Document:

Exhibit 10.25

    
 

    BUILDING
      MATERIALS HOLDING CORPORATION

    2004
      AMENDED INCENTIVE AND PERFORMANCE PLAN

    As
      of May 1,
      2007

     

    
      	
              Section 1.

            	
              Purpose
                of Plan.

            

    

     

    The
      purpose of this
      2004 Incentive and Performance Plan (the "Plan")
      of Building
      Materials Holding Corporation (the "Company"),
      is to enable
      the Company to attract, retain and motivate its employees, directors,
      independent contractors and consultants by providing for or increasing the
      proprietary interests of such employees, directors, independent contractors
      or
      consultants in the Company. All share references in the Plan have been adjusted
      to reflect the two-for-one split in the Company's Common Stock effected in
      February 2006.

     

    
      	
              Section 2.

            	
              Persons
                Eligible Under Plan.
                

            

    

     

    Any
      employee,
      director, independent contractor or consultant (each, a "Participant")
      of the Company
      or any of its direct or indirect subsidiaries, or any of its affiliates, or
      any
      corporation or other legal entity that becomes a subsidiary after the adoption
      of this Plan (each, a "Subsidiary"),
      shall be
      eligible to be considered for the grant of Awards under this Plan, provided
      that
      Incentive Stock Options may only be granted to employees of the Company or
      any
      Subsidiary and provided, further, that Eligible Directors shall only be eligible
      for Awards pursuant to Section 4.5 of the Plan.

     

    
      	
              Section 3.

            	
              Awards.

            

    

     

    3.1 On
      behalf of the
      Company, the Committee is hereby authorized to enter into any type of
      arrangement with a Participant that is not inconsistent with the provisions
      of
      this Plan and that, by its terms, involves or might involve the issuance of
      common stock, par value $0.001, of the Company (the "Common
      Stock")
      or is an Annual
      Incentive Award. The entering into of any such arrangement is referred to herein
      as the "grant"
      of an
      "Award."

     

    3.2 Awards
      are not
      restricted to any specified form or structure and may include, without
      limitation, sales or bonuses of stock, restricted stock, stock options, other
      rights to acquire stock, securities convertible into or redeemable for stock,
      stock appreciation rights, phantom stock, performance units or performance
      shares, and cash, and an Award may consist of one such security or benefit,
      or
      two or more of them in tandem or in the alternative.

     

    3.3 Awards
      may be
      issued, and shares of Common Stock may be issued pursuant to an Award, for
      any
      lawful consideration as determined by the Committee, including, without
      limitation, services rendered by the recipient of such Award.

     

    3.4 Awards
      shall be
      granted subject to the terms, conditions and restrictions contained in an Award
      agreement (an "Award
      Agreement")
      between the
      Participant and the Company. Subject to the provisions of this Plan, the
      Committee, in its sole and absolute discretion, shall determine all of the
      terms
      and conditions of each Award granted under this Plan, which terms and conditions
      may include, among other things: 

     

    3.4.1 a
      provision
      permitting the recipient of such Award, including any recipient who is an
      officer of the Company, to pay the purchase price of the shares of Common Stock
      or other property issuable pursuant to such Award, and such recipient's tax
      withholding obligation, if any, with respect to such issuance, in whole or
      in
      part, by any one or more of the following:

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    3.4.1.1 the
      delivery of
      cash;

     

    3.4.1.2 the
      delivery of
      other property deemed acceptable by the Committee;

     

    3.4.1.3 the
      delivery of
      previously owned shares of capital stock of the Company; or

     

    3.4.1.4 a
      reduction in the
      amount of Common Stock or other property otherwise issuable pursuant to such
      Award.

     

    3.4.2 a
      provision
      conditioning or accelerating the receipt of benefits pursuant to such Award,
      either automatically or in the discretion of the Committee, upon the occurrence
      of specified events, including, without limitation, a Change of Control of
      the
      Company or the termination of the employment of the Participant. A "Change
      in
      Control" of the Company shall be deemed to have occurred if (i) there shall
      be
      consummated (x) any consolidation or merger of the Company in which the Company
      is not the continuing or surviving corporation or pursuant to which shares
      of
      the Company's Common Stock are to be converted into cash, securities or other
      property, other than a merger of the Company in which the holders of the
      Company's Common Stock immediately prior to the merger have the same
      proportionate ownership of common stock of the surviving corporation immediately
      after the merger, or (y) any sale, lease, exchange or other transfer (in one
      transaction or a series of related transactions) of all, or substantially all,
      of the business and/or assets of the Company, or (ii) the stockholders of the
      Company approve a plan or proposal for the liquidation or dissolution of the
      Company, or (iii) any "person" (as defined in Sections 13(d) and 14(d) of the
      Securities Exchange Act of 1934, as amended (the "Exchange Act"), including
      any
      group), shall become the "beneficial owner" (as defined in Rule 13d-3 under
      the
      Exchange Act), directly or indirectly, of fifty (50%) percent or more of the
      Company's outstanding Common Stock, or (iv) if for any reason a majority of
      the
      Board is not comprised of "Continuing Directors," where a "Continuing Director"
      of the Corporation as of any date means a member of the Board who (x) was a
      member of the Board two years prior to such date and at all times through such
      date or (y) was nominated for election or elected to the Board with the
      affirmative vote of at least two-thirds of the directors who were Continuing
      Directors at the time of such nomination or election; provided,
however,
      that no
      individual initially elected or nominated as a director of the Corporation
      as a
      result of an actual or threatened election contest with respect to directors
      or
      any other actual or threatened solicitation of proxies or consents by or on
      behalf of any person other than the Board shall be deemed to be a Continuing
      Director. 

     

    3.4.3 provisions
      relating
      to the status of an Award as an incentive stock option (an "Incentive
      Stock Option")
      under
      Section 422 of the Internal Revenue Code of 1986, as amended (the
      "Code"),
      including but
      not limited to:

     

    3.4.3.1 a
      requirement that
      the exercise price for each Incentive Stock Option granted hereunder shall
      be
      not less than one hundred percent (100%) of the Fair Market Value (as defined
      in
      this Plan) of the Common Stock on the date such Award is granted to a
      Participant (110% if the Participant owns, directly or indirectly through the
      application of the attribution rules of Section 424(d) of the Code, stock
      possessing more than 10% of the total combined voting power of all classes
      of
      stock of the Company, its parent and any Subsidiary);

     

    3.4.3.2 a
      provision that
      any Incentive Stock Option granted under this Plan shall by its terms be
      nontransferable by the Participant other than by will or the laws of descent
      and
      distribution (in which case such descendant or beneficiary shall be subject
      to
      all terms of the Plan applicable to Participants) and is exercisable during
      the
      Participant's lifetime only by the Participant or by the Participant's guardian
      or legal representative in the event of the Participant's death or
      disability;

     

    3.4.3.3 a
      provision that
      for so long as required under Section 422 of the Code and the regulations
      promulgated thereunder, during the term of the Plan, the aggregate Fair Market
      Value of the Common Stock with respect to which Incentive Stock Options are
      first exercisable by a Participant under this Plan and all other plans of the
      Company, its parent or any Subsidiary during any calendar year shall not exceed
      $100,000 and options in excess of such amount shall be treated as non-qualified
      stock options. For the purpose of this paragraph, the Fair Market Value of
      the
      Common Stock shall be determined at the time the Incentive Stock Option is
      granted;

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3.4.3.4 a
      requirement that
      any stock option may not be exercised after the expiration of seven years from
      the date such stock option is granted to a Participant; and

     

    3.4.3.5 a
      provision that
      the Participant must notify the Company in writing of any sale or other
      disposition of shares of Common Stock acquired pursuant to an Incentive Stock
      Option if such sale or other disposition occurs (i) within two years of the
      grant of the Incentive Stock Option or (ii) within one year of the issuance
      of the shares of Common Stock to the Participant.

     

    3.4.4 a
      right to
      repurchase the Common Stock acquired upon exercise of an Award if Participant's
      employment or association with the Company or any Subsidiary is terminated
      for
      any reason, or in other circumstances, at either the exercise price thereof
      or
      the Fair Market Value thereof on the last day of the month preceding the month
      in which such termination or other circumstance occurs; provided,
however,
      that if the right
      to repurchase is at the exercise price thereof, such repurchase right shall
      lapse at the rate of at least 20% of the shares per year over five years from
      the date the Award is granted. Such repurchase right shall be exercised for
      cash
      or cancellation of purchase money indebtedness for the shares within 90 days
      of
      termination of employment (or in the case of securities issued upon exercise
      of
      Awards after the date of termination, within 90 days after the date of
      exercise). Each certificate representing Common Stock subject to such provisions
      shall bear a legend to the effect that such shares are subject to certain
      repurchase rights of the Company.

     

    

    3.4.5 a
      provision that
      upon a termination of employment for cause, the Participant will not be entitled
      to exercise or vest in any Award or other rights at any time after such
      termination. For purposes of this Plan, "cause"
      is defined as:
      (i) an act of dishonesty or willful misconduct; (ii) a breach of fiduciary
      duty
      owed to the Company, any Subsidiary or its stockholders involving personal
      profit or any other material breach of fiduciary duty; (iii) an act of fraud,
      embezzlement, malfeasance or misappropriation of Company property or any
      Subsidiary's property; (iv) a conviction of an illegal act or felony, or use
      of
      illegal drugs or controlled substances; or (v) a willful failure to perform
      reasonable duties, responsibilities or instructions from the Company or any
      Subsidiary. or

    

    3.4.6 a
      provision
      entitling a Participant or Permitted Transferee to exercise Awards other than
      Incentive Stock Options after retirement as follows:

    

    3.4.6.1 Retirement
      After
      Age 55.
      A Participant
      shall be entitled to exercise any of the Participant’s Awards other than
      Incentive Stock Options for a period of thirty-six (36) months from the date
      of
      such Participant’s retirement from employment after age 55 in accordance with
      the Company’s then-current retirement policy (or the then-current retirement
      policy of any parent or Subsidiary, if applicable), to the extent the
      Participant was entitled to exercise such Award on the date of the Participant’s
      retirement, and provided that the actual date of exercise is in no event after
      the expiration of the term of the Award. In the event that a Participant intends
      to retire from employment after age 55 and such Participant is the holder of
      one
      or more Incentive Stock Options, then such Participant shall be entitled, for
      a
      period of sixty (60) days ending on the date which is six (6) months prior
      to
      the Participant’s date of retirement, to elect to convert one or more Incentive
      Stock Options into non-statutory stock options by written request received
      by
      the Company within such sixty (60) day period and, thereafter, such newly
      converted non-statutory stock options shall be subject to the thirty-six (36)
      month exercise period set forth herein; provided that, such Participant actually
      retires on his or her retirement date. In the event a Participant fails to
      convert any Incentive Stock Option hereunder, then such Incentive Stock Options
      shall be governed by the provisions of Section 3.5.5 below.

     

    3.4.6.2 Retirement
      at
      Age 60 or Older.
      A Participant
      shall be entitled to exercise any of the Participant’s Award according to the
      same provisions as stated in Section 3.4.2, except, that the Awards held by
      a Participant who retires at age 60 or older are also subject to the following
      accelerated vesting: In cases where a Participant retires at age 60 or older,
      with at least 15 years of service with the Company and predecessor companies,
      50% of their unvested Awards at the date of retirement automatically vest and
      an
      additional 5% of their unvested Awards vest for each year of service beyond
      15
      years. In cases of Participants retiring at age 60 or older with 25 or more
      years of service all unvested Awards vest.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    3.5 Any
      Award to
      acquire shares of Common Stock granted under this Plan shall comply with the
      following provisions:

     

    3.5.1 the
      exercise price
      per share of Common Stock shall not be less than, in the case of stock options,
      100% of the Fair Market Value of a share of Common Stock at the time the option
      is granted, except that the exercise price of an Incentive Stock Option shall
      be
      110% of the Fair Market Value in the case of any person who owns, directly
      or
      indirectly through the application of the attribution rules of Section 424(d)
      of
      the Code, stock possessing more than 10% of the total combined voting power
      of
      all classes of stock of the Company, its parent and any Subsidiary;

     

    3.5.2 the
      exercise period
      of the Award shall not be more than 60 months from the date the Award is
      granted;

     

    3.5.3 the
      Award shall be
      nontransferable other than by will or the laws of descent and distribution;
      provided, however, that the transfer by a Participant to a trust created by
      the
      Participant for the benefit of the Participant or the Participant's family
      which
      is revocable at any and all times during the Participant's lifetime by the
      Participant and as to which the Participant is the sole trustee during his
      or
      her lifetime, will not be deemed to be a transfer for purposes of this Plan.
      In
      addition, under such rules and regulations as the Committee may establish
      pursuant to the terms of this Plan, a beneficiary may be designated with respect
      to an Award in the event of the death of a Participant. If the estate of the
      Participant is the beneficiary with respect to such grant, any rights with
      respect to such grant may be transferred to the person or entity (including
      a
      trust) entitled thereto under the will of such Participant or pursuant to the
      laws of descent and distribution. Notwithstanding the foregoing, the Committee
      may, in its discretion, authorize all or a portion of any Award to be granted
      to
      a Participant to be on terms which permit transfer by such Participant to
      (i) the spouse, children or grandchildren of the Participant (collectively,
      the "Immediate
      Family Members"),
      (ii) a
      trust or trusts for the exclusive benefit of such Immediate Family Members,
      (iii) a partnership in which such Immediate Family Members are the only
      partners, or (iv) any other person or entity that the Committee, in its
      discretion, may permit (collectively, when so approved by the Committee, a
      "Permitted
      Transferee");
      provided that
      (1) such Award is not an Incentive Stock Option, (2) the Award
      Agreement pursuant to which such Award is granted is approved by the Committee,
      and expressly provides for transferability in a manner consistent with this
      Section 3.5.3, and (3) subsequent transfers of transferred Awards are
      prohibited except those in accordance with this Section 3.5.3. Following
      transfer, any such Award shall continue to be subject to the same terms and
      conditions as were applicable immediately prior to transfer, provided that
      for
      purposes of this Section 3.5.3, Section 10 and Section 13 hereof,
      the term "Participant" shall be deemed to refer to the Permitted Transferee.
      In
      addition, any provisions regarding termination of employment pursuant to
      Section 3.4.2, Section 3.4.4, Section 3.4.5, Section 3.4.6 or
      Section 3.5.5 hereof shall continue to be applied with respect to the
      original Participant. Following termination of a Participant, Awards shall
      be
      exercisable by the Permitted Transferee only to the extent, and for the periods
      specified in, Section 3.4.5 or Section 3.5.5, as applicable. Unless
      otherwise required by this Plan, the Company shall have no obligation to notify
      the Permitted Transferee as to events that may affect the exercisability or
      expiration of any Award, including, without limitation, the original
      Participant's termination of employment or association with the Company or
      any
      Subsidiary. Before any transfer becomes effective, the intended transferee
      (or
      his or her parents or legal guardians or agents) must execute an assumption
      agreement describing the rights and obligations of the intended transferee
      including, without limitation, who has the power to exercise the Award (if
      the
      intended transferee is a minor, partnership, trust or corporation or otherwise
      is not readily apparent who has the authority to exercise such option), who
      is
      responsible for taxes and to whom notices are to be delivered;

     

    3.5.4 except
      as otherwise
      provided herein, in the case of an Award granted to persons other than officers
      or consultants of the Company or its affiliates, the Award's vesting period
      shall be at least 20% per year over five years from the date the Award is
      granted, subject to reasonable conditions including, without limitation,
      continued employment; in the case of an Award granted to officers or consultants
      of the Company or its affiliates, the Award shall vest at any time or during
      any
      period established by the Committee;

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    3.5.5 unless
      employment
      is terminated for cause (as defined above), and subject to Section 3.4.6, the
      Participant shall be entitled to exercise his or her Awards after termination
      of
      employment as follows:

     

    3.5.5.1 at
      least six (6)
      months from the date of termination if termination was caused by death or
      disability within the meaning of Section 22(e)(3) of the Code;
      and

     

    3.5.5.2 at
      least thirty
      (30) days from the date of termination if termination was caused by other than
      death or disability;

     

    3.5.6 all
      Participants
      shall be provided with financial statements at least annually unless all
      Participants are key employees of the Company whose duties in connection with
      the Company assure them the equivalent information; and

     

    3.5.7 any
      stock option
      shall be clearly identified as to its status as an "Incentive Stock Option"
      or a
      "non-qualified stock option."

     

    3.6 Notwithstanding
      anything to the contrary herein, in no event may the Committee (i) amend
      the terms of any Award to provide for a lower exercise price after the date
      of
      grant of such Award, or (ii) issue new Awards in exchange for the
      cancellation of outstanding Awards, unless approved by a majority of the
      Company's stockholders.

     

    
      	
              Section
                4

            	
              Terms
                of
                Awards Other Than Stock Options.

            

    

     

    4.1 Stock
      Appreciation Rights.
“Stock
      Appreciation Right”
means
      any right
      granted to a Participant to receive, upon exercise by the Participant, the
      excess of (a) the Fair Market Value of one share of Common Stock on the date
      of
      exercise or, if the Committee shall so determine, at any time during a specified
      period before the date of exercise over (b) the grant price of the right on
      the
      date of grant, or if granted in connection with an outstanding stock option
      on
      the date of grant of the related stock option, as specified by the Committee
      in
      its sole discretion, which shall not be less than 100% of the Fair Market Value
      of one share of Common Stock on such date of grant of the right or the related
      stock option, as the case may be. Any payment by the Company in respect of
      such
      right may be made in, cash, shares of Common Stock, other property or any
      combination thereof, as the Committee, in its sole discretion, shall determine.
      Stock Appreciation Rights may be granted hereunder to Participants either alone
      or in addition to other Awards granted under the Plan and may, but need not,
      relate to a specific stock option. The provisions of Stock Appreciation Rights
      need not be the same with respect to each recipient. Any Stock Appreciation
      Right related to a stock option may be granted at the same time such stock
      option is granted or at any time thereafter before exercise or expiration of
      such stock option. In the case of any Stock Appreciation Right related to any
      stock option, the Stock Appreciation Right or applicable portion thereof shall
      terminate and no longer be exercisable upon the termination or exercise of
      the
      related stock option, except that a Stock Appreciation Right granted with
      respect to less than the full number of shares of Common Stock covered by a
      related option shall not be reduced until the exercise or termination of the
      related stock option exceeds the number of shares of Common Stock not covered
      by
      the Stock Appreciation Right. Any stock option related to any Stock Appreciation
      Right shall no longer be exercisable to the extent the related Stock
      Appreciation Right has been exercised. The Committee may impose such conditions
      or restrictions on the exercise of any Stock Appreciation Right as it shall
      deem
      appropriate.

     

    4.2 Restricted
      Stock.
“Restricted
      Stock”
means
      any share
      of Common Stock issued with the contingency or restriction that the holder
      may
      not sell, transfer, pledge or assign such share of Common Stock and with such
      other contingencies or restrictions as the Committee, in its sole discretion,
      may impose (including, without limitation, any contingency or restriction on
      the
      right to vote such share of Common Stock and the right to receive any cash
      dividends), which contingencies and restrictions may lapse separately or in
      combination, at such time or times, in installments or otherwise, as the
      Committee may deem appropriate. 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    4.2.1
Issuance.
      A Restricted
      Stock Award shall be subject to contingencies or restrictions imposed by the
      Committee during a period of time specified by the Committee (the “Restricted
      Period”).
      Restricted
      Stock Awards may be issued hereunder to Participants, for no cash consideration
      or for such minimum consideration as may be required by applicable law, either
      alone or in addition to other Awards granted under the Plan. The provisions
      of
      Restricted Stock Awards need not be the same with respect to each recipient.
      Awards of Restricted Stock may be made without regard to the Fair Market Value
      of the shares of Common Stock, provided, however, that Awards of Restricted
      Stock may not exceed 25% of the maximum number of shares subject to Awards
      in
      any calendar year.

     

    4.2.2
Forfeiture.
      Except as
      otherwise determined by the Committee at the time of grant or thereafter, upon
      termination of employment for any reason during the Restricted Period, all
      shares of Restricted Stock still subject to contingency or restriction shall
      be
      forfeited by the Participant and reacquired by the Company. Non-restricted
      shares, evidenced in such manner as the Committee shall deem appropriate, shall
      be issued to the Participant promptly after the Restricted Period, as determined
      or modified by the Committee, shall expire.

     

    4.2.3
Minimum
      Vesting
      Condition.
      The minimum
      Restricted Period applicable to any Restricted Stock Award that is not subject
      to performance conditions restricting transfer shall be three (3) years from
      the
      date of grant; provided, however, that a Contingency Period of less than three
      (3) years may be approved for such Awards with respect to up to 10,000 shares
      of
      Common Stock under the Plan.

     

    4.3 Performance
      Awards.
“Performance
      Award”
means
      any Award
      of Performance Shares or Performance Units. Performance Awards may be granted
      hereunder to Participants, for no cash consideration or for such minimum
      consideration as may be required by applicable law, without regard to the Fair
      Market Value of the shares of Common Stock, either alone or in addition to
      other
      Awards granted under the Plan. The performance criteria to be achieved during
      any Performance Period and the length of the Performance Period shall be
      determined by the Committee upon the grant of each Performance Award. Except
      as
      for Awards that are accelerated in connection with a Change of Control,
      Performance Awards will be paid only after the end of the relevant Performance
      Period. Performance Awards may be paid in cash, shares of Common Stock, other
      property or any combination thereof, in the sole discretion of the Committee,
      at
      the time of payment. The performance levels to be achieved for each Performance
      Period and the amount of the Award to be paid shall be conclusively determined
      by the Committee. Performance Awards may be paid in a lump sum or in
      installments following the close of the Performance Period or, in accordance
      with procedures established by the Committee, on a deferred basis. “Performance
      Period”
means
      that period
      established by the Committee at the time any Performance Award is granted or
      at
      any time thereafter during which any performance goals specified by the
      Committee with respect to such Award are to be measured. A Performance Period
      may not be less than one year. “Performance
      Share”
means
      any grant
      of a unit valued by reference to a designated number of shares of Common Stock,
      which value may be paid to the Participant by delivery of such property as
      the
      Committee shall determine, including, without limitation, cash, shares of Common
      Stock or any combination thereof, upon achievement of such performance goals
      during the Performance Period as the Committee shall establish at the time
      of
      such grant or thereafter. “Performance
      Unit”
means
      any grant
      of a unit valued by reference to a designated amount of property other than
      shares of Common Stock, which value may be paid to the Participant by delivery
      of such property as the Committee shall determine, including, without
      limitation, cash, shares of Common Stock or any combination thereof, upon
      achievement of such performance goals during the Performance Period as the
      Committee shall establish at the time of such grant or thereafter.

     

    4.4 Other
      Stock Unit
      Awards.
      Other Awards of
      shares of Common Stock and other Awards that are valued in whole or in part
      by
      reference to, or are otherwise based on, shares of Common Stock or other
      property (“Other
      Stock
      Unit Awards”)
      may be granted
      hereunder to Participants, either alone or in addition to other Awards granted
      under the Plan. Other Stock Unit Awards may be granted hereunder to
      Participants, for no cash consideration or for such minimum consideration as
      may
      be required by applicable law, without regard to the Fair Market Value of the
      shares of Common Stock, either alone or in addition to other Awards granted
      under the Plan. Other Stock Unit Awards may be paid in shares of Common Stock,
      cash or any other form of property as the Committee shall determine. Subject
      to
      the provisions of the Plan, the Committee shall have sole and complete authority
      to determine the Participants of the Company and its Subsidiaries to whom,
      and
      the time or times at which, such Awards shall be made, the number of shares
      of
      Common Stock to be granted pursuant to such Awards and all other conditions
      of
      the Awards. The provisions of other Stock Unit Awards need not be the same
      with
      respect to each recipient.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    4.5 Non-Discretionary
      Grants to Non-Employee Directors.
      Shares of Common
      Stock will be automatically issued to Eligible Directors as
      follows:

    

    4.5.1 Annual
      Issuances.
      On each Annual
      Issue Date, immediately after the annual election of directors, the Company
      shall issue to each Eligible Director then in office a number of shares of
      Common Stock equal to Fifty Thousand Dollars ($50,000) divided by the
      closing price on the relevant Annual Issue Date of one share of Common Stock
      on
      the New York Stock Exchange, rounded up to the nearest 100 shares, for a
      purchase price of $0.01 per Share.

    

    4.5.2 Termination
      of
      Membership on the Board.
      If an Eligible
      Director's membership on the Board terminates for any reason, no further shares
      of Common Stock shall be issued under this Plan to such Eligible Director on
      or
      after such date of termination.

     

    4.5.3 Certain
      Definitions.
      "Annual
      Issue Date"
      shall mean the
      date of the Company's Annual Meeting of Shareholders. "Eligible
      Director"
      shall mean any
      person who is a member of the Board of Directors and who is not a full or
      part-time employee of the Company or of any parent or subsidiary corporation
      (as
      defined in Section 424 of the Code) of the Company, and who has not been an
      employee of the Company or of any parent or Subsidiary of the Company within
      one
      (1) year prior to participation in this Plan.

     

    4.6 Annual
      Incentive
      Awards.
      Annual Incentive
      Awards are granted to senior executive officers of the Company based on the
      attainment of performance goals specified by the Committee. The Award period
      for
      an Annual Incentive Award is a fiscal year. No more than ninety (90) days after
      the beginning of each Award period, the Committee shall establish in writing
      the
      specific performance goals to be achieved, and the formula pursuant to which
      the
      amount of the Annual Incentive Award (equal to a specified percentage of a
      Participant's salary) shall be determined based on the attainment of specified
      levels of the applicable performance goals. The formula may take into account
      performance goals achieved in prior years. To the extent that an Annual
      Incentive Award is intended to qualify as "performance-based compensation"
      within the meaning of Section 162(m) of the Code, it shall not, when combined
      with other "performance-based compensation" (excluding any such compensation
      received pursuant to an option or stock appreciation right granted under this
      Plan) exceed $5,000,000 in any given Award period. Performance goals shall
      be
      based on one or any combination of the following business criteria: revenue;
      net
      income or net income per share; earnings before interest, taxes, depreciation
      and amortization; return on sales; return on assets; return on shareholders’
equity; cash flow; economic value added; cumulative operating income; return
      on
      investment; total shareholders’ return; cost reductions; or achievement of
      environment and health and safety goals of the Company or a Subsidiary or
      business unit of the Company or a Subsidiary for or within which the Participant
      primarily is employed. As soon as practical after the conclusion of each fiscal
      year, the Committee shall determine whether, and the extent to which, the
      performance goals for such fiscal year have been satisfied and the level of
      the
      Annual Incentive Award that has been earned. Payment of earned Annual Incentive
      Awards shall be made in cash.

     

    
      	
              Section 5.

            	
              Stock
                Subject to Plan.

            

    

     

    5.1 Subject
      to
      adjustment as provided in Section 8, at any time, the aggregate number of
      shares of Common Stock issued and issuable pursuant to all Awards (including
      all
      Incentive Stock Options) granted under this Plan shall not exceed Two Million
      Four Hundred Thousand (2,400,000) shares, as adjusted for any stock splits
      or dividends; and provided further that adjustments pursuant to Section 8
      with respect to Incentive Stock Options issued under this Plan, shall be limited
      to those that will not adversely affect the status of options as Incentive
      Stock
      Options. The share reserve set forth in this Section 5.1 along with all other
      share references in the Plan has been adjusted to reflect the two-for-one split
      in the Company's Common Stock effected in February 2006.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    5.2 For
      purposes of
      Section 5.1 of this Plan, the aggregate number of shares of Common Stock
      issued and issuable pursuant to Awards granted under this Plan shall at any
      time
      be deemed to be equal to the sum of the following:

     

    5.2.1 the
      number of
      shares of Common Stock that were issued prior to such time pursuant to Awards
      granted under this Plan, other than shares of Common Stock that were
      subsequently reacquired by the Company pursuant to the terms and conditions
      of
      such Awards and with respect to which the holder thereof received no benefits
      of
      ownership, such as dividends; plus 

     

    5.2.2 the
      maximum number
      of shares of Common Stock that are or may be issuable at or after such time
      pursuant to Awards granted under this Plan prior to such time.

     

    5.3 For
      clarification
      purposes, if an Award expires or becomes unexercisable without having been
      exercised in full, or is surrendered or exchanged, the unpurchased shares of
      Common Stock which were subject thereto shall become available for future grant
      under the Plan (unless the Plan has terminated); provided,
however,
      that shares of
      Common Stock that have actually been issued under the Plan shall not be returned
      to the Plan and shall not become available for future distribution under the
      Plan, unless they are repurchased by the Company at their original purchase
      price. 

     

    5.4 The
      aggregate
      number of shares of Common Stock subject to Awards granted to any one
      Participant in any one year shall not exceed Four Hundred
      Thousand (400,000) shares. Such number shall be subject to adjustment as
      provided in Section 8; provided,
however,
      that to the
      extent the Committee deems necessary, adjustments pursuant to Section 8
      shall be limited to those that will not adversely affect the status of Awards
      as
      "performance-based compensation" within the meaning of Section 162(m) of the
      Code.

     

    
      	
              Section 6.

            	
              Duration
                of Plan.

            

    

     

    No
      Awards shall be made under this Plan after February 10, 2011. Although shares
      of
      Common Stock may be issued after February 10, 2011 pursuant to Awards made
      on or
      prior to such date, no shares of Common Stock shall be issued under this Plan
      after February 10, 2018 (the "Termination
      Date").

     

    
      	
              Section 7.

            	
              Administration
                of Plan.

            

    

     

    7.1 This
      Plan shall be
      administered by the Compensation Committee (the "Committee")
      of the Board of
      Directors consisting of two or more directors, who are independent directors
      (as
      determined in accordance with the rules of the New York Stock Exchange). With
      respect to any Awards intended to qualify for the "performance-based
      compensation" exception in Section 162(m) of the Code, the Committee shall,
      to the extent necessary, consist of two or more directors, each of whom is
      an
      "outside director" within the meaning of Section 162(m) of the Code and
      such Award shall not be subject to Board approval. With respect to any Award
      subject to, and intended to be exempt from, Section 16 of the Exchange Act,
      such Award shall be granted in accordance with the provisions of Rule 16b-3
      of the Rules promulgated under the Exchange Act.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    7.2 Subject
      to the
      provisions of this Plan, the Committee shall be authorized and empowered to
      do
      all things necessary or desirable in connection with the administration of
      this
      Plan, including, without limitation, the following:

     

    7.2.1 adopt,
      amend and
      rescind rules and regulations relating to this Plan;

     

    7.2.2 determine
      which
      persons are Participants and to which of such Participants, if any, Awards
      shall
      be granted hereunder;

     

    7.2.3 grant
      Awards to
      Participants and determine the terms and conditions thereof, including the
      number of shares of Common Stock issuable pursuant thereto;

     

    7.2.4 accelerate
      the
      exercisability of an Award or extend the period during which an owner of an
      Award may exercise his or her rights under such Award (but not beyond the
      Termination Date);

     

    7.2.5 determine
      whether,
      and the extent to which adjustments are required pursuant to Section 8
      hereof; and

     

    7.2.6 interpret
      and
      construe this Plan and the terms and conditions of any Award granted this
      Plan.

     

    Notwithstanding
      anything in this Section 7 to the contrary, the Committee shall not be empowered
      or entitled to take any action or exercise any discretion that would cause
      an
      Award intended to qualify as "performance-based compensation" within the meaning
      of Section 162(m) of the Code to fail such qualification.

     

    
      	
              Section 8.

            	
              Adjustments.
                

            

    

     

    If
      the outstanding securities of the class then subject to this Plan are increased,
      decreased or exchanged for or converted into cash, property or a different
      number or kind of securities, or if cash, property or securities are distributed
      in respect of such outstanding securities, in either case as a result of a
      reorganization, merger, consolidation, recapitalization, restructuring,
      reclassification, dividend (other than cash dividends) or other distribution,
      stock split, reverse stock split or the like, or if substantially all of the
      property and assets of the Company are sold, then the Committee shall make
      appropriate and proportionate adjustments in (i) the number, exercise price
      and type of shares or other securities or cash or other property, as applicable,
      that may be acquired pursuant to Incentive Stock Options and other Awards
      theretofore granted under this Plan, (ii) the maximum number and type of
      shares or other securities that may be issued pursuant to Incentive Stock
      Options and other Awards thereafter granted under this Plan, and (iii) the
      maximum number of shares of Common Stock that may be subject to Awards granted
      during any twelve-month period to any Participant, as provided in
      Section 5.4 hereof; provided,
however,
      that no
      adjustment shall be made to the number of shares of Common Stock that may be
      acquired pursuant to outstanding Incentive Stock Options or the maximum number
      of shares of Common Stock with respect to which Incentive Stock Options may
      be
      granted under this Plan to the extent such adjustment would result in such
      options being treated as other than Incentive Stock Options; provided,
further,
      that no such
      adjustment shall be made to the extent the Committee determines that such
      adjustment would result in the disallowance of a federal income tax deduction
      for compensation attributable to Awards hereunder by causing such compensation
      to be other than "performance-based compensation" within the meaning of Section
      162(m)(4)(C) of the Code.

     

    
      	
              Section 9.

            	
              Code
                Section 162(m) Provisions.
                

            

    

     

    9.1 Application
      of
      Section.
      Notwithstanding
      any other provision of this Plan, this Section 9 shall apply to any Award of
      Restricted Stock, Performance Award, or Other Stock Unit Award that is granted
      to a Participant who is, or who is likely to be as of the end of the tax year
      in
      which the Company would claim a tax deduction in connection with such Award,
      a
      "covered employee" within the meaning of Section 162(m)(3) of the Code, but
      only
      to the extent that the Company's deduction for compensation paid to such
      Participant is limited pursuant to Section 162(m) of the Code.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    9.2 Performance
      Conditions.
      If an Award is
      subject to this Section 9, then the lapsing of contingencies or
      restrictions thereon (in the case of an Award subject to contingencies or
      restrictions), or the distribution of cash, shares of Common Stock, or other
      property pursuant thereto (in the case of an Award not subject to contingencies
      or restrictions), as applicable, shall be subject to the achievement of one
      or
      more objective performance goals established by the Committee. No later than
      ninety (90) days after the beginning of each Award period, or, in the case
      of an
      Award period that is shorter than one (1) year, no later than the date that
      represents twenty-five percent (25%) of the number of days in such Award period,
      the Committee shall establish in writing the specific performance goals to
      be
      achieved, and the formula pursuant to which the amount of the Award or Awards
      shall be determined based on the attainment of specified levels of the
      applicable performance goals. Performance goals shall be based on one or any
      combination of the following business criteria: revenue; net income or net
      income per share; earnings before interest, taxes, depreciation and
      amortization; return on sales; return on assets; return on shareholders’ equity;
      cash flow; economic value added; cumulative operating income; return on
      investment; total shareholders’ return; cost reductions; or achievement of
      environment and health and safety goals of the Company or a Subsidiary or
      business unit of the Company or a Subsidiary for or within which the Participant
      primarily is employed. An Award subject to this Section 9 shall not, when
      combined with other "performance-based compensation" (excluding any such
      compensation received pursuant to an option or stock appreciation right granted
      under this Plan), exceed $5,000,000 in any given fiscal year.

     

    9.3 Adjustment
      of
      Awards.
      The Committee may
      not increase the amount payable pursuant to, waive the achievement of the
      performance goals applicable to, or accelerate the lapsing of contingencies
      or
      restrictions with respect to, an Award subject to this Section 9. The foregoing
      sentence is not required to apply to an Award payable in connection with a
      Change of Control, however, if it does not apply, such Award will in no event
      qualify as "performance-based compensation" to the extent required by
      law.

     

    9.4 Committee
      Authority.
      The Committee
      shall have the power to impose such other restrictions on Awards subject to
      this
      Section 9 as it may deem necessary or appropriate to ensure that such
      Awards satisfy all requirements for “performance-based compensation” within the
      meaning of Section 162(m) of the Code, or any successor provision
      thereto.

     

    
      	
              Section 10.

            	
              Amendment
                and Termination of Plan.
                

            

    

     

    The
      Board may amend
      or terminate this Plan at any time and in any manner, subject to the following
      limitations:

     

    10.1 No
      such amendment
      or termination shall deprive the recipient of any Award theretofore granted
      under this Plan, without the consent of such recipient, of any of his or her
      rights thereunder or with respect thereto; and

     

    10.2 If
      an amendment to
      this Plan would (i) increase the maximum number of shares of Common Stock
      that may be issued pursuant to (1) all Awards granted under this Plan,
      (2) all Incentive Stock Options granted under this Plan, or (3) Awards
      granted under this Plan during any calendar year to any one Participant,
      (ii) change the class of persons eligible to receive Awards under this
      Plan, or (iii) affect this Plan's compliance with applicable provisions of
      the Code, as amended from time to time, the amendment shall be subject to
      approval by the Company's stockholders to the extent required to comply with
      Sections 422 and 162(m) of the Code, and other applicable provisions of or
      rules
      under the Code, as amended from time to time.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
              Section 11.

            	
              Effective
                Date of Plan.
                

            

    

     

    This
      Plan shall be
      effective as of February 10, 2004, the date upon which it was approved by the
      Board; provided,
however,
      that no options
      or other Awards may be issued under this Plan until it has been approved by
      the
      affirmative votes of the holders of a majority of the outstanding securities
      of
      the Company entitled to vote for directors, which approval shall be obtained
      within twelve months from the date hereof.

     

    
      	
              Section 12.

            	
              Definition
                of Fair Market Value.

            

    

     

    For
      purposes of
      this Plan, "Fair
      Market
      Value"
      of the Company's
      Common Stock shall mean (i) if the shares of Common Stock are listed on the
      New York Stock Exchange, the closing sales price of the Common Stock on the
      relevant date as reported in the Wall
      Street
      Journal,
      (ii) if the
      shares of Common Stock are not listed on the New York Stock Exchange, the
      average of the closing bid and asked prices per share for the Common Stock
      in
      the over-the-counter market as quoted on the New York Stock Exchange on the
      relevant date, or (iii) if the shares of Common Stock are not listed on the
      New York Stock Exchange, an amount determined in good faith by the
      Committee.

     

    
      	
              Section
                13.

            	
              No
                Stockholder and Employment Rights.

            

    

     

    13.1 A
      Participant shall
      have no stockholder rights with respect to the shares of Common Stock subject
      to
      his or her outstanding Awards until such shares are purchased on the
      Participant's behalf in accordance with the provisions of the Plan and the
      Participant has become a holder of record of the purchased shares.

     

    13.2 Nothing
      in the Plan
      shall confer upon the Participant any right to continue in the employ of the
      Company, its parent or any Subsidiary for any period of specific duration or
      interfere with or otherwise restrict in any way the rights of the Company,
      its
      parent or any Subsidiary or of the Participant, which rights are hereby
      expressly reserved by each, to terminate such person's employment at any time
      for any reason, with or without cause. 

     

    Section
      14.    Termination
      of Prior Plans. No
      stock options or
      other awards may be granted under the Prior Plans after the date of stockholder
      approval of this Plan, but all such awards theretofore granted shall extend
      for
      the full stated terms thereof in accordance with the terms of the Prior Plans.
      The term "Prior
      Plans"
      means the
      Company's 1991 Senior Management and Field Management Plan, the 1992
      Non-Qualified Stock Option Plan, the 1993 Employee Stock Option Plan, the 1993
      Second Amended and Restated Non-Employee Stock Option Plan and the 2000 Stock
      Incentive Plan.

    
      
        
        

      

      
        11Exhibit
      10.40

     

    BUILDING
      MATERIALS HOLDING CORPORATION

     

    2007
      ANNUAL
      INCENTIVE PROGRAM

     

    

     

    WHEREAS,
      the
      Company obtained shareholder approval of the Building Materials Holding
      Corporation 2004 Incentive and Performance Plan (the "Plan"),
      which
      authorizes the Committee under Section 4.6 to grant annual incentive awards
      ("Annual Incentive Awards") based on the performance of Building Materials
      Holding Corporation ("BMHC" or the "Company"); and which authorizes the
      Committee under Section 4.3 to grant Performance Shares (as defined in the
      Plan);

     

    WHEREAS,
      the
      Compensation Committee of the Board of Directors (the "Committee") established
      this 2007 Annual Incentive Program (the "Incentive Program") for certain
      employees of BMHC and SelectBuild, Inc. ("Participants") to increase the value
      of the Company by aligning the interests of the Participants with those of
      the
      stockholders of the Company through the granting of Annual Incentive Awards;
      and

     

    WHEREAS,
      the
      Committee on November 14, 2006 approved the terms of the Incentive Program
      as
      applicable to SelectBuild, subject to further adjustments allowing for a
      designated portion of the Annual Incentive Award to be paid through the award
      of
      Performance Shares (called "Management Performance Units" or "MPUs") granted
      under the terms and conditions of that form of Management Performance Unit
      Agreement set forth in Exhibit A hereto;

     

    WHEREAS,
      the
      Committee on November 14, 2006 reviewed the terms of the proposed Incentive
      Program as applicable to BMHC, final action being deferred to the February
      meeting of the Committee;

     

    WHEREAS,
      the
      Committee on December 7, 2006 further amended the Incentive Program as
      applicable to SelectBuild;

     

    WHEREAS,
      the
      Committee on February 19, 2007 approved the metrics for the Incentive Program
      applicable to BMHC, subject to final approval of the allocation of funds
      generated by the metrics;

     

    WHEREAS,
      the
      Committee on March 29, 2007 approved the final terms of the Incentive Program
      as
      applicable to BMHC;

     

    WHEREAS,
      the
      Committee on April 19, 2007 approved the final terms of the Incentive Program
      applicable to SelectBuild; and

     

    WHEREAS,
      Section 7
      of the Plan authorizes the Committee to administer the Incentive
      Program.

     

    NOW,
      THEREFORE, the
      Company, through the foregoing actions of the Committee, hereby adopts the
      following Incentive Program effective January 1, 2007.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1. Calculation
      of Annual Incentive Award

     

    a. The
      Annual
      Incentive Award is based on (i) NOPAT and (ii) Economic Profit (EP) performance
      by the Company (for BMHC Participants) or by the SelectBuild business
      segment
      and its regions or markets
      (for SelectBuild
      Participants), relative to targets during the Company’s 2007 fiscal year
      ("Fiscal
      Year
      2007").
      Each NOPAT
      amount and each EP amount is multiplied by a funding percentage to determine
      separate pools from which Participants' Annual Incentive Awards will be paid
      based on each Participant's designated individual percentage share of such
      pools. A BMHC Participant will have his or her Annual Incentive Award drawn
      from
      Company-wide pools, and a SelectBuild Participant will have his or her Annual
      Incentive Award drawn from business segment, regional and/or market pools,
      as
      applicable to that Participant. To calculate a Participant's Annual Incentive
      Award, the Participant's individual percentage shares of the pools applicable
      to
      him or her are multiplied by each pool dollar amount for Fiscal Year 2007 and
      the results are added together. Each Participant shall receive an Annual
      Incentive Award Summary setting forth the following features applicable to
      the
      individual Participant:

     

    
      	 	
              ·

            	
              Funding
                percentages applicable to NOPAT and
                EP;

            

    

     

    
      	 	
              ·

            	
              Pools
                (Company-wide, business segment, regional, market);
                and

            

    

     

    
      	 	
              ·

            	
              Participant's
                individual percentage share of the applicable
                pools.

            

    

     

    Calculation
      of the
      Annual Incentive Award is performed by BMHC's Controller and Human Resources
      office and certified by the Committee, whose determination shall be final and
      binding on Participants.

     

    b. The
      financial
      performance of any business acquired by the Company shall be included in the
      calculation of NOPAT and EP on an as-incurred basis. Gains or losses on the
      sale
      of real estate by the Company shall be included in the calculation of NOPAT
      and
      EP. Other extraordinary or non-recurring gains or losses, including, without
      limitation, impairments due to an accounting rule change or other factor outside
      of management's control and not related to the ongoing operations of the
      Company, shall not be included in the calculation of NOPAT and EP unless
      specifically provided by the Committee. FAS 142 intangible impairments shall
      be
      included in the calculation of NOPAT and EP unless specifically excluded by
      the
      Committee.

     

    2. Payment
      of
      Annual Incentive Award

     

    Notwithstanding
      any
      other provision of this Incentive Program or the Plan, the Annual Incentive
      Award, or any portion thereof, is not and shall not be deemed to be earned
      by a
      Participant or payable to Participant until the end of Fiscal Year 2007
      (December 31, 2007). Such final determination and payment of the Annual
      Incentive Award (if any) shall be made within [sixty (60)] days following the
      end of Fiscal Year 2007. The sole exception is for Participants who are employed
      by BMHC but who are not officers, who may receive a mid-year payments of part
      of
      the cash portion only (see below) of their Annual Incentive Award. Payment
      of
      Annual Incentive Awards shall be made partly in the form of a cash lump sum,
      unless deferred in accordance with BMHC's deferred compensation plan for
      eligible employees, and partly in the form of an award of MPUs, which shall
      be
      made automatically on the date that the Committee certifies the value of such
      an
      employee's Annual Incentive Award. The allocation of the Annual Incentive Award
      between cash and MPUs shall be made in the sole determination of the Committee.
      In no event may the value of an Annual Incentive Award (including any grant
      of
      MPUs made as part of such award) exceed $5,000,000.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3. Terms

     

    a. Participant
      must be an active employee of the Company as of the end of Fiscal Year 2007
      (December 31, 2007) in order to receive an Annual Incentive Award or grant
      of
      MPU.
      Notwithstanding
      the foregoing, if,
      during Fiscal
      Year 2007, Participant (i) is involuntarily terminated by the Company other
      than
      for Cause, (ii) dies or becomes disabled, (iii) retires at age 55 or older
      with
      at least ten years of service, or (iv) is on an approved leave of absence,
      Participant (or his or her designated beneficiary) shall be eligible to receive
      an Annual Incentive Award that is prorated based on Participant’s number of days
      in active service with the Company during Fiscal Year 2007. Such prorated Annual
      Incentive Award, if any, shall be paid as provided in Section 2.
      For the avoidance
      of doubt, Participant shall not be entitled to an Annual Incentive Award if,
      before the end of Fiscal Year 2007, Participant is involuntarily terminated
      by
      the Company for Cause or voluntarily terminates employment with the Company
      under any circumstances except as outlined in (i) through (iv) of this
      paragraph.

     

    b. If
      Participant
      violates any provision of a non-competition agreement or a confidentiality
      agreement with the Company, Participant will not be eligible to receive an
      Annual Incentive Award or any pro rata portion thereof. 

     

    c. Notwithstanding
      any
      other provision of the Plan to the contrary, to the extent an Annual Incentive
      Award is payable to Participant after Participant’s termination of employment
      (other than due to Participant’s death), such payment shall be subject to
      Participant’s execution of an effective release of claims acceptable to the
      Company.

     

    d. Payments
      made
      pursuant to this Incentive Program are subject to all required federal, state
      and local withholding taxes. 

     

    e. It
      is the intent of
      the parties that the provisions of this Incentive Program conform to the
      requirements of Section 409A of the Internal Revenue Code of 1986 (the
      "Code")
      and any final
      Treasury Regulations or other authoritative guidance issued thereunder, if
      such
      Code section is applicable, and the Incentive Program shall be so construed
      and
      interpreted. In the event that the Company determines in good faith that any
      provision of this Incentive Program does not comply with Section 409A of the
      Code, the Company may amend this Incentive Program to the minimum extent
      necessary to cause the Incentive Program to comply. In the event that the
      Company determines in good faith that payment of an Annual Incentive Award
      pursuant to Section 2 hereof would violate Section 409A of the Code, then such
      award instead shall be paid on the date Participant incurs a separation from
      service from the Company as defined in Section 409A(a)(2)(A)(i) of the Code
      (or
      six months after such date if Section 409A(a)(2)(B)(i) of the Code
      applies).

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    4. Administration

     

    The
      Incentive
      Program shall be administered by the Committee. Any determination made by the
      Committee in interpreting or administering the Incentive Program, including
      determinations made in respect of Management Performance Units granted
      hereunder, shall be final and binding upon Participant. Payments under the
      Incentive Program are intended to qualify as "performance-based compensation"
      within the meaning of Section 162(m) of the Code, and the Incentive Program
      shall be administered consistently with those requirements.

     

    5. No
      Alienation, Assignment or Encumbrance of Payments

     

    A
      Participant’s interest hereunder may not be alienated, assigned or encumbered,
      except by will, beneficiary designation, or the laws of descent and
      distribution, or as otherwise approved by the Company in writing.

     

    6. No
      Employment Contract; No Effect on other Plans

     

    This
      Incentive
      Program shall not be deemed to be a contract of employment between the Company
      and Participant. Nothing contained herein shall give Participant the right
      to be
      retained in the employ of the Company or shall interfere with the right of
      the
      Company to discharge Participant at any time, with or without reason, for any
      reason or for no reason. This Incentive Program does not affect Participant’s
      right to participate in any other plan or program sponsored by the Company,
      including, without limitation, any discretionary bonus that Participant may
      be
      eligible to receive from time to time.

     

    7. Beneficiary

     

    In
      the event an Annual Incentive Award is payable hereunder after a Participant’s
      death, such award shall be paid to Participant’s designated beneficiary, or, if
      none, to Participant's estate.

     

    8. Definitions

     

    a. "Cause"
      means
      (i) conviction of or a plea of nolo
      contendre
      to a felony
      involving moral turpitude; (ii) misappropriating any significant amount of
      funds or property of the Company; (iii) attempting to obtain any
      significant personal profit from any transaction in which Participant has an
      interest which is adverse to the interest of the Company, unless the Company
      has
      first obtained consent from an officer of the Company; or (iv) a pattern of
      gross dereliction of duty that has not been cured within 15 days after
      Participant's receipt of written notice from the Company; provided, however,
      that if "Cause" otherwise is defined in an employment agreement between
      Participant and the Company, it shall have the meaning given in the employment
      agreement.

     

    b. "Economic
      Profit"
      means NOPAT minus
      the cost of capital as determined by the Company's Controller based on the
      Company's audited financial statements.

     

    c. "NOPAT"
      means Net
      Operating Profit After Tax as determined by the Company's Controller based
      on
      the Company's audited financial statements.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    9. Governing
      Law

     

    The
      Incentive
      Program shall be governed by, and construed in accordance with, the laws of
      the
      State of California without regard to its conflicts of law principles. All
      actions and proceedings arising out of or relating to the Incentive Program
      shall be heard and determined exclusively in a California state or federal
      court
      sitting in the Northern District of California or in the City and County of
      San
      Francisco, California, as applicable, and the parties hereto hereby irrevocably
      submit to the exclusive jurisdiction of such courts in any such action or
      proceeding and irrevocably agree to the laying of venue in such courts and
      waive
      the defense of an inconvenient forum to the maintenance of any such action
      or
      proceeding.

     

    10. Captions

     

    The
      captions of
      this Incentive Program are for convenience and reference only and in no way
      define, describe, extend or limit the scope or intent of this Incentive Program
      or the intent of any provision hereof.

     

    11. Severability

     

    Any
      provision of
      this Incentive Program which is deemed invalid, illegal or unenforceable in
      any
      jurisdiction shall, as to that jurisdiction and subject to this paragraph,
      be
      ineffective to the extent of such invalidity, illegality or unenforceability,
      without affecting in any way the remaining provisions hereof in such
      jurisdiction or rendering that or any other provision of this Incentive Program
      invalid, illegal, or unenforceable in any other jurisdiction.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    Form
      of
      Management Performance Unit Agreement

     

    
       

      BUILDING
        MATERIALS HOLDING CORPORATION

      

      MANAGEMENT
        PERFORMANCE UNIT AGREEMENT

      Pursuant
        to
        the

      2004
        INCENTIVE AND PERFORMANCE PLAN

      

       

      This
        Management
        Performance Unit Agreement (this “Agreement”) is made and entered into as of the
        ___ day of _________, 2008 (the “Date of Grant”) by and between Building
        Materials Holding Corporation, a Delaware corporation (the “Company”) and «To»
(“Grantee”). This Agreement is entered into pursuant to the Company’s 2004
        Incentive and Performance Plan (the “Plan”) and is subject to the terms thereof.
        Unless otherwise defined in this Agreement, capitalized terms used herein
        have
        the meanings designated in the Plan or Incentive Program (as defined
        below).

       

      1. GRANT
        OF
        MANAGEMENT PERFORMANCE UNITS.

       

      (a) The
        Company hereby,
        as of the Date of Grant, grants to Grantee an award of «Units» management
        performance units (the “MPUs”), which are Performance Shares granted pursuant to
        Section 4.3 of the Plan. Each MPU represents Grantee’s right to receive a cash
        settlement, upon vesting, equal to the Fair Market Value of one share of
        Common
        Stock on the vesting date plus Dividend Equivalents (defined below) declared
        with respect to such share during the vesting period. For purposes of this
        Agreement, “Fair Market Value” means the average trading price of Common Stock
        over the 11 trading-day period surrounding (i.e.,
        five trading days
        before, the measurement date, and five trading days after) the applicable
        measurement date.

       

      (b) The
        number of MPUs
        awarded hereunder is equal to ___% of the dollar value of the Annual Incentive
        Award awarded to Grantee under the Company’s 2007 Annual Incentive Program (the
“Incentive Program”), divided by the Fair Market Value of one share of Common
        Stock on the date the Committee certifies the amount of such Annual Incentive
        Award, and rounded up to the nearest whole share.

       

      (c) MPUs
        granted to
        Grantee will be credited to a Management Performance Unit Account, or “MPA,”
which is a hypothetical account designated under Grantee’s name used solely for
        the purpose of tracking the value to be paid to Grantee upon the MPUs’ vesting
        dates.

       

      2. VESTING
        AND
        SETTLEMENT.

       

      MPUs
        shall vest in
        three installments on January 31 of each year following the calendar year
        in
        which the MPUs were granted (i.e.,
        one-third on the
        first January 31, one-half of the balance on the second January 31, and the
        remaining balance on the third January 31), so long as Grantee has performed
        service (whether as an employee, director or consultant for the Company,
        SelectBuild Construction, Inc. (“SelectBuild”), or any of their respective
        affiliates) (“Service”) from the beginning of Fiscal Year 2008 to the applicable
        vesting date. MPUs shall be settled in cash by the Company or SelectBuild
        (i.e.,
        whichever entity
        Grantee directly provides services to) no later than 60 days after the
        applicable vesting date, provided, however, that the settlement of MPUs is
        subject to delay to the extent necessary to avoid incurring additional taxes
        pursuant to Section 409A of the Code. Grantee shall be entitled, at his or
        her
        election, to defer the cash settlement of MPUs into the BMHC Deferred
        Compensation Plan, pursuant to the terms and conditions of such plan and
        provided that Grantee is eligible to participate in such plan.

      
        
          
          

        

        
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      3. DIVIDEND
        EQUIVALENTS.

       

      Grantee
        shall be
        entitled to receive Dividend Equivalents with respect to the MPUs granted
        hereunder. “Dividend Equivalent” means the right to receive the cash equivalent
        (credited as additional MPUs) of all dividends paid with respect to one share
        of
        Common Stock. Dividend Equivalents (1) shall be determined when paid by BMHC,
        (2) shall be deemed to be reinvested in the Common Stock, (3) shall vest
        according to the same vesting schedule that applies to the underlying MPUs,
        and
        (4) shall be paid to Grantee at the same time vested MPUs are
        settled.

       

      4. TERMINATION
        EVENTS.

       

      The
        following
        provisions shall apply to all MPUs granted hereunder upon termination of
        Grantee’s Service:

       

      (a) If
        Grantee’s
        Service is terminated due to Grantee’s death or Disability, all MPUs credited to
        Grantee’s MPA shall become immediately vested and settled in accordance with
        Section 2. For purposes of this Agreement, “Disability” shall have the
        definition set forth in the Company’s Long-Term Disability Plan, or in the
        absence of such a definition, Disability shall mean Grantee’s inability, due to
        mental or physical incapacity, to substantially perform the duties of his
        or her
        employment for 180 consecutive days, and which impairment is determined to
        be
        total and permanent by a physician selected by the Company or SelectBuild
        (i.e.,
        whichever entity
        Grantee directly provides services to) or its insurers and reasonably acceptable
        to Grantee or his or her legal representative.

       

      (b) If
        the Company or
        SelectBuild, terminates Grantee’s Service without Cause, all unvested MPUs shall
        become immediately vested and settled in accordance with Section 2.

       

      (c) If
        Grantee
        voluntarily terminates Service under any circumstances, except as provided
        in
        Sections 4(a), (d) and (e), or Grantee’s Service is terminated for Cause, all
        MPUs, whether vested or unvested, shall be immediately forfeited without
        settlement or payment of value.

       

      (d) If
        Grantee’s
        Service terminates due to Grantee’s Retirement, Grantee’s MPUs shall continue to
        vest as if Grantee had continued to perform Service and shall be settled
        in
        accordance with Section 2.

       

      (e) If
        Grantee
        transfers employment from the Company to SelectBuild, or vice versa, without
        otherwise incurring a termination of employment (in the discretion of the
        Committee), MPUs shall continue to vest as if Grantee had not had a break
        in
        Service and shall be settled in accordance with Section 2.

       

      "Retirement"
        means
        Participant's voluntary termination from the Company (1) after reaching age
        55
        with 10 years of service, or (2) after reaching age 65.

       

      5. CHANGE
        IN
        CONTROL.

       

      All
        MPUs shall
        immediately and fully vest prior to the occurrence of a Change in Control
        and be
        settled no later than 30 days on or after the occurrence of a Change in Control.
        For purposes of this Agreement, Change in Control shall mean: (1) a change
        in
        control occurs at the Company, as defined in Section 3.4.2 of the Plan, or
        (2)
        any of the following occurs with respect to SelectBuild: (i) any “person” (as
        defined in Sections 13(d) and 14(d) of the Exchange Act, including any related
        group), other than the
        Company
        or an employee
        benefit plan sponsored by the Company or a controlled affiliate of the Company,
        acquires direct or indirect beneficial ownership of 50% or more of the
        outstanding voting equity of SelectBuild; (ii) the consummation of any sale
        or
        disposition of all or substantially all of the consolidated assets of the
        SelectBuild (other than such a sale or disposition immediately after which
        such
        assets will be owned directly or indirectly by the stockholders of SelectBuild
        in substantially the same proportions as prior to such sale or disposition);
        or
        (iii) a liquidation or dissolution of SelectBuild For avoidance of doubt,
        a
        Change in Control under clause (2) above only shall be applicable to employees
        of SelectBuild.

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      6. ADJUSTMENT
        OF
        MPUs.

       

      (a) If,
        at any time
        after the Date of Grant, the Committee determines that the earlier determination
        as to the achievement of performance goals under the Incentive Program was
        based
        on incorrect data and that, in fact, the performance goals have not been
        achieved or have been achieved to a greater or lesser extent than originally
        determined and a different number of MPUs would have been granted given the
        correct data, then (i) such portion of the MPUs that were granted erroneously
        shall be forfeited, (ii) any of such erroneously granted MPUs that became
        vested
        shall be deemed to be not vested, (iii) any cash settlement of such erroneously
        granted MPUs shall be repaid by Grantee to the Company or SelectBuild
        (i.e.,
        whichever entity
        Grantee directly provides services to) upon notice as provided by the Committee
        or shall reduce further payments of any Annual Incentive Award or cash
        settlement of MPUs from the Company or SelectBuild, and (iv) any MPUs not
        previously granted shall be immediately granted with the same terms and
        conditions as the MPUs originally granted as if they had been granted on
        the
        original Date of Grant.

       

      (b) Upon
        the occurrence
        of any event described in Section 8 of the Plan, the Committee shall make
        appropriate, equitable adjustments in the value of the MPUs described herein;
        provided, however, that no such adjustment shall be made to the extent that
        the
        Committee determines that such adjustment would result in the disallowance
        of a
        federal income tax deduction for compensation attributable to the MPUs under
        Section 162(m) of the Code.

       

      7. UNFUNDED
        STATUS
        OF MPUs.

       

      MPUs
        are an
        unfunded obligation of the Company to pay compensation in the future. Neither
        the grant nor vesting of MPUs hereunder, nor the taking of any other action
        in
        respect of MPUs shall give Grantee rights that are greater than those of
        a
        general creditor of the Company; provided, however, that the Company may
        create
        a trust or make other arrangements to meet its obligations in respect of
        MPUs,
        which trusts or other arrangements shall be consistent with the status of
        MPUs
        as an unfunded obligation, unless the Committee otherwise determines with
        the
        consent of Grantee.

       

      8. CLAIMS;
        NOTICES.

       

      (a) Any
        claim that
        Grantee makes for benefits relating to MPUs shall be filed in writing with
        the
        Committee. Written notice of the disposition of the claim shall be delivered
        to
        Grantee within 60 days after filing. If the claim is denied, the reasons
        shall
        be set forth in a statement delivered to Grantee. The filing of a claim in
        accordance with this Section 8 shall be a condition precedent to the initiation
        of any legal proceeding with respect to such claim.

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      (b) All
        notices or
        other communications made or given in respect off MPUs shall be in writing
        and
        shall be sufficiently made or given if hand-delivered or mailed by certified
        mail addressed to the Grantee at the address contained in the records of
        the
        Company or of SelectBuild, or to the Company [attention of the Committee]
        at the
        Company’s principal office.

       

      9. ENTIRE
        AGREEMENT.

       

      This
        Agreement,
        together with the Plan and the Incentive Program, constitutes the entire
        agreement between Grantee and the Company relating to this subject matter.
        No
        other prior or contemporaneous agreements, promises, representations, covenants,
        warranties, or any other undertaking whatsoever respecting such matters shall
        be
        deemed in any way to exist or to bind any of the parties. Grantee acknowledges
        and agrees that s/he has not executed this Agreement in reliance on any such
        other agreement, promise, representation, covenant, warranty, or undertaking.
        The Agreement may not be orally modified. All modifications must be agreed
        to in
        writing and signed by both parties.

       

      10. PLAN
        CONTROLS;
        INCENTIVE PROGRAM.

       

      (a) The
        terms of this
        Agreement are governed by the terms of the Plan, as it may be amended from
        time
        to time. In the event of any conflict between the provisions of this Agreement
        and the provisions of the Plan, the terms of the Plan shall
        control.

       

      (b) The
        general terms
        set forth in the Incentive Program, including but not limited to applicable
        portions of Sections 2 and 3 thereof, shall apply to the grant, vesting and
        settlement of MPUs.

       

      11. SETOFF.

       

      The
        Company or
        SelectBuild may, to the extent permitted by law, deduct from and set off
        against
        either of their obligations to Grantee from time to time, (including without
        limitation amounts payable in connection with settlement of MPUs, as wages
        or
        benefits or other form of compensation), any amounts that Grantee owes to
        them
        for any reason whatsoever. Grantee shall remain liable for any portion of
        Grantee’s obligation not satisfied by such setoff. By accepting the MPUs granted
        hereunder, Grantee agrees to any deduction or setoff under this Section
        11.

       

      12. TRANSFERABILITY
        AND ALIENATION.

       

      Except
        insofar as
        may otherwise be required by law or Section 11 above, no amount payable at
        any
        time pursuant to this award of MPUs shall be subject in any manner to alienation
        by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment,
        charge, or encumbrance of any kind, nor in any manner be subject to the debts
        or
        liabilities of any person, and any attempt to so alienate or subject any
        such
        amount, whether presently or thereafter payable, shall be void. If any person
        shall attempt to, or shall, alienate, sell, transfer, assign, pledge, attach,
        charge, or otherwise encumber any amount payable pursuant to this award of
        MPUs,
        or any part thereof, or if by reason of his or her bankruptcy or other event
        happening at any such time such amount would be made subject to his or her
        debts
        or liabilities or would otherwise not be enjoyed by him or her, then the
        Company, if it so elects, may direct that such amount be withheld and that
        the
        same or any part thereof be paid or applied to or for the benefit of such
        person, his or her spouse, children or other dependents, or any of Grantee’s
        heirs, in such manner and proportion as the Company may deem
        proper.

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      13. NO
        EMPLOYMENT,
        CONTINUED SERVICE OR EQUITYHOLDER RIGHTS.

       

      This
        Agreement
        shall not give Grantee any right to remain employed by the Company, SelectBuild,
        or any of their respective affiliates, nor shall it provide Grantee with
        any
        rights to any other form of service (such as a consultant or director) with
        any
        of the foregoing entities. The Company and SelectBuild each reserve the right
        to
        terminate the employment or service of Grantee at any time, and for any reason
        or no reason, subject to applicable laws, employee manuals (as may be revised
        from time to time) and any employment or other agreement. Grantee shall not
        have
        the rights of an equityholder of the Company as a result of the grant or
        vesting
        of MPUs.

       

      14. COMMITTEE
        AUTHORITY

       

      Committee
        may
        impose on any MPUs or the exercise thereof, at the date of grant or thereafter,
        such additional terms and conditions, not inconsistent with those set forth
        herein as the Committee shall determine. The Committee shall retain full
        power
        and discretion with respect to any term or condition of an MPU award that
        is not
        mandatory under the Plan. The Committee shall require the payment of lawful
        consideration for an MPU to the extent necessary to satisfy the requirements
        of
        applicable corporate law of the state in which the Company is then
        incorporated.

       

      IN
        WITNESS WHEREOF, the Company has caused this Management Performance Unit
        Agreement to be duly executed by its officers thereunto duly authorized,
        and
        Grantee has hereunto set his or her hand as of the date first above
        written.

       

      
        	 	 	 
	 	BUILDING
                MATERIALS HOLDING CORPORATION
	 
 	 
 	 
 
	 	
                By: 

              	 
	 	Name:	
                

              
	 	Title:
                	 
	 	 	 
	 	 	 
	 	GRANTEE:
	 	 	 
	 	Signed:   	
              
	 	 	
                

              

      

      
        
          
          

        

        
          10

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