Exhibit 10.16


 


BUILDING MATERIALS CORPORATION OF
AMERICA

2001 LONG-TERM INCENTIVE PLAN


 


Amended and Restated Effective as of January 1,
2005


 


INTRODUCTION


 


Building Materials Corporation of America, a Delaware corporation
(hereinafter referred to as the “Corporation”) established the “BUILDING
MATERIALS CORPORATION OF AMERICA 2001 LONG-TERM INCENTIVE PLAN” (hereinafter
referred to as the “Plan”) to permit the grant of Incentive Units (as hereafter
defined) to eligible employees of the Corporation and the Subsidiaries (as
hereafter defined).  The Plan provides
for a long term incentive system that supports the Corporation’s business
strategy and emphasizes pay-for performance by tying reward opportunities to
corporate goals.


 


The Plan’s original
effective date was December 31, 2000 (the “Effective Date”).  The Corporation hereby amends and restates
the Plan, effective as of January 1, 2005, to comply with the
provisions of Section 409A of the Code (hereinafter defined) and
regulations and guidance issued thereunder (“Section 409A”).  The Plan shall be interpreted and
administered consistent with this intent and shall apply to all outstanding and
prospective Incentive Unit awards.


 


I.  DEFINITIONS


 


For
purposes of this Plan, the following terms shall be defined as follows unless
the context clearly indicates otherwise:


 


(a)          “Affiliate”
shall mean any member of the group of corporations, trades or businesses
or other organizations comprising the “controlled group” with the
Corporation.  For purposes of the foregoing,
whether an entity is affiliated shall be determined pursuant to the controlled
group rules of Code Section 414; however, a 50% minimum ownership
threshold shall be used when applying the applicable provisions of (A) Code
Section 1563 for determining a controlled group of corporations under Code
Section 414(b), and (B) Treasury Regulation Section 1.414(c)-2
for determining the trades or businesses that are under common control under
Code Section 414(c).


 


(b)          “Beneficiary”
shall mean one or more persons, trusts, estates or other entities designated by
the Employee in accordance with Section V that are entitled to receive
payment of a Gain under this Plan upon the death of an Employee.


 


(c)           “Board of
Directors” or “Board”
shall mean the Board of Directors of the Corporation. All determinations by the
Board shall be made in good faith in its sole discretion and shall be binding
and conclusive.


 


(d)          “Book Value”
shall mean, as of any Valuation Date, the sum of (i) $268,542,680, (ii) the
cumulative consolidated net income or loss of the Corporation for the period January 1,
2001 through the date of determination and (iii) $2,480,625 multiplied by 


 


1

















 


the number of full fiscal quarters of the Corporation that have ended
after December 31, 2000 but on or before the date of determination
(such product representing a 15% per annum credit on the aggregate dividends or
distributions made by the Corporation to its stockholders during the period of October 1,
1997 through December 31, 2000), and excluding, to the extent occurring
after December 31, 2000, the impact of (A) nonrecurring operating
losses, nonrecurring operating gains and extraordinary items, each as
determined in accordance with generally accepted accounting principles, (B) any
charge incurred after December 31, 2000 relating to asbestos-related
liabilities, (C) net after-tax gains or losses in respect of dispositions
of assets by the Corporation other than in the ordinary course of business, (D) any
charges relating to amortization of goodwill and other intangibles arising from
the management buy-out of GAF Corporation in March 1989, and (E) such
other items as the Board of Directors may determine to be extraordinary or
unusual and the impact of which should not be included in consolidated net
income or loss, as the case may be, for the purposes of computing Book Value.
There shall be deducted from Book Value an amount equal to a 15% per annum
charge on the aggregate capital contributions made to the Corporation by its
stockholders during the period commencing January 1, 2001 and ending with
the date of determination (the “Period”), amounts actually received by the
Corporation during the Period for shares of its capital stock and, to the
extent not actually charged against the net income of the Corporation, on the
outstanding principal amount of loans and other advances made to the
Corporation by affiliates (excluding Subsidiaries of the Corporation) during
the Period. There shall be added to Book Value a 15% per annum credit on the
aggregate dividends or distributions (including redemption of shares of its
capital stock) made by the Corporation to its stockholders during the Period
and, to the extent interest is not actually imputed to the Corporation in respect
of such amounts, on the outstanding principal amount of loans and other
advances made by the Corporation to affiliates (excluding Subsidiaries of the
Corporation) during the Period. Any adjustments to Book Value (including the
15% charge and credit referred to in the preceding two sentences) shall take
into account the tax effect, if any, associated therewith. If the Corporation’s
common stock is converted into or exchanged for other securities or property
pursuant to a recapitalization, stock split, combination, reorganization,
merger, exchange or similar transaction, or if a sale of all or substantially
all of, the common stock of the Corporation shall occur or be pending, Book
Value, the Incentive Units and the terms hereof shall be modified by the Board
of Directors in such manner as is reasonable under the circumstances. All
determinations by the Board of Directors hereunder shall be made in good faith
and shall be binding and conclusive.


 


(e)           “Change in
Control of the Corporation” shall mean (i) the sale or
disposition, in one or a series of related transactions during a twelve-month
period ending on the date of the most recent transaction, of all or
substantially all of the assets of the Corporation (with assets sold or
disposed having a total gross fair market value equal to or more than 75% of
the total gross fair market value of all assets owned directly and indirectly
by such entity immediately prior to such acquisition or acquisitions), to any “person”
or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of
The Securities Exchange Act of 1934, as amended (the “Act”)) other than the
Corporation or its Subsidiaries, or (ii) any person or group, other than
an Affiliate, is or becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Act), directly or indirectly, of more than 50% of the total
voting power of the voting stock of the 


 


2

















 


Corporation,
including by way of merger, consolidation or otherwise, and an Affiliate of the
Corporation ceases to control the Board.


 


(f)            “Code”
shall mean the Internal Revenue Code of 1986, as amended.


 


(g)          “Corporation”
shall have the meaning set forth in the Introduction.


 


(h)          “Committee”
shall have the meaning set forth in Section II(a) hereof.


 


(i)           “Default Fixed
Exercise Date” shall mean the Incentive Unit award Expiration Date.


 


(j)            “Deferral
Agreement” shall mean the agreement entered into by an Employee in
accordance with Section IV(h) below. 
The Deferral Agreement may be in the form of one or more documents or
electronic media, as prescribed by the Committee.


 


(k)          “Deferred
Compensation Plan” shall mean the GAF Deferred Compensation Plan, as
may be amended from time to time.


 


(l)           “Effective Date”
shall have the meaning set forth in the Introduction.


 


(m)          “Elected Fixed
Exercise Date” shall mean the fixed date an Employee specifies to
exercise his or her Incentive Units pursuant to Section IV(d)(ii).  An Elected Fixed Exercise Date must be on or
after the date the Incentive Units vest and on or prior to the award Expiration
Date.


 


(n)          “Employee”
shall mean a common-law employee of the Corporation or of any Affiliate at a
salary grade of 12 (or its equivalent) or above.


 


(o)          “Exercise and
Payment Agreement” shall mean the agreement entered into by an
Employee in accordance with Section IV(d)(ii).  The Exercise and Payment Agreement may be in
the form of one or more documents or electronic media, as prescribed by the
Committee.


 


(p)          “Expiration Date”
shall mean the date the Incentive Unit award expires in accordance with Section IV(g).


 


(q)          “Final Value”
shall have the meaning set forth in Section IV(e) hereof.


 


(r)           “Gain”
shall mean the excess, if any, of the Final Value of each Incentive Unit over
the Initial Value of such Incentive Unit, reduced by any withholding taxes
under Section VI(b).


 


(s)           “Good Cause”
shall, with respect to any Employee, mean (i) the Employee’s willful or
gross misconduct or willful or gross negligence in the performance of his
duties for the Corporation or for any Affiliate, (ii) the Employee’s
intentional or habitual neglect of his duties for the Corporation or for any
Affiliate, (iii) the Employee’s theft or misappropriation of funds of the
Corporation or of any Affiliate, fraud, criminal misconduct, 


 


3





















 


breach of fiduciary duty or dishonesty in the performance of his duties
on behalf of the Corporation or any Affiliate or commission of a felony, or
crime of moral turpitude or any other conduct reflecting adversely upon the
Corporation or any Affiliate or (iv) the Employee’s violation of any
covenant not to compete or not to disclose confidential information with
respect to the Corporation or any Affiliate.


 


(t)           “Good Reason”
shall, with respect to any Employee, mean a change or changes in the terms of
such Employee’s employment that are materially adverse to such Employee,
including changes relating to salary and bonus, level of responsibility or
location of employment.


 


(u)          “Incentive Unit”
shall mean a bookkeeping item equal in value, as of any Valuation Date, to (i) the
Corporation’s Book Value determined as of such Valuation Date divided by (ii) 1,000,010.  The value of each Incentive Unit as of a
Valuation Date and the determination of accumulated comprehensive income and
losses as of a Valuation Date shall each be determined by the Board and may be
adjusted by the Board if the number of outstanding shares of the Corporation’s
common stock increases or decreases at any time after the Effective Date.


 


(v)           “Initial Value”
shall have the meaning set forth in Section IV(a) hereof.


 


(w)          “Plan”
shall have the meaning set forth in the Introduction.


 


(x)           “Retirement”
shall mean an Employee’s Separation from Service after (i) he attains age
fifty-five (55) and (ii) the sum of his age and the number of his years of
service with the Corporation and/or any  Affiliate  equals sixty (60) or more.  For purposes of determining years of service,
service with predecessors to the Corporation and/or Affiliates shall be
considered.


 


(y)           “Section 409A”
shall have the meaning set forth in the Introduction.


 


(z)           “Separation from
Service”  shall mean
the Employee’s termination of employment with the Corporation and all
Affiliates, voluntarily or involuntarily, for any reason other than on account
of death, or as otherwise provided by Treasury Regulation Section 1.409A-1(h).  However, the Employee’s employment
relationship shall be treated as continuing intact while the individual is on a
military leave, sick leave or other bona fide leave of absence if the period of
such leave does not exceed six months (or longer, if required by statute or
contract).  If the period of the leave
exceeds six months and the Employee’s right to reemployment is not provided
either by statute or contract, the employment relationship is deemed to
terminate on the first date immediately following such six-month period for
purposes of this Plan only.


 


(aa)        “Subsidiary”
shall mean a corporation or other entity of which more than fifty percent (50%)
of the aggregate of its outstanding voting securities are owned directly or
indirectly by the Corporation.


 


(bb)        “Valuation Date”
shall mean the last day of business of each fiscal quarter of the Corporation.


 


4





















 


(cc)         “Value”
shall mean the value of each Incentive Unit as of a specified date, as
determined on a consistent basis by the Committee in its sole discretion.


 


II.  ADMINISTRATION


 


(a)          Administration; Term of Office; Appointment of
Chairperson.
The Plan shall be administered by a committee (the “Committee”) appointed by
the Board from among the Employees. The Committee shall be comprised, unless
otherwise determined by the Board, of the individuals serving as the
Corporation’s Chief Executive Officer, Chief Financial Officer and Vice
President-Human Resources. Each member of the Committee shall hold office until
the date that he or she resigns from the Committee or is removed from
membership on the Committee by action of the Board. In the event an individual
for any reason ceases to be a member of the Committee, the Board shall appoint
another qualified individual to serve on the Committee. The members of the
Committee shall choose from among themselves one such member to serve as
chairperson of the Committee.


 


(b)          Quorum and Manner of Acting. Except as hereinafter provided, a majority of the
members of the entire Committee shall constitute a quorum for the transaction
of business and the vote of a majority of the Committee members present at the
time of the vote shall be the act of the Committee. In the absence of a quorum
at any meeting of the Committee, a majority of the Committee members present
thereat may adjourn such meeting to another time and place. Notice of the time
and place of any such adjourned meeting shall be given to the Committee members
who were not present at the time of the adjournment and, unless such time and
place were announced at the meeting at which the adjournment was taken, to the
other Committee members. At any adjourned meeting at which a quorum is present,
any business may be transacted which might have been transacted at the meeting
as originally called. In the event any Committee member is disqualified from
acting on a specific matter pursuant to Section II(f) hereof, such
individual shall not be taken into account in determining whether a quorum of
the Committee exists for taking action with respect to such matter. The
Committee members shall act only as a Committee and the individual Committee
members shall have no power as such. All decisions of the Committee or the
Board in the interpretation and administration of the Plan shall lie within its
sole and absolute discretion and shall be final, conclusive and binding on all
parties concerned (including, but not limited to, Employees and their
Beneficiaries or successors).


 


(c)           Action Without a Meeting. Any action required or permitted to be taken by
the Committee at a meeting may be taken without a meeting if all members of the
Committee consent in writing to the adoption of a resolution authorizing such
action. The resolution and written consents thereto by the members of the
Committee shall be filed with the minutes of the proceedings of the Committee.


 


(d)          Telephonic Participation. Any one or more members of the Committee may
participate in a meeting of the Committee by means of a conference telephone or
similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.


 


5





















 


(e)           Compensation. Members of the Committee shall not be compensated for service as a
Committee member.


 


(f)            Disqualification. Each member of the Committee shall be disqualified from acting as such
with respect to all matters that concern such person individually other than to
the extent all Employees holding Incentive Units are affected uniformly.


 


(g)          Responsibilities of the Committee. Except to the extent specifically reserved herein
for the Board, the Committee shall have all powers, responsibilities and duties
for controlling and administering the Plan, including, but not limited to, the
following:


 


(i)            to establish, amend and
enforce certain rules, regulations, and procedures as it deems necessary or
proper for the efficient administration of the Plan;


 


(ii)           to interpret the Plan,
with its interpretations made in good faith to be final and conclusive, and to
decide all questions concerning the Plan and correct any defect or omission or
reconcile any inconsistency in the Plan in the manner and to the extent the
Committee deems necessary or desirable;


 


(iii)          to determine the ongoing
eligibility of any individual to participate in the Plan, and to require any
person to furnish any information as it may request to properly administer the
Plan as a condition to that person receiving any benefit under the Plan;


 


(iv)          to compute the amount of
benefits that are payable to any Employee or Beneficiary in accordance with the
provisions of the Plan, and to determine the person or persons to whom those
benefits will be paid; and


 


(v)           to authorize the payment
of benefits from the Plan in compliance with Section 409A.


 


(h)          Indemnification.  The
Corporation shall indemnify each Committee member against any liability or loss
sustained by reason of any act or failure to act made in good faith,
including, but not limited to, those in reliance on certificates, reports,
tables, opinions or other communications from any company or agents chosen by
the Committee in good faith, but excluding the gross negligence or willful
misconduct of any member.  Such
indemnification shall include attorneys’ fees and other costs and expenses
reasonably incurred in defense of any action brought by reason of any such act
or failure to act.


 


III.  ELIGIBILITY TO PARTICIPATE


 


Each
individual who is an Employee shall be initially eligible to participate in the
Plan.  No individual shall automatically
be entitled to receive a grant of Incentive Units solely because he is
classified as an Employee.


 


6














 


IV.  INCENTIVE UNITS


 


(a)          Grant of Incentive Units. The
Committee may, in its sole discretion, grant Incentive Units to any one or more
Employees.  The number of Incentive Units
granted to each Employee shall be determined by the Committee in its sole discretion.  Incentive Units may only be granted as of a
Valuation Date.  Unless otherwise
determined by the Committee, in its sole discretion, subject to adjustment as
provided in Section IV(b), the “Initial Value” of any Incentive Unit granted under this Plan shall be equal to the value
of such Incentive Unit determined as of the Valuation Date on which such
Incentive Unit is granted.


 


(b)          Recapitalization, Etc. In the event there is any change in the
outstanding common stock of the Corporation by reason of any merger,
reorganization, recapitalization, stock split, stock dividend, combination of
shares, increase or decrease in the number of outstanding shares or otherwise
(including that a sale of all or substantially all of the assets of its common
stock shall occur or be pending), there shall be substituted for, added to or
subtracted from each Incentive Unit then outstanding under the Plan, the number
of additional or partial Incentive Units that the Board determines accurately
reflects the effect of such merger, reorganization, recapitalization, stock
split, stock dividend, share combination or other such event.  Likewise, the Initial Value of each Incentive
Unit shall also be adjusted by the Board if it determines in its sole
discretion that such adjustment is appropriate. 
In the event that the Corporation enters into a transaction with an
Affiliate of the Corporation, the Board may make an equitable adjustment to the
Incentive Units if, in its sole discretion, the Board determines that such
adjustment is appropriate.


 


(c)           Vesting in Incentive Units. The Incentive Units granted to an Employee shall
vest as determined by the Committee, in its sole discretion.  In the absence of any action by the Committee
to select a different vesting schedule, Incentive Units shall vest
cumulatively, in twenty percent (20%) increments annually and such vesting
shall end upon the Employee’s (i) Separation from Service for any reason
whatsoever or (ii) transfer from the employer to whom he was providing
services as of the date he received an Incentive Unit award to an Affiliate
(other than a Subsidiary). 
Notwithstanding the foregoing, to the extent not previously canceled or
forfeited, Incentive Units shall become immediately vested if, within twelve
(12) months after a Change in Control of the Corporation, an Employee’s
employment is terminated (x) by the Corporation or Affiliate for any
reason other than Good Cause, (y) as a result of death or permanent
disability, or (z) by the Employee for Good Reason.  Notwithstanding any Plan provision to the
contrary, if an Employee separates from service for Good Cause, all Incentive
Units shall be immediately forfeited on the date of the Employee’s Separation
from Service.


 


(d)          Exercise of Incentive Units; Fixed Payment Date.


 


(i)            Default
Fixed Exercise Date.  Subject to Sections IV(d)(ii)-(v), an
Employee’s vested Incentive Units shall be deemed to be exercised on the
Default Fixed Exercise Date.  Resulting
Gains shall be paid in a lump sum in the next fiscal quarter.  Notwithstanding the foregoing, with respect
to any exercise occurring in the last fiscal month of any fiscal year, related
Gains shall be paid 


 


7

















 


during the
first fifteen (15) days of the second fiscal quarter following the Default
Fixed Exercise Date.


 


(ii)           Elected Fixed Exercise Date. 
Notwithstanding Section IV(d)(i), the Committee, in its sole
discretion, may permit an Employee to elect an Elected Fixed Exercise Date on
which Incentive Units shall be exercised. 
Gains resulting from such exercise shall be paid in a lump sum in the
next fiscal quarter.  Notwithstanding the
foregoing, with respect to any exercise occurring in the last fiscal month of
any fiscal year, related Gains shall be paid during the first fifteen (15) days
of the second fiscal quarter following the Elected Fixed Exercise Date.  An Elected Fixed Exercise Date must be on or
after the date an Incentive Unit vests and prior to the Default Fixed Exercise
Date.


 


(A)          Process
and Timing.  To select an Elected Fixed Exercise Date, the
Employee must complete and submit an Exercise and Payment Agreement to the
Corporation no later than the end of the calendar year prior to the year in
which an Incentive Unit is granted, or such earlier date specified by the Committee.  The Exercise and Payment Agreement shall
become irrevocable as of the end of such calendar year, or such earlier date as
specified by the Committee. 
Notwithstanding the foregoing, at the discretion of the Committee, an
Employee may select an Elected Fixed Exercise Date within thirty (30) days
after the Incentive Unit is granted, provided that the Exercise and Payment
Agreement is submitted at least twelve (12) months in advance of the Incentive
Unit’s first vesting date.  In such case,
the Exercise and Payment Agreement shall become irrevocable as of the end of
such thirty (30) day period.


 


(B)           Section 409A Transition Relief. 
Notwithstanding paragraph (A), on or before December 31, 2008, the
Committee, in its sole discretion, may permit Employees to select or change an
Elected Fixed Exercise Date for previously awarded Incentive Units by
submitting an Exercise and Payment Agreement to the Corporation consistent with
transition relief provided by the Department of the Treasury in
Notice 2006-79, Notice 2007-86 and proposed regulations promulgated under Section 409A.  If an Employee submits or changes an Exercise
and Payment Agreement pursuant to this paragraph (B), then the last Exercise
and Payment Agreement validly in effect as of December 31, 2008 shall
control and be irrevocable.


 


(iii)          Separation from Service. 
Notwithstanding Sections IV(d)(i) and IV(d)(ii) and subject to
Section IV(d)(iv), a deemed exercise shall occur with respect to vested
Incentive Units on the date an Employee experiences a Separation from
Service.  Resulting Gains shall be paid
in a lump sum in the fiscal quarter following the Employee’s Separation from
Service.  Notwithstanding the foregoing,
with respect to any deemed exercise occurring in the last fiscal month of any
fiscal year, related Gains shall be paid during the first fifteen (15) days of
the second fiscal quarter following the Employee’s Separation from
Service.  If 


 


8

















 


an Employee
separates from service for Good Cause, all vested and unvested Incentive Units
shall be immediately forfeited on the date of the Employee’s Separation from
Service.


 


(iv)          Retirement.  Notwithstanding Section IV(d)(iii), in
the event of an Employee’s Retirement, a deemed exercise shall occur with
respect to vested Incentive Units on a date which is the earliest of:  (1) the first anniversary of the
Employee’s Separation from Service, (2) the Employee’s Elected Fixed
Exercise Date or (3) the Default Fixed Exercise Date.  Resulting Gains shall be paid in a lump sum
in the fiscal quarter following the deemed exercise date.  Notwithstanding the foregoing, with respect
to any deemed exercise occurring in the last fiscal month of any fiscal year,
related Gains shall be paid during the first fifteen (15) days of the second
fiscal quarter following the deemed exercise date.


 


(v)           Death.  In the
event of an Employee’s death, a deemed exercise shall occur with respect to
vested Incentive Units on the date of the Employee’s death.  Resulting Gains shall be paid to the Employee’s
Beneficiary in a lump sum in the first fiscal quarter following the Employee’s
death.  Notwithstanding the foregoing,
with respect to any deemed exercise occurring in the last fiscal month of any
fiscal year, related Gains shall be paid to the Employee’s Beneficiary during
the first fifteen (15) days of the second fiscal quarter following the Employee’s
death.


 


(vi)          Forfeiture of Unvested
Incentive Units.  Subject to Section IV(c),
in the event of an Employee’s Separation from Service, death or transfer to an
Affiliate (other than a Subsidiary), all unvested Incentive Units shall be
forfeited immediately on the date of such Separation from Service, death or
transfer.


 


(vii)         Transfer to an Affiliate
(other than a Subsidiary). 
Effective with respect to Incentive Units awarded on or after January 1,
2009, in the event that an Employee transfers from the employer to whom he was
providing services as of the date he received an Incentive Unit Award to an
Affiliate (other than a Subsidiary), a deemed exercise shall occur with respect
to vested Incentive Units on the Employee’s transfer date.  Resulting Gains (including any earnings or
losses, as described below) shall be paid in a lump sum at the earliest time
payment would otherwise have occurred, applying the provisions of Sections
IV(d)(i)-(v).  Until such time as the
Gains are paid, the Committee, in its sole discretion, may permit an Employee
to notionally invest such Gains in accordance with Section IV(f).


 


(e)           Value of Incentive Unit Upon Exercise.  Upon the
exercise or deemed exercise of an Incentive Unit, the Employee (or his
Beneficiary in the event of the Employee’s death) shall receive from the
Corporation a cash payment equal to the Gain.


 


(i)            “Final Value” Generally.  For purposes
of calculating the Gain, the “Final Value” shall equal the Incentive Unit Value as of the Valuation Date immediately preceding the
exercise date or, if applicable, the Value on the Valuation Date 


 


9

















 


coinciding
with the date of such exercise; provided that if the date of such exercise or
deemed exercise is within thirty (30) days of the end of the Corporation’s
fiscal quarter, then the “Final Value” shall equal the Incentive Unit Value as
of the Valuation Date immediately following the date of such exercise or deemed
exercise.


 


(ii)           “Final
Value” for Employees Transferred to An Affiliate. 
Notwithstanding any provision to the contrary, for purposes of
calculating the Gain in relation to the deemed exercise of Incentive Units
pursuant to Section IV(d)(vii), the “Final Value” shall equal the
Incentive Unit Value as of the Valuation
Date immediately preceding the Employee’s transfer date or, if applicable, the
Value on the Valuation Date coinciding with the Employee’s transfer date;
provided that if the date of such transfer is within thirty (30) days of the
end of the Corporation’s fiscal quarter, then the “Final Value” shall equal the
Incentive Unit Value as of the Valuation Date immediately following the Employee’s
transfer date.


 


(iii)          “Final Value” Upon Certain
Terminations Following a Change in Control. 
Notwithstanding Section IV(e)(i), in the event an
Employee experiences an involuntary termination of employment other than for
Good Cause or a termination of employment for Good Reason within twelve (12)
months following a Change in Control, for
purposes of calculating the Gain resulting from a deemed exercise, the “Final
Value” shall equal the Value of the Incentive Unit as of the fiscal month ended
immediately preceding the Change in Control, provided that, notwithstanding the
foregoing, in determining such “Final Value”, the Corporation shall exclude any
non-cash charges incurred in connection with the Change in Control which would
otherwise have been included in such calculation.


 


(f)            Investment of Transferred Employees’ Gains.  Upon the
deemed exercise of an Employee’s Incentive Unit pursuant to Section IV(d)(vii),
the Committee, in its sole discretion, may permit the Employee to make a
written election to notionally invest his Gain in investment funds selected by
the Committee.  The Committee may
promulgate rules and procedures governing investment elections under this Section IV(f).  If such an
election is made, the Committee shall establish a bookkeeping account for the
Employee to reflect earnings and losses allocable thereto at such times
and in such manner as shall be determined by the Committee.  Notwithstanding any provision in the Plan to
the contrary, earnings and losses based on an Employee’s investment elections
shall begin to accrue only as of the date such Employee’s Gain is credited to
his account.


 


(g)          Expiration Date.  Outstanding Incentive Units
shall expire at 5:00 p.m. New York City time on the sixth (6th) anniversary of the grant date.


 


(h)          Deferral Election.  Employees eligible to
participate in the Deferred Compensation Plan may elect to contribute up to
100% of the Gain, if any, into the Deferred Compensation Plan on a pre-tax
basis.  To make a deferral election, the
Employee must complete and submit a Deferral Agreement to the Corporation no
later than the end of the calendar year prior to the year in which an Incentive
Unit is granted, or such earlier date specified by the 


 


10

















 


Committee.  The Deferral Agreement shall become irrevocable as of the end of such
calendar year, or such earlier date as specified by the Committee.  Notwithstanding the foregoing, at the
discretion of the Committee, an Employee may complete and submit a Deferral Agreement
within thirty (30) days after the date the Incentive Unit is granted, provided
that the Deferral Agreement is submitted at least twelve (12) months in advance
of the Incentive Unit’s first vesting date. 
In such case, the Deferral Agreement shall
become irrevocable as of the end of such thirty (30) day period.


 


V.  BENEFICIARY DESIGNATION


 


(a)          Beneficiary.  Each
Employee may, at any time, designate one or more Beneficiaries (both primary as
well as contingent) to receive any benefits payable under the Plan upon his
death.  The Beneficiary designated under
this Plan may be the same or different from the Beneficiary designation under
any other plan of the Corporation or Subsidiary in which the Employee
participates.


 


(b)          Beneficiary Designation; Change.  An Employee shall designate his
Beneficiary by completing and signing a beneficiary designation form
established by the Committee or its delegate, and returning it to the Committee
or its designated agent.  An Employee may
change his Beneficiary designation by completing, signing and otherwise
complying with the terms of the beneficiary designation form and the Committee’s
rules and procedures, as in effect from time to time.  Upon the acceptance by the Committee of a new
beneficiary designation form, all Beneficiary designations previously filed
shall be canceled.  The Committee shall
rely on the last completed beneficiary designation form filed by the Employee
and accepted by the Committee before his death.


 


(c)           Acknowledgment.  No Beneficiary designation
or change in Beneficiary designation shall be effective until accepted by the
Committee or a Plan representative.


 


(d)          No Beneficiary Designation.  If
an Employee fails to designate a Beneficiary as provided in this Section V
or, if all designated Beneficiaries predecease the Employee, then the Employee’s
designated Beneficiary shall be deemed to be his surviving spouse.  If the Employee leaves no surviving spouse,
payment shall be made to the Employee’s estate.


 


(e)           Discharge of Obligations.  The
complete payment under the Plan to a Beneficiary shall fully and completely
discharge the Corporation and its Subsidiaries from all further obligations
under this Plan with respect to the Employee.


 


VI.  MISCELLANEOUS PROVISIONS


 


(a)          Assignment or Transfer. No right to any accrued but unpaid Incentive Unit
shall be sold, assigned, redeemed, pledged, transferred or otherwise encumbered
by an Employee except by will or the laws of descent and distribution.


 


(b)          Withholding Taxes. The Corporation or the appropriate Subsidiary
shall have the right to deduct from all cash payments hereunder any federal,
state, local or foreign income and employment taxes required by law to be
withheld with respect to such payments.


 


11

















 


(c)           Costs and Expenses. The costs and expenses of administering the Plan
shall be borne by the Corporation and shall not be charged against any
particular award nor to any Employee receiving an Incentive Unit but shall be
included in the Corporation’s computation of consolidated net income or loss.


 


(d)          Funding of Plan. The Plan shall be unfunded. The Corporation shall
not be required to segregate any of its assets to assure the payment of any
Incentive Unit under the Plan. Neither the Employees nor any other persons
shall have any interest in any fund or in any specific asset or assets of the
Corporation or any other entity by reason of any accrued but unpaid Incentive
Unit. The interests of each Employee hereunder are unsecured and shall be
subject to the general creditors of the Corporation and the applicable
Subsidiaries.


 


(e)           Other Incentive Plans. The adoption of the Plan does not preclude the
adoption by appropriate means of any other incentive plan for Employees of the
Corporation or any Subsidiary.


 


(f)            Plurals and Gender. Where appearing in this Plan, masculine gender
shall include the feminine and neuter genders, and the singular shall include
the plural, and vice versa, unless the context clearly indicates a different
meaning.


 


(g)          Headings. The headings and sub-headings in this Plan are
inserted for the convenience of reference only and are to be ignored in any
construction of the provisions hereof.


 


(h)          Severability. In case any provision of this Plan shall be held
illegal or void, such illegality or invalidity shall not affect the remaining
provisions of this Plan, but shall be fully severable, and the Plan shall be
construed and enforced as if said illegal or invalid provisions had never been
inserted herein.


 


(i)           Limitations on Liability. Neither the Corporation nor any Subsidiary shall
be responsible in any way for any action or omission of the Board, the
Committee, or any other fiduciaries in the performance of their duties and
obligations as set forth in this Plan. Furthermore, neither the Corporation nor
any Subsidiary shall be responsible for any act or omission of any of their
agents, or with respect to reliance upon advice of their counsel, provided that
the Corporation and/or the appropriate Subsidiary relied in good faith upon the
action of such agent or the advice of such counsel. Neither the Corporation,
any Subsidiary, the Board, the Committee, nor any agents, employees, officers,
directors or stockholders of any of them, nor any other person, shall have any
liability or responsibility with respect to this Plan, except as expressly
provided herein.


 


(j)            Incapacity. If the Committee shall receive evidence satisfactory to it that a
person entitled to receive payment of, or exercise, any Incentive Unit is, at
the time when such benefit becomes payable, a minor, or is physically or
mentally incompetent to receive such Incentive Unit and to give a valid release
thereof, and that another person or an institution is then maintaining or has
custody of such person and that no guardian, committee or other representative
of the estate of such person shall have been duly appointed, the Committee may
make payment of such Incentive Unit otherwise payable to 


 


12

















 


such person to such other person or institution, including a custodian
under a Uniform Gifts to Minors Act, or corresponding legislation (who shall be
an adult, a guardian of the minor or a trust company), and the release by such
other person or institution shall be a valid and complete discharge for the
payment or exercise of such Incentive Unit.


 


(k)          Cooperation of Parties. All parties to this Plan and any person claiming
any interest hereunder agree to perform any and all acts and execute any and
all documents and papers which are necessary or desirable for carrying out this
Plan or any of its provisions.


 


(l)           Governing Law. All questions pertaining to the validity,
construction and administration of the Plan shall be determined in accordance
with the laws of the State of New Jersey, without giving effect to conflict of
law principles.


 


(m)          Nonguarantee of Employment. Nothing contained in this Plan shall be construed
as a contract of employment between the Corporation or any Subsidiary and any
Employee, as a right of any Employee to be continued in the employment of the
Corporation or any Subsidiary, or as a limitation on the right of the
Corporation or any Subsidiary to discharge any of its Employees, at any time,
with or without cause.


 


(n)          Notices. Each notice relating to this Plan shall be in writing
and delivered in person, by recognized overnight courier or by certified mail
to the proper address. Except as otherwise provided in any Incentive Unit award
agreement with respect to the exercise thereunder, all notices to the
Corporation or the Committee shall be addressed to it at GAF-Elk Corporation,
14911 Quorum Drive, Suite 600, Dallas, TX 75254, Attn: Senior Vice
President-Human Resources. All notices to Employees, former Employees,
beneficiaries or other persons acting for or on behalf of such persons shall be
addressed to such person at the last address for such person maintained in the
Corporation’s records.


 


VII.  AMENDMENT OR TERMINATION OF PLAN


 


The
Board may amend the Plan from time to time or suspend or terminate the Plan at
any time. In the event the Plan is terminated for any reason, the vesting,
exercise, and expiration provisions, as described in this Plan, for all
Incentive Units granted up to and including the date of the termination of the
Plan, shall remain in effect.


 


*     *    
*


 


IN
WITNESS WHEREOF, the duly authorized officer of Building Materials Corporation
of America has executed the Plan, as amended and restated, by the authority of
its Board of Directors, effective as of January 1, 2005.


 


	
   

  	
  BUILDING MATERIALS CORPORATION OF AMERICA

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jan Jerger-Stevens

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice-President, Human Resources

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  December 30, 2008

  



 


13