenced payment under Article 4, the rates applicable to Account accruals are
as follows:

 

--------------------------------------------------------------------------------

 
Participant
Classification
Years of Service
Interest Credit Rate
Active Employees
—
7.0%
Inactive Employees
Fewer than 5
0.0%
At least 5, but fewer than 10
1.5%
At least 10, but fewer than 15
3.0%
At least 15, but fewer than 20
4.0%
At least 20, but fewer than 25
5.0%
25 or more
6.0%

The rates will be reviewed by the Committee each February.  Any changes will be
effective for the January 1 balance of the same year.
 

 
(b)
After Commencement of Payment.  After the payment of installments has commenced
under Article 4, the Company shall continue to credit each affected
Participant’s Account with a simple interest rate, expressed as an annual rate,
as of January 1 of each year.  As of the Effective Date, the rates applicable to
the method of payment elected are as follows:

 

 
(1)
General Rule.  Subject to subsection (b)(2), the Interest Credit rate applicable
to each method of payment shall be determined by the number of Years of Service
completed by the Participant prior to his or her Separation from Service and the
method of payment elected by the Participant pursuant to Section 3.3, as
follows:

 
Participant Classification or Event
Monthly
Installment
Period
Available
Corresponding
Interest Credit
Rate
Participants having a Separation from Service—
- after completing at least 25 Years of Service, or
- after the Participant’s Normal Retirement Date
15 years
9.0%
- after completing at least 25 Years of Service
10 years
8.0%
5 years
7.0%
- prior to completing 25 Years of Service
15 years
6.0%
10 years
5.0%
5 years
4.0%

 

--------------------------------------------------------------------------------

 

 
(2)
Disability or Death.  In the event of the Participant’s Disability or death
prior to the commencement of Plan payments, the Participant’s Account shall be
payable in monthly installments over 5 years, and the applicable Interest Credit
rate shall be determined as follows:

 
Participant Classification or Event
Monthly
Installment
Period Available
Corresponding
Interest Credit
Rate
Participant’s Disability or death—
- while in Service, or
- after completing at least 25 Years of Service
5 years
9.0%
- prior to completing 25 Years of Service
5 years
6.0%

 
(c)
Interest Calculations.  The computations of future values, present values or
installment payments shall use the “end of period” assumption for the first
payment.

 
3.3
Election of Payment Terms.

 

 
(a)
Initial Election - Method of Distribution.  By the later of December 31, 2005
and the date that is 30 days after becoming eligible for the Plan, or such later
date as permitted under Code Section 409A, each Participant (or Beneficiary)
will submit an election of the method of distribution applicable to the
Participant’s entire Account.  Participants may choose among the following
methods of distribution in accordance with the form provided by the Committee:

 

 
(1)
a single lump sum payment, or

 

 
(2)
monthly installments over a designated period of 5, 10 or 15 years, which
election shall affect the Interest Credits that may be credited to the
Participant’s Account in accordance with Section 3.2, and which installment
shall be treated as a single payment for election purposes.

 

--------------------------------------------------------------------------------

In the event the Participant fails properly to designate the method of
distribution, subject to a subsequent election made under subsection (c), such
amounts shall be payable in the form of monthly installments over 5 years,
beginning as of the Participant’s Early Retirement Date, if the Participant is
eligible, or if not, the Participant’s Normal Retirement Date.

 
(b)
Subsequent Elections to Change Timing or Method of Distribution.  A Participant
(or Beneficiary) may not accelerate the time or schedule of any payment under
the Plan, except as provided in Regulations.  Any change to an election
regarding the timing or method of distribution must satisfy the following
conditions to be effective:

 

 
(1)
the subsequent election to delay a payment must be made no later than 12 months
prior to the date of the first scheduled payment; and

 

 
(2)
the first payment must be deferred for a period of at least 5 years from the
date the payment would otherwise have been made.

 
If such subsequent election does not satisfy the conditions specified in this
subsection, the prior election shall be used to determine the timing and form of
payment.  The last effective election accepted and acknowledged by the Committee
shall govern the payment of the Participant’s Account.  Elections under this
subsection will not affect the timing of distributions made on account of
Disability, death or Hardship except as provided in Article 4.

ARTICLE 4.  PAYMENT OF BENEFITS
 
4.1
Payment upon Distribution Event.  Subject to the provisions of this article, the
Company shall commence distributions in accordance with the terms of a
Participant’s elections under Article 3 upon the earliest to occur of the
following events:

 

 
(a)
upon the Participant’s Separation from Service following his or her Early
Retirement Date;

 

 
(b)
upon the Participant’s Separation from Service following his or her Normal
Retirement Date;

 

 
(c)
upon such other date as specified by the Participant in the applicable
Participation Agreement, provided that such date is one of the following:

 

 
(1)
a specific date, including a specified age of the Participant,

 

--------------------------------------------------------------------------------

 

 
(2)
the beginning of the Plan Year following the passage of a specified number of
years, or

 

 
(3)
the Participant’s Separation from Service, or, in the case of Key Employees, a
date that is 6 months after the date of Separation from Service (or, if earlier,
the Participant’s date of death), if the Separation from Service is later than
the Participant’s Early Retirement Date.

 
4.2
Conditions on Payment.  No payment shall be due under the Plan if (a) the
Participant has a Separation from Service prior to his Normal Retirement Date by
reason of fraudulent or dishonest conduct, or (b) the Participant has violated
the non-compete provisions of Section 2.2, each as determined according to the
Committee in its sole discretion.  In the case of a Participant who has had a
Separation from Service prior to his Normal Retirement Date by reason of
fraudulent or dishonest conduct, and who has not violated the non-compete
provisions of Section 2.2, the Committee may, in its sole discretion, provide
for payment to the Participant in a lump sum equal to the sum of the Company
Contributions attributable to the Participant without Interest Credits.

 
4.3
Withdrawal for Hardship.  A Participant may apply for distributions from his or
her Account to the extent that the Participant demonstrates to the reasonable
satisfaction of the Committee that he or she needs the funds due to
Hardship.  The Committee may deny a withdrawal for Hardship for any reason or
approve a upon any terms permitted under the Code and Regulations, as determined
in its sole discretion.

 
4.4
Payment Following a Change in Control.

 

 
(a)
Benefits Following an Approved Change of Control.

 

 
(1)
In the event a Participant’s has a Separation from Service for any reason within
a 5-year period following a Change of Control, and the transaction constituting
the Change of Control was approved in writing prior to its consummation by a
majority vote of the members of the Company’s incumbent Board of Directors (an
“Approved Change of Control”), then the Participant shall be entitled to receive
monthly installment payments of his or her Account over a period of 5 years
applying a 9% Interest Credit during the period of payment.

 

 
(2)
Following an Approved Change of Control, any Participant (or Beneficiary)
already receiving benefit payments under the Plan shall continue to receive
benefit payments under the Plan for the lesser of—

 

 
(A)
the remainder of the current installment schedule, or

 

 
(B)
a 5-year period commencing upon the consummation of the Approved Change of
Control.

 

--------------------------------------------------------------------------------

 

 
(b)
Benefits Following an Unapproved Change of Control.

 

 
(1)
In the event a Participant’s has a Separation from Service for any reason within
a 5-year period following a Change of Control, and the Change of Control was not
approved in writing prior to its consummation by a majority vote of the members
of the Company’s incumbent Board of Directors (an “Unapproved Change of
Control”), then the Participant shall be entitled to receive payment of his or
her Account balance in a lump sum payment.

 

 
(2)
Following an Unapproved Change of Control, any Participant (or Beneficiary
thereof) already receiving payments under the Plan shall receive the remainder
of his or her benefit under the Plan in the form of a lump sum payment.

 

 
(c)
Delayed Payment.  In the case of a Key Employee, any payment made on account of
a Separation from Service following a Change in Control shall not be made until
a date that is 6 months after the date of Separation from Service.

 
4.5
Payment upon Disability.  Upon a Participant’s Disability, as determined by the
Committee in its sole discretion, prior to the date when payment of his or her
Accounts would otherwise commence under Article 3, the Participant will be
entitled to receive all amounts credited to the Accounts as of the date of
Disability according to the method of payment elected by the Participant.

 
4.6
Payment upon Death.  Upon a Participant’s Separation from Service by reason of
death, prior to the date when payment of his or her Accounts would otherwise
commence, the Participant’s Beneficiary will be entitled to receive all amounts
credited to the Accounts of the Participant as of the date of death according to
the method of payment elected by the Participant, or to the extent permissible
under Code Section 409A, according to the method of payment elected by the
Beneficiary.  Upon the death of the Participant following the commencement of
distribution, but prior to complete distribution of the entire balance of the
Participant’s Accounts, the balance of the Participant’s Accounts on the date of
death shall continue to be paid in the elected form of payment to the
Participant’s Beneficiary; provided, however, that if the Participant has
received at least all of the scheduled monthly installments prior to his or her
death, no further benefits shall be due under the Plan.

 
4.7
Designation of Beneficiary.  The Participant may designate a Beneficiary or
Beneficiaries to receive any amount due hereunder by the Participant by written
notice thereof to the Company at any time prior to his or her death and may
revoke or change the Beneficiary so designated without the Beneficiary’s consent
by written notice delivered to Company at any time and from time to time prior
to the Participant’s death.  If the Participant is married and a resident of a
community property state, one half of any amount due under the Plan which is the
result of an amount contributed to the Plan during the Participant’s marriage is
the community property of the Participant’s spouse and the Participant may
designate a Beneficiary or Beneficiaries to receive only the Participant’s
one-half interest. If the Participant shall have failed to designate a
Beneficiary, or if no such Beneficiary shall survive him, then such amount shall
be paid to his or her estate. Designations of Beneficiaries shall be in the form
provided by the Committee.

 

--------------------------------------------------------------------------------

 
4.8
Administration of Payments.  Distribution of the lump sum or the first
installment shall be made or commence within 90 days following the date of the
distribution event or the proper identification of the Beneficiary, if later, as
applicable, but in no event later than the end of the 2½ month period following
the Plan Year in which occurs the distribution event.  Subsequent installments,
if any, shall be made on the first day of each month following the first
installment as determined by Company.  The amount of each installment shall be
calculated by dividing the Account balance as of the date of the distribution by
the number of installments remaining pursuant to the Participant’s distribution
election.  Each such installment, if any, shall take into account Interest
Credits credited to the balance of the Account remaining unpaid.

 
4.9
Permitted Acceleration of Payments.  To the extent permitted by Code Section
409A and related Regulations, the Company may, in the sole discretion of the
Committee, commence distribution to Participant, Participant’s Beneficiary or
other appropriate payee the portion of Participant’s Account authorized for
distribution in accordance with Code Section 409A and related Regulations,
including the following:

 

 
(a)
amounts payable to an individual other than the Participant under a domestic
relations order approved by the Committee in its sole discretion;

 

 
(b)
de minimis cashout payments that result in the termination of the entirety of a
Participant’s interest in the Plan, if the payment is made on or before the
later of December 31 of the Plan Year in which occurs the Participant’s
Separation from Service or the date 2½ months after the Participant’s Separation
from Service and the payment is not greater than $10,000;

 

 
(c)
payment to Participant to pay the Federal Insurance Contributions Act tax
imposed under Code Section 3101 and 3121(v)(2) on Eligible Compensation deferred
under the Plan, grossed up as permitted under applicable Regulations; and

 

 
(d)
payment to Participant in the event the Plan with respect to that Participant
fails to meet the requirements of Code Section 409A and related Regulations in
an amount not to exceed the amount required to be included in income as a result
of the failure to comply with the requirements of Code Section 409A and the
related Regulations.

 
4.10
Permitted Delay of Payments.  To the extent permitted by Code Section 409A and
related Regulations, the Company shall delay distribution to Participant,
Participant’s Beneficiary or other appropriate payee the portion of
Participant’s vested Plan Benefit authorized for distribution to the extent—

 

--------------------------------------------------------------------------------

 

 
(a)
that the Committee reasonably anticipates that the Company’s deduction with
respect to such payment otherwise would be limited or eliminated by application
of Code Section 162(m);

 

 
(b)
that the Committee reasonably anticipates that the making of the payment will
violate a term of a loan agreement or other similar contract to which the
Company is a party, and such violation will cause material harm to the Company;

 

 
(c)
that the Committee reasonably anticipates that the making of the payment will
violate federal securities laws or other applicable law;

 

 
(d)
upon such other events and conditions as may be permitted under the Code and
Regulations;

 
provided that the payment shall be made at the earliest date at which the
Committee reasonably anticipates that the applicable circumstance specified
above is of no further force or effect.

ARTICLE 5.  TRUST
 
5.1
Accounts.  The Company shall establish separate Accounts for each Participant
who participates in the Plan.  No special fund shall be established nor shall
any note or security be issued by the Company with respect to a Participant’s
Accounts.

 
5.2
Participants’ Rights Unsecured.  The right of the Participant or his or her
Beneficiary to receive a distribution hereunder shall be an unsecured claim
against the general assets of the Company, and neither the Participant nor his
or her Beneficiary shall have any rights in or against any amount credited to
his or her Account or any other specific assets of the Company, except as
otherwise provided in the Trust.  Nothing contained in the Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a trust
of any kind or a fiduciary relationship between the Plan and the Company or any
other person.  

 
5.3
Trust Agreement.  The Company may establish the Trust for the purpose of
retaining assets set aside by the Company pursuant to the Trust Agreement for
payment of all or a portion of the amounts payable pursuant to the Plan.  Any
benefits not paid from the Trust shall be paid solely from the Company’s general
funds, and any benefits paid from the Trust shall be credited against and
reduced by a corresponding amount the Company’s liability to the Participants
under the Plan.  No special or separate fund, other than the Trust Agreement,
shall be established and no other segregation of assets shall be made to assure
the payment of any benefits hereunder.  All Trust Funds shall be subject to the
claims of general creditors of the Company in the event the Company is insolvent
(as that term is defined in the Trust Agreement).  The obligations of the
Company to pay benefits under the Plan constitute an unfunded, unsecured promise
to pay and Participants shall have no greater rights than general creditors of
the Company.  Trust assets shall not, at any time, be located outside of the
United States or be transferred outside of the United States, whether or not
such assets are available to satisfy claims of general creditors.

 

--------------------------------------------------------------------------------

ARTICLE 6.  AMENDMENT AND TERMINATION
 
The Committee shall have the right to amend the Plan at any time and from time
to time, including a retroactive amendment.  Any such amendment shall become
effective upon the date stated therein, and shall be binding on all
Participants, except as otherwise provided in such amendment; provided, however,
that said amendment shall not affect benefits adversely to the affected
Participant without the Participant’s written approval.  Benefits accruing to a
Participant pursuant to any employment agreement in effect between the Company
and the Participant that entitles the Participant to participate in and to
certain rights under the Plan shall not be affected by an amendment of the Plan.

ARTICLE 7.  ADMINISTRATION
 
7.1
Administration.  The Committee shall administer and interpret the Plan in
accordance with the provisions of the Plan and the Trust Agreement.  Any
determination or decision by the Committee shall be conclusive and binding on
all persons who at any time have or claim to have any interest whatever under
the Plan.  To the extent required to avoid penalties under section 409A of the
Internal Revenue Code, the Committee intends to interpret and operate the Plan
in all respects in compliance with Code Section 409A and related Regulations.

 
7.2
Applying for Benefits.  The following claims procedures are generally applicable
to claims filed under the Plan.  To the extent required by law and to the extent
the Committee is ruling on a claim for benefits on account of a disability, the
Plan will follow, with respect to that claim, claims procedures required by law
for plans providing disability benefits.

 

 
(a)
General Procedures.  Subject to the provisions of subsection (b), the following
procedures shall apply in the determination of claims under the Plan.

 

 
(1)
Filing a Claim.  All applications and claims for benefits shall be filed in
writing by the Participant, his or her Beneficiary, or the authorized
representative of the claimant, by completing the procedures required by the
Committee.  The procedures shall be reasonable and may include the completion of
forms and the submission of documents and additional information.

 

 
(2)
Review of Claim.  The Committee shall review all applications and claims for
benefits and shall decide whether to approve or deny the claim in whole or in
part.  If a claim is denied in whole or in part, the Committee shall provide
written notice of denial to the claimant within a reasonable period of time no
later than 90 days after the Committee receives the claim, unless special
circumstances require an extension of time for processing the claim.  If an
extension is required, the Committee shall notify the claimant in writing
(including by electronic media) by the end of the initial 90-day period and
indicate the special circumstances requiring an extension of time and the date
by which the Committee expects to render a decision on the claim.  The extension
shall not exceed an additional 90 days.  The notice of denial shall be written
(including in electronic media) in a manner calculated to be understood by the
claimant and shall include the following:

 

--------------------------------------------------------------------------------

 

 
(A)
specific reasons for the denial;

 

 
(B)
specific references to pertinent Plan provisions;

 

 
(C)
description of any additional material or information necessary for the claimant
to perfect his or her claim and an explanation of why such material or
information is necessary; and

 

 
(D)
appropriate information as to the steps the claimant should take if he or she
wishes to submit the denied claim for review, including any applicable time
limits and including a statement of the claimant’s right to bring a civil action
under ERISA § 502(a) following a denied claim on review.

 

 
(3)
Appealing a Claims Denial.  If the claimant wishes a review of the denied claim,
he or she shall notify the Committee in writing within 60 days of the claimant’s
receipt of notification of the denied claim.  The claimant or the claimant’s
representative may review pertinent Plan documents and may submit issues or
comments to the Committee in writing.  The claimant or the claimant’s
representative may provide the Committee with a written statement of the
claimant’s position and with written materials in support of his or her
position, including documents, records and other information relating to the
claim.  The claimant or the claimant’s representative may have, upon request and
free of charge, reasonable access to, and copies of, all documents, records and
other information relevant to the claim.  A document, record or other
information shall be considered relevant to the claim if such document, record
or other information (A) was relied upon in making the benefit determination,
(B) was submitted, considered or generated in the course of making the benefit
determination, without regard to whether such document, record or other
information was relied upon in making the benefit determination, or (C)
demonstrates compliance with the administrative processes and safeguards
designed to ensure and verify that benefit claim determinations are made in
accordance with the Plan and that, where appropriate, the Plan provisions have
been applied consistently with respect to similarly situated claimants.

 

--------------------------------------------------------------------------------

 

 
(4)
Review of Appeal.  The Committee shall forward all requests for review of a
denied claim together with all associated documents to the Chairman of the
Committee promptly after receipt.  The Committee shall make its decision on
review solely on the basis of the written record, including documents and
written materials submitted by the claimant and/or the claimant’s
representative.  The Committee shall make a decision on review within a
reasonable period of time, not later than 60 days after the Committee receives
the claimant’s written request for review unless special circumstances require
additional time for review of the claim.  If the Committee needs an extension of
time to review the claim, it shall notify the claimant in writing before the end
of the initial 60-day period, and shall indicate the special circumstances
requiring an extension of time and the date by which the Committee expects to
render the determination on review.  The extension shall not be longer than an
additional 60 days.  The decision on review will be written in a manner
calculated to be understood by the claimant.  If the claim is denied, the
written noticed shall include specific reasons for the decision as well as
specific references to pertinent Plan provisions on which the decision is based,
a statement of the claimant’s right to bring an action under ERISA § 502(a) and
a statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant to the claimant’s claim for benefits, with “relevant”
defined as provided in the previous subsection.  

 

 
(b)
Determination of Disability.  To the extent the Committee is determining a
claims for benefits under the Plan on account of disability, the following
procedures shall apply.

 

 
(1)
Notice of Denial.  If any person claiming benefits under the Plan on account of
disability is denied such benefits by the Committee, no later than 45 days after
receipt of the claim by the Committee (or within 75 days if special
circumstances require an extension and if written (including electronic) notice
of such extension and circumstances is given to such person within the initial
45-day period), he or she shall be furnished with written notification from the
Committee stating the following: The notice of denial shall be written
(including in electronic media) in a manner calculated to be understood by the
claimant and shall include the following:

 

 
(A)
specific reasons for the denial;

 

 
(B)
specific references to pertinent Plan provisions on which the adverse
determination is based;

 

--------------------------------------------------------------------------------

 

 
(C)
description of the Plan’s review procedures and time limits applicable to such
procedures, including a statement of the claimant’s right to bring a civil
action under ERISA Section 502(a) following an adverse benefit determination on
review;

 

 
(D)
if an internal rule, guideline, protocol or other similar criterion (a
“Guideline”) was relied upon in making the adverse determination, either (A) a
copy of the Guideline, or (B) a statement that such Guideline was relied upon in
making the adverse determination and a statement that a copy of such Guideline
will be provided free of charge to the claimant upon request; and

 

 
(E)
if the adverse benefit determination is based on a medical necessity or
experimental treatment or similar exclusion or limit, either an explanation of
the scientific or clinical judgment for the determination, applying the terms of
the Plan to the claimant’s medical circumstances, or a statement that such
explanation will be provided free of charge upon request.

 
In the case of any extension, the notice of extension shall specifically explain
the standards on which entitlement to a benefit is based, the unresolved issues
that prevent a decision on the claim, and the additional information needed to
resolve those issues, and the claimant shall be afforded at least 45 days within
which to provide the specified information.
 
In the event that a period of time is extended due to a claimant’s failure to
submit necessary information, the period for making the benefit determination
shall be tolled from the date on which the notification of the extension is sent
to the claimant until the date on which the claimant responds to the request for
additional information.
 

 
(2)
Appeal Process.  A claimant shall have 180 days following receipt of a
notification of an adverse benefit determination within which to appeal the
determination.  A claimant shall be entitled to submit on appeal written
comments, documents, records and other information relating to the
claim.  During the time the claimant has for filing an appeal, the claimant
shall be provided, upon request and free of charge, reasonable access to and
copies of all documents, records and other information relevant to the
claim.  The Committee shall forward all requests for review of a denied claim
together with all associated documents to the Chair of the Committee promptly
after receipt.  The Committee’s review of the claim shall take into account all
comments, documents, records and other information submitted by the claimant
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.  The review shall not give
deference to the initial adverse benefit determination.  If the initial benefit
determination was, in whole or in part, based on medical judgment (including
determinations with regard to whether a particular treatment, drug or other item
is experimental, investigational, or not medically necessary or appropriate), in
deciding the appeal the Committee shall consult with a health care professional
who has appropriate training and experience in the field of medicine involved in
the medical judgment.  Such professional shall be an individual who is neither
an individual who was consulted in connection with the adverse benefit
determination that is the subject of the appeal, nor the subordinate of any such
individual.  If the Plan obtained advice from any medical or vocational experts
in making the initial benefit determination, the Committee shall identify such
experts to the claimant, regardless of whether the advice was relied upon in
making the initial benefit determination.

 

--------------------------------------------------------------------------------

The Committee shall notify the claimant of the benefit determination on review
within a reasonable period of time, not to exceed 45 days after receipt by the
Plan of the claimant’s request for review, unless the Committee determines that
special circumstances (such as the need to hold a hearing, if the Plan’s
procedures provide for a hearing) require an extension of time for processing
the claim.  If the Committee determines that an extension of time for processing
is required, written notice of the extension shall be furnished to the claimant
prior to the termination of the initial 45-day period.  In no event shall such
extension exceed a period of 45 days from the end of the initial period.  The
extension notice shall indicate the special circumstances requiring an extension
of time and the date by which the Plan expects to render the determination on
review.
 
Notwithstanding the previous paragraph, if the Committee holds regularly
scheduled meetings at least quarterly, the Committee shall instead make a
benefit determination no later than the date of such meeting that immediately
follows the Plan’s receipt of a request for review, unless the request for
review is filed within 30 days preceding the date of such meeting.  In such
case, a benefit determination may be made by no later than the date of the
second meeting following the Plan’s receipt of the request for review.  If
special circumstances (such as the need to hold a hearing, if the Plan’s
procedures provide for a hearing) require a further extension of time for
processing, a benefit determination shall be rendered not later than the third
meeting of the Committee following the Plan’s receipt of the request for
review.  If such an extension of time for review is required because of special
circumstances, the Committee shall provide the claimant with written notice of
the extension, describing the special circumstances and the date as of which the
benefit determination will be made, prior to the commencement of the extension.
The Committee shall notify the claimant of the benefit determination as soon as
possible, but not later than 5 days after the benefit determination is made.
 

--------------------------------------------------------------------------------

The period of time within which a benefit determination on review is required to
be made shall begin at the time an appeal is filed in accordance with the
reasonable procedures of the Plan, without regard to whether all the information
necessary to make a benefit determination on review accompanies the filing.  In
the event that a period of time is extended due to a claimant’s failure to
submit information necessary to decide a claim, the period for making the
benefit determination on review shall be tolled from the date on which the
notification of the extension is sent to the claimant until the date on which
the claimant responds to the request for additional information.
 

 
(3)
Notification of Benefit Determination on Review.  The Committee shall provide
the claimant with written notification of the Plan’s benefit determination on
review.  If on review the initial denial of benefits is affirmed, the
notification shall set forth, in a manner calculated to be understood by the
claimant, the following:

 

 
(A)
specific reason for the adverse determination;

 

 
(B)
specific references to pertinent Plan provisions on which the adverse
determination is based;

 

 
(C)
statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claimant’s claim for benefits;

 

 
(D)
statement describing the Plan’s voluntary appeal procedures, if any, and
describing the claimant’s right to obtain the information about such procedures,
and a statement of the claimant’s right to bring an action under ERISA Section
502(a);

 

 
(E)
if a Guideline was relied upon in making the adverse determination, either (A) a
copy of the Guideline, or (B) a statement that such Guideline was relied upon in
making the adverse determination and a statement that a copy of such Guideline
will be provided free of charge to the claimant upon request;

 

 
(F)
if the adverse benefit determination is based on a medical necessity or
experimental treatment or similar exclusion or limit, either an explanation of
the scientific or clinical judgment for the determination, applying the terms of
the Plan to the claimant’s medical circumstances, or a statement that such
explanation will be provided free of charge upon request; and

 

--------------------------------------------------------------------------------

 

 
(G)
the following statement: “You and your Plan may have other voluntary alternative
dispute resolution options, such as mediation.  One way to find out what may be
available is to contact your local U.S. Department of Labor Office and your
State insurance regulatory agency.”

 

 
(c)
The Committee shall have full discretionary authority to consider claims filed
under the Plan and to determine eligibility, status and rights of all
individuals under the Plan and to construe any and all terms of the Plan.

 

 
(d)
Following the approval of a claim for benefits under the Plan, pursuant to the
claims procedure set forth in this section, the Committee shall have the
authority to construe and administer the Plan in a manner that is consistent
with the payment of benefits in accordance with the approved claim.

 
7.3
Liability of Committee; Indemnification.  To the extent permitted by law, the
Committee shall not be liable to any person for any action taken or omitted in
connection with the interpretation and administration of the Plan unless
attributable to his or her own bad faith or willful misconduct.  The Committee
may employ legal counsel, consultants, actuaries and agents as they may deem
desirable in the administration of the Plan and may rely on the opinion of such
counsel or the computations of such consultant or other agent.  The Committee
shall provide for the keeping of detailed written minutes of its actions
hereunder, which shall be reviewed by the legal counsel or the consultant
engaged by the Committee prior to their finalization.

 
7.4
Expenses.  The costs of the establishment of the Plan and the adoption of the
Plan by the Company, including but not limited to legal and accounting fees,
shall be borne by the Company.  The expenses of administering the Plan shall be
borne by the Trust; provided, however, that the Company shall bear, and shall
not be reimbursed by, the Trust for any tax liability of the Company associated
with the investment of assets by the Trust.  All taxes associated with
participation in the Plan, including any tax liability under Code Section 409A,
shall be borne by the Participant.

 
ARTICLE 8.  GENERAL AND MISCELLANEOUS
 
8.1
Rights Against the Company.  Except as expressly provided by the Plan, the
establishment of the Plan shall not be construed as giving to any Participant or
to any person whomsoever, any legal, equitable or other rights against the
Company, or against its officers, directors, agents or shareholders, or as
giving to any Participant or Beneficiary any equity or other interest in the
assets, business or shares of Company stock or giving any Participant the right
to be retained in the employment of the Company.  All Participants shall be
subject to discharge (with or without cause) to the same extent they would have
been if the Plan had never been adopted.  The rights of a Participant hereunder
shall be solely those of an unsecured general creditor of the Company.  Neither
the Plan nor any action taken hereunder shall be construed as giving to any
Participant the right to continue rendering services to or for the benefit of
the Company or as affecting the right of the Company to dismiss any
Participant.  Any benefit payable under the Plan shall not be deemed salary or
other compensation for the purpose of computing benefits under any Participant
benefit plan or other arrangement of the Company for the benefit of its
Participants.

 

--------------------------------------------------------------------------------

 
8.2
Assignment or Transfer.  No right, title or interest of any kind in the Plan
shall be transferable or assignable by any Participant or Beneficiary or be
subject to alienation, anticipation, encumbrance, garnishment, attachment,
execution or levy of any kind, whether voluntary or involuntary, nor subject to
the debts, contracts, liabilities, engagements, or torts of the Participant or
Beneficiary.  Any attempt to alienate, anticipate, encumber, sell, transfer,
assign, pledge, garnish, attach or otherwise subject to legal or equitable
process or encumber or dispose of any interest in the Plan shall be void.  

 
8.3
Severability.  If any provision of the Plan shall be declared illegal or invalid
for any reason, said illegality or invalidity shall not affect the remaining
provisions of the Plan but shall be fully severable, and the Plan shall be
construed and enforced as if said illegal or invalid provision had never been
inserted herein.  

 
8.4
Construction.  The article and section headings and numbers are included only
for convenience of reference and are not to be taken as limiting or extending
the meaning of any of the terms and provisions of the Plan.  Whenever
appropriate, words used in the singular shall include the plural or the plural
may be read as the singular.  When used herein, the masculine gender includes
the feminine gender.  

 
8.5
Governing Law.  The validity and effect of the Plan and the rights and
obligations of all persons affected hereby shall be construed and determined in
accordance with the laws of the State of Delaware unless superseded by federal
law, which shall govern correspondingly.

 
8.6
Payment Due to Incompetence.  If the Committee receives evidence that a
Participant or Beneficiary entitled to receive any payment under the Plan is
physically or mentally incompetent to receive such payment, the Committee may,
in its sole and absolute discretion, direct the payment to any other person or
Trust which has been legally appointed by the courts or to any other person
determined by the Company to be a proper recipient on behalf of such person
otherwise entitled to payment, or any of them, in such manner and proportion as
the Company may deem proper.  Any such payment shall be in complete discharge of
the Company’s obligations under the Plan.  

 
8.7
Taxes.  All amounts payable hereunder shall be reduced by any and all federal,
state, and local taxes imposed upon Participant or his or her Beneficiary, which
are required to be paid or withheld by Company.  The determination of Company
regarding applicable income and employment tax withholding requirements shall be
final and binding on Participant.

 

--------------------------------------------------------------------------------

 
8.8
Insurance.  In the event that any Participant elects, in his or her discretion,
to independently purchase an insurance policy covering the inability of the Plan
or the Trust to make any payments to which Participant is entitled under the
Plan or the Trust, the Company shall use its best efforts to facilitate the
payment by Participant of any applicable excise taxes which become due as the
result of the payment of premiums under such policy.  Nothing contained herein
shall be construed as an endorsement by the Company of the purchase of such a
policy or a recommendation by the Company that the purchase of such a policy is
necessary or desirable as the result of Participant’s participation in the
Plan.  In the event that such insurance would result in adverse tax consequences
to the Participant, the Participant shall terminate such insurance.

 
8.9
Attorney’s Fees.  Company shall pay the reasonable attorney’s fees incurred by
any Participant in an action brought against Company to enforce Participant’s
rights under the Plan, provided that such fees shall only be payable in the
event that the Participant prevails in such action.

 
8.10
Plan Binding on Successors and Assignees. The Plan shall be binding upon and
inure to the benefit of the Company and its successor and assigns and the
Participant and the Participant’s designee and estate.

 

--------------------------------------------------------------------------------

Building Materials Holding Corporation
Executive and Director Supplemental Retirement Income
 
TRUST AGREEMENT

This Agreement made this first day of August, 2005 by and between Building
Materials Holding Corporation (Company), and U. S. Bank Institutional Trust and
Custody, Idaho (Trustee).

WHEREAS, the Company has established the Executives’ Supplemental Retirement
Income Plans, both Old and New Plans (the “Plans”), attached hereto as Exhibit A
and B, to encourage the participants in the Plans (the “Participants”) to
continue to render services to the Company by providing for the Participants’
security after their retirement from service with the Company; and,

WHEREAS, the Plans provide for payments to be made under the conditions and on
the terms contained therein to the Participants and/or their beneficiaries
(hereinafter individually and collectively the (“Trust Beneficiaries”); and,

WHEREAS, the Company desires to establish this Trust Agreement to provide in
whole or in part, for the payment of the benefits due under the Plans and
accordingly to discharge its obligations thereunder, and to transfer to the
Trust certain property which shall be held herein until paid to the Trust
Beneficiaries in accordance with and pursuant to the Plans, subject however, to
the claims of the Company’s creditors in the event of the Company’s insolvency
as defined herein; and,

WHEREAS, it is the intention of the Company to make such contributions to the
Trust as it may from time to time determine to be necessary or appropriate, to
discharge its obligations to the Trust Beneficiaries under the Plans subject to
Section 3 hereof;

NOW, THEREFORE, the Company hereby establishes with the Trustee this Trust to
hold all property acceptable to the Trustee, together with the income thereon,
as shall be transferred to it hereunder for the uses and purposes and upon the
terms and conditions set forth herein.

--------------------------------------------------------------------------------

SECTION I - DEFINITIONS

1.1
Plans. The plans covered by this Trust are those attached hereto as Exhibit A
and B. The Company may at any time, by written notice to the Trustee, add
additional plans to become subject to this Trust. Any such additional plans
shall become Plans subject to this Trust only upon receipt and acceptance by the
Trustee of the additional plan documents.

1.2
Board of Directors. The Board of Directors of Building Materials Holding
Corporation.

1.3
Compensation Committee. The Committee established by the Board of Directors to
evaluate, recommend and administer compensation programs of the Company for the
Board of Directors.

1.4
Trust Beneficiaries. The Participants under the Plans covered by this agreement
and/or their Beneficiaries who become eligible for the benefit payments under
the Plans.

1.5
Insolvency. The Company is insolvent for purposes of this Trust if Company is
unable to pay its debts as they become due or the Company is subject to
insolvency or bankruptcy proceedings under federal, state or local law.

1.6
Insolvency Creditors. The general creditors of the Company as designated by a
court of competent jurisdiction, or person appointed by such court having
jurisdiction over Company’s insolvency proceedings.

SECTION II - TRUST FUND

2.1
Company’s Obligations to Participants. The Company shall continue to be liable
to the Participants to make all payments required under the terms of the Plans
to the extent such payments are not made from this Trust. Distributions made
from this Trust to Participants or their beneficiaries shall, to the extent of
such distributions, satisfy the Company’s obligations to pay benefits to
Participants and their beneficiaries under the Plans.

2.2
Contributions. The Company shall make contributions to the Trust as it deems
appropriate in its sole discretion to provide funds to satisfy Company’s
contractual obligations under the Plans. Such contributions may be in cash or
other property acceptable to the Trustee.

2.3
Irrevocable Trust. The Company and the Trustee agree that the Trust hereby
created has been established to pay obligations of the Company pursuant to the
Plans and is subject to the rights of general creditors of the Company in the
event of the Company’s insolvency as defined herein, and accordingly is a
grantor trust under the provisions of Sections 671 through 677 of the Internal
Revenue Code of 1986, as amended (the “Code”). The Company hereby agrees to
report all items of income and deduction of the Trust on its own income tax
returns. It shall be impossible at any time prior to satisfaction of all
liabilities with respect to Trust Beneficiaries under the Plans and to
Insolvency Creditors, if any, for any part of the corpus or income of the Trust
to be transferred to the Company other than such part as is required to pay
taxes and administration expenses or the reimburse the Company for payments made
under the Plan as herein provided. No contribution to or income of the Trust is
intended to be taxable to the Participants until benefits are distributed to
them.

 

--------------------------------------------------------------------------------

 
2.4
Rights to Trust Assets. The property of the Trust shall be held separate and
apart from other funds of the Company and shall be used exclusively for the
purposes herein set forth. The Trust Beneficiaries shall not have any preferred
claim on, or any beneficial ownership interest in, any assets of the Trust prior
to the time such assets are paid to the Trust Beneficiaries as provided in
Section 3 hereof, and the Trust Beneficiaries’ rights to payments created under
the Plans and this Trust Agreement shall be no greater than the rights of
unsecured general creditors of the Company.

All Trust assets remaining after all amounts due under the Plans and all amounts
then due Insolvency Creditors are paid shall be paid to the company.

2.5
ERISA Considerations. The Plans attached hereto as Exhibit A and B are intended
to be “unfunded” and maintained “Primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees”
for purposes of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) and as such are intended not to be covered by Parts 2 through 4 of
Subtitle B of Title I of ERISA. The existence of this Trust is not intended to
alter this characterization of the Plans.

SECTION III - PAYMENTS TO TRUST BENEFICIARIES

3.1
Payments Except During Insolvency. The Trustee shall make payments of benefits
to the Trust Beneficiaries from the assets of the Trust, if and to the extent
such assets are available for distribution, in accordance with the Plans, so
long as the Company is not insolvent, as defined herein. Unless such insolvency
is deemed to exist, the Trustee shall hold the Trust Fund exclusively to pay
fees and expenses of the Trust and Plans’ benefits until all such benefits have
been paid. Unless insolvency exists as herein defined, creditors of the Company
shall not be paid from the Trust Fund. The Company may not hypothecate the
assets of the Trust nor create any security interest in the Trust Fund in favor
of any of its creditors.

3.2
Determination of Benefits Due. The Compensation Committee will be responsible
for notifying the Trustee of amounts due to the Trust Beneficiaries and the
dates such payments are due. If the Trustee has cause to believe that a payment
is due and has not received notice from the Compensation Committee, the Trustee
will request confirmation from the Compensation Committee and if no response is
received may take such steps as Trustee deems appropriate and necessary to
fulfill his obligations hereunder to determine what payment is actually due to
make payments accordingly.

3.3
Insufficient Funds in Trust. If the property of the Trust is not sufficient to
make payments under the Plans to the Trust Beneficiaries, upon notice from the
Trustee to that effect, the Company shall make the balance of each such payment
as it falls due.

 

--------------------------------------------------------------------------------

 
3.4
Facility of Payment. Any payments made by the Trustee hereunder to the Trust
Beneficiaries shall be in discharge of the Company’s obligations under the
Plans, provided, however, that the Company shall remain liable to the Trust
Beneficiaries for all amounts due under the Plans to the extent not paid
hereunder.

SECTION IV - INSOLVENCY

4.1
Determination of Insolvency. The Company shall promptly give notice to the
Trustee upon becoming insolvent. The Chief Executive Officer and/or the Board of
Directors of the Company and/or the Compensation Committee shall be obligated to
give such notice. If the Trustee receives such notice or receives from any other
person claiming to be a creditor of the Company a written allegation that the
Company is insolvent, the Trustee shall independently determine whether such
insolvency exists. The expenses of such determination shall be allowed as
administrative expenses of the Trust.

4.2
Suspension of Payments. The Trustee shall cease making any payments due from the
Trust Fund to the Trust Beneficiaries while it is determining the existence of
insolvency. Such payments shall cease and the Trustee shall commence insolvency
Administration under Section 4.5 upon receipt of any notice of insolvency as
provided in Section 4.1.

4.3
Obligation of Trustee. The Trustee shall have no obligation to investigate the
financial condition of the Company prior to receiving a notice or allegation of
insolvency. The Trustee may, in all events rely on such evidence concerning the
Company’s solvency as may be furnished to the Trustee which will give the
Trustee a reasonable basis for making the determination concerning the Company’s
solvency.

4.4
Insolvency Administration. During Insolvency Administration, the Trustee shall
hold the Trust Fund for the benefit of the general creditors of the Company and
make payments only in accordance with this Section 4.4. The Trustee shall
continue the investment of the Trust Fund in accordance with Section 5.

 
(A)
After payment of Trustee fees authorized herein, the Trustee shall make payments
out of the Trust Fund only as follows:

 
(i)
To general creditors in accordance with instructions from a court of competent
jurisdiction, or a person appointed by such court, having jurisdiction over the
Company’s condition of insolvency, and/or

 
(ii)
To the Trust Beneficiaries in accordance with instructions of such persons or
entities specified in subparagraph A(i) above.

 
(B)
The Trustee shall be a secured creditor with a priority claim to the Trust Fund
with respect to its own fees and expenses.

4.5
Termination of Insolvency Administration. Insolvency Administration shall
terminate when the Trustee determines that the Company is not insolvent, in
response to a notice or allegation of insolvency under Section 4.1 or Company is
no longer insolvent or a court of competent jurisdiction determines that the
Company is no longer insolvent.

 

--------------------------------------------------------------------------------

 
4.6
Resumption of Benefits. Upon termination of Insolvency Administration, the Trust
Fund shall continue to be held for the benefit of the Trust Beneficiaries.
Benefit payments due but not paid during the period of Insolvency Administration
shall be made as soon as practicable.

SECTION V - INVESTMENT OF TRUST ASSETS

5.1
Types of Investments. Except for money and other property subject to the
investment responsibility of an investment manager as provided in Section 5.5
hereof, and subject to Section 5.2 the Trustee shall, in its discretion, invest
and reinvest the assets of the Trust without distinction between principal and
income, in any property, real, personal or mixed, wherever situated, and whether
or not productive of income or consisting of wasting assets, including, without
limitation, common and preferred stocks, mutual funds, common trust funds,
bonds, notes, debentures, securities convertible into common stock, leaseholds,
mortgages (including, without limitation, any collective or part interest in any
bond and mortgage or note and mortgage), interest bearing accounts and
certificates of deposit, oil, mineral or gas properties, royalties, interests or
rights (including equipment pertaining thereto), equipment trust certificates,
investment trust certificates, savings bank deposits, commercial paper, and
insurance contracts (including those to which amounts may be deposited and
withdrawn). The Trustee may invest in certificates of deposit or savings
accounts which bear a reasonable interest rate in a federally insured
institution which may be affiliated with the Trustee. The Trustee shall, on the
direction of the Company, purchase life insurance and/or annuity contracts
including group annuity contracts providing for flexible funding or similar
vehicles or for the investment of assets in separate accounts, invested in any
securities and other property including real estate, regardless of whether or
not the insurance carrier shall have assumed any contractual or other liability
as to the benefits to be provided thereunder, the value thereof, or the return
therefrom. Such life insurance and/or annuity contracts shall be considered
investments of the Trust Fund and, together with all rights, privileges, options
and elections contained therein, shall vest in the Trustee but shall be
exercised, assigned or otherwise disposed of as directed by the Company. The
insurance carrier under any such contract shall have full responsibility for the
management and control of the assets held thereunder.

5.2
Investment Policies. The Board of Directors of the Company shall have the right
at any time and in its discretion to formulate investment policies and standards
for the investment of the Trust Fund. Such policies and standards may include,
among other things, the percentage of the Trust Fund which may be invested in
fixed income securities, the percentage of the Trust Fund which may be invested
in common stocks, and the percentage of the Trust Fund which may be invested in
the securities of any one company. Such policies may be changed from time to
time by resolution of the Board.

5.3
Investment Funds. The Trustee shall maintain separate investment funds as the
Company may direct. Contributions to the Trust shall be allocated among the
funds by the Trustee in accordance with the directions of the Company. Each
separate investment fund shall be invested only in types of investments
consistent with guidelines established by the Company for such fund. Pending
such investment and reinvestment, or transfers as herein provided, the Trustee
may temporarily invest and reinvest the funds in any marketable short and medium
term fixed income securities, United States Treasury Bills, other short and
medium term government obligations, commercial paper, other money market
instruments and part interest in any one of more of the foregoing, or may
maintain cash balances consistent with the liquidity needs of the Plans as
communicated to the Trustee by the Company. In addition, the Trustee shall have
full power and authority to invest and reinvest all or any part of any
investment fund through the medium of any pooled investment fund or group trust
which is invested principally in property of the kind authorized for investment
of the respective investment funds. To the extent of investment of the Trust’s
assets in such a pooled fund or group trust, the terms of the instrument
establishing such pooled fund or group trust are made a part hereof as fully as
if set forth at length herein. The Trustee shall make transfers between each of
the funds in accordance with the directions of the Company and may dispose of
such investments in the particular investment fund as may be necessary to enable
it to make any such transfer.

 

--------------------------------------------------------------------------------

 
5.4
Powers of the Trustee. The Trustee shall be authorized and empowered, in its
discretion (except as provided in Section 5.5) to exercise any and all of the
following rights, powers and privileges with respect to any cash, securities or
other properties held by the Trustee in Trust hereunder:

 
(A)
To sell any such property at such time and upon such terms and conditions as the
Trustee deems appropriate. Such sales may be public or private, for cash or
credit, or partly for cash and partly for credit, and may be made without notice
of advertisement of any kind.

 
(B)
To exchange, mortgage, or lease any such property and to convey, transfer or
dispose of any such property on such terms and conditions as the Trustee deems
appropriate.

 
(C)
To grant options for the sale, transfer exchange or disposal of any such
property.

 
(D)
To exercise all voting rights pertaining to any securities and to consent to or
request any action on the part of the issuer of any such securities and to give
general or special proxies or powers of attorney with or without power of
substitution.

 
(E)
To consent to or participate in amalgamations, reorganizations,
re-capitalizations, consolidations, mergers, liquidations, or similar
transactions with respect to any securities, and to accept and to hold any other
securities issued in connection therewith.

 
(F)
To exercise any subscription rights or conversion privileges with respect to any
securities held in the Trust Fund.

 
(G)
To collect and receive any and all money and other property of whatsoever kind
or nature due or owing to belonging to the Trust Fund and to give full discharge
and acquaintance therefore and to extend the time of payment of any obligation
at any time owing to the Trust Fund, as long as such extension is for a
reasonable period, and continues at reasonable interest.

 

--------------------------------------------------------------------------------

 

 
(H)
To cause any securities or other property to be registered in, or transferred
to, the individual name of the Trustee or in the name of one or more of its
nominees, or one or more nominees of any system for the centralized handling of
securities, or it may retain them unregistered and in form permitting
transferability by delivery, but the books and records of the Trust shall at all
times show that all such investments are a part of the Trust Fund.

 
(I)
To organize under the laws of any State a Company for the purpose of acquiring
the holding title to any property which it is authorized to acquire under this
Trust Agreement and to exercise with respect thereto any or all of the powers
set forth in this Trust Agreement.

 
(J)
To manage, operate, repair, improve, develop, preserve, mortgage or lease for
any period any real property or any oil, mineral or gas properties, royalties,
interest or rights held by it directly or through any Company, either alone or
by joining with others, using other Trust assets for any of such purposes; to
modify, extend, renew, waive or otherwise adjust any or all of the provisions of
any such mortgage or lease and to make provision for amortization of the
investment in or depreciation of the value of such property.

 
(K)
To settle, compromise, or submit to arbitration any claims, debts or damages due
or owing to or from the Trust; to commence or defend suits or legal proceedings
whenever, in its judgment any interest of the Trust requires it; and to
represent the Trust in all suits or legal proceedings in any court of law or
equity or before any other body or tribunal, insofar as such suits or
proceedings relate to any property forming part of the Trust Fund or to the
administration of the Trust Fund.

 
(L)
To borrow money from others for the purposes of the Trust, but the Trustee shall
not be authorized to borrow any money from its banking department or from the
Company or any subsidiary or associated company.

 
(M)
The Trustee may, for the purpose of investing in and holding title to real or
personal property or part interests therein located outside the state of Idaho,
appoint one or more individuals or Companies as a co-trustee or subtrustee or
join with one or more individuals or Companies (including itself) in the
establishment of one or more than one or all of the powers, authorities,
discretions, duties and functions of the Trustee under this Trust Agreement and
the amendments hereto as shall be designated in the instrument establishing such
subtrust including without limitation by the reference thereto power to receive
and hold property, real or personal, or part interest therein, oil, mineral or
gas properties, royalty interests or rights, including equipment pertaining
thereto, leaseholds, mortgages and other interests in realty, situated in any
state in which the co-trustee or subtrustee is authorized to act as trustee and
pay the reasonable expenses and compensation of such co-trustee or subtrustee.

 

--------------------------------------------------------------------------------

 

 
(N)
To purchase, hold and sell interests or units of participation in any collective
or common trust fund established by the Trustee, including any such funds which
may be established in the future.

 
(O)
Generally to do all acts, whether or not expressly authorized, which the Trustee
deems necessary or desirable, but acting at all times according to the
principles expressed in Section 9.

5.5
Investment Responsibilities. The Company may (but need not) appoint an
Investment Manager or Managers to manage (including the power to acquire and
dispose of) all or any of the assets of the trust Fund. In the event of any such
appointment, the Company shall establish the portion of the assets of the Trust
Fund which shall be subject to the management of the Investment Manager and
shall so notify the Trustee in writing. Likewise, the Company may establish that
all or a portion of the assets of the Trust Fund shall be subject to the
investment jurisdiction of the Company itself (through the Compensation
Committee or other designee) and shall advise the Trustee of such determination.
With respect to such assets over which either an Investment Manager or the
Company has investment responsibility, the Investment Manager or the Company
shall possess all of the investment and administrative power and
responsibilities granted to the Trustee hereunder, including the power to hold
the indicia of ownership of any investment in a collective trust fund, and the
Trustee shall invest and reinvest such assets pursuant to the written directions
of the Investment Manager or the Company. If the Company so directs, an
Investment Manager shall have the power to acquire and dispose of assets in the
name of the Trust. The investment jurisdiction of the Company may be exercised
in any manner consonant with its duties as a fiduciary including:

 
(A)
directing the Investment Manager or the Trustee that certain investments or
types of investments be made or liquidated;

 
(B)
directing the Investment Manager or the Trustee that certain investments not be
made;

 
(C)
requiring that the Trustee or the Investment Manager obtain approval prior to
acquiring or disposing of any asset. The Trustee shall have no investment
responsibility with respect to the assets subject to the investment
responsibility of an Investment Manager or the Company, and shall have no duty
to inquire into the direction of such Investment Manager or the Company, to
solicit such directions nor to review and follow the investments made pursuant
to any such direction, other than to the extent provided by law.

 
SECTION VI - RESPONSIBILITY OF TRUSTEE

6.1
Accounting. The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements and all other transactions required
hereunder. All such accounts, books and records shall be open to inspection at
all reasonable times by the Company and by the Trust Beneficiaries. Within 60
days following the close of each calendar year and within 60 days after the
removal or resignation of the Trustee, the Trustee shall deliver to the Company
and the Trust Beneficiaries a written account of its administration of the Trust
during such year or during the period from the close of the last preceding year
to the date of such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions effected by the Trustee.

 

--------------------------------------------------------------------------------

 
6.2
General Responsibilities.

 
(A)
The Trustee shall act with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims provided, however, that the Trustee shall have no
liability for any action taken pursuant to a direction given by the Company
contemplated by and complying with the terms of the Trust Agreement.

 
(B)
The Trustee shall not be responsible for determining the required amount or
frequency of contributions made by Company nor shall the Trustee be responsible
for the adequacy of the Trust Fund to meet and discharge all liabilities under
the Plans.

 
(C)
The Trustee shall not be required to undertake or to defend any litigation
arising in connection with this Trust Agreement, unless it is first indemnified
by the company against its costs, and the Company hereby agrees to indemnify the
Trustee for such costs.

 
(D)
The Trustee may consult with legal counsel with respect to any of its duties or
obligations hereunder and shall be fully protected in acting or refraining from
action in accordance with such advice of counsel.

 
(E)
The Trustee may hire agents, accountants, actuaries and financial consultants to
assist it in the performance of its duties hereunder.

 
(F)
The Trustee shall have, without exclusion, all powers conferred on Trustees by
applicable law unless expressly provided otherwise herein.

6.3
Trustee Fees and Expenses. The Trustee shall be entitled to be reimbursed for
all expenses and receive such reasonable compensation for its services hereunder
as shall be agreed upon, from time to time, by the Company and the Trustee. Such
expenses, compensation and fees shall be payable by the Company. If such
expenses, compensation and fees are not so paid, they shall be paid out of the
Trust Fund, and shall be a charge against such Trust Fund until paid. The
Company shall be obligated to reimburse the Trust Fund for any such expenses,
compensation and fees paid out of the Trust Fund.

 
SECTION VII - OTHER TRUSTEE MATTERS

7.1
Resignation and Removal of Trustee. The Trustee may be removed upon 30 days
written notice to the Trustee at any time by the Company. The Trustee may resign
at any time, upon 30 days written notice to the Company. In the event of such
resignation or removal, a new corporate Trustee shall be appointed by the
Company which shall be independent and not subject to the control of either the
Company or the Trust Beneficiaries. Notwithstanding the foregoing, an individual
may be appointed, serve, resign, or be removed as a successor Trustee in the
same manner as a corporate trustee, provided that in no event may an individual
Trustee be a Participant, or a spouse thereof. Any Trustee hereunder that is
removed, or any Trustee that resigns hereunder, is authorized, however, to
reserve such sum of money, as to it may seem advisable, for the payment of any
outstanding taxes or other liabilities of the Trust Fund and its reasonable fees
and expenses in connection with the settlement of its accounts. Any balance of
such reserve remaining after the payment of such taxes, liabilities, fees and
expenses shall be paid over to the successor Trustee.

 

--------------------------------------------------------------------------------

 
7.2
Exoneration and Indemnification of Trustee. 

 
(A)
The Trustee has no liability to any Trust Beneficiary or other party interested
herein regarding the income tax consequences to any such person under the terms
of the Plans, under the terms of this Trust Agreement as they affect the Plans,
or otherwise occurring as a result of this Trust Agreement or any actions
pertaining hereto. The company shall indemnify and hold harmless the Trustee,
individually and as Trustee, from any costs, claims, losses, demands or
liabilities (including reasonable attorney’s fees incurred in defending against
such matters) incurred by or brought against the Trustee in respect of any such
actual or asserted income tax liability of any such interested party.

 
(B)
The Company shall indemnify and hold harmless the Trustee, individually and as
Trustee, against all costs, claims, losses, demands or liabilities (including
reasonable attorney’s fees in defending against such claims), incurred by or
brought against the Trustee in respect of the acts, omissions, transactions,
duties, obligations or responsibilities which the Trustee performs or undertakes
on the direction of the Investment Manager, the Company or any other fiduciary
given the power to direct the Trustee. In addition, such indemnity should
include all claims and liabilities arising from any breach of fiduciary
responsibility by a fiduciary other than the Trustee, unless the Trustee
knowingly participates in or knowingly undertakes to conceal, an act or omission
of such other fiduciary. The performance by the Trustee of trades, custody,
reporting, recording and bookkeeping with respect to assets managed by another
fiduciary shall not be deemed to give rights to any participation or knowledge
on the part of the Trustee. The undertakings of this section shall survive the
amendment or termination of this agreement of the Company and Trustee under the
laws of the State of Idaho.

 
SECTION VIII - MISCELLANEOUS

8.1
Amendment. This Trust Agreement may not be amended except by a written
instrument executed by the Trustee and the Company and consented to by a simple
majority of the then Participants.

8.2
Duration. This Trust shall continue in effect and be irrevocable with respect to
amounts contributed to it until all assets of the trust fund are exhausted
through distribution of benefits to the Participants in accordance with the
Plans, payment to general creditors in the event of insolvency, payment of fees
and expenses of the Trustee, and return of remaining funds to the Company.

 

--------------------------------------------------------------------------------

 
8.3
Severability.  Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition without invalidating the
remaining provisions hereof.

8.4.
Non Alienation. To the extent permitted by law, benefits payable to the Trust
Beneficiaries under this Agreement may not be assigned, alienated, or subject to
attachment, garnishment, levy execution or any other legal or equitable process
and no benefit actually paid to the Trust Beneficiaries shall be subject to any
claim for repayment by the Company or the Trustee. The Trust Beneficiaries may
not assign or transfer any interest in the benefits due hereinafter and shall
have no direct interest in any Trust asset.

8.5.
Governing Law. This Trust Agreement shall be construed and administered in
accordance with the laws of the State of Idaho, except as preempted by ERISA.

8.6.
Taxes. The Company shall from time to time pay taxes of any and all kinds
whatsoever which at any time are lawfully levied or assessed upon or become
payable in respect of the Trust Fund, the income or any property forming a part
thereof, or any security transaction pertaining thereto. To the extent that any
taxes levied or assessed upon the trust Fund are not paid by the Company or are
contested by the Company, the Trustee shall pay such taxes out of the trust
Fund. If requested by the company, the Trustee shall, at the company’s expense,
contest the validity of such taxes in any manner deemed appropriate by the
Company or it counsel, but only if it has received an indemnity bond or other
security satisfactory to it to pay an expenses of such contest.

IN WITNESS WHEREOF, the foregoing Trust Agreement has been duly executed by the
Company and the Trustee.

Building Materials Holding Corporation
 
U. S. Bank Institutional Trust and Custody, Idaho
     
Paul S. Street
Sr. Vice President, Chief Administrative Officer,
General Counsel and Corporate Secretary
 
Jennifer Hogaboom
Vice President & Relationship Manager
     
Date
 
Date
           
Steven H. Pearson
Sr. Vice President - Human Resources
               
Date
   

--------------------------------------------------------------------------------

 

EXHIBIT A

Executives’ Supplemental Retirement Income Plan “NEW Plan”

--------------------------------------------------------------------------------

EXHIBIT B

Executives’ Supplemental Retirement Income Plan “OLD Plan”

--------------------------------------------------------------------------------