BUILDERS FIRSTSOURCE, INC. Second Amendment to the Employment Agreement with Floyd Sherman
Exhibit 10.27
Second Amendment to the Employment Agreement
with Xxxxx Xxxxxxx
with Xxxxx Xxxxxxx
This Second Amendment to the Employment Agreement dated as of September 1, 2001, as amended
by a First Amendment to the Employment Agreement dated June 1, 2005, (the “Agreement”) between
Builders FirstSource, Inc. (the “Company”) and Xxxxx Xxxxxxx (“Executive”) is made this 29th day of
October, 2008.
The Board of Directors of the Company and Executive have determined that it is in their best
interests to amend the Agreement to include special provisions intended to ensure compliance with
Internal Revenue Code Section 409A relating to deferred compensation. In consideration of the
mutual covenants contained herein and the continued employment of Executive by the Company, the
parties agree as follows:
| 1. | The Agreement is hereby amended by adding the following sentence to the end of Section 5(c): | ||
| “Annual cash bonuses shall be paid in the calendar year following the year to which the bonus relates, and not later than March 15 of such year.” | |||
| 2. | Section 8 of the Agreement is hereby amended by adding the words “During the Term,” to the beginning of the first sentence of Section 8, and by adding the following sentence to the end of Section 8: | ||
| “With respect to Executive’s rights under this Section 8, (i) the amount reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, (ii) the reimbursement of an eligible business expense must be made no later than December 31 of the year after the year in which the business expense was incurred, and (iii) such rights shall not be subject to liquidation or exchange for another benefit.” | |||
| 3. | The Agreement is hereby amended by deleting Section 11(b) in its entirety and replacing with the following: | ||
| “(b) Death. The employment by the Company of Executive pursuant to this Agreement shall be terminated upon the death of Executive, in which event Executive’s spouse or heirs shall receive the following: (i) Executive’s Base Salary and benefits to be paid or provided to Executive under this Agreement through the Date of Termination (“Accrued Obligations”), payable no later than thirty (30) days after the Date of Termination, (ii) continuation of Executive’s Base Salary for a period of one (1) year after the Date of Termination, and (iii) continuation of the health benefits provided for pursuant to Section 9(a) hereof (“Health Benefits”) and welfare benefits provided for pursuant to Section 9(b) hereof (“Welfare Benefits”) for a period of one (1) year after the Date of Termination.” | |||
| 4. | The Agreement is hereby amended by deleting the second sentence of Section 11(c) in its entirety and replacing with the following: |
| “In the event the employment by the Company of Executive is terminated pursuant to this Section 11(c), Executive shall be entitled to receive the following: (i) the Accrued Obligations, payable no later than thirty (30) days after the Date of Termination, (ii) subject to Section 25 hereof, continuation of his Base Salary for a period of one (1) year after the Date of Termination, (iii) continuation of Health Benefits for a period of one (1) year after the Date of Termination, and (iv) subject to Section 25 hereof, continuation of Welfare Benefits for a period of one (1) year after the Date of Termination; provided, however, that amounts payable to Executive under this Section 11(c) shall be reduced by the proceeds of any short- and/or long-term disability payments under the Company plans referred to in Section 9 hereof to which Executive may be entitled during such period.” | |||
| 5. | The Agreement is hereby amended by deleting the second sentence of Section 11(e) in its entirety and replacing it with the following: | ||
| “In the event the employment by the Company of Executive is terminated pursuant to this Section 11(e), Executive shall be entitled to receive the following: (i) the Accrued Obligations, payable no later than thirty (30) days after the Date of Termination, (ii) subject to Section 25 hereof, continuation of his Base Salary for the remainder of the Term, (iii) continuation of Health Benefits for the remainder of the Term, and (iv) subject to Section 25 hereof, continuation of Welfare Benefits for the remainder of the Term.” | |||
| 6. | The Agreement is hereby amended by adding a new Section 10(h) to read as follows:: | ||
| “(k) Continuation of Welfare Benefits. With respect to Executive’s rights to continuation of Welfare Benefits provided for in Sections 11(b), (c), and (e), (i) the benefits provided in any one calendar year shall not affect the benefits provided in any other calendar year, (ii) the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the business expense was incurred, and (iii) such rights shall not be subject to liquidation or exchange for another benefit.” | |||
| 7. | The Agreement is hereby amended by adding the following new Section 25: | ||
| “25. Code Section 409A. |
(a) Notwithstanding anything in this Agreement to the contrary, to the extent that any
amount or benefit that would constitute non-exempt “deferred compensation” for purposes of
Section 409A of the Code would otherwise be payable or distributable hereunder by reason of
the occurrence of Executive’s separation from service, such amount or benefit will not be
payable or distributable to Executive by reason of such separation from service unless (i)
the circumstances giving rise to such separation from service meet any description or
definition of “separation from service” in Section 409A of the Code and applicable
regulations (without giving effect to any elective provisions that may be available under
such definition), or (ii) the payment or distribution of such amount or benefit would be
exempt from the application of Section 409A of the Code by reason of the short-term
deferral exemption or otherwise. This provision does not prohibit the vesting of any
amount upon a separation from service, however defined. If this provision prevents the
payment or distribution of any amount or benefit, such payment or distribution shall be
made on the date, if any, on which an event occurs that constitutes a Section
409A-compliant “separation from service.”
(b) Notwithstanding anything in this Agreement to the contrary, if any amount or
benefit specified herein as “subject to Section 25 hereof,” or any other amount or benefit
that would otherwise constitute non-exempt “deferred compensation” for purposes of Section
409A of the Code would otherwise be payable or distributable under this Agreement by reason
of the Executive’s separation from service during a period in which he is a Specified
Employee (as defined below), then, subject to any permissible acceleration of payment by
the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order),
(j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):
(i) if the payment or distribution is payable in a lump sum, Executive’s right to
receive payment or distribution of such non-exempt deferred compensation will be delayed
until the earlier of Executive’s death or the first day of the seventh month following
Executive’s separation from service (the “Delay Period”); and
(ii) if the payment or distribution is payable over time, the amount of such
non-exempt deferred compensation that would otherwise be payable during the six-month
period immediately following Executive’s separation from service will be accumulated and
Executive’s right to receive payment or distribution of such accumulated amount will be
delayed until the earlier of Executive’s death or the end of the Delay Period, whereupon
the accumulated amount will be paid or distributed to Executive and the normal payment or
distribution schedule for any remaining payments or distributions will resume; and
(iii) to the extent that this Section 25(b) applies to the provision of Welfare
Benefits, Executive shall be entitled to pay the full cost of premiums to maintain the
Welfare Benefits during the Delay Period, and the Company shall pay to Executive an amount
equal to the amount of such premiums promptly following the end of the Delay Period.
| For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder.” | |||
| 8. | Except as expressly amended hereby, the terms of the Agreement shall be and remain unchanged and the Agreement as amended hereby shall remain in full force and effect. |
IN WITNESS WHEREOF, the Company and Executive have caused this Amendment to be executed on the
day and year first above written.
| BUILDERS FIRSTSOURCE, INC. | ||||||
| By: | /s/ Xxxxxx X. XxXxxxxxx
|
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| EXECUTIVE | ||||||
| /s/ Xxxxx Xxxxxxx | ||||||
| Xxxxx Xxxxxxx | ||||||
