Exhibit 10.44

 
 
 
 
Building Materials Holding Corporation
2005 Deferred Compensation Plan
for Executives
(Effective as of January 1, 2005)
 
 
 
 
 

 
 

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Table of Contents
Page
 
ARTICLE 1. DEFINITIONS
51
1.1
Account
51
1.2
Beneficiary
51
1.3
Change in Control
51
1.4
Code
52
1.5
Committee
52
1.6
Company
52
1.7
Company Contributions
52
1.8
Disability
52
1.9
Effective Date
52
1.10
Eligible Compensation
52
1.11
Hardship
53
1.12
Key Employee
53
1.13
LTIP
53
1.14
Participant
53
1.15
Plan
53
1.16
Plan Year
53
1.17
Regulations
54
1.18
Separation from Service
54
1.19
Trust or Trust Agreement
54
1.20
Trust Fund
54
1.21
Trustee
54
     
ARTICLE 2. ELIGIBILITY
54
     
ARTICLE 3. DEFERRED COMPENSATION
54
3.1
Deferral Elections
54
3.2
Vesting
56
3.3
Election of Payment Terms
56
     
ARTICLE 4. PAYMENT OF DEFERRED COMPENSATION
58
4.1
Payment upon Distribution Event
58
4.2
Withdrawal for Hardship
58
4.3
Payment upon Change in Control
58
4.4
Payment upon Disability
58
4.5
Payment upon Death
58
4.6
Designation of Beneficiary
59
4.7
Administration of Payments
59
4.8
Permitted Acceleration of Payments
59
     
ARTICLE 5. TRUST AND INVESTMENT
60
5.1
Accounts
60
5.2
Participants’ Rights Unsecured
60
5.3
Trust Agreement
60
5.4
Investment of Contribution
60

 
 
 

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ARTICLE 6. AMENDMENT AND TERMINATION
61
     
ARTICLE 7. ADMINISTRATION
61
7.1
Administration
61
7.2
Applying for Benefits
61
7.3
Liability of Committee; Indemnification
67
7.4
Expenses
67
     
ARTICLE 8. GENERAL AND MISCELLANEOUS
67
8.1
Rights Against Company
67
8.2
Assignment or Transfer
68
8.3
Severability
68
8.4
Construction
68
8.5
Governing Law
68
8.6
Payment Due to Incompetence
68
8.7
Taxes
68
8.8
Insurance
69
8.9
Attorney’s Fees
69
8.10
Plan Binding on Successors and Assignees
69

Appendices
Acknowledgment
 
Distribution Election
 
Executive Election of Deferral
 
Beneficiary Designation

 
 

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BUILDING MATERIALS HOLDING CORPORATION
2005 DEFERRED COMPENSATION PLAN
FOR EXECUTIVES
 
Building Materials Holding Corporation, a Delaware corporation (the “Company”)
hereby establishes an unfunded plan 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 adopt an unfunded deferred compensation plan 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 deferred compensation plan
to take the place of the 1999 Deferred Compensation Plan for Executives with
respect to any compensation earned on or after January 1, 2005.

ARTICLE 1.  DEFINITIONS
 
1.1
Account. means the separate account(s) established under the Plan and the Trust
for each participating Participant.  The Company shall furnish each Participant
with an annual statement of his or her Account balance.

 
1.2
Beneficiary. means the beneficiary designated by the Participant to receive the
Participant’s deferred compensation benefits in the event of his or her death.

 
1.3
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 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

 
 
 

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(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 during 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.

 
1.4
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.

 
1.5
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.

 
1.6
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.

 
1.7
Company Contributions. means the Company’s discretionary contribution, if any,
pursuant to Section 3.1(b).

 
1.8
Disability. means—

 

 
(a)
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

 

 
(b)
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

 
1.9
Effective Date. means January 1, 2005.

 
1.10
Eligible Compensation. means projected annual compensation, determined on an
annual basis by the Company at or before the beginning of the Plan Year, which
may consist of salary, bonus, and/or other cash-based or stock-based incentive
payments, but which shall not include any special or non-recurring compensatory
payments such as hiring bonuses, moving or relocation bonuses or automobile
allowances.

 
 
 

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1.11
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.

 
1.12
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.
 
1.13
LTIP. means an incentive program designated by the Company from time to time as
the Building Materials Holding Corporation Long Term Incentive Plan, as amended
from time to time.

 
1.14
Participant. means each employee of the Company designated by the Company to be
entitled to defer compensation pursuant to the Plan and includes a Participant’s
Beneficiary where the context so requires.  

 
1.15
Plan. means the Building Materials Holding Corporation 2005 Deferred
Compensation Plan for Executives, as amended from time to time.

 
1.16
Plan Year. means the year beginning each January 1 and ending December 31.

 
 
 

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1.17
Regulations. means the rules, regulations, interpretations and procedures
promulgated under the Code, as modified from time to time.

 
1.18
Separation from Service. means the termination of employment or association of
the Participant as an employee or director of the Company eligible for
participation in a deferred compensation plan, and includes termination by way
of resignation, removal or Disability.  A Participant who is on temporary leave
of absence, whether with or without pay, shall be deemed not to have terminated
employment or association.  “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.

 
1.19
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.

 
1.20
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.

 
1.21
Trustee. means the designated Trustee acting at any time under the Trust.  

 
ARTICLE 2.  ELIGIBILITY
 
For any Plan Year, eligibility to participate in the Plan shall be limited to
key management employees of the Company who have Eligible Total Compensation in
excess of $100,000 for the prior or estimated upcoming Plan Year.  To the extent
that the number of Participants eligible to participate in the Plan exceeds 2%
of the Company’s total employee population, those eligible to be Participants
who have the lowest Eligible Compensation in the prior Plan Year shall not be
eligible for the following Plan Year.  

The Committee shall designate Participants who shall be covered by the Plan in a
separate Acknowledgment (in the form provided by the Committee) for each such
Participant.  Participation in the Plan shall commence as of the date such
Acknowledgment is signed by the Participant and delivered to the Company,
provided that deferral of compensation under the Plan shall not commence until
the Participant has complied with the election procedures set forth in Article
3.  Nothing in the Plan or in the Acknowledgment should be construed to require
any contributions to the Plan on behalf of the Participant by the Company.

ARTICLE 3.  DEFERRED COMPENSATION
 
3.1
Deferral Elections.

 

 
(a)
Election to Defer Compensation.  Each eligible Participant may elect to defer
annually the receipt of a portion of the Eligible Compensation for active
service otherwise payable to him by the Company during each Plan Year or portion
of a Plan Year that the Participant shall provide services to the Company.  Any
Participant’s election to defer Eligible Compensation must satisfy the following
conditions:

 
 
 

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(1)
Newly Eligible Participants.  An employee who first becomes a Participant during
a Plan Year shall have 30 days from the date of becoming a Participant to submit
the required election documents for the then-current Plan Year.  

 

 
(2)
Plan Year Elections.  Each other election must be made no later than the day
prior to the beginning of the Plan Year with respect to which the Compensation
to be deferred is otherwise payable to the Participant or such later date as may
be permitted under Code Section 409A.

 

 
(3)
Minimum and Maximum Deferrals.  The minimum annual deferral amount, which must
be withheld from base salary, is $5,000.  The maximum deferral percentage is 80%
of Eligible Compensation.

 

 
(4)
Conditions of Election.  Any deferral election must be in writing, signed by the
Participant, and delivered to the Company, together with all other documents
required, as determined by the Committee.  Each deferral election shall be
irrevocable with respect to any Eligible Compensation covered by the election,
including Compensation payable in the Plan Year in which the election suspending
or modifying the prior deferral election is delivered to the Company.  Each
election or discontinuance of an election will continue in force for each
successive year until or unless suspended or modified by the filing of a
subsequent election with the Company by the Participant in accordance with
subsection (a)(2).  The election to defer Eligible Compensation shall be in the
form provided by the Committee.

 

 
(b)
Company Contributions.  The Company shall not be obligated to make any other
contribution to the Plan on behalf of any Participant at any time.  Company may
make Company Contributions to the Plan on behalf of one or more the
Participants.  Company Contributions, if any, made to Participant Accounts shall
be determined in the sole and absolute discretion of the Company, and may be
made without regard to whether the Participant to whose Account such
contribution is credited has made, or is making, deferrals.  The Company shall
not be bound or obligated to apply any specific formula or basis for calculating
the amount of any Company Contributions, and the Company shall have sole and
absolute discretion as to the allocation of Company Contributions among
Participants’ Accounts.  The use of any particular formula or basis for making a
Company Contribution in one year shall not bind or obligate the Company to use
such formula or basis in any other year.

 
 
 

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(c)
LTIP.  Participants who are eligible for the LTIP may elect to defer monies
received as a result of the LTIP through the Plan.  Such deferral determination
must be made no later than the latest date permitted in accordance with Code
Section 409A and related Regulations.  An employee may also decide to convert
all, or a portion of, their pay out to Company common stock which will be issued
in the Participant’s name in an amount based on the market price on the day that
the Committee approves the pay out.  Such decision to convert part of the
deferral to stock must also be made prior to the final Fiscal Year of the
cycle.   Distribution election for the stock must be for the entire amount of
stock deferred for that year following at least one year of deferral.

 

 
(d)
Administration of Deferral Elections.  The Company shall withhold the amount or
percentage of base salary specified to be deferred in equal amounts for each
payroll period and shall withhold the amount or percentage of cash bonus
specified to be deferred at the time or times such bonus is or otherwise would
be paid to the Participant.  The amount or percentage of base salary and bonus,
as applicable, that a Participant elects to defer will remain constant for the
Plan Year of the election and shall not be subject to change during the Plan
Year.  “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.  “Cash bonus” means amounts
(if any) awarded under the annual bonus policy maintained by the Company, any
commissions earned on sales and any payments made under the Company’s LTIP.

 
3.2
Vesting.  All deferrals from Eligible Compensation elected by the Participant
shall be fully vested at all times.  Notwithstanding any provision of the Plan
to the contrary, Company Contributions, if any, may be subject to a substantial
risk of forfeiture in accordance with the terms of a vesting schedule, which may
be selected by the Company in its sole and absolute discretion.

 
3.3
Election of Payment Terms.

 

 
(a)
Initial Election - Time of Distribution.  By the later of December 31, 2005 and
the date that is 30 days after becoming eligible for the Plan, each Participant
will submit an election of the time of distribution applicable to the
Participant’s entire Account.  Participants may choose among the following times
for distribution in accordance with the form provided by the Committee:

 

 
(1)
upon the Participant’s reaching a specified age,

 

 
(2)
upon the passage of a specified number of years,

 

 
(3)
upon the Participant’s Separation from Service with the Company 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), or

 
 
 

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(4)
upon the earliest to occur of—

 

 
(A)
the Participant’s reaching a specified age,

 

 
(B)
the passage of a specified number of years, and

 

 
(C)
the Participant’s Separation from Service with the Company 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),

 

 
(5)
upon the latest to occur of—

 

 
(A)
the Participant’s reaching a specified age,

 

 
(B)
the passage of a specified number of years, and

 

 
(C)
the Participant’s Separation from Service with the Company 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).

 

 
(b)
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, 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 lump sum payment, or

 

 
(2)
monthly installments over a designated period of 5 or 10 years.

 
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 a lump sum.

 
(c)
Subsequent Elections to Change Timing or Method of Distribution.  A Participant
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:

 

 
(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.

 
 
 

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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 DEFERRED COMPENSATION
 
4.1
Payment upon Distribution Event.  Except as otherwise provided in this article,
a Participant will be entitled to receive all amounts credited to the
Participant’s Account in accordance with the terms of his or her elections under
Article 3.

 
4.2
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.  Any Participant receiving a distribution on account of Hardship shall
be ineligible to defer any additional compensation under the Plan until the
first day of the Plan Year following the second anniversary of the date of the
distribution. In addition, a new election of deferral must be submitted to the
Company as a condition of participation in the Plan.

 
4.3
Payment upon Change in Control. Notwithstanding any other provisions of this
Plan, the aggregate balances credited to and held in the Participants’ Accounts
shall be distributed to the Participants in a lump sum within 30 days of a
Change in Control or such longer period as may be required by the Code or
Regulations; provided that, in the case of a Key Employee, any payment made on
account of a Separation of Service following a Change in Control shall not be
made until a date that is 6 months after the date of Separation from Service.

 
4.4
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.

 
4.5
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 under Article 3, 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.

 
 
 

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4.6
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.

 
4.7
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.  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 earnings credited to the balance of the Account
remaining unpaid.

 
4.8
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.  Such an amendment may
be made with respect to previously deferred amounts under the plan as well as
amounts to be deferred in the future; and

 

 
(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.

 
 
 

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ARTICLE 5.  TRUST AND INVESTMENT
 
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.

 
5.4
Investment of Contribution.

 

 
(a)
The investment options available to each Participant shall be determined by the
Company and set forth in a separate written document, a copy of which shall be
attached hereto and by this reference is incorporated herein.  Each Participant
shall have the right to direct the Trustee as to the investment of his or her
Account in accordance with policies and procedures implemented by the
Trustee.  The Company shall not be liable for any investment decision made by
any Participant while the funds attributable to the Participant’s Account are
held by the Trustee.

 

 
(b)
Accounts shall be credited with the actual financial performance or earnings
generated by such investments directed by the Participant and made by the
Trustee, until the Account has been fully distributed to the Participant or to
the Participant’s Beneficiary.

 
 
 

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(c)
Notwithstanding any provision of the Plan to the contrary, the Committee or the
Trustee may determine not to take into account the Participant’s designated
investments and may invest the Participant’s Account in any other manner as the
Committee or the Trustee shall determine.

 
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.

 
 
 

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(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.

 

 
 

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

 

ACKNOWLEDGMENT
 
The undersigned Employee hereby acknowledges that Employer has selected him or
her as a participant in the Building Materials Holding Corporation 2005 Deferred
Compensation Plan as amended, subject to all terms and conditions of the Plan, a
copy of which has been received, read, and understood by the Employee in
conjunction with executing this Acknowledgment.  Employee acknowledges that he
or she has had satisfactory opportunity to ask questions regarding his or her
participation in the Plan and has received satisfactory answers to any questions
asked.  Employee also acknowledges that he or she has sufficient knowledge and
experience in financial and business matters to be capable of evaluating the
merits and risks of participation in the Plan.  Employee understands that his or
her participation in the Plan shall not begin until this Acknowledgment has been
signed by Employee and returned to Employer.

 
Dated:
____________________________________________
             
Print Name:
____________________________________________
             
Signed:
____________________________________________
   
Employee
       
Dated:
____________________________________________
         
BUILDING MATERIALS HOLDING CORPORATION
 
Signed:
____________________________________________
         
[Officer]

 
r
I waive enrollment in the 2005 Executive Deferred Compensation Plan for the Plan
year 2006.

 

 
 

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

 

DISTRIBUTION ELECTION
 
Pursuant to the Building Materials Holding Corporation 2005 Deferred
Compensation Plan as amended (the "Plan"), I hereby elect to have all amounts
credited to my Account during the period of my participation in the Plan,
together with any interest or other earnings credited thereon, distributed to me
on the terms elected below:
I elect to have any distributions of money covered by this election paid to me:
oupon reaching age: _____
oupon the passage of ______ years
oupon termination of employment
oupon the earlier to occur of termination of association with Company or passage
of ___years
oupon the later to occur of termination of association with Company or passage
of ____years

I elect to have any distribution of money covered by this election to receive
distribution paid to me in:
oA lump sum
oAn annuity of sixty (60) monthly installments determined as of each installment
date by dividing the entire amount in my Account (including interest and other
earnings) by the number of installments then remaining to be paid.
oAn annuity of one hundred twenty (120) monthly installments determined as of
each installment date by dividing the entire amount in my Account (including
interest and other earnings) by the number of installments then remaining to be
paid.

Dated: _________________________________________

Print Name: ____________________________________

Signed: _______________________________________

 
 

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

 

ELECTION OF DEFERRAL
 
I elect, pursuant to the Building Materials Holding Corporation 2005 Deferred
Compensation Plan (the "Plan"), to make the following deferral(s) with respect
to compensation earned during the Plan Year beginning January 1, 200_ and ending
December 31, 200_:
       
o  I waive enrollment in the 2005 Executive Deferred Compensation Plan for Plan
year 2006 OR:
     
Deferred Compensation Plan
   
o  _____%
of base salary (even %)
       
o  _____%
of any mid year cash bonus (even %) paid to me by Employer for 2006 (payout in
mid-2006; must be elected by December 31, 2005) and
       
o  _____%
of any year end bonus (even %) paid to me by Employer for 2006 (payout in 2007;
must be elected by June 30, 2006)
       
OR
         
o  $_____
of any mid year cash bonus paid to me by Employer for 2006 (payout in mid-2006,
must be elected by December 31, 2005) and
       
o  $_____
of any year end bonus paid to me by Employer for 2006 (payout in 2007; must be
elected by June 30, 2006)
       
o  OR
         
o  $ALL
of my cash bonus paid to me by Employer over $________
       
Long-Term Incentive Plan (2007 Payout)
       
o  $_____ or _____% of any payment from a Long Term Incentive Plan and/or
       
o  $_____ or _____% of any payment from a Long Term Incentive Plan that I wish
to have converted to BMHC stock and deferred in accordance with my instructions.

This election shall take effect for the Plan Year beginning January 1, 200_.  It
may be terminated or modified by me only with written notice.  If termination is
not submitted by the last day of any Plan Year, the election shall take effect
for the Plan Year following. The deferral of compensation hereby elected is
subject to all of the terms and conditions of the Plan and of the Building
Materials Holding Corporation 2005 Deferred Compensation Plan Trust Agreement as
amended, copies of which the Employer has given me, and which I have read and
understood.

Dated:           _____________________________________

Print Name:  _____________________________________

Signed:         _____________________________________

 
 

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

 

Beneficiary Designation
In the event I should die prior to the receipt of all money accrued to my credit
under the Building Materials Holding Corporation 2005 Deferred Compensation Plan
(the “Plan”), I elect to have the balance paid to the following named
individual(s) in the following percentages(s) (Complete A if you are a resident
of a community property state.  Complete B if the state in which you reside is
not a community property state.):

A.
50%
 
[Spouse]
         
_______%
  ________________________________________________________________          
_______%
  ________________________________________________________________          
_______%
  ________________________________________________________________        
B.
_______%
  ________________________________________________________________          
_______%
  ________________________________________________________________          
_______%
  ________________________________________________________________          
_______%
  ________________________________________________________________

Participant
 
 
Signature: _____________________________________
 
Date: ____________________
           
Name: ________________________________________
   

To be completed only if any above named beneficiary is not my spouse:

I, as the spouse of
____________________________________________________________________________
________________, do hereby consent to designation of any beneficiary that might
in any way impair my rights under applicable state law, including but not
limited to, laws relating to Community Property, Wills, Trusts, and Intestacy.
 
Spouse
 
 
Signature: _____________________________________
 
Date: ____________________
           
Name: ________________________________________
   

 
 
 

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