EX-10.3






Exhibit 10.3




Omnibus Code Section 409A Compliance Policy



GIBRALTAR INDUSTRIES, INC. and its Affiliates (the “Company”) hereby adopts this Code Section 409A
Compliance Policy (“Policy”) to be effective January 1, 2009.



WHEREAS the Company has adopted and will in the future adopt various compensation agreements,
policies and plans (“Arrangements”) that are or may constitute “nonqualified deferred compensation
plans” within the meaning of Internal Revenue Code (“Code”) Section 409A and the Treasury
Regulations promulgated thereunder, and



WHEREAS Code Section 409A and the Treasury Regulations promulgated thereunder require that all
Arrangements that constitute “nonqualified deferred compensation plans” within the meaning of Code
Section 409A be in writing and compliant with Code Section 409A and the Regulations no later than
December 31, 2008, and



WHEREAS the Company intends for this Policy to supplement the terms of each of its Arrangements,
whether or not the Arrangement is otherwise in written form,



NOW, THEREFORE, in accordance with its authority to amend each Arrangement and/or its authority to
impose unilaterally rules governing how it will administer each Arrangement, the Company hereby
declares that each Arrangement in existence on December 31, 2008 shall be deemed amended effective
December 31, 2008, and each Arrangement not in existence on December 31, 2008 shall be deemed
amended when such Arrangement comes into existence (provided, however, that this Policy shall not
amend any Grandfathered Arrangement) as follows:




1. Definitions.




     1.1. “Affiliate” means any entity that, with Gibraltar Industries, Inc., forms part of a
controlled group of corporations or group of trades or businesses under common control within the
meaning of Code Section 414(b) or (c). Accordingly, an Affiliate may be any corporation or other
entity that is 80 percent or more owned directly or indirectly by Gibraltar Industries, Inc.



     1.2. “Arrangement” means any plan, agreement, policy or other arrangement that provides for
the payment of Compensation. Without limiting the generality of the foregoing, an Arrangement may
include a generally applicable Compensation plan or policy, an individual employment agreement, a
change in control agreement or an equity compensation plan.



     1.3. “Code” means the Internal Revenue Code of 1986 as amended.



     1.4. “Company” means Gibraltar Industries, Inc. and its Affiliates.



 









 





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     1.5. “Compensation” means “compensation” within the meaning of Code Section 61(a)(1) payable
to an Employee who is a United States (“US”) citizen or US resident alien subject to US income tax
with respect to the Compensation.



     1.6. “Deferred Compensation” means Compensation that is payable at a time and in a manner that
constitutes a “deferral of compensation” within the meaning of Regulation §1.409A-1(b)(1) or
another section of the Regulations



     1.7. “Employee” means an employee or former employee of the Company.



     1.8. “Grandfathered Arrangement” means an Arrangement to the extent that the Arrangement
provides for payment of Deferred Compensation that is not subject to Code Section 409A because the
Deferred Compensation payable thereunder was accrued and vested before January 1, 2005 and the
terms of the Arrangement regarding the payment of such Deferred Compensation have not been altered
by a “material modification” within the meaning of Regulation §1.409A-6(a)(4). For the purpose of
the preceding sentence, in determining whether a material modification has altered the terms of an
Arrangement, this Policy shall be ignored.



     1.9. “Regulation” or “Regulations” means the final Treasury Regulations promulgated under Code
Section 409A as amended.



     1.10. “Separation from Service” has the meaning provided at Regulation §1.409A-1(h). Without
limiting the generality of the previous sentence, “Separation from Service” includes the
termination of the Employee’s employment with any and all entities that comprise the Company.



     1.11. “Specified Employee” means an Employee who is a “specified employee” within the meaning
of Code Section 409A(2)(B)(i) and Regulation § 1.409A-1(i) as determined by the Company in a
uniform manner for all nonqualified deferred compensation plans maintained by the Company under
written rules adopted by the Company for the identification of Specified Employees as may be in
effect and compliant with Regulation § 1.409A-1(i) on the date of the Employee’s Separation from
Service. If there are no written rules adopted by the Company for the identification of Specified
Employees in effect and compliant with Regulation § 1.409A-1(i) on the date of the Employee’s
Separation from Service, then the default rules of Regulation § 1.409A-1(i) shall apply.



     1.12. “Substantial Risk of Forfeiture” has the meaning provided at Regulation §1.409A-1(d).
Without limiting the generality of the previous sentence, Compensation is subject to a Substantial
Risk of Forfeiture if entitlement to the amount is conditioned on the performance of substantial
future services by any person or the occurrence of a condition related to the purpose of the
Compensation, and the possibility of forfeiture is substantial.



 









 





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2. Application of Short-term Deferral Rule.
In the case of an Arrangement that does not otherwise provide in its governing document when
Compensation will be paid, such Compensation shall be paid as soon as practicable following the
lapse of any Substantial Risk of Forfeiture with respect to such Compensation, within the meaning
of Regulation §1.409A-1(b)(4)(i)(C), and in all events shall be paid on or before the last day of
the “applicable 2-1/2 month period”, within the meaning of Regulation §1.409A-1(b)(4)(i). Without
limiting the generality of the foregoing, any bonus or other incentive pay that is payable in a
calendar year following the calendar year in which it is earned shall be paid on or before the last
day of the “applicable 2-1/2 month period”, within the meaning of Regulation §1.409A-1(b)(4)(i),
unless the Arrangement provides for payment at another time.



3. Application of 6-Month Delay Rule. In the case of an Arrangement that provides for
payment of Deferred Compensation to a Specified Employee, which payment is triggered by the
Specified Employee’s Separation from Service, unless the payment is a separate “payment” within the
meaning of Regulation §1.409A-2(b)(2) that is intended to be paid within the short-term deferral
period following the lapse of a Substantial Risk of Forfeiture as provided under Regulation
§1.409A-1(b)(4), or the payment is intended to constitute separation pay due to involuntary
separation from service within the meaning of Regulation §1.409A-1(b)(9)(iii), payment of the
Deferred Compensation shall not occur sooner than the day following the date that is the 6-month
anniversary of the date of the Specified Employee’s Separation from Service (“Delayed Payment
Date”).



Unless the Arrangement provides otherwise, payment of the Deferred Compensation shall occur (in the
case of a single payment) or commence (in the case of multiple payments) on or before the 90th day
following the Delayed Payment Date. If the Arrangement provides for installment or annuity
payments commencing prior to the Delayed Payment Date, all installments or annuity payments that
would have been paid before the Delayed Payment Date but for this 6-month delay rule, shall be paid
on or before the 90th day following the Delayed Payment Date.



Unless otherwise specified by an Arrangement, no interest or other earnings shall be paid in
connection with the delay in payment of Deferred Compensation between the Specified Employee’s
Separation from Service and the Delayed Payment Date.



For purposes of this Section 3, a payment is clearly intended to constitute separation pay due to
involuntary separation from service within the meaning of Regulation §1.409A-1(b)(9)(iii) if the
payment will be made solely in the event of an involuntary separation from service and the amount
paid before the Delayed Payment Date does not exceed the limiting amount described in Regulation
§1.409A-1(b)(9)(iii)(A) and such amount must be paid no later than the last day of the second
calendar year following the calendar year in which the Separation from Service occurs.



4. Default Payment Trigger.
In the case of an Arrangement that provides for the payment of Deferred Compensation, that has
previously become nonforfeitable, upon




 









 








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the occurrence of an event that is not a permissible payment
event under Code Section 409A(a)(2)(A) (“impermissible payment event”), the section in the
Arrangement providing for payment upon the occurrence of an impermissible payment event shall be
deemed void and inoperative. If the Arrangement provides for payment, in the alternative, at a
later time upon the occurrence of an event that is a permissible payment event under Code Section
409A(a)(2)(A) (“permissible payment event”), the section in the Arrangement providing for
alternative payment at the latter time shall control the payment. If the Arrangement does not
provide for payment, in the alternative, at a later time upon the occurrence of an event that is a
permissible payment event, the Arrangement shall be deemed amended by this Policy to provide for
payment at the earliest of the following times: (1) the day following the 6-month anniversary of
the Employee’s Separation from Service, (2) the day following the Employee’s death, or (3) the day
on which occurs a change in ownership or effective control of the Employee’s employer, or in the
ownership of a substantial portion of the assets of the Employee’s employer within the meaning of
Code Section 409A(a)(2)(A)(v) and the Regulations.



5. Payment Period Overlapping Two Taxable Years. In the case of an Arrangement that
provides for payment of Deferred Compensation during a period of two or more days that overlaps two
taxable years of the Employee or other payee, the Employee or other payee to whom the amount is
payable shall have no right to determine the taxable year in which payment occurs.



6. No Acceleration of Payments. Any existing provision or subsequent amendment of an
Arrangement that has the effect of accelerating the payment of Deferred Compensation shall be null
and void unless the acceleration is permitted under Regulation §1.409A-3(j) or another Regulation,
or the provision or amendment states that the acceleration is intended notwithstanding the
violation of Code Section 409A(a)(3).



7. Application of the Toggle Rule under Regulation §1.409A-3(c). Except as otherwise
provided in the Regulations, each deferral of compensation provision of an Arrangement that
constitutes a separate “plan” under Regulation §1.409A-1(c)(2) (including any other deferral of
compensation provision under the first Arrangement and/or any other Arrangement that must be
aggregated with the such provision under the first Arrangement as a single “plan” under Regulation
§1.409A-1(c)(2)) may designate only one time and form of payment upon the occurrence of each
payment event within the meaning of Regulation §1.409A-3(a)(1), (2), (3), (5) and (6). In the
event that any such provision in violation of the Regulations designates more than one time and
form of payment upon the occurrence of a payment event, the provision shall be deemed to designate
as the time and form of payment for any occurrence of such payment event, the time and form of
payment in effect under the provision for the
earliest possible occurrence of the payment event, and with the fewest payment triggers,
notwithstanding any contrary language in the first or any other Arrangement. This Section 7 is
intended




 









 








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to comply with Regulation §1.409A-3(c) while preserving to the extent practicable the
terms of the first and any other Arrangement and shall be so construed.



8. Reimbursement of Expenses Incurred During Employment. The Company shall not reimburse
any expense incurred during employment by an Employee, which reimbursement is includable in the
Employee’s gross income, unless such reimbursement is made pursuant to an Arrangement that provides
an objectively determinable nondiscretionary definition of the expense eligible for reimbursement.
In addition, any such Arrangement shall be deemed to provide that: (1) the amount of expense
eligible for reimbursement with respect to any calendar year shall not effect the amount of such
expense eligible for reimbursement in any other calendar year unless otherwise permitted under the
Regulations, (2) the reimbursement shall occur no later than the last day of the calendar year
following the calendar year in which the expense was incurred, and (3) the Employee’s eligibility
for reimbursement of the expense may not be exchanged for another benefit.



9. Reimbursement of Expenses Incurred After Employment. The Company shall not reimburse
any expense incurred after employment by an Employee, which reimbursement is includable in the
Employee’s gross income, unless such reimbursement is made pursuant to an Arrangement that
provides: (1) an objectively determinable nondiscretionary definition of the expense eligible for
reimbursement, and (2) only for reimbursement of expenses incurred during an objectively and
specifically prescribed period (which may be the lifetime of the former Employee). In addition,
any such Arrangement shall be deemed to provide that: (1) the amount of expense eligible for
reimbursement with respect to any calendar year shall not effect the amount of such expense
eligible for reimbursement in any other calendar year unless otherwise permitted under the
Regulations, (2) the reimbursement shall occur no later than the last day of the calendar year
following the calendar year in which the expense was incurred, and (3) the Employee’s eligibility
for reimbursement of the expense may not be liquidated or exchanged for another benefit.



10. Provision of in-kind Benefits After Employment. The Company shall not provide any
in-kind benefit to an Employee after the individual has ceased to be employed by the Company unless
the in-kind benefit is provided pursuant to an Arrangement that provides: (1) an objectively
determinable nondiscretionary definition of the in-kind benefit to be provided, and (2) only for
the provision of the in-kind benefit during an objectively and specifically prescribed period
(which may be the lifetime of the Employee). In addition, any such Arrangement shall be deemed to
provide that: (1) the amount of the in-kind benefit provided in any calendar year shall not effect
the amount of such in-kind benefit provided in any other
calendar year unless otherwise permitted under the Regulations, and (2) the Employee’s eligibility
for the in-kind benefit may not be liquidated or exchanged for another benefit. This Section 10 is
limited to in-kind benefits that are includable in the Employee’s gross income.





 









 








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11. Tax Gross-up Payments. Any Arrangement that provides for tax gross-up payments to be
paid to or on behalf of an Employee shall be deemed to provide that payment will be made by the end
of the Employee’s taxable year next following the Employee’s taxable year in which the Employee
remits the related taxes. For purposes of this Section 11, the term “tax gross-up payment” refers
to a payment to reimburse the Employee in an amount equal to all or a designated portion of the
Federal, state, local, or foreign taxes imposed upon the Employee as a result of Compensation paid
or made available to the Employee by the Company, including the amount of additional taxes imposed
upon the Employee due to the Company’s payment of the initial taxes on such Compensation. In
addition, any Arrangement that provides a right to the reimbursement of expenses incurred due to a
tax audit or litigation addressing the existence or amount of a tax liability, whether Federal,
state, local, or foreign, shall be deemed to provide that payment of the reimbursement will be made
by the end of the Employee’s taxable year following the Employee’s taxable year in which the taxes
that are the subject of the audit or litigation are remitted to the taxing authority, or where as a
result of such audit or litigation no taxes are remitted, the end of the Employee’s taxable year
following the Employee’s taxable year in which the audit is completed or there is a final and
nonappealable settlement or other resolution of the litigation.



12. Deferral of Compensation Paid for Final Payroll Period. Unless an Arrangement provides
otherwise, Compensation payable after the last day of the Employee’s taxable year solely for
services performed during the final payroll period described in Code Section 3401(b) containing the
last day of the Employee’s taxable year, where such amount is payable pursuant to the timing
arrangement under which the Company normally compensates Employees for services performed during a
payroll period described in Code Section 3401(b), is treated as compensation for services performed
in the subsequent taxable year in which the payment is made. Any amendment of an Arrangement to
add a provision providing for a differing treatment of such compensation may not be effective for
12 months from the date the amendment is executed and enacted.



13. Disputed payments and refusals to pay. If the Company fails to make a payment of
Deferred Compensation in whole or in part as of the date specified under an Arrangement, either
intentionally or unintentionally, other than with the express or implied consent of the Employee,
the payment will be treated as made upon the date specified under the Arrangement if the Employee
accepts the portion (if any) of the payment that the Company is willing to make (unless
such acceptance will result in a relinquishment of the claim to all or part of the remaining
amount), makes prompt and reasonable, good faith efforts to collect the remaining portion of the
payment, and any further payment (including payment of a lesser amount that satisfies the
obligation to make the payment) is made no later than the end of the first taxable year of the
Employee in which the Company and the Employee enter into a legally binding settlement of such
dispute, the Company concedes that the amount is payable, or the Company is required to make such
payment pursuant to a final and nonappealable judgment or other binding decision. For purposes of
this Section, efforts to collect the




 









 








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payment will be presumed not to be prompt, reasonable, good
faith efforts, unless the Employee provides notice to the Company within 90 days of the latest date
upon which the payment could have been timely made in accordance with the terms of the Arrangement
and the Regulations, and unless, if not paid, the Employee takes further enforcement measures
within 180 days after such latest date. This Section 12 does not apply indemnification payments
which are not subject to Code Section 409A.



14. Amendment of Change in Control Agreements. Any Arrangement between the Company and a
single Employee that provides for the payment of Compensation upon the occurrence of a “Change in
Control” (a “CIC Agreement”) shall, in addition to the amendments and modifications provided for by
the preceding provisions of this Agreement, be amended as follows:




     14.1. Definition of “Change in Control”. The term “Change in Control” as used in the
CIC Agreement shall mean only the following events: (a) a change in ownership or effective control
of the Employee’s employer, or in the ownership of a substantial portion of the assets of the
Employee’s employer within the meaning of Code Section 409A(a)(2)(A)(v) and the Regulations (a
“Section 409A Change in Control”), or (b) the Employee’s involuntary termination without “Cause” or
resignation for “Good Reason” during the period beginning on the date a “Merger Sale Agreement” is
executed and ending on the date the “Merger Sale” is consummated or the Merger Sale Agreement is
terminated (a “Non-Section 409A Change in Control”). Notwithstanding the preceding sentence, a
“Change in Control” shall be deemed not to have occurred if the putative “Change in Control”
constitutes a consolidation, merger or other reorganization that is effected pursuant to the terms
of a Merger Sale Agreement that provides that the consolidation, merger or other reorganization
contemplated by the Merger Sale Agreement will not constitute a “Change in Control” for purposes of
the CIC Agreement. For the purposes of this Section 14.1, the terms “Cause”, “Merger Sale” and
“Merger Sale Agreement” shall have the meanings provided in the CIC Agreement.



     14.2. Definition of “Good Reason”. The term “Good Reason” as used in the CIC
Agreement shall be modified to provide that before the occurrence of one of the events listed in
the CIC Agreement as providing the Employee “Good Reason” to terminate his employment (hereinafter
a “Good Reason Event”) will be deemed to be a termination for “Good Reason”, the Employee must,
within ninety (90) days following the occurrence of
a Good Reason Event, provide notice to the Company (or the person, firm, corporation, limited
liability company or other entity which, as a result of a Change in Control, has succeeded,
directly or indirectly, to substantially all the assets, rights, properties, liabilities and
obligations of the Company (such person, firm, corporation, limited liability company or other
entity being hereinafter a “Successor”)) that the Good Reason Event has occurred and the Company
(or the Successor) must not, within the thirty (30) day period following the date on which the
Employee provides the Company (or the Successor) notice of the occurrence of a Good Reason Event,
remedy the condition which resulted in the occurrence of the Good Reason Event.



 









 





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     14.3. Cash-out of Stock Options. If an Employee has a CIC Agreement with the Company
which provides that the Employee has the right to elect to accept an award of options to purchase
common stock or other equity interests in a Successor in lieu of payment of an amount (hereinafter
the “Option Cashout Amount”) equal to the Highest Sale Price (as defined in the CIC Agreement),
determined as of the date the Change in Control occurs, multiplied by the total number of shares of
common stock of the Company which the Employee could acquire by exercising all of the options to
acquire common stock of the Company which, as of the date the Change in Control occurs, were issued
to the Employee, outstanding and unexercised, minus the Aggregate Exercise Price (as defined in the
CIC Agreement), notwithstanding the contrary provisions of the CIC Agreement, the Employee shall
not have the right to elect to accept options to purchase stock or other equity interests in any
such Successor in lieu of receiving payment of the Option Cashout Amount and the Employee shall
receive a lump sum cash settlement equal to the Option Cashout Amount no later than thirty (30)
days following the occurrence of a Change in Control.



     14.4. Non-Section 409A Change in Control. No Compensation shall be paid to a
Specified Employee on account of a Non-Section 409A Change in Control before the day following the
6-month anniversary of the Employee’s Separation from Service.



     14.5. Deferred Compensation Arrangements. Any provision in the CIC Agreement that
purports to modify the terms of any other Arrangement that provides for payment of Deferred
Compensation so as to make such Deferred Compensation payable upon the occurrence of a Change in
Control (other than the provisions of the CIC Agreement, if any, which provide that the Employee
will be entitled to issuance of shares of common stock of the Company which would have been issued
to the Employee under any long term equity based compensation plan if the Change in Control had not
occurred and the Employee had met all applicable performance standards) shall be void and
inoperative unless such other Arrangement specifically provides that it is governed by the CIC
Agreement. For the avoidance of doubt, any provisions of the CIC Agreement which provide that the
Employee will be entitled to issuance of shares of common stock of the Company which would have
been issued to the Employee under any long term equity based compensation plan if the Change in
Control had not occurred and the Employee had met all applicable performance standards shall
continue in full force and effect.


15. Compliance with Section 409A.  This Policy is intended avoid the triggering additional
taxes and penalties under Section 409A of the Code, whether by reason of the form or the operation
of any Arrangement. The Policy shall at all times be interpreted, construed, and administered with
respect to Arrangements so as to avoid insofar as possible the imposition of excise taxes and other
penalties under Section 409A of the Code. This Policy is adopted with the intent to achieve
compliance with Code Section 409A and the Regulations and shall be construed accordingly. Any
provision in this Policy that is found to conflict with the Regulations shall be deemed inoperative





 











 







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     IN WITNESS WHEREOF, this Policy has been executed by a duly authorized officer of Gibraltar
Industries, Inc. on the date indicated below the signature.



	 	 	 	 	 	 	 
	 	 	Gibraltar Industries, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Paul M. Murray	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	SVP HR & ORG. DEV.	 	 
	 

	 	 	 	 	 	 
	 

	 	Date:	 	12-30-08	 	 
	 

	 	 	 	 	 	 





 









 





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The undersigned employee of Gibraltar Industries, Inc. or its Affiliate (the “Company”) agrees that
the foregoing Omnibus Code Section 409A Compliance Policy shall be applicable to any agreements
between the Company and the undersigned concerning the payment of deferred compensation by the
Company to the Undersigned.1




	 	 	 	 	 
	 	 	Employee
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	Signature	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Print Name	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Date	 	 
	 

	 	 	 	 







 




			
	1	 	A separate page 7 should be executed for each affected
employee.