Document:

Unassociated Document

    Exhibit
      10.25.1

     

    BUILDING
      MATERIALS HOLDING CORPORATION

     

    STOCK
      OPTION AGREEMENT

    Pursuant
      to the

    2004
      INCENTIVE AND PERFORMANCE PLAN

     

    

    BUILDING
      MATERIALS HOLDING CORPORATION (the “Company”) hereby grants to the optionee
      attached an option to purchase its Common Stock (the “Option”). The terms and
      conditions of the Option are set forth in this Stock Option Agreement and in
      the
      Company’s 2004 Incentive and Performance Plan (the “Plan”). Unless otherwise
      defined in this Agreement, capitalized terms used herein have the meanings
      designated in the Plan.

     

    TERMS
      AND CONDITIONS

     

     

    1.    VESTING
      AND EXERCISE.

     

    (a)    The
      Option shall not be exercisable as of the Date of Grant. After the Date of
      Grant, to the extent not previously exercised, and subject to termination or
      acceleration and other restrictions as provided in this Agreement and the Plan,
      the Option shall be exercisable to the extent it becomes vested, which shall
      occur in accordance with the Vesting Schedule set forth on the attached Notice
      of Grant of Stock Options.

     

    (b)    Notwithstanding
      the foregoing, if there is a Change in Control of the Company, the Option shall
      immediately vest in full upon such Change in Control, and shall be exercisable
      until the Expiration Date, unless earlier terminated pursuant to Section 5
      of
      this Agreement. 

     

    (c)    To
      the
      extent then exercisable, the Option may be exercised during Optionee’s lifetime
      only by Optionee or by Optionee’s guardian or legal representative in the event
      of the Optionee’s death or disability. 

     

    2.    TRANSFER.

     

    Unless
      otherwise permitted by the Committee, the Option may not be sold, transferred,
      pledged, assigned or otherwise alienated or hypothecated, other than by will
      or
      by the laws of descent and distribution (in which case the descendant or
      beneficiary shall be subject to all terms of this Agreement and all terms of
      the
      Plan applicable to Optionee). Any attempted disposition in violation of this
      Section 2 shall be void. 

     

    3.    LIMITATION
      ON EXERCISE OF INCENTIVE STOCK OPTION.

     

    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 Optionee under the Plan and all other plans of the Company, its parent or
      any
      Subsidiary during any calendar year shall not exceed $100,000. Options in excess
      of such amount shall be treated as non-qualified stock options. For the purpose
      of this Section 3, the Fair Market Value of the Common Stock shall be determined
      at the time the Incentive Stock Option is granted.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.    NOTICE
      OF SALE.

     

    Optionee
      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 Optionee.

     

    5.    TERMINATION
      OF EMPLOYMENT.

     

    (a)    Upon
      a
      termination of employment for cause, Optionee will not be entitled to exercise
      the Option at any time after such termination. For purposes of this Section,
      "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.

     

    (b)    Upon
      termination of employment for any reason other than for cause, Optionee shall
      be
      entitled to exercise his or her Option after termination of employment (i)
      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 (ii) ninety (90) days from the
      date of termination if termination was caused by other than death or
      disability.

     

    6.    RETIREMENT.

     

    Optionee
      or Permitted Transferee may exercise the Option after retirement as
      follows:

     

    (a)    Retirement
      After Age 55.
      Optionee shall be entitled to exercise any Option other than an Incentive Stock
      Option for a period of thirty-six (36) months from the date of Optionee’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 Optionee was entitled to
      exercise the Option on the date of Optionee’s retirement, and provided that the
      actual date of exercise is in no event after the expiration of the term of
      the
      Option. In the event that Optionee intends to retire from employment after
      age
      55 and Optionee is the holder of one or more Incentive Stock Options, then
      Optionee shall be entitled, for a period of sixty (60) days ending on the date
      which is six (6) months prior to Optionee’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,
      Optionee actually retires on his or her retirement date. In the event Optionee
      fails to convert any Incentive Stock Option under this paragraph, then such
      Incentive Stock Options shall be governed by the provisions of Section 5 of
      this Agreement.

     

    (b)    Retirement
      at Age 60 or Older.
      Optionee shall be entitled to exercise the Option in accordance with the
      provisions of the Plan and this Agreement, but if Optionee retires at age 60
      or
      older, the Option is also subject to the following accelerated vesting: If
      Optionee retires at age 60 or older, with at least 15 years of service with
      the
      Company and predecessor companies, 50% of Optionee’s unvested Options at the
      date of retirement automatically vest and an additional 5% of Optionee’s
      unvested Options vest for each year of service beyond 15 years. If Optionee
      retires at age 60 or older with 25 or more years of service, all unvested
      Options vest.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.    STATUS
      OF PARTICIPANT

     

    Optionee
      shall not be, or have rights as, a stockholder of the Company with respect
      to
      any of the shares of Common Stock subject to the Option until such shares have
      been purchased and delivered to him or her. The Company shall not be required
      to
      issue or transfer any certificates for shares of Common Stock purchased upon
      exercise of the Option until all applicable requirements of law have been
      complied with and the shares have been duly listed on any securities exchange
      on
      which the Common Stock may then be listed. 

     

    8.    NO
      EFFECT ON CAPITAL STRUCTURE.

     

    The
      Option shall not affect the right of the Company or any Subsidiary to
      reclassify, recapitalize or otherwise change its capital or debt structure
      or to
      merge, consolidate, convey any or all of its assets, dissolve, liquidate,
      windup, or otherwise reorganize. 

     

    9.    EXPIRATION
      OF OPTION.

     

    The
      right
      to purchase Common Stock under the Option shall expire seven (7) years from
      the
      Date of Grant, unless earlier terminated in accordance with the terms of the
      Plan or this Agreement. The Company will make every effort to notify you prior
      to the expiration of an option; however, it is the Optionee's responsibility
      to
      be aware of the date the Option terminates.

     

    10.    COMMITTEE
      AUTHORITY.

     

    Any
      question concerning the interpretation of this Agreement, any adjustments
      required to be made under the Plan, and any controversy that may arise under
      the
      Plan or this Agreement shall be determined by the Committee in its sole
      discretion. Any decisions by the Committee regarding the Plan or this Agreement
      shall be final and binding.

     

    11.    PLAN
      CONTROLS.

     

    The
      terms
      of this Agreement are governed by the terms of the Plan, as it exists on the
      date of the grant and as the Plan is 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.

     

    12.    LIMITATION
      ON RIGHTS; NO RIGHT TO FUTURE GRANTS; EXTRAORDINARY ITEM.

     

    By
      entering into this Agreement and accepting the Option, Optionee acknowledges
      that: (a) the Plan is discretionary and may be modified, suspended or
      terminated by the Company at any time as provided in the Plan; (b) the
      grant of the Option is a one-time benefit and does not create any contractual
      or
      other right to receive future grants of awards or benefits in lieu of awards;
      (c) all determinations with respect to any such future grants, including,
      but not limited to, the times when awards will be granted, the number of shares
      subject to each award, the award price, if any, and the time or times when
      each
      award will be settled, will be at the sole discretion of the Company;
      (d) participation in the Plan is voluntary; (e) the value of the
      Option is an extraordinary item which is outside the scope of Optionee's
      employment contract, if any, unless expressly provided for in any such
      employment contract; (f) the Option is not part of normal or expected
      compensation for any purpose, including without limitation for calculating
      any
      benefits, severance, resignation, termination, redundancy, end of service
      payments, bonuses, long-service awards, pension or retirement benefits or
      similar payments, and Optionee will have no entitlement to compensation or
      damages as a consequence of the forfeiture of any unvested portion of the Option
      as a result of Optionee’s termination of employment for any reason; (g) the
      future value of the Common Stock subject to the Option is unknown and cannot
      be
      predicted with certainty; (h) neither the Plan, the Option nor the issuance
      of the shares underlying the Option confers upon Optionee any right to continue
      in the employ or service of (or any other relationship with) the Company or
      any
      Subsidiary, nor do they limit in any respect the right of the Company or any
      Subsidiary to terminate Optionee’s employment or other relationship with the
      Company or any Subsidiary, as the case may be, at any time with or without
      Cause; and (i) the grant of the Option will not be interpreted to form an
      employment relationship with the Company or any Subsidiary.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    13.    GENERAL
      PROVISIONS

     

    (a)    Notice.
      Whenever any notice is required or permitted hereunder, such notice must be
      in
      writing and delivered in person or by mail (to the address set forth below
      if
      notice is being delivered to the Company) or electronically. Any notice
      delivered in person or by mail shall be deemed to be delivered on the date
      on
      which it is personally delivered, or, whether actually received or not, on
      the
      third business day after it is deposited in the United States mail, certified
      or
      registered, postage prepaid, addressed to the person who is to receive it at
      the
      address set forth in this Agreement. Notices delivered to Optionee in person
      or
      by mail shall be addressed to the address for Optionee in the records of the
      Company. Notices delivered to the Company in person or by mail shall be
      addressed as follows:

     

    
      	
              Company: 

            	 	
              Building
                Materials Holding Corporation

              Attn:
                Legal Department

              720
                Park Blvd., Suite 200

              Boise,
                Idaho 83712

            

    

     

    The
      Company or Optionee may change, by written notice to the other, the address
      previously specified for receiving notices.

     

    (b)    No
      Waiver.
      No
      waiver of any provision of this Agreement will be valid unless in writing and
      signed by the person against whom such waiver is sought to be enforced, nor
      will
      failure to enforce any right under this Agreement constitute a continuing waiver
      of the same or a waiver of any other right hereunder.

     

    (c)    Undertaking.
      Optionee hereby agrees to take whatever additional action and execute whatever
      additional documents the Company may deem necessary or advisable in order to
      carry out or effect one or more of the obligations or restrictions imposed
      on
      either Optionee or the Option pursuant to the express provisions of this
      Agreement.

     

    (d)    Entire
      Contract.
      This
      Agreement and the Plan constitute the entire contract between the parties hereto
      with regard to the subject matter hereof. This Agreement is made pursuant to
      the
      provisions of the Plan and will in all respects be construed in conformity
      with
      the express terms and provisions of the Plan.

     

    (e)    Successors
      and Assigns.
      The
      provisions of this Agreement shall inure to the benefit of, and be binding
      on,
      the Company and its successors and assigns and Optionee and Optionee's legal
      representatives, heirs, legatees, distributees, assigns and transferees by
      operation of law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f)    Securities
      Law Compliance.
      The
      Company currently has an effective registration statement on file with the
      Securities and Exchange Commission with respect to the shares of Common Stock
      subject to the Option. The Company intends to maintain this registration but
      has
      no obligation to do so. If the registration ceases to be effective, Optionee
      will not be able to transfer or sell shares of Common Stock issued pursuant
      to
      the Option unless one or more exemptions from registration under applicable
      securities laws are available. Such exemptions from registration are very
      limited and might be unavailable. Optionee agrees that any resale of the shares
      of Common Stock issued pursuant to the Option shall comply in all respects
      with
      the requirements of all applicable securities laws, rules and regulations
      (including, without limitation, the provisions of the Securities Act of 1933,
      the Securities Exchange Act of 1934 and the respective rules and regulations
      promulgated thereunder) and any other law, rule or regulation applicable
      thereto, as such laws, rules, and regulations may be amended from time to time.
      The Company shall not be obligated to either issue shares of Common Stock or
      permit the resale of any such shares if such issuance or resale would violate
      any such requirements.

     

    (g)    Information
      Confidential.
      As
      partial consideration for the granting of the Option, Optionee agrees that
      he or
      she will keep confidential all information and knowledge that Optionee has
      relating to the manner and amount of his or her participation in the Plan;
      provided, however, that such information may be disclosed as required by law
      and
      may be given in confidence to Optionee's spouse, tax and financial advisors,
      or
      to a financial institution to the extent that such information is necessary
      to
      secure a loan. 

     

    (h)    Governing
      Law.
      Except
      as may otherwise be provided in the Plan, the provisions of this Agreement
      shall
      be governed by the laws of the State of Delaware, without giving effect to
      principles of conflicts of law.Exhibit
      10.26

    

    Amended

    Building
      Materials Holding Corporation

    1999
      Cash Equity
      Pl

    

    

    ARTICLE
      I

    NAME
      AND
      PURPOSE

    

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

    

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

    

    ARTICLE
      II

    DEFINITIONS
      OF TERMS

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    ARTICLE
      III

    UNITS

    

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

    

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

    

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

    

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

    

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

    

    ARTICLE
      IV

    ELIGIBILITY

    

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

    

    ARTICLE
      V

    ADMINISTRATION

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

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

    

    
      	 	
              (a)

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

            

    

    

    
      	 	
              (b)

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

            

    

    

    
      	 	
              (c)

            	
              Interpret
                and
                construe the Plan and all
                Agreements;

            

    

    

    
      	 	
              (d)

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

            

    

    

    
      	 	
              (e)

            	
              Determine
                the
                content and form of all Agreements;

            

    

    

    
      	 	
              (f)

            	
              Determine
                all
                questions relating to Awards under the
                Plan;

            

    

    

    
      	 	
              (g)

            	
              Maintain
                accounts, records and ledgers relating to
                Awards;

            

    

    

    
      	 	
              (h)

            	
              Maintain
                records concerning its decisions and
                proceedings;

            

    

    

    
      	 	
              (i)

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

            

    

    

    
      	 	
              (j)

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

            

    

    

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

    

    ARTICLE
      VI

    AMENDMENT
      OF PLAN

    

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

    

    ARTICLE
      VII

    EFFECTIVE
      DATE AND TERMINATION OF PLAN

    

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

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    ARTICLE
      VIII

    MODIFICATION
      OR TERMINATION OF AWARDS

    

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

    

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

    

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

    

    ARTICLE
      IX

    TERMINATION
      OF EMPLOYMENT

    

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

    

    9.2       Voluntary
      Termination.  In
      the event of
      voluntary termination of employment or involuntary termination of employment
      without cause, vested Units may be exercised within 30 days after
      termination.  If a Participant violates the non-compete covenant as
      described in Section 10.2 within a one-year period, the proceeds of an
      Award are forfeited and must be repaid to the Company within 30 days of notice
      of such violation.

     

    9.3
             Retirement.  If
      a Participant
      retires at age 65, the person may exercise a portion of their unvested equity
      units determined by dividing the number of months of service relating to the
      cash equity grant prior to the retirement date divided by 36
      months.  If a Participant retires prior to age 65 the Participant must
      have 15 years of service with the Company or its predecessors at the date of
      retirement to receive pro rata vesting.  This provision is effective
      as of January 1, 2001.

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

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

    

    ARTICLE
      X

    GENERAL
      PROVISIONS

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

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

    

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

    

    ARTICLE
      XI

    ADOPTION

    

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

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