Exhibit 10.26

Amended
Building Materials Holding Corporation
1999 Cash Equity Pl

ARTICLE I
NAME AND PURPOSE

1.1       Name.  The name of the Plan is the “Building Materials Holding
Corporation 1999 Cash Equity Plan.”

1.2       Purpose.  The purpose of the Plan is to provide a meaningful incentive
for key management employees of Building Materials Holding Corporation (the
Company) to successfully grow its market share of the building materials
distribution industry, and thereby to increase the Company’s revenues and
profits.  Ultimately, the purpose of the Plan is to align the financial
interests of Company management with those of the Company’s shareholders.  The
objective of the Plan is to generate significant awards for performance premised
on the enhancement of the Company’s stock price.

ARTICLE II
DEFINITIONS OF TERMS

2.1       General Definitions.  The following words and phrases, when used in
the Plan, unless otherwise specifically defined or unless the context clearly
otherwise requires, shall have the following respective meanings:

(a)       Agreement.  The document which evidences the grant of an Award under
this Plan to an individual Employee and which sets forth the terms, conditions
and provisions of, and restrictions relating to, such Award.

(b)       Award.  Any grant of Units under the Plan.

(c)       Board.  The Board of Directors of the Company.

(d)       Committee.  The Compensation Committee of the Board of Directors.  The
Committee shall consist of an odd number of members, a majority of which is not
composed of current employees of the Company.

(e)       Company.  Building Materials Holding Corporation, or a successor
corporation to which the majority of Building Materials Holding Corporation’s
assets are transferred.

(f)       Effective Date.  April 1, 1999 or such later date as is specified by
the Board in approving the Plan.
 
 

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(g)       Employee.  Any individual employed by the Employer, except officers
and directors of Building Materials Holding Corporation and BMC West
Corporation.

(h)       Exercise.  An exchange of an Award for cash in the amount of the then
current fair market value of Company common stock.

(i)       Exercise Period.  Awards may not be exercised during the blackout
period (the "blackout period") commencing at the close of business on the 10th
day of the last month in a quarterly financial period until 48 hours after the
date of public disclosure of the financial results for a particular fiscal
quarter or year.

(j)       Fair Market Value.  Fair market value shall be the closing price on
the exchange upon which the Company’s Shares are traded (currently Nasdaq
National Market) on the date the Company receives written notice from the
Participant during the Exercise Period of Participant’s Exercise of the Award,
or in the absence of sales on the notice date, the closing price on the most
recent date on which a sale occurred prior the notice date.  

(k)       Participant.  An Employee who is granted an Award under the
Plan.  Awards may be granted only to Employees.

(l)       Plan.  The Building Materials Holding Corporation 1999 Cash Equity
Plan and all amendments, attachments and supplements thereto.

(m)       Share.  A share of the Company’s, or a successor entity’s, common
stock.

(n)       Subsidiary.  Knipp Brothers Industries, LLC and any other corporation,
partnership, joint venture, limited liability company or other entity in an
unbroken chain beginning with the Company each of which, other than the last
entity in the unbroken chain, owns 50% or more of the total combined voting
power of all securities in one of the other entities in such chain.

(o)       Unit.  A measure of an Award, representing the equivalent of one
Share.

2.2       Other Definitions.  In addition to the above definitions, certain
words and phrases used in the Plan and any Agreement may be defined in other
portions of the Plan or in such Agreement.

2.3       Conflicts in Plan.  In the case of any conflict in the terms of the
Plan, or between the Plan and an Agreement, relating to an Award, the provisions
in the Article of the Plan which specifically grants such Award shall control
those in a different Article or in such Agreement.
 
 

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ARTICLE III
UNITS

3.1       Number of Units.  The number of Units available for grant under the
Plan (including Units previously granted and remaining unexercised) shall not
exceed two percent (2%) of the number of outstanding Shares from time to time.

3.2       Grants.  The Committee may grant an Award at such times, in such
amounts, and under such terms and conditions as it deems appropriate.  Unit
grants may vary in number, frequency, price, and otherwise from the initial
grants.  The receipt of a grant in any year by any Employee does not entitle
that Employee or any other Employee to receive a grant in any other year or at
any other time.

3.3       Vesting.  No Unit may be exercised before the third anniversary of the
date of grant, except as provided in section 10.8.   Units will vest completely
at the end of the three-year service period, measured from the date of grant.

3.4       Exercise and Liquidity.  A Participant may exercise his/her vested
Units during any 15 trading day period following the public release of the
Company’s financial results for a fiscal quarter or for a fiscal year of the
Company (whichever is applicable).  A Participant may exercise vested Units by
notifying the Company in writing pursuant to the provisions of the Agreement of
his or her desire to exercise his or her vested Units.  Upon exercising the
Units, the Participant shall be entitled to receive amount equal to the number
of Units exercised multiplied by the Fair Market Value (the closing price of the
stock on the day selected) of the Company’s common stock on the date such notice
is received by the Company.  Such payment shall be made within 10 business days
following the date of exercise.  However, notwithstanding the foregoing, if the
Company’s cash compensation obligation attributable to Unit exercises in the
aggregate exceeds 25% of the Company’s pre-tax net income for the immediately
preceding fiscal year quarter, then the Company shall have the discretion to
defer the payment of Awards on a pro rata basis from fiscal quarter to fiscal
quarter until such limitation is no longer exceeded (including any additional
obligation created by exercises occurring in subsequent quarters).  Except as
otherwise provided in Article IX of the Plan, all vested Units must be exercised
no later than 30 days following the Participant’s termination of employment.

3.5       Term.  Awards shall have a maximum term of five (5) years from the
date of grant.  If not exercised, Awards shall terminate on the fifth
anniversary of the grant.

ARTICLE IV
ELIGIBILITY

4.1       Issues Determined by the Committee.  The Participants and the grants
they receive under the Plan shall be determined by the Committee in its sole
discretion.  In making its determinations, the Committee shall consider past,
present and expected future contributions of Participants and potential
Participants.

ARTICLE V
ADMINISTRATION

5.1       Committee.  The Plan shall be administered by the Committee.
 
 

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5.2       Authority.  Subject to the terms of the Plan, the Committee shall have
sole discretionary authority to:

 
(a)
Determine the individuals to whom Awards are granted, the type of awards and
amounts to be granted, the date of issuance and duration of all such grants;

 
(b)
Determine the terms, conditions and provisions of, and restrictions relating to,
each Award granted;

 
(c)
Interpret and construe the Plan and all Agreements;

 
(d)
Prescribe, amend and rescind rules and regulations relating to the Plan;

 
(e)
Determine the content and form of all Agreements;

 
(f)
Determine all questions relating to Awards under the Plan;

 
(g)
Maintain accounts, records and ledgers relating to Awards;

 
(h)
Maintain records concerning its decisions and proceedings;

 
(i)
Employ agents, attorneys, accountants, consultants or other persons for such
purposes as the Committee considers necessary or desirable; and

 
(j)
Do and perform all acts that it may deem necessary or appropriate for the
administration of the Plan and carry out the purposes of the Plan.

5.3       Decisions of Committee.  All decisions made by the Committee pursuant
to the provisions hereof shall be final and binding on all persons.

ARTICLE VI
AMENDMENT OF PLAN

6.1       Power of Committee.  Subject to Article VIII, the Board may amend the
Plan at any time and from time to time as it deems necessary.

ARTICLE VII
EFFECTIVE DATE AND TERMINATION OF PLAN

7.1       Effective Date.  The Plan is effective as of April 1, 1999, upon
approval by the Board.

7.2       Termination.  Subject to Article VIII, the Plan may be terminated at
any time by the Board.  No grants shall be made pursuant to this Plan after the
tenth anniversary of the Effective Date.
 
 

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ARTICLE VIII
MODIFICATION OR TERMINATION OF AWARDS

8.1       General.  Subject to provisions of Section 8.2, the amendment or
termination of the Plan shall not adversely affect a Participant’s rights to or
under any Award granted prior to such amendment or termination.

8.2       Committee’s Right.  Except as may be provided in an Agreement, any
Award granted may be converted, modified, forfeited, or canceled, prospectively
or retroactively, in whole or in part, by the Committee in its sole discretion,
provided, however, subject to Section 8.3, no such action may impair the rights
of any Participant without his or her consent.  Except as may be provided in an
Agreement, the Committee may, in its sole and absolute discretion, in whole or
in part, waive any restrictions or conditions applicable to, or accelerate the
vesting of, any Award.

8.3       Termination of Benefits Under Certain Conditions.  The Committee, in
its sole discretion, may cancel any unexpired, unpaid, or deferred Award at any
time if the Participant is not in compliance with all applicable provisions of
the Plan (including Section 10.2) or with any Agreement or if the Participant,
whether or not he or she is currently employed by an Employer, performs acts of
willful malfeasance or gross negligence in a matter of material importance to
the Company or a Subsidiary.

ARTICLE IX
TERMINATION OF EMPLOYMENT

9.1       Death or Permanent Disability.  In the event of death or permanent
disability, the Participant, or his or her estate, may exercise vested Units
only within one year of such event.

9.2       Voluntary Termination.  In the event of voluntary termination of
employment or involuntary termination of employment without cause, vested Units
may be exercised within 30 days after termination.  If a Participant violates
the non-compete covenant as described in Section 10.2 within a one-year period,
the proceeds of an Award are forfeited and must be repaid to the Company within
30 days of notice of such violation.
 
9.3        Retirement.  If a Participant retires at age 65, the person may
exercise a portion of their unvested equity units determined by dividing the
number of months of service relating to the cash equity grant prior to the
retirement date divided by 36 months.  If a Participant retires prior to age 65
the Participant must have 15 years of service with the Company or its
predecessors at the date of retirement to receive pro rata vesting.  This
provision is effective as of January 1, 2001.

9.4       Involuntary Termination With Cause.  In the event of involuntary
termination with Cause, all vested and unvested Units shall be canceled and
forfeited immediately.  For purposes of the Plan, “Cause” shall mean one of the
following: misappropriating any funds or property of the Company; attempting to
obtain any personal profit from any transaction in which the Participant has an
interest which is adverse to the interest of the Company, unless the Participant
has first obtained the consent of the President of the Division of the Company
in which the Participant works or in the case of eligible BMHC employees, the
President and CEO of BMHC; unreasonable failure or refusal to perform the duties
assigned to the Participant continuing after notice by the Board identifying the
duties not performed; a violation of Section 10.2 and/or conviction of a felony.
 
 

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9.5       Exceptions.  Termination of employment excludes a termination and
immediate employment by a Subsidiary.

ARTICLE X
GENERAL PROVISIONS

10.1       Withholding.  The Company shall, at the time any distribution is made
under the Plan, or at any time any Unit is exercised, withhold from such
distribution any amount necessary to satisfy federal, state and local tax
withholding requirements with respect to such distribution or exercise of an
award.

10.2       Non-Compete Covenant.  Participants in the Plan must agree not to be
engaged in any capacity, whether as an employee, director, consultant,
stockholder, lessor, creditor, guarantor, or independent contractor, by any
company in the building materials distribution (or framing) business within a
100-mile radius of any Company or Subsidiary location for a period of one (1)
year following termination of their employment.

10.3       Nontransferability.  Unless otherwise determined by the Committee,
(i) no Award granted under the Plan may be transferred or assigned by the
Participant to whom it was granted, pursuant to the laws of descent and
distribution, or pursuant to a domestic relations order, and (ii) an Award
granted under this Plan may be exercised, during the Participant’s lifetime,
only by the Participant or by the Participant’s guardian or legal
representative.

10.4       Governing Law.  The Plan and each Agreement shall be construed and
administered in accordance with the laws of the state of Idaho.

10.5       No Employment Contract.  Neither the adoption of the Plan nor any
Award granted hereunder shall confer upon any Employee the right to continued
employment nor shall the Plan or any Award interfere in any way with the right
of the Company to terminate the employment of any of its Employees at any time.

10.6       No Effect on Other Benefits.  The receipt of Awards under the Plan
shall have no effect on any other benefits to which a Participant may be
entitled from the Company, under another plan or otherwise, or preclude a
Participant from receiving any such benefits.

10.7       Adjustments.  If outstanding Shares are increased or decreased, or
are changed into or exchanged for a different number or kind of shares or
securities of the Company, through reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split, an
appropriate and proportionate adjustment shall be made in the maximum number
and/or type of Units as to which Awards may be granted under the Plan.  A
corresponding adjustment changing the number and/or type of Units allocated to
unexercised Awards, or portions thereof, which shall have been granted prior to
any such change, shall likewise be made.  Adjustments under this Section 10.7
shall be made by the Board, and its determinations as to what adjustments shall
be made, and the extent thereof, shall be final and binding.  The grant of
Awards pursuant to the Plan shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure or to merge, consolidate, dissolve or
liquidate, or to sell or transfer all or any part of its business or assets.
 
 

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10.8       Change of Control.  Upon the dissolution or liquidation of the
Company, upon a reorganization, merger or consolidation of the Company with one
or more entities as a result of which holders of the outstanding voting stock of
the Company prior to the transaction do not own a majority of the outstanding
voting stock of the combined entity, or upon a sale of substantially all the
property of the Company or the acquisition of Stock representing more than 50%
of the voting power of the then outstanding securities of the Company by another
entity or person or persons acting in concert (any of which shall be deemed
hereunder to constitute a “Terminating Transaction”), any unvested Awards shall
become vested.  All persons with unexercised portions of vested Awards then
outstanding shall have the right during a period designated by the Company which
shall not be later than 30 days after the Terminating Transaction to exercise
the unexercised portion of their vested Awards.

10.9       No Rights as A Shareholder.  No Employee who has been granted an
Award shall have any rights as a stockholder with respect to any Shares covered
by the Award.  No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights of stockholders of the Company.

ARTICLE XI
ADOPTION

This Plan was adopted by the Compensation Committee of Building Materials
Holding Corporation on April 2, 1999 and amended April 30, 2001.
 
 
 
 
 

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