Exhibit 10.9

TOPBUILD

 

Terms and Conditions of

Performance Restricted Stock Awards Granted Under the

Amended and Restated TopBuild 2015 Long Term Stock Incentive Plan

 

These Terms and Conditions apply to an award to you of performance-based
restricted stock (the “Grant”) by TopBuild Corp. (the “Company”).  The grant
date, number of shares and performance and time vesting conditions and dates
(“Grant Information”) are set forth in Appendix A hereto and at your log-in page
at the Company’s online stock administration portal, and are incorporated herein
by reference.  By accepting the grant on the Company’s online stock
administration portal, you agree to accept the Grant, and you voluntarily agree
to these Terms and Conditions and the provisions of the Amended and Restated
2015 Long Term Stock Incentive Plan (as adopted effective May 2, 2016, as may be
amended from time to time, the “Plan”), and acknowledge that:

 

·

You have read and understand these Terms and Conditions, and are familiar with
the provisions of the Plan. 

·

 

·

You have received or have access to all of the documents referred to in these
Terms and Conditions.

·

All of your rights to the Grant are embodied in these Terms and Conditions and
in the Plan, and there are no other commitments or understandings currently
outstanding with respect to any other grants of options or restricted stock,
except as may be evidenced by agreements duly executed by you and the Company.

 

You and the Company agree that all of the terms and conditions of the Grant
(including the Grant Information) are set forth in these Terms and Conditions
and in the Plan. These Terms and Conditions together with the Grant Information
constitute your restricted stock award agreement (the “Agreement”).  Please read
these documents and the related Participation Guide/Prospectus
carefully.  Capitalized terms that are used but not defined herein shall have
the meaning ascribed to them in the Plan.  Copies of the Plan, the Participation
Guide/Prospectus and information about the Company are available in the online
stock administration portal.

 

The use of the words "employment" or "employed" shall be deemed to refer to
employment by the Company and its subsidiaries and shall not include employment
by an "Affiliate" (as defined in the Plan) which is not a subsidiary of the
Company unless the Committee so determines at the time such employment
commences.

 

Certificates for the shares of stock evidencing the Restricted Shares (as
defined in the Plan) will not be issued but the shares will be registered in
your name in book entry form promptly after your acceptance of this award.  You
will be entitled to vote and, to the extent permitted by Company policy, receive
any cash dividends (net of required tax withholding) on the Restricted Shares
but you will not be able to obtain a stock certificate or sell, encumber or
otherwise transfer the shares until the shares have been earned except in
accordance with the Plan.

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Provided you have been continuously employed by the Company since the date of
the Grant, the restrictions on the shares will lapse and the final number of
shares of stock awarded will be determined in accordance with the terms of
Section 6(e) of the Plan and Appendix A.

 

If your employment is terminated for any reason, with or without cause, while
restrictions remain in effect, other than as set forth below in connection with
a Change in Control, all Restricted Shares for which restrictions have not
lapsed will be automatically forfeited to the Company. 

 

You agree not to engage in certain activities.

 

Notwithstanding the foregoing, if at any time you engage in an activity
following your termination of employment which in the sole judgment of the
Committee is detrimental to the interests of the Company, a subsidiary or
affiliated company, all Restricted Shares for which restrictions have not lapsed
will be forfeited to the Company.  You acknowledge that such activity includes,
but is not limited to, “Business Activities” (as defined below).

 

In addition you agree, in consideration for the Grant, and regardless of whether
restrictions on shares subject to the Grant have lapsed, while you are employed
or retained as a consultant by the Company or any of its subsidiaries and for a
period of one year following any termination of your employment and, if
applicable, any consulting relationship with the Company or any of its
subsidiaries other than a termination in connection with a Change in Control (as
defined in the Plan), not to engage in, and not to become associated in a
“Prohibited Capacity” (as hereinafter defined) with any other entity engaged in,
any Business Activities and not to encourage or assist others in encouraging any
employee of the Company or any of its subsidiaries to terminate employment or to
become engaged in any such Prohibited Capacity with an entity engaged in any
Business Activities.  “Business Activities” shall mean the design, development,
manufacture, sale, marketing or servicing of any product or providing of
services competitive with the products or services of (x) the Company or any
subsidiary if you are employed by or consulting with the Company at any time
while the Grant is outstanding, or (y) the subsidiary employing or retaining you
at any time while the Grant is outstanding, to the extent such competitive
products or services are distributed or provided either (1) in the same
geographic area as are such products or services of the Company or any of its
subsidiaries, or (2) to any of the same customers as such products or services
of the Company or any of its subsidiaries are distributed or
provided.  “Prohibited Capacity” shall mean being associated with an entity as
an employee, consultant, investor or another capacity where (1) confidential
business information of the Company or any of its subsidiaries could be used in
fulfilling any of your duties or responsibilities with such other entity, (2)
any of your duties or responsibilities are similar to or include any of those
you had while employed or retained as a consultant by the Company or any of its
subsidiaries, or (3) an investment by you in such other entity represents more
than 1% of such other entity’s capital stock, partnership or other ownership
interests.

 

Should you breach any of the restrictions contained in the preceding paragraph,
by accepting this Grant you agree, independent of any equitable or legal
remedies that the Company may have and without limiting the Company’s right to
any other equitable or legal remedies, to pay to the Company in cash immediately
upon the demand of the Company (1) the amount of income realized for income tax
purposes from this Grant, net of all federal, state and other taxes

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payable on the amount of such income, but only to the extent such income is
realized from restrictions lapsing on shares on or after your termination of
employment or, if applicable, any consulting relationship with the Company or
its subsidiary or within the two year period prior to the date of such
termination, plus (2) all costs and expenses of the Company in any effort to
enforce its rights under this or the preceding paragraph.  The Company shall
have the right to set off or withhold any amount owed to you by the Company or
any of its subsidiaries or affiliates for any amount owed to the Company by you
hereunder.

 

You agree to the application of the Company’s Dispute Resolution Policy.

 

Section 3 of the Plan provides, in part, that the Committee shall have the
authority to interpret the Plan and Grant agreements, and decide all questions
and settle all controversies and disputes relating thereto. It further provides
that the determinations, interpretations and decisions of the Committee are
within its sole discretion and are final, conclusive and binding on all persons.
In addition, you and the Company agree that if for any reason a claim is
asserted against the Company or any of its subsidiaries or affiliated companies
or any officer, employee or agent of the foregoing (other than a claim involving
non-competition restrictions or the Company’s, a subsidiary’s or an affiliated
company’s trade secrets, confidential information or intellectual property
rights) which (1) are within the scope of the Company’s Dispute Resolution
Policy (the terms of which are incorporated herein, as it shall be amended from
time to time); (2) subverts the provisions of Section 3 of the Plan; or (3)
involves any of the provisions of the Agreement or the Plan or the provisions of
any other restricted stock awards or option or other agreements relating to
Company Common Stock or the claims of yourself or any persons to the benefits
thereof, in order to provide a more speedy and economical resolution, the
Dispute Resolution Policy shall be the sole and exclusive remedy to resolve all
disputes, claims or controversies which are set forth above, except as otherwise
agreed in writing by you and the Company or a subsidiary of the Company. It is
our mutual intention that any arbitration award entered under the Dispute
Resolution Policy will be final and binding and that a judgment on the award may
be entered in any court of competent jurisdiction. Notwithstanding the
provisions of the Dispute Resolution Policy, however, the parties specifically
agree that any mediation or arbitration required by this paragraph shall take
place at the offices of the American Arbitration Association located in the
Daytona Beach, Florida area or such other location in the Daytona Beach, Florida
area as the parties might agree. The provisions of this paragraph: (a) shall
survive the termination or expiration of this Agreement, (b) shall be binding
upon the Company’s and your respective successors, heirs, personal
representatives, designated beneficiaries and any other person asserting a claim
based upon the Agreement, (c) shall supersede the provisions of any prior
agreement between you and the Company or its subsidiaries or affiliated
companies with respect to any of the Company’s option, restricted stock or other
stock-based incentive plans to the extent the provisions of such other agreement
requires arbitration between you and your employer, and (d) may not be modified
without the consent of the Company. Subject to the exception set forth above,
you and the Company acknowledge that neither of us nor any other person
asserting a claim described above has the right to resort to any federal, state
or local court or administrative agency concerning any such claim and the
decision of the arbitrator shall be a complete defense to any action or
proceeding instituted in any tribunal or agency with respect to any dispute.

 

The Grant does not imply any employment or consulting commitment by the Company.

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You agree that the Grant and acceptance of the Grant does not imply any
commitment by the Company, a subsidiary or affiliated company to your continued
employment or consulting relationship, and that your employment status is that
of an employee-at-will and in particular that the Company, its subsidiary or
affiliated company has a continuing right with or without cause (unless
otherwise specifically agreed to in writing executed by you and the Company) to
terminate your employment or other relationship at any time.  You agree that
your acceptance represents your agreement not to terminate voluntarily your
current employment (or consulting arrangement, if applicable) for at least one
year from the date of this Grant unless you have already agreed in writing to a
longer period.

 

You agree to comply with applicable tax requirements and to provide information
as requested.

 

You agree to comply with the requirements of applicable federal and other laws
with respect to withholding or providing for the payment of required taxes. You
also agree to promptly provide such information with respect to shares acquired
pursuant to the Grant, as may be requested by the Company or any of its
subsidiaries or affiliated companies.

 

You agree that this Grant and certain Awards previously granted to you will be
subject to the Company’s Clawback Policy.

 

You agree that in the event that either (1) the Company has a material
restatement of its financial statements, other than as a result of changes to
accounting rules and regulations or (2) your employment is terminated as a
result of your having engaged in Covered Conduct (as defined below), the
Committee shall have the discretion at any time (notwithstanding any expiration
of the Plan or of the rights or obligations otherwise arising under an Award) to
require you (whether or not you are then an employee, consultant or director of
the Company or any of its affiliates) to return some or all of the Proceeds (as
defined below) from Subject Awards (as defined below) and may require you to
waive, forfeit and surrender to the Company your rights with respect to all or a
portion of your Subject Awards which have not yet vested or become exercisable
(or have not been exercised).   The preceding sentence sets forth the Company’s
“Clawback Policy.”  For purposes of the Clawback Policy: (i) the term “Covered
Conduct” shall mean conduct that constitutes “Cause” as such term is defined in
the Company’s Executive Severance Plan (as amended February 18, 2019), whether
or not you participate in the Executive Severance Plan; (ii) the term “Subject
Awards” shall mean Awards granted under the Plan and incentive compensation
awards granted under any other plan, program or agreement, in each case to the
extent such awards are (1) granted following February 18, 2019 and (2) granted
or became vested during the three year period preceding the restatement of
financial statements or latest date on which you engaged in Covered Conduct (as
applicable); and (iii) the term “Proceeds” shall mean Shares or cash received
pursuant to the vesting or exercise of a Subject Award (or, in the event that
such Shares have been disposed of, cash in an amount equal to the Fair Market
Value of the Shares on the date of vesting, exercise or disposition, as
determined by the Company); Proceeds with respect to options shall be determined
net of the applicable exercise price.  You also acknowledge that the Clawback
Policy shall be interpreted and administered by the Committee in its
discretion. 

 

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You will be entitled to accelerated vesting of the Grant and certain other
Awards under certain circumstances in connection with a Change in Control.

 

With respect to this Grant and each other then-outstanding Award that you hold
which is assumed or substituted for in connection with a Change in Control, in
the event of a termination of your service with the Company or an Affiliate
without Cause (as defined below) during the 12-month period immediately
following such Change in Control, on the date of such termination (1) such Award
shall become fully vested and, if applicable, exercisable, (2) the restrictions,
payment conditions, and forfeiture conditions applicable to any such Award
granted shall lapse, and (3) any performance conditions imposed with respect to
any such Award shall be deemed to be achieved at the actual level of performance
at the time of the termination, or, if not determinable, at the applicable
target level of performance.  With respect to this Grant and each other
then-outstanding Award that you hold which is not assumed or substituted in
connection with a Change in Control, immediately prior to the occurrence of the
Change in Control, (1) such Award shall become fully vested and, if applicable,
exercisable, (2) the restrictions, payment conditions, and forfeiture conditions
applicable to any such Award granted shall lapse, and (3) any performance
conditions imposed with respect to Award shall be deemed to be achieved at the
actual level of performance at the time of the Change in Control, or, if not
determinable, at the applicable target level of performance.  For purposes of
the preceding sentences, the Committee shall have the full and final authority
to determine whether an Award shall be considered assumed or substituted for
and, without limiting the foregoing, an Award which remains subject to
substantially the same terms and conditions that were applicable to the Award
immediately prior to the Change in Control but which confers the right to
receive common stock of the acquiring entity may be considered assumed or
substituted for hereunder.  Solely for purposes of the forgoing provisions
governing treatment of Awards following a Change in Control, “Cause” shall mean
(i) your willful and continued failure by (other than any such failure resulting
from your incapacity due to physical or mental illness) to perform substantially
the duties and responsibilities of your position with the Company after a
written demand for substantial performance is delivered to you, which demand
specifically identifies the manner in which the Company believes that you have
not substantially performed such duties or responsibilities; (ii) your
conviction by a court of competent jurisdiction for felony criminal conduct; or
(iii) the willful engaging by you in fraud or dishonesty which is demonstrably
and materially injurious to the Company or its reputation, monetarily or
otherwise.

 

This Agreement shall be governed by and interpreted in accordance with Florida
law.

 

The headings set forth herein are for information purposes only and are not a
substantive part of these Terms and Conditions.

 

Except as specified above with respect to the Clawback Policy and treatment in
connection with a Change in Control (which terms and conditions you agree are
effective for this Grant and are retroactively effective for other Awards as set
forth above), these Terms and Conditions are effective for grants made on and
after February 17, 2020.

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Appendix A

 

Appendix to the ____ Performance Share Equity Grant

 

The amount and vesting of Performance shares are dependent on the financial
performance of TopBuild Corp. (the “Company”) over a three year period.  The
accounting performance measurement period will extend from [__________] to
[__________] (the “Measurement Period”).

 

The vesting of shares can be adjusted up or down from the target based on
achieving a pre-defined target Relative Total Shareholder Return (“RTSR”),
relative to a peer group of related companies, metric for the Company.

 

The grants are issued at an expected target payout of 100% and can be adjusted
to reflect the actual performance of the Company as determined by the
Compensation Committee after the end of the Measurement Period.   Partial
payout, or no payout, are permitted for performance that falls below target
levels and a maximum potential payout of up to 200% of the target award if the
level for performance meets or exceeds certain target performance, based on
scaling determined by the Compensation Committee. 

 

All determinations regarding any achievement shall be made by the Compensation
Committee in its sole discretion and all such determinations shall be final and
binding on all parties.  Any shares will be deemed eligible to vest (“Eligible
Shares”) on the date that both (i) the Audit Committee of the Board or the
Company’s independent auditors has verified in writing to the Compensation
Committee the calculations of the RTSR and (ii) the Compensation Committee has
then certified in writing as to the amount of vesting based on performance (such
date, the “Certification Date”).

 

On the Certification Date, any shares that did not become Eligible Shares shall
immediately be forfeited without consideration.

 

Eligible Shares will vest on the first applicable Company prescribed stock
vesting date on or after the Certification Date.

 

The Compensation Committee reserves the right to make certain assumptions and
minor calculation decisions when calculating performance.

 

Change in Control – Upon the occurrence of a Change in Control during the
Measurement Period while you remain employed at the Change in Control, Shares
will be deemed earned and become Eligible Shares according to the pre-approved
scaling based on actual performance against the peer group assuming the
Measurement Period ended upon the Change in Control.  The Company’s stock price
will be deemed to be the price per share payable to Company stockholders in the
Change in Control.  A pro-rata portion of Eligible Shares will vest upon the
Change in Control based upon the portion of time (expressed as fully completed
months) served as of the Change in Control during the Measurement Period.  The
remainder of Eligible Shares that did not

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vest on the Change in Control shall time-vest on the last day of the Measurement
Period, subject to continued employment with the Company (or its successor).

 

 

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