COMPENSATION COMMITTEE REPOR
T
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis prepared by management and contained in this proxy statement. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
Compensation Committee
Mark A. Petrarca (Chair)
Dennis W. Archer
Carl T. Camden
Joseph S. Cantie
Alec C. Covington
Margaret M. Whelan
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Proxy Statement -
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COMPENSATION OF EXECUTIVE OFFICER
S
Executive Officer
s
Set forth below is information about our executive officers. There are no family relationships among any of the officers named below or Mr. Volas, our Chief Executive Officer and a member of the Board. See “Proposal 1: Election of Directors—Information about Director Nominees and Continuing Directors—Continuing directors with terms expiring in 2018” for Mr. Volas' biographical information.
Robert M. Buck
. Mr. Buck, 46, has served as our President and Chief Operating Officer since June 2015. Mr. Buck served as Group Vice President of Masco from 2014 until June 2015. In this position, Mr. Buck was responsible for the Installation and Other Services Segment consisting of both Masco Contractor Services and Service Partners, LLC. Mr. Buck served as President and Chief Executive Officer of Masco Contractor Services from 2011 until June 2015. Mr. Buck began his career with Masco in 1997 at Liberty Hardware Mfg. Corp., where he spent eight years in several operations leadership roles and worked extensively in international operations. Mr. Buck became Executive Vice President in 2005 and helped lead the merger of another Masco company with Liberty Hardware before being promoted to the office of President in 2007. Mr. Buck holds a Bachelor of Science degree in Information Systems and Operations Management, and a Masters in Business Administration from the University of North Carolina at Greensboro.
John S. Peterson
. Mr. Peterson, 57, has served as our Vice President and Chief Financial Officer since June 2015. Mr. Peterson served as Executive Vice President, Chief Financial Officer of Masco Contractor Services from November 2010 until June 2015. From 2006 to 2010, he was the Chief Financial Officer of Masco Retail Cabinet Group, a Masco subsidiary. From 2001 to 2006, he was the Vice President—Finance for Biolab and from 1998 to 2001, he was the Vice President—Finance, Performance Chemicals Division, both subsidiaries of Great Lakes Chemical, which has since changed its name to Chemtura Corporation. Mr. Peterson holds a Bachelor of Science degree in Accounting from Pennsylvania State University and a Masters in Business Administration from the University of Indianapolis.
Michelle A. Friel
. Ms. Friel, 46, has served as our Vice President, General Counsel and Secretary since June 2015. Ms. Friel joined Masco in 2015. From 2012 to 2015, she was the Executive Vice President and General Counsel for YRC Worldwide, one of the largest transportation providers in the world. She has also acted as President and CEO of YRC Worldwide’s North American subsidiary in Mexico. From 2010 to 2012, she served as Senior Vice President, General Counsel and Corporate Secretary at Spirit AeroSystems Holdings. Ms. Friel holds Bachelor degrees in Anthropology and Atmospheric Science and a Juris Doctorate degree from the University of Kansas.
Mark R. Moore
. Mr. Moore, 51, has served as the President of Service Partners, LLC since 2003. He joined Service Partners at its inception in 1998 and served in various senior financial capacities prior to assuming his current role. He became part of the Masco team upon Masco's acquisition of Service Partners in 2002. From 1987 to 1998, Mr. Moore held various senior financial and operational positions with privately held firms in the petroleum distribution industry. Mr. Moore began his career with DuPont. Mark holds a Bachelor of Science in Commerce degree from the University of Virginia and a Masters in Business Administration from the University of Richmond.
Robin L. Reininger
. Ms. Reininger, 59, has served as our Vice President, Chief Human Resource Officer since June 2015. Ms. Reininger held the position of Vice President, Human Resources for Masco Contractor Services from 2011 to 2015. Ms. Reininger has significant experience leading change management and organizational strategy initiatives. Before joining Masco Contractor Services in 2011, Ms. Reininger was the Senior Global Director of Human Resources for Avery Dennison. She also served as Vice President, Strategic Accounts with Staples/Corporate Express, Region Vice President Human Resources with Corporate Express and held management positions with CompuCom Systems, NVR and Cooper Industries. Ms. Reininger holds a Bachelor's degree in Business Administration from Washington and Jefferson College and a Masters in Business Administration from DeSales University.
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Nicholas R. Thompson, Jr
.
Mr. Thompson, 47, has served as our Corporate Controller since June 2015. Mr. Thompson served as the Controller for Masco Contractor Services from 2011 until June 2015. Mr. Thompson began his career in public accounting with Price Waterhouse. He has held various roles since then, including FP&A Manager, Controller and Accounting Director for St. Joe/Arvida, Lennar Homes and CNL Real Estate and Development. Mr. Thompson holds a Bachelor's degree in Accounting from Jacksonville University and a Masters in Business Administration from Florida State University. Mr. Thompson is a Certified Public Accountant in the State of Florida.
Compensation Discussion and Analysi
s
Overview
For purposes of this Compensation Discussion and Analysis and the disclosure under “Compensation of Executive Officers,” our named executive officers are identified below (collectively, our “named executive officers”). The information provided reflects summary information concerning TopBuild’s executive compensation approach developed to date.
Named Executive Officers
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Name
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TopBuild Title
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Previous Masco Title
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Gerald Volas
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Chief Executive Officer
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Masco Group President—North American Diversified Businesses
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Robert M. Buck
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President and Chief Operating Officer
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Masco Group Vice President and Masco Contractor Services President and Chief Executive Officer
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John S. Peterson
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Vice President and Chief Financial Officer
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Masco Contractor Services Executive Vice President and Chief Financial Officer
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Mark R. Moore
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President, Service Partners, LLC
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President—Service Partners, LLC
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David G. Cushen
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Senior Vice President of Operations, TruTeam LLC
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Masco Contractor Services Senior Vice President of Operations
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TopBuild Compensation Programs
We recognize the importance of attracting and retaining executive officers who can effectively lead our business and make effective strategic decisions and motivating them to maximize our corporate performance and create long-term value for our stockholders. We believe in rewarding our executive officers to a significant degree based on our performance. Our Compensation Committee continues to thoughtfully and thoroughly analyze our compensation practices and programs.
The Company believes that having a significant ownership interest in stock is critical to aligning the interests of executive officers with the long-term interests of stockholders. Accordingly, equity grants in the form of restricted stock awards and stock options with extended vesting periods are an important component of compensation for executive officers. The value ultimately realized from equity awards depends on the long-term performance of TopBuild common stock.
TopBuild Compensation Practices
TopBuild has adopted the following compensation practices:
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·
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a compensation mix weighted towards performance-based incentives;
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·
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no excise tax gross-ups;
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an annual market analysis of executive compensation and published survey data for comparably-sized companies;
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·
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only limited perquisites to our executive officers; and
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·
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prohibiting the re-pricing of options under our equity plan.
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Our intention is to have executive compensation within 90%-110% of market median. Many of our executives are currently below that target and over a period of time, individual and company performance permitting, they will be moved closer to market median.
Our Compensation Committee believes it is in TopBuild’s interest to retain flexibility in its compensation programs. Consequently, in some circumstances, TopBuild may pay compensation that is not tax-deductible by TopBuild.
Compensation Mix
Stock Ownership Guidelines
Our Compensation Committee has adopted a policy requiring our executives to own a multiple of their base salary in our common stock. In the case of our Chief Executive Officer, the multiple is five (5) times base salary. In the case of our President and Chief Operating Officer and our Vice President and Chief Financial Officer, the multiple is three (3) times base salary. In the case of our Vice President, General Counsel and Secretary and our Vice President, Chief Human Resource Officer, the multiple is two (2) times base salary. In the case of all other Vice Presidents, the multiple is one (1) times base salary. The targeted ownership levels must be met by July 1, 2020, five (5) years after the date we became a public company.
Executive Compensation Approach
TopBuild’s 2015 compensation structure was composed of the following primary components:
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·
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Annual performance-based restricted stock awards; and
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·
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Annual stock option awards.
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We have no employment agreements with our executive officers. Our executive officers enter into award agreements in connection with grants of equity awards. The award agreements contain certain restrictive covenants, including a non-competition covenant during employment and for one (1) year thereafter.
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Equity Incentive Compensation
We believe that a combination of performance-based restricted stock and stock options are appropriate vehicles for a newly public company to focus executives on long-term performance and alignment with stockholder interests. The amount of annual restricted stock awards granted by the Compensation Committee is based on the prior year’s performance. In addition, some of our named executive officers received initial equity awards consisting of stock options and restricted stock at the time of the Spin-Off to more tightly align their interests with those of our stockholders (a “Founders Grant”). Extended vesting and exercise periods further align our named executive officers with our stockholders. Our equity grants for 2015 performance contain five (5) year vesting/exercisability requirements. See “Annual Stock Option Grant for the 2015 Program” and “New Equity Compensation Program Adopted in February 2016,” below.
Market Comparison for Compensation
In connection with preparations for the Spin-Off, Masco reviewed compensation surveys by AonHewitt and Willis Towers Watson for U.S. public companies with $1 billion to $2 billion in sales and information provided by Masco’s Organization and Compensation Committee’s independent consultant, Semler Brossy. In addition, Masco identified the following companies for additional compensation benchmarking, based on similar business characteristics (in particular, installation and distribution of homebuilding products) and revenue size between $700 million and $3 billion:
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Armstrong World Industries, Inc.
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MSC Industrial Direct Co., Inc.
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A.O. Smith Corporation
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Nortek, Inc.
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Beacon Roofing Supply, Inc.
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Ply Gem Holdings, Inc.
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BlueLinx Holdings Inc.
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Quanex Building Products Corporation
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Builders FirstSource, Inc.
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Simpson Manufacturing Co., Inc.
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Comfort Systems USA, Inc.
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Stock Building Supply Holdings, Inc.
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Gibraltar Industries, Inc.
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Universal Forest Products, Inc.
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Our Compensation Committee is considering alternatives as we evaluate market pay practices going forward.
Compensation of Named Executive Officers
The disclosure in the “Summary Compensation Table” relates to the 2015 compensation of our named executive officers. Effective March 1, 2016, our Compensation Committee approved increases to the base salary, target bonus (Mr. Peterson only) and long-term incentive opportunity for our named executive officers. The table below summarizes our 2015 compensation levels and the changes approved effective March 1, 2016, for each of our named executive officers.
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Name
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Position
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Base
Salary as
of
December
31, 2015
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Target
Bonus as
Percentage
of
Salary
(2)
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Target
Stock
Award
(3)
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Stock
Option
Award
(4)
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July 8, 2015
Founders
Grant
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Base
Salary as
of March
1, 2016
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Target
Bonus
for 2016
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LTI Level as
of
February 22,
2016
(5)
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Gerald Volas
(1)
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Chief Executive Officer
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$
700,000
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100%
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$
700,000
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$
700,000
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$
2,000,000
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$
765,000
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100%
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$
2,000,000
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Robert M. Buck
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President and Chief
Operating Officer
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$
450,000
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75%
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$
337,500
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$
337,500
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$
1,000,000
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$
500,000
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75%
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$
800,000
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John S. Peterson
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Vice President and
Chief Financial Officer
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$
370,000
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60%
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$
222,000
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$
222,000
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$
500,000
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$
420,000
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65%
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$
525,000
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Mark R. Moore
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President, Service
Partners, LLC
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$
320,000
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50%
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$
160,000
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$
160,000
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$
300,000
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$
340,000
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50%
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$
340,000
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David G. Cushen
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Senior Vice President of
Operations, TruTeam
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$
300,000
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50%
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$
150,000
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$
150,000
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$
300,000
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$
320,000
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50%
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$
320,000
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(1) TopBuild has entered into an agreement with Mr. Volas that would provide him severance benefits under specified termination events. This agreement does not include any “golden parachute” excise tax gross-up payments.
(2) Maximum bonus opportunity of 200% of target.
(3) Maximum stock award opportunity of 200% of target.
(4) Black-Scholes value.
(5) Allocated 40% to stock options (Black-Scholes value) and 60% to performance-based restricted stock awards (target/maximum is 200% of target).
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Masco Long Term Cash Incentive Program
Mr. Volas is our only named executive officer who participated in Masco's Long Term Cash Incentive Program (“LTCIP”). The cash performance awards granted in 2015 under the LTCIP (reflected in the “Grants of Plan-Based Awards” table below) will be earned only if Masco achieves long-term growth and profitability, measured by the achievement of return on invested capital (“ROIC”) goals over a three-year period from 2015 to 2017. Masco’s Organization and Compensation Committee chose the ROIC performance metric because it reinforces executive officers’ focus on capital efficiency and consistent return on capital and is a measure of importance to Masco stockholders in their assessment of long-term value creation. Under the LTCIP, Masco defines ROIC as adjusted after-tax operating income from continuing operations adjusted to exclude the effect of special charges and certain other non-recurring income and expenses, divided by invested capital. Invested capital includes shareholders equity, which Masco adjusts to add back the cumulative after-tax impact of goodwill and intangible asset impairment charges and to exclude the impact of certain non-operating income and expenses and the effects of special charges, plus short-term and long-term debt minus cash.
Under the LTCIP, Masco measures performance over three annual performance periods, with the average results for the three annual performance periods determining the amount of any award. Performance goals are established at the start of each three-year period.
If the threshold three-year average ROIC is attained, Masco will determine the actual award to be paid under the LTCIP by multiplying the target opportunity for the officer by the payout percentage corresponding to the actual three-year average ROIC achieved. If the ROIC threshold is not achieved, no payments will be made under the LTCIP.
As a result of the achievement for the three-year performance period under the LTCIP for the 2013-2015 period, Mr. Volas received a payout included in the Summary Compensation Table below based on the following targets and results:
Three-Year Average ROIC
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Threshold
(40% Payout)
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Target
(100 Payout)
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Maximum
(200% Payout)
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Actual
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2013 - 2015 Performance Period
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7.50%
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8.5%
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10.25%
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10.49%
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As a result, Mr. Volas received a payment under the LTCIP for the 2013-2015 period determined by multiplying his target opportunity (which was 75% of his salary in 2013) by 200%, the maximum payout percentage under the LTCIP.
With respect to ongoing three-year periods under the LTCIP that have not ended as of the Separation date, TopBuild will not assume Mr. Volas
'
LTCIP award. Instead, he will remain eligible for a future prorated payout from Masco based on Masco's actual performance at the end of the applicable three-year periods, but prorated to reflect the conclusion of his employment with Masco at the Separation date.
Conversion of Stock and Options Awards
Masco restricted stock awards (“RSAs”) and stock options that were unvested as of the date of the Spin-Off under Masco’s Long Term Stock Incentive Plan were replaced with unvested TopBuild RSAs and stock options (the “Replacement Awards”), under TopBuild’s 2015 Long Term Stock Incentive Plan (the “Existing LTIP”). The replacement of RSAs and stock options with Replacement Awards was “value-neutral” to participants and the vesting schedule for the Replacement Awards remained the same as the vesting schedule for the Masco RSAs and options. “Value-neutral” means that the market value of the Masco equity awards, measured by the average closing prices on the three (3) trading days (June 26, 2015, June 29, 2015 and June 30, 2015) before the Spin-Off, were equal to the value of the post-spin equity awards (either TopBuild Replacement Awards or adjusted Masco option awards), measured in the three (3) trading days (July 1, 2016, July 2, 2016 and July 6, 2016) after the Spin-Off. The tax treatment when RSAs vest or when options are exercised did not change as a result of the Spin-Off.
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The formulas used to convert the unvested Masco RSAs and unvested Masco options were as follows: Number of Masco RSAs x (Masco’s pre-spin market price, $26.9171) ÷ (TopBuild’s post-spin market price, $27.9555). The formula used to convert the exercise price of the vested Masco options was as follows: Pre-spin option exercise price x (Masco’s post-spin market price, $23.6189) ÷ (Masco’s pre-spin market price, $26.9171). The formula used to convert the exercise price of the unvested Masco options that were converted to TopBuild options was as follows: pre-spin option exercise price x (TopBuild’s post spin market price, $27.9555) ÷ (Masco’s pre-spin market price, $26.9171).
Masco vested options were not replaced with TopBuild vested options and, if not exercised by September 30, 2015, were forfeited.
2015 Annual Incentive Performance-Based Restricted Stock and Cash Bonus Opportunities
TopBuild provided annual performance-based restricted stock and cash bonus opportunities for fiscal 2015 to our named executive officers to emphasize annual performance, provide incentive to achieve critical business objectives and align officers’ interests with those of Masco stockholders. The performance goals were based on the performance of TruTeam and Service Partners, the Masco business divisions that became TopBuild at the time of the Separation and Spin-Off on June 30, 2015.
The performance goals were Operating Profit (weighted at 75%) and Working Capital as a Percent of Sales (weighted at 25%). The metrics chosen for the 2015 annual performance program are set forth below. These metrics were those believed to most effectively enhance stockholder value. Operating profit was more heavily weighted because it reflects management’s contribution to operating performance.
The following tables show target and actual performance for each metric along with percentage attained for the 2015 annual performance program.
Annual Performance Goals and Achievements
Performance Metric
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Threshold
(40%
Payout)
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Target
(100%
Payout)
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Maximum
(200%
Payout)
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Actual as
Adjusted
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Actual
Percentage
Attained
Relative
to Target
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Weighting
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Actual
Weighted
Performance
Percentage
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Operating Profit (in millions)
(1)
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$
95.0
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$
130.0
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$
155.0
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$
111.4
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46.9
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%
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75
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%
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35.2
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%
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Working Capital as a Percent of Sales
(2)
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8.5%
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8.0%
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7.5%
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7.5%
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200
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%
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25
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%
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50.0
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%
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TOTAL
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85.2
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%
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(1) For purposes of determining achievement of the performance target, operating profit from continuing operations was adjusted to exclude the effects of rationalization and other special charges and other unusual non-recurring gains and losses.
(2) Working capital as a percent of sales is defined as quarter-end averages of reported accounts receivable and inventories, less accounts payable, divided by reported sales for the year.
To determine the cash bonus and restricted stock award values to be granted to our named executive officers based on the 2015 performance achievements set forth above, the target opportunities for each executive officer were multiplied by their applicable payout percentage (that is, 100% for Mr. Volas, 75% for Mr. Buck, 60% for Mr. Peterson and 50% for Messrs. Cushen and Moore), which was in turn multiplied by each executive officer's base salary. For Messrs. Volas, Buck, Peterson and Moore, the individual amounts for the cash bonus awards were increased by $103,600, $49,950, $32,856 and $50,000 respectively, for their strong leadership during the Spin-Off which enabled TopBuild to retain key talent, keep the organization focused on company initiatives and prevent disruption of the business.
Threshold, target and maximum payouts under the 2015 cash bonus program are shown in the 2015 Grants of Plan-Based Awards Table, while actual awards for 2015 are disclosed in the Summary Compensation Table.
The restricted stock awards were granted on February 22, 2016, and have a five-year vesting, beginning on February 22, 2017.
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Annual Stock Option Grant for the 2015 Program
Stock options were approved by our Compensation Committee in February 2016 for our executive officers for the 2015 program to motivate and reward them for improving share price, to align their long-term interests with those of stockholders and to maintain the competitiveness of the total compensation package. Further, they provide value to our executive officers following the grant of the stock options and over their long vesting schedule only if the price of our common stock increases. These stock options vest ratably in five (5) equal installments, beginning on February 22, 2017. To determine the stock option value to be granted to each of our named executive officers for 2015, the target opportunities for each executive officer (that is, 100% for Mr. Volas, 75% for Mr. Buck, 60% for Mr. Peterson, and 50% for Messers. Cushen and Moore), were multiplied by each executive officer’s base salary.
New Equity Compensation Program Adopted in February 2016
In February 2016, our Compensation Committee approved equity awards designed to align executive compensation with market best practices, create a strong link between compensation and performance, drive compensation consistency by having the same performance metrics for executives and non-executives and assist with the ability to attract and retain key employees.
The February 2016 equity awards consisted of stock options (40% of award) and performance-based restricted stock (60% of award) under the Existing LTIP. The change in allocation between stock options and performance-based restricted stock was made to align with market best practices and in recognition that shareholders prefer a greater percentage of equity in performance based awards.
The stock options will vest in three equal increments on each of the first three anniversaries of the date of the grant (February 22, 2016) and have an exercise price of $26.30 (the closing price of our common stock on the NYSE on the date of grant).
The performance-based restricted stock was awarded as our equity incentive program for the 2016-2018 period. The performance-based restricted shares will vest on February 22, 2019, subject to the Company achieving certain pre-determined performance goals relating to our cumulative three (3) year earnings per share (50% of award) and our relative total shareholder return (“TSR”) (50% of award), over the three-year period ending on December 31, 2018. Partial payouts are permitted for performance that falls below target levels (in either of the two measures) and our executive officers may earn up to 200% of their target award level for performance that exceeds target performance. Payouts are permitted in cases where one of the performance measures is met and the other is not.
TopBuild Peer Group Established for TSR Measurement
The following companies have been identified as a company peer group for TSR measurement in the 2016-2018 equity incentive program design. The peer group is based on similar business characteristics, including industry and revenue size between $650 million and $4.3 billion.
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Toll Brothers Inc.
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Beazer Homes USA Inc.
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KB Home
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BMC Stock Holdings Inc.
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Taylor Morrison Home Corporation
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Summit Materials Inc.
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MSC Industrial Direct Co. Inc.
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MI Homes Inc.
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Universal Forest Products Inc.
|
Eagle Materials Inc.
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Nortek Inc.
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Gibraltar Industries Inc.
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Beacon Roofing Supply Inc.
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Headwaters Incorporated
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Builders FirstSource Inc.
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American Woodmark Corp.
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Meritage Homes Corporation
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Patrick Industries Inc.
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Armstrong World Industries Inc.
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Simpson Manufacturing Co. Inc.
|
Ply Gem Holdings Inc.
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Installed Building Products Inc.
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Summary Compensation Table for Fiscal Years 2013-201
5
The following table sets forth certain information regarding compensation paid to the named executive officers of TopBuild in their capacities as officers of Masco (prior to the Spin-Off) and their capacities as officers of TopBuild (after the Spin-Off).
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Name of Principal
Position
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Year
(1)
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Salary
($)
(2)
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Bonus
($)
(3)
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|
Stock
Awards
($)
(4)
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Option
Awards
($)
(5)
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Non-equity Incentive Plan Compensation
($)
(6)
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Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
(7)
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All Other Compensation
($)
(8)
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TOTAL
($)
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Gerald Volas
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2015
|
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611,462
|
|
103,600
|
|
1,596,474
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2,050,612
|
|
1,190,200
|
|
-
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|
13,325
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|
5,565,673
|
|
CEO
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2014
|
|
507,442
|
|
-
|
|
309,000
|
|
345,463
|
|
1,021,500
|
|
1,347,615
|
|
65,765
|
|
3,596,785
|
|
|
|
2013
|
|
487,500
|
|
-
|
|
614,930
|
|
603,925
|
|
615,000
|
|
751,927
|
|
100,129
|
|
3,173,411
|
|
Robert M. Buck
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2015
|
|
431,077
|
|
49,950
|
|
787,454
|
|
837,490
|
|
287,550
|
|
-
|
|
8,947
|
|
2,402,468
|
|
COO
|
|
2014
|
|
380,335
|
|
18,000
|
|
149,929
|
|
-
|
|
82,000
|
|
-
|
|
17,500
|
|
647,764
|
|
|
|
2013
|
|
345,800
|
|
-
|
|
328,082
|
|
-
|
|
218,800
|
|
-
|
|
57,414
|
|
950,096
|
|
John S. Peterson
|
|
2015
|
|
349,963
|
|
32,856
|
|
439,230
|
|
471,990
|
|
189,144
|
|
-
|
|
7,349
|
|
1,490,532
|
|
CFO
|
|
2014
|
|
306,192
|
|
10,080
|
|
55,897
|
|
-
|
|
45,920
|
|
-
|
|
17,500
|
|
435,589
|
|
|
|
2013
|
|
283,750
|
|
-
|
|
149,923
|
|
-
|
|
150,000
|
|
-
|
|
47,713
|
|
631,386
|
|
Mark R. Moore
|
|
2015
|
|
316,309
|
|
50,000
|
|
150,134
|
|
310,061
|
|
-
|
|
-
|
|
10,974
|
|
837,477
|
|
Pres. SP
|
|
2014
|
|
301,522
|
|
5,486
|
|
103,696
|
|
-
|
|
63,714
|
|
44,503
|
|
14,329
|
|
533,250
|
|
|
|
2013
|
|
294,125
|
|
-
|
|
85,158
|
|
-
|
|
56,700
|
|
19,984
|
|
50,409
|
|
506,376
|
|
David G. Cushen
|
|
2015
|
|
296,817
|
|
-
|
|
277,952
|
|
300,065
|
|
127,800
|
|
-
|
|
57,261
|
|
1,059,894
|
|
SVP TT
|
|
2014
|
|
282,462
|
|
-
|
|
48,061
|
|
-
|
|
48,000
|
|
-
|
|
16,698
|
|
395,221
|
|
|
|
2013
|
|
267,148
|
|
-
|
|
134,908
|
|
-
|
|
135,000
|
|
-
|
|
22,238
|
|
559,294
|
|
(1) In 2013, 2014 and prior to the completion of the Spin-Off on June 30, 2015, the named executive officers were employed by and were compensated by, Masco or its subsidiaries.
(2) This column includes amounts voluntarily deferred by each named executive officer as salary reductions under the 401(k) Savings Plan.
(3) These amounts include discretionary increases in excess of the amounts earned by the applicable executive based on the performance measures. Amounts also include discretionary bonus payments for their strong leadership during the Spin-Off which enabled TopBuild to retain key talent, keep the organization focused on company initiatives and prevent disruption of the business.
(4) Based on SEC rules, this column reports the grant date fair value of the restricted stock award opportunity calculated in accordance with FASB ASC Topic 718 for the applicable performance year even though the restricted stock award is not granted until the following year. Because the rules require such value to be based on the probable outcome at the grant date, such estimated fair value reflects the actual awards for the 2015, 2014 and 2013 performance year, as applicable, since the grant date for the award occurred when the award was actually determined in early 2016, 2015, and 2014, respectively. The threshold, target and maximum dollar values that were eligible to be awarded based on 2015 performance are shown in the Grants of Plan Based Awards Table below. The named executive officers do not realize the value of restricted stock awards until those awards vest over the five (5) year vesting period following the grant date. Values for 2015 include the Founders Grant on July 8, 2015, and a grant on February 22, 2016, for 2015 performance.
(5) Amounts in these columns reflect the aggregate grant date fair value of stock options, calculated in accordance with FASB ASC Topic 718. In determining the fair market value of stock options, we used the same assumptions as
set forth in the Note L to Masco’s financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2014. The named executive officers have no assurance that these amounts will be realized. Actual gains, if any, on stock option exercises will depend on overall market conditions, the future performance of the common stock and the timing of exercise of the option. See the “Compensation Discussion and Analysis” for a discussion of the treatment of Masco equity awards upon the completion of the Spin-Off. Values for 2015 include the Founders Grant on July 8, 2015, and a grant on February 22, 2016, for 2015 performance.
(6) This column includes performance-based cash bonuses that were earned in the fiscal year based on the attainment of performance targets. Amounts include payments under the Masco LTCIP for the 2012-2014 performance period (Mr. Volas only) and 2013-2015 annual performance periods (all of the named executive officers). For Mr. Volas, included is a payment of $593,800 under the Masco LTCIP for the 2013-2015 performance period, as described in the “Compensation Discussion and Analysis.”
(7) This column shows changes in the sum of year-end pension values for Mr. Volas and Mr. Moore (the only named executive officers who participated in any defined benefit pension plan), which reflect actuarial factors and variations in interest rates used to calculate present values. An increase in pension value does not represent increased benefit accruals since benefits in Masco’s domestic defined benefit plans were frozen effective January 1, 2010 (as described under the “2015 Pension Plan Table” below). We calculated the pension values for 2015 using the same assumptions as set forth in the notes to Masco’s financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2014. The named executive officers did not have any above-market earnings under any of the plans in which they participate.
(8) Includes Company matching contributions under TopBuild’s new tax-qualified 401(k) savings plan. 2015 value for Mr. Cushen includes a $47,780 tax gross-up to make relocation reimbursements in 2013 and 2014 tax-neutral.
|
|
|
TopBuild Corp
. -
Proxy Statement -
36
|
2015 Grants of Plan-Based Awards Tabl
e
The following table provides information about (i) the potential payouts that were available in 2015 to our named executive officers under our annual performance-based cash bonus opportunity and (ii) the actual grants of restricted stock and stock options made to our named executive officers in respect of 2015 performance under the Existing LTIP. The “Compensation Discussion and Analysis” above describes the treatment of Masco equity awards in connection with the Spin-Off.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under Non-
Equity Incentive Plan Awards
|
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
(5)
|
|
All Other
Stock Awards:
|
|
All Other Option Awards:
|
|
Name
|
|
Grant Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Number of
Shares of
Stock or
Units(#)
|
|
Number of
Securities
Underlying
Options (#)
|
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
|
Grant Date
Fair Value of
Stock and
Option
Awards ($)
(6)
|
|
Gerald Volas
|
|
2/11/2015
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,903
|
|
27.13
|
|
350,538
|
|
|
|
6/11/2015
(2)
|
|
280,000
|
|
700,000
|
|
1,400,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/11/2015
(3)
|
|
|
|
|
|
|
|
280,000
|
|
700,000
|
|
1,400,000
|
|
|
|
|
|
|
|
|
|
|
|
7/8/2015
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95,790
|
|
27.10
|
|
1,000,048
|
|
|
|
7/8/2015
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,900
|
|
|
|
|
|
999,990
|
|
|
|
2/17/2015
(8)
|
|
150,000
|
|
375,000
|
|
750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/2016
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68,630
|
|
26.30
|
|
700,026
|
|
|
|
2/22/2016
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,680
|
|
|
|
|
|
596,484
|
|
Robert M. Buck
|
|
6/11/2015
(2)
|
|
135,000
|
|
337,500
|
|
675,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/11/2015
(3)
|
|
|
|
|
|
|
|
135,000
|
|
337,500
|
|
675,000
|
|
|
|
|
|
|
|
|
|
|
|
7/8/2015
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,890
|
|
27.10
|
|
499,971
|
|
|
|
7/8/2015
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,450
|
|
|
|
|
|
499,995
|
|
|
|
2/22/2016
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,090
|
|
26.30
|
|
337,518
|
|
|
|
2/22/2016
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,930
|
|
|
|
|
|
287,459
|
|
John S. Peterson
|
|
6/11/2015
(2)
|
|
88,800
|
|
222,000
|
|
444,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/11/2015
(3)
|
|
|
|
|
|
|
|
88,800
|
|
222,000
|
|
444,000
|
|
|
|
|
|
|
|
|
|
|
|
7/8/2015
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,950
|
|
27.10
|
|
250,038
|
|
|
|
7/8/2015
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,230
|
|
|
|
|
|
250,133
|
|
|
|
2/22/2016
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,760
|
|
26.30
|
|
221,952
|
|
|
|
2/22/2016
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,190
|
|
|
|
|
|
189,097
|
|
Mark R. Moore
|
|
6/11/2015
(2)
|
|
64,000
|
|
160,000
|
|
320,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/11/2015
(3)
|
|
|
|
|
|
|
|
64,000
|
|
160,000
|
|
320,000
|
|
|
|
|
|
|
|
|
|
|
|
7/8/2015
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,370
|
|
27.10
|
|
150,022
|
|
|
|
7/8/2015
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,540
|
|
|
|
|
|
150,134
|
|
|
|
2/22/2016
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,690
|
|
26.30
|
|
160,038
|
|
David G. Cushen
|
|
6/11/2015
(2)
|
|
60,000
|
|
150,000
|
|
300,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/11/2015
(3)
|
|
|
|
|
|
|
|
60,000
|
|
150,000
|
|
300,000
|
|
|
|
|
|
|
|
|
|
|
|
7/8/2015
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,370
|
|
27.10
|
|
150,022
|
|
|
|
7/8/2015
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,540
|
|
|
|
|
|
150,134
|
|
|
|
2/22/2016
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,710
|
|
26.30
|
|
150,042
|
|
|
|
2/22/2016
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,860
|
|
|
|
|
|
127,818
|
|
(1) The amounts shown reflect the grant date fair value of Masco stock options granted on February 11, 2015, which converted to TopBuild options on
the date of Separation. These options vest ratably in five equal installments over five years beginning on February 11, 2016, one year after the grant date.
(2) The amounts shown reflect the threshold, target and maximum opportunities under the 2015 annual cash bonus program. The amounts actually paid under this program are set forth in the “2015 Summary Compensation Table” above.
(3) The amounts shown reflect the threshold, target and maximum opportunities under the 2015 annual performance-based restricted stock program described in our “Compensation Discussion and Analysis.”
(4) The amounts shown reflect the number of stock options granted in 2015. These options vest ratably in five equal installments over five years beginning on July 8, 2016, one year after the grant date.
(5) The amounts shown reflect the number of shares of restricted stock granted in 2015, at per share value of $27.10. These stock grants vest ratably in five equal installments over five years beginning on July 8, 2016, one year after the grant date.
(6) These awards were denominated in dollars but payable in equity based on the market price of our common stock when achievement of the performance level is determined.
(7) The grant date fair value shown in the column is determined in accordance with accounting guidance. Regardless of the value placed on a stock option on the grant date, the actual value of the option will depend on the market value of our common stock at a future date when the option is exercised.
(8) The amounts shown reflect the threshold, target and maximum opportunities under the LTCIP relating to Masco's performance for the 2015-2017 performance period. On June 30, 2015, the threshold, target and maximum opportunities were reduced from $150,000, $375,000 and $750,000, respectively, to $25,750, $64,375 and $128,750, respectively, to reflect the occurrence of the Spin-Off and the fact that Mr. Volas ceased being an executive officer of Masco on June 30, 2015. Payment of this cash award depends on return on invested capital performance over the three-year period. TopBuild did not assume any payment obligation in respect of this award opportunity and any payment will be the responsibility of Masco.
(9) The amounts shown reflect the grant date fair value of TopBuild stock options granted on February 22, 2016, in respect of 2015 performance. These options vest ratably in five equal installments over five years beginning on February 22, 2017, one year after the grant date.
|
|
|
TopBuild Corp
. -
Proxy Statement -
37
|
(10) The amounts shown reflect the grant date fair value of shares of restricted stock granted on February 22, 2016, for 2015 performance, at a per share value of $26.30. These stock grants vest ratably in five equal installments over five years beginning on February 22, 2017, one year after the grant date.
2015 Outstanding Equity Awards at Fiscal Year-En
d
The following sets forth certain information regarding equity-based awards held by each named executive officer at December 31, 2015. See “Compensation Discussion and Analysis—Effects of the Spin-Off on Outstanding Awards of our Named Executive Officers” for a description of the treatment of Masco equity awards as a result of the Spin-Off.
Participant Name
|
|
Original
Grant Date
|
|
Numbers of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
Numbers of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(1)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
Shares or
Units of
Stock that
have not
Vested (#)
|
|
Market Value of
Shares or Units
of Stock that
have not Vested
($)
(2)
|
|
Gerald Volas
|
|
|
|
|
|
|
|
|
|
|
|
118,177
|
|
3,636,306
|
|
|
|
2/16/2011
|
|
-
|
|
27,922
|
|
13.31
|
|
2/16/2021
|
|
|
|
|
|
|
|
2/15/2012
|
|
-
|
|
27,922
|
|
12.12
|
|
2/15/2022
|
|
|
|
|
|
|
|
2/13/2013
|
|
-
|
|
41,884
|
|
21.15
|
|
2/13/2023
|
|
|
|
|
|
|
|
2/12/2014
|
|
-
|
|
27,922
|
|
23.27
|
|
2/12/2024
|
|
|
|
|
|
|
|
2/11/2015
|
|
-
|
|
34,903
|
|
27.13
|
|
2/11/2025
|
|
|
|
|
|
|
|
7/08/2015
|
|
-
|
|
95,790
|
|
27.10
|
|
7/08/2025
|
|
|
|
|
|
Robert M. Buck
|
|
|
|
|
|
|
|
|
|
|
|
63,518
|
|
1,954,449
|
|
|
|
7/08/2015
|
|
-
|
|
47,890
|
|
27.10
|
|
7/08/2025
|
|
|
|
|
|
John S. Peterson
|
|
|
|
|
|
|
|
|
|
|
|
25,850
|
|
795,405
|
|
|
|
7/08/2015
|
|
-
|
|
23,950
|
|
27.10
|
|
7/08/2025
|
|
|
|
|
|
Mark R. Moore
|
|
|
|
|
|
|
|
|
|
|
|
37,038
|
|
1,139,659
|
|
|
|
7/08/2015
|
|
-
|
|
14,370
|
|
27.10
|
|
7/08/2025
|
|
|
|
|
|
David G. Cushen
|
|
|
|
|
|
|
|
|
|
|
|
18,485
|
|
568,783
|
|
|
|
7/08/2015
|
|
-
|
|
14,370
|
|
27.10
|
|
7/08/2025
|
|
|
|
|
|
(1)
Except as otherwise noted, stock options and restricted stock awards become exercisable or vest in equal annual installments of 20% commencing in the year following the year of grant.
(2)
Based on TopBuild’s closing stock price of $30.77 on December 31, 2015.
2015 Option Exercises and Stock Veste
d
The following table provides additional information about stock option exercises and shares acquired upon the vesting of TopBuild Corp. stock awards, including the value realized, during the fiscal year ended December 31, 2015, by the named executive officers.
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number of Shares
Acquired on Exercise
(#)
|
|
Value Realized on
Exercise ($)
|
|
Number of Shares
Acquired on Vesting
(#)
(1)
|
|
Value Realized on
Vesting ($)
(2)
|
|
Gerald Volas
|
|
-
|
|
-
|
|
2,116
|
|
57,132
|
|
Robert M. Buck
|
|
-
|
|
-
|
|
1,122
|
|
30,294
|
|
John S. Peterson
|
|
-
|
|
-
|
|
1,301
|
|
35,127
|
|
Mark R. Moore
|
|
-
|
|
-
|
|
267
|
|
7,209
|
|
David G. Cushen
|
|
-
|
|
-
|
|
1,972
|
|
53,244
|
|
(1) TopBuild shares vested on July 1, 2015.
(2) Based on closing stock price of $27.00 on July 1, 2015.
|
|
|
TopBuild Corp
. -
Proxy Statement -
38
|
The following table provides additional information about stock option exercises and shares acquired upon the vesting of Masco stock awards, including the value realized, during the fiscal year ended December 31, 2015, by the named executive officers. Our named executive officers received Masco stock in connection with the exercise of Masco stock options. However, because Masco restricted stock awards were converted into TopBuild restricted stock awards in connection with the Spin-Off, our named executive officers received TopBuild stock in connection with the vesting of Masco restricted stock awards. The values realized on exercise and vesting set forth in the table below are based on the closing price of Masco’s common stock or TopBuild’s common stock (as applicable) on the date of such exercise or vesting.
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number of Shares
Acquired on
Exercise (#)
|
|
Value Realized on
Exercise ($)
|
|
Number of Shares
Acquired on
Vesting (#)
|
|
Value Realized on
Vesting ($)
|
|
Gerald Volas
|
|
113,082
|
|
5,712,758
|
|
31,917
|
|
780,371
|
|
Robert M. Buck
|
|
3,101
|
|
116,573
|
|
17,892
|
|
437,459
|
|
John S. Peterson
|
|
1,045
|
|
37,714
|
|
6,081
|
|
148,680
|
|
Mark R. Moore
|
|
7,878
|
|
312,280
|
|
13,947
|
|
341,004
|
|
David G. Cushen
|
|
2,954
|
|
109,934
|
|
3,212
|
|
78,533
|
|
TopBuild Long Term Incentive Plan
On June 30, 2015, the Existing LTIP, which was previously approved by the Board and Masco, as our sole stockholder, became effective. The Existing LTIP authorizes us to issue up to a specified number of shares of our common stock pursuant to equity awards to our employees, consultants and directors and to employees and consultants of our affiliates.
Any shares that are subject to awards under the Existing LTIP that are forfeited, canceled or expired or withheld by us for payment of income taxes upon vesting of a restricted stock award or restricted stock units, will again become available for issuance under the Existing LTIP, and such shares will not be charged against the maximum share limitation under the Existing LTIP. Any awards settled in cash will not be counted against the maximum share reserve under the Existing LTIP. However, shares delivered in payment of an option and shares that are repurchased by us with the proceeds from any option exercise and any unissued shares resulting from the settlement of SARs in stock or net settlement of a stock option will not be returned to the number of shares available for issuance under the Existing LTIP. A participant may receive multiple awards under the Existing LTIP. Shares delivered under the Existing LTIP will be authorized but unissued shares of our common stock, treasury shares or shares purchased in the open market or otherwise.
Under the Existing LTIP, we may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and dividend equivalents. Awards may be granted alone, in addition to, in tandem with or in substitution for any award granted under the Existing LTIP or another plan of the Company or an affiliate.
Restricted Stock
. A restricted stock award generally provides the recipient with all of the rights of a stockholder, including the right to vote the shares. Restricted stock is generally subject to certain forfeiture conditions as specified by our Compensation Committee and may not be transferred by the recipient until those restrictions lapse.
Restricted Stock Units.
A restricted stock unit is the right to receive cash, other securities, other awards or other property, subject to the termination of a restricted period specified by our Compensation Committee. Restricted stock units are generally subject to forfeiture conditions and may not be transferred by the recipient until those restrictions lapse. Restricted stock units are not outstanding shares of stock and do not entitle a participant to voting or other rights; however, an award of restricted stock units may provide for the crediting of additional restricted stock units based on the value of dividends paid on our common stock while the award is outstanding.
|
|
|
TopBuild Corp
. -
Proxy Statement -
39
|
Stock Options.
Stock options are rights to purchase a specified number of shares of our common stock at an exercise price of at least 100 percent of the fair market value on the date of grant, except in the case of options granted in substitution of options previously granted by a company we may acquire or as a result of the Spin-Off. The maximum term of an option awarded under the Existing LTIP is ten (10) years after the
initial date of grant. There will be maximum annual amounts granted to any one (1) participant as stock options.
Stock Appreciation Rights (“SARs”).
A SAR entitles a recipient to receive, upon surrender of the SAR, cash equal to the excess of the fair market value of a specified number of shares of our common stock on the date the SAR is surrendered over the fair market value of such shares on the date of grant. There will be maximum annual amounts granted to any one (1) participant as SARs.
Performance Awards.
Performance awards may be denominated in, or payable in, cash, our common stock, or other securities or awards under the Existing LTIP. Under the Existing LTIP, there will be maximum annual amounts payable to any one (1) participant as performance awards. Performance awards confer rights valued by our Compensation Committee and payable to (or exercisable by) the recipient when the recipient achieves performance goals during a specified performance period. Performance awards to executive officers under the Existing LTIP that are intended to satisfy the requirements for performance-based compensation under Section 162(m) of the Code will be subject to meeting performance goals from one (1) or more of the following performance metrics (each as determined in accordance with generally accepted accounting principles and with such adjustments as set forth in the Existing LTIP):
|
|
|
Cash flow
|
Quality measures
|
Safety measures
|
Earnings per share
|
Return on assets
|
SG&A as a percent of sales
|
EBIT
|
Return on equity
|
Total cost productivity
|
EBITDA
|
Return on invested capital
|
Total stockholder return
|
Gross margin
|
Return on net assets
|
Working capital
|
Gross profit
|
Return on net tangible assets
|
Working capital as a percent of sales
|
Net income
|
Return on sales
|
Working capital efficiency
|
Operating margin
|
Revenue growth
|
|
Operating profit
|
Revenues
|
|
The Existing LTIP provides full vesting of unvested awards upon a change in control only if a participant fails to receive marketable replacement awards equal in value to awards outstanding at the time of the change in control or, having received such replacement awards, within a two (2) year period thereafter is terminated or
resigns for specified reasons of “good cause” as determined by our Compensation Committee.
Our Board has the authority to terminate, suspend or discontinue the Existing LTIP at any time, subject to limitations to the extent required by applicable rules and regulations.
Retirement Plan
s
The following two tables describe benefits under Masco's retirement plans, which were not assumed by TopBuild (individual accounts in Masco’s tax-qualified 401(k) and profit sharing plans for all employees of TopBuild were transferred to TopBuild's new tax-qualified 401(k) savings plan). The defined benefit pension plans described below were frozen for future benefit accruals effective January 1, 2010. None of our named executive officers other than Mr. Volas and Mr. Moore is eligible for benefits under Masco's defined benefit pension plans.
|
|
|
TopBuild Corp
. -
Proxy Statement -
40
|
2015 Non-Qualified Deferred Compensatio
n
|
|
|
|
|
|
|
|
|
|
Name
|
|
Allocations for 2015
($)
(1)(2)
|
|
Aggregate Earnings in
2015
(3)
|
|
Aggregate
Withdrawals/Distributions ($)
(4)
|
|
Aggregate
Balance at
December
31, 2015 ($)
|
|
Gerald Volas
|
|
10,600
|
|
-
|
|
-
|
|
275,723
|
|
Robert M. Buck
|
|
8,947
|
|
189
|
|
|
|
118,074
|
|
John S. Peterson
|
|
7,297
|
|
354
|
|
|
|
65,666
|
|
Mark R. Moore
|
|
9,020
|
|
-
|
|
-
|
|
87,754
|
|
David G. Cushen
|
|
7,793
|
|
153
|
|
-
|
|
0
|
|
(1) Reflects Company matching contributions under TopBuild’s new tax-qualified 401(k) savings plan.
(2) Amounts in this column are included in “All Other Compensation” in the Summary Compensation Table.
(3) Aggregate Earnings for Mr. Volas is negative $2,412 and Mr. Moore is negative $273.
(4) Aggregate Withdrawals/Distributions for Mr. Volas is negative $4,068, Mr. Moore negative $2,006 and Mr. Cushen negative $11,143.
2015 Pension Benefit
s
|
|
|
|
|
|
|
|
Name
|
|
Plan Name
|
|
Number of Years of
Service (#)
(3)
|
|
Present Value of
Accumulated
Benefits ($)
(4)
|
|
Gerald Volas
|
|
Masco Pension Plan
(1)
|
|
26
|
|
$820,828
|
|
|
|
Defined Benefit Portion – BRP
(1)
|
|
26
|
|
$757,167
|
|
|
|
SERP
(2)
|
|
15
|
|
$3,528,746
|
|
Mark R. Moore
|
|
Masco Pension Plan
(1)
|
|
6
|
|
$123,095
|
|
|
|
Defined Benefit Portion - BRP
|
|
6
|
|
$17,481
|
|
(1) The frozen tax-qualified Masco Corporation Pension Plan (the "Pension Plan") and a portion of the non-qualified BRP applicable to the Pension Plan, provide that at normal retirement age (65), participants receive an annual payment for the remainder of their lives, with five years of payments guaranteed. Employees became 100% vested in their pension benefit after completing five years of employment with Masco. The benefits are not subject to reduction for social security benefits or for other offsets. Participants who retire or terminate employment with Masco are eligible for a reduced early retirement benefit between age 55 and 65. If a participant retires or terminates employment and commences payments at age 55, his or her benefit would be reduced by one-half; if he or she retires and commences payments at age 60, the benefit would be reduced by one-third. The maximum credited service under the Pension Plan and the defined benefit portion of the BRP was 30 years. A participant who becomes disabled while employed by Masco and has 10 or more years of service with Masco is eligible to receive a disability benefit equal to the participant’s accrued benefit. Benefits accrued under the Pension Plan and the portion of the BRP applicable to the Pension Plan were frozen as of January 1, 2010.
(2) Under the frozen non-qualified Supplemental Executive Retirement Plan ("SERP"), participants receive an annual payment for life of an amount up to 60% of the average of their highest three years’ cash compensation (base salary plus annual cash bonus, up to 60% of that year's maximum bonus opportunity) earned on or before January 1, 2010. SERP payments are offset by amounts payable under the Pension Plan and the Profit Sharing Plan balance as of January 1, 2010 and the portions of the BRP applicable to those plans, and, in most cases, by retirement benefits payable to the SERP participant by other employers. Benefits under the SERP are not payable in a lump sum, other than in the case of a change in control or alternate change in control. The maximum benefit under the SERP accrues after 15 years, limited to service accrued at January 1, 2010. Mr. Volas is fully accrued and fully vested in his SERP benefit. SERP benefits are not payable to a terminated participant until age 65, provided no change in control or alternate change in control of Masco has occurred. Participants must refrain from activities negatively impacting Masco's or TopBuild's business following termination of employment in order to continue to receive SERP benefits. The SERP provides a disability benefit for participants who have been employed by Masco at least two years and who become disabled while employed by Masco. The disability benefit is paid until the earlier to occur of death, recovery from disability or age 65, is offset by payments from long-term disability insurance Masco has paid for, and is equal to 60% of the participant's annual salary and bonus (up to 60% of the maximum bonus opportunity) as of January 1, 2010. At age 65, payments revert to a calculation based on the highest three-year average compensation as of January 1, 2010. Under the SERP, participants and their spouses may also receive medical benefits. A change in control or alternate change in control accelerates full vesting, may accelerate the payment of benefits (calculated on a present value basis) and may result in payment of an amount for any related excise taxes, as discussed below under “Payments Upon Change in Control.” A surviving spouse will receive reduced benefits.
(3) Reflects credited service through January 1, 2010, the date on which Masco's defined benefit pension plans were frozen, for years of employment with Masco, its subsidiaries or certain of its prior affiliates and their subsidiaries. Credited service under the SERP includes service through January 1, 2010 only with Masco and businesses in which Masco had a 50% or greater interest.
(4) Amounts in this column were calculated as of December 31, 2015, using the normal form of benefit payable under each plan using (a) base pay only for the
Pension Plan and BRP, (b) base pay plus cash bonus for the SERP, and (c) the same discount rates and mortality assumptions as described in the notes to financial statements in Masco's Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Although SEC disclosure rules require a present value calculation, none of these plans (other than the SERP and the BRP, in the event of a change in control or alternate change in control) provides benefits in a lump sum.
Payments upon a Change of Contro
l
If we experienced a change in control, the Existing LTIP provides that all participants, including the named executive officers, could receive accelerated vesting and reimbursement.
The following table sets forth the values of all payments (other than from our tax-qualified and non-qualified retirement plans which are set forth above under “Retirement Plans”) assuming a change in
|
|
|
TopBuild Corp
. -
Proxy Statement -
41
|
control of TopBuild had occurred on December 31, 2015. Equity payments would be triggered by a change in control of TopBuild, while the SERP and BRP Payments would be triggered by a change in control of Masco.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Cash
($)
|
|
Equity ($)
(1)
|
|
SERP and BRP
Payments
($)
(2)
|
|
Perquisites ($)
|
|
Excise Tax
Reimbursement
($)
|
|
Other
($)
|
|
Total ($)
|
|
Gerald Volas
|
|
|
|
5,735,509
|
|
4,241,859
|
|
|
|
|
|
|
|
9,977,368
|
|
Robert M. Buck
|
|
|
|
2,130,205
|
|
118,074
|
|
|
|
|
|
|
|
2,248,279
|
|
John S. Peterson
|
|
|
|
883,301
|
|
65,666
|
|
|
|
|
|
|
|
948,967
|
|
Mark R. Moore
|
|
|
|
1,192,397
|
|
104,420
|
|
|
|
|
|
|
|
1,296,817
|
|
David G. Cushen
|
|
|
|
451,056
|
|
0
|
|
|
|
|
|
|
|
451,056
|
|
(1) A change in control would trigger vesting of unvested restricted stock and stock option awards. This column is comprised of the incremental values for vestings of such awards, based on TopBuild’s closing stock price of $30.77 on December 31, 2015.
(2) Amounts calculated for both the SERP and the BRP utilize the discount rates and mortality assumptions equal to the Pension Benefit Guarantee Corporation discount rates for lump sums in plan terminations, as in effect four (4) months prior to the change in control or alternate change in control, and the UP-1984 mortality table (both of which differ from the rates and assumptions used to calculate the lump sums set forth in the Pension Plan Table). If a change in control occurs that does not meet the narrower “alternate change in control” definition, lesser lump sum values (reflecting the portion of benefits not subject to Code Section 409A) would be payable, and the portion of benefits subject to Section 409A would not be paid in a lump sum but would be paid over time, as if such event had not occurred. Prior to 2008, the BRP had no change in control provision; it was amended to provide that any change in control would result in funding a trust, but the indicated lump sum benefits would be payable only upon the occurrence of an "alternate change in control," whereas in the case of the more broadly-defined "change in control," benefits would not be paid in a lump sum, but would be paid over time, as if such event had not occurred.
Payments upon Retirement, Termination, Disability or Deat
h
In accordance with the Existing LTIP, if employment terminates by reason of retirement on or after attaining age 65, such restrictions will continue to lapse in the same manner as though employment had not been terminated. If employment is terminated for any reason, with or without cause, while restrictions remain in effect, all Restricted Shares for which restrictions have not lapsed will be automatically forfeited to the Company. If an employee should terminate by reason of permanent and total disability or should die while Restricted Shares remain unvested, the restrictions on all Restricted Shares will lapse and their rights to the shares will become vested on the date of such termination or death.
Severance and Change in Control Plans
As of December 31, 2015, only Mr. Volas had a severance agreement with TopBuild Corp.
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Severance
Plan
Multiple
(#)
|
|
Eligible for
Pro-rata Target
Incentive with
Respect to Year of
Termination
|
|
Eligible for
Salary
Continuation
|
|
Eligible for
Bonus
|
|
Medical Plan
Provided
During
Continuation
Period
|
|
Gerald Volas
|
|
1.5
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Yes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Salary in Year of
Termination
($)
(1)
|
|
Value of Salary
Continuation
($)
(2)
|
|
Value of Bonus
(Update)
($)
(3)
|
|
Value of Medical
Plan Provided
During
Continuation
Period
($)
(4)
|
|
Update Total
Company
Severance
Expenses
($)
(5)
|
|
Gerald Volas
|
|
700,000
|
|
1,050,000
|
|
1,050,000
|
|
6,849
|
|
2,106,849
|
|
(1)
The Value of Salary with Respect to Year of Termination represents the salary for Mr. Volas if he had terminated on December 31, 2015. If the termination date is other than the last day of the Company’s fiscal year, incentive earned would equal the salary prorated for the number of days worked in the year.
(2) The Value of Salary Continuation is calculated by taking the annual salary times the relevant multiple according to the Severance Agreement. Salary earned would equal the target incentive prorated for the number of days worked in the year.
(3) The Value of Bonus is calculated by taking the annual target incentive times the relevant multiple according to the Severance Agreement.
(4) The Value of Medical Plan Provided is calculated as the Company-paid portion of the Medical Plan cost, times the number of months eligible according to the Severance Agreement. Costs include medical only (assumes no change in Health Plan or coverage type). Executive continues to make normal employee contributions during the severance period.
(5) Total Company Severance Expense is the sum of the Value of Pro-rata Target Incentive with Respect to Year of Termination, Salary Continuation, Bonus and Medical Plan Provided.
|
|
|
TopBuild Corp
. -
Proxy Statement -
42
|
Additionally, as of the Termination Date (i) the vested portion of each option award will be exercisable for 90 days thereafter, according to the Plan, and the unvested portion of all option awards shall be forfeited to the Company and (ii) with respect to unvested restricted stock awards, all restrictions on unvested shares shall continue to lapse as if the termination had not occurred.
Upon severance, the incentive earned in the year of termination with respect to restricted stock awards and stock options would equal the amount prorated for the number of days worked in the year.
New Executive Severance Plan and Change in Control and Severance Agreement
In order to provide a vehicle to ensure retention of our executive officers, the Board of Directors adopted an Executive Severance and Change-in-Control Plan in February 2016 (the “Severance Plan”) for a limited number of executive officers. In addition, on March 1, 2016, we entered into a Change in Control and Severance Agreement (the “Severance Agreement”) with Gerald Volas, our Chief Executive Officer and a member of our board of directors. The Severance Plan and the Severance Agreement provide severance benefits to certain executive officers in the event their employment is terminated under certain conditions, as outlined below.
In order to be covered, eligible executive officers must sign a non-compete, non-solicitation and confidentiality agreement and a release of all claims against the Company and its affiliates. Under the terms of the Severance Plan and the Severance Agreement, each participant would be entitled to severance payments and benefits in the event that he or she experiences a “qualifying termination” (i.e., termination without cause by the Company or for a good reason by the executive officer). Each event is defined in the Severance Plan and the Severance Agreement.
If an eligible executive officer experiences a qualifying termination under the Severance Plan or the Severance Agreement, the executive officer would be entitled to an incentive payment that is based on the target amount established under the Company’s annual incentive plan for the year in which the termination occurs. The payment would be adjusted on a pro-rata basis according to the number of calendar days the eligible executive officer was actually employed during such plan year and is determined based on actual performance after the performance period ends. The eligible executive officer would also receive salary continuation payments in an amount equal to such multiple as may be identified in the Severance Plan or the Severance Agreement multiplied by the executive officer’s base salary and bonus at target. The table in the section “Potential Payments Upon Termination or Change in Control” indicates the applicable multiple for each named executive officer. The salary continuation and incentive continuation, if applicable, would be paid in a lump sum or installments over the severance period and in accordance with the Company’s standard payroll practice, subject to the requirements of Section 409A. The Company would provide Health and Wellness benefits to the eligible named executive officer and his or her dependents for the period identified in the Severance Plan or the Severance Agreement.
Executive Severance Plan Elements 2016
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Severance
Plan
Multiple
(#)
|
|
Eligible for
Pro-rata Target
Incentive with
Respect to Year of
Termination
|
|
Eligible for
Salary
Continuation
|
|
Eligible for
Bonus
Continuation
|
|
Medical Plan
Provided
During
Continuation
Period
|
|
Gerald Volas
|
|
2
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Robert M. Buck
|
|
1
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Yes
|
|
John S. Peterson
|
|
1
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Mark R. Moore
|
|
1
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Yes
|
|
David G. Cushen
|
|
1
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Yes
|
|
|
|
|
TopBuild Corp
. -
Proxy Statement -
43
|
Executive Severance Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Salary in Year of
Termination
($)
(1)
|
|
Value of Salary
Continuation
($)
(2)
|
|
Value of Bonus
Continuation
($)
(3)
|
|
Value of
Medical Plan
Provided
During
Continuation
Period
($)
(4)
|
|
Total
Company
Severance
Expenses
($)
(5)
|
|
Gerald Volas
|
|
700,000
|
|
1,400,000
|
|
1,400,000
|
|
9,132
|
|
2,809,132
|
|
Robert M. Buck
|
|
450,000
|
|
450,000
|
|
337,500
|
|
4,566
|
|
792,066
|
|
John S. Peterson
|
|
370,000
|
|
370,000
|
|
222,000
|
|
13,674
|
|
605,674
|
|
Mark R. Moore
|
|
320,000
|
|
320,000
|
|
160,000
|
|
14,987
|
|
494,987
|
|
David G. Cushen
|
|
300,000
|
|
300,000
|
|
150,000
|
|
14,987
|
|
464,987
|
|
(1) The Value of Salary with Respect to Year of Termination represents the salary for the named executive officers if they terminated on December 31, 2015.
(2) The Value of Salary Continuation is equal to base pay times the multiple.
(3) The Value of Bonus is the bonus at target times the multiple. The current year bonus is prorated based on time worked and actual performance.
(4) Benefits continuation is for the time period described by the multiple.
(5) Total Company Severance Expense is the sum of the Value of Pro-rata Target Incentive with Respect to Year of Termination, Salary Continuation, Bonus and Medical Plan Provided.
Unvested stock options vest pro-rata and must be exercised within a three month anniversary date of the termination date. Unvested performance shares vest pro-rata as of the termination date based on actual performance against target. Except with respect to Mr. Volas, unvested restricted stock awards vest pro-rata as of the termination date based on the portion of the vesting period during which the executive officer was an active participant.
Executive Change in Control Plan Elements 2016
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Severance
Plan
Multiple
(#)
|
|
Eligible for
Accelerated
Equity
Vesting
|
|
Eligible for
Salary
Continuation
|
|
Eligible
for
Prorated
Bonus
|
|
Medical Plan
Provided
During
Continuation
Period
|
|
Gerald Volas
|
|
3
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Robert M. Buck
|
|
2
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Yes
|
|
John S. Peterson
|
|
2
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Mark R. Moore
|
|
2
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Yes
|
|
David G. Cushen
|
|
2
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Yes
|
|
Executive Change in Control Compensation Table
|
|
|
|
|
|
|
|
|
|
|
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Name
|
|
Salary in Year of
Termination
($)
(1)
|
|
Value of Salary
Continuation
($)
(2)
|
|
Value of Bonus
Continuation
($)
(3)
|
|
Value of Medical
Plan Provided
During
Continuation
Period
($)
(4)
|
|
Total Company
Severance
Expenses
($)
|
|
Gerald Volas
|
|
700,000
|
|
2,100,000
|
|
2,100,000
|
|
13,697
|
|
4,213,697
|
|
Robert M. Buck
|
|
450,000
|
|
900,000
|
|
675,000
|
|
9,132
|
|
1,584,132
|
|
John S. Peterson
|
|
370,000
|
|
740,000
|
|
444,000
|
|
27,348
|
|
1,211,348
|
|
Mark R. Moore
|
|
320,000
|
|
640,000
|
|
320,000
|
|
29,973
|
|
989,973
|
|
David G. Cushen
|
|
300,000
|
|
600,000
|
|
300,000
|
|
9,183
|
|
909,183
|
|
(1) The Value of Salary with Respect to Year of Termination represents the salary for the named executive officers if they terminated on December 31, 2015.
(2) The Value of Salary Continuation is equal to base pay times the CIC multiple.
(3) The Value of Bonus is bonus at target times the CIC multiple. The current year bonus is prorated based on time worked and target performance.
(4) Benefits continuation is for the time period described by the CIC multiple.
Unvested stock options become 100% vested following a termination without cause or for good reason in connection with a Change in Control. Outstanding and unvested performance shares become 100% vested based on performance at target levels following a termination without cause or for good reason in connection with a Change in Control. Unvested restricted stock awards become 100% vested following a termination without cause or for good reason in connection with a Change in Control.
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TopBuild Corp
. -
Proxy Statement -
44
|
PROPOSAL
2: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has appointed PricewaterhouseCoopers LLP, an independent registered public accounting firm (“PwC”), to audit the Company’s financial statements for the fiscal year ending December 31, 2016. The Company is submitting its appointment of PwC for ratification by the stockholders at the Annual Meeting. A representative of PwC is expected to be present at the Annual Meeting, will have the opportunity to make a statement and is expected to be available to respond to appropriate questions. PwC has served as our independent registered public accounting firm since the June 2015 Spin-Off.
Although the selection and appointment of our independent registered public accounting firm is not required to be submitted to a vote of stockholders, the Board deems it desirable to obtain stockholders’ ratification and approval of this appointment. If the appointment is not ratified by our stockholders, the adverse vote will be considered as an indication to the Audit Committee that it should consider selecting another independent registered public accounting firm for the following fiscal year, but it is not required to do so. Even if the appointment is ratified, the Audit Committee, in its discretion, may select a new independent registered public accounting firm at any time during the year if it believes that such a change would be in the Company’s best interest.
In making its recommendation to ratify the appointment of PwC as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016, the Audit Committee considered whether the services provided by PwC are compatible with maintaining the independence of PwC.
Before the Audit Committee selected PwC, it carefully considered the independence and qualifications of that firm, including their past performance as the Company’s independent registered public accounting firm and their reputation for integrity and for competence in the fields of accounting and auditing.
Audit Fees
The following table sets forth the aggregate fees billed or estimated to be billed to us by PwC for the year ended December 31, 2015, all of which were approved by the Audit Committee:
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|
|
|
|
|
Year Ended
December 31,
2015
|
|
Audit Fees
(1)
|
|
1,780,000
|
|
Audit-Related Fees
(2)
|
|
-
|
|
Tax Fees
(3)
|
|
5,000
|
|
All Other Fees
(4)
|
|
1,800
|
|
TOTAL
|
|
1,786,800
|
|
(1) Audit Fees consisted of fees billed or estimated to be billed by PwC for the audit of our annual financial statements included in our Annual Report on Form 10-K, review of our interim financial statements included in our Quarterly Reports on Form 10-Q, and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements for the year ended December 31, 2015.
(2) Audit-Related Fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.”
(3) Tax Fees consisted of fees for federal tax compliance.
(4) All Other Fees consisted of fees other than the services reported above. The services provided in the year ended December 31, 2015, consisted of a subscription to an accounting website.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee is responsible for appointing, compensating and overseeing the work performed by PwC as well as audit services performed by other independent public accounting firms. The Audit Committee has established a policy governing our use of the services of our independent registered public accounting firm. Under the policy, our Audit Committee is required to pre-approve all audit and non-audit services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair the independent registered public accounting firm’s independence.
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TopBuild Corp
. -
Proxy Statement -
45
|
|
The Board of Directors recommends that you vote
“FOR”
the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm.
|
PROPOSAL
3: ADVISORY VOTE ON COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
The Exchange Act, and more specifically, Section 14A of the Exchange Act which was added under the DoddFrank Wall Street Reform and Consumer Protection Act, enacted in July 2010, requires that we provide stockholders with the opportunity to vote to approve, on a nonbinding advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules (commonly referred to as “SayonPay”).
Our compensation program for named executive officers is intended to link compensation to performance; to provide competitive compensation levels to attract, retain and reward executives; and to align management’s interests with those of our stockholders. The compensation provided to the named executive officers is dependent on the Company’s financial, operational and strategic performance and the named executive officer’s individual performance and is intended to drive creation of long-term stockholder value. In addition, both the Existing LTIP and the proposed Amended LTIP provide that, in the event the Company has a restatement of its financial statements, other than as a result of changes to accounting rules and regulations, the Compensation Committee may require the return of cash or equity which a participant may have acquired during the three (3) year period preceding the date of restatement of such restated financial results.
We encourage stockholders to read the “Compensation Discussion and Analysis” section of this proxy statement, the Summary Compensation Table and the other related tables and disclosure for a detailed description of the fiscal year 2015 compensation of our named executive officers. The Compensation Committee and the Board believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our named executive officers reported in this proxy statement appropriately reflects our results during the fiscal year.
The vote on this resolution is not intended to address any specific element of compensation; rather, the advisory vote relates to the overall compensation of our named executive officers. This vote is advisory, which means that it is not binding on the Company, the Board or the Compensation Committee. However, we value the opinion of our stockholders and the Board and the Compensation Committee will review the voting results and will take into account the outcome of the vote when considering future compensation decisions for the named executive officers.
Accordingly, we ask our stockholders to vote on the following resolution:
“RESOLVED, that the Company’s stockholders approve, on a nonbinding advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the Company’s proxy statement for the 2016 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables and narrative discussion.”
|
The Board of Directors recommends that you vote
“FOR”
the proposal to approve, on an advisory basis, the compensation of our named executive officers.
|
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|
|
TopBuild Corp
. -
Proxy Statement -
46
|
PROPOSAL
4: ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
Section 14A of the Exchange Act and related SEC rules also require that we provide stockholders the opportunity to vote, on a non-binding, advisory basis, as to how frequently we should hold future non-binding, advisory votes on the compensation of our named executive officers as disclosed in our annual proxy statement in accordance with SEC rules (which we refer to as “an advisory vote on executive compensation”). SEC rules provide that stockholders must have an opportunity to indicate whether they would prefer that we hold future advisory votes on executive compensation once every year, once every two (2) years, or once every three (3) years. Stockholders may also abstain from voting on this proposal. SEC rules require us to hold the advisory vote on the frequency of future advisory votes to approve the compensation of our named executive officers at least once every six (6) years.
After careful consideration of this proposal, the Board has determined that an advisory vote to approve the compensation of our named executive officer that occurs every year (an annual vote) is the most appropriate alternative, and therefore recommends that you vote to hold the advisory votes to approve the compensation of our named executive officers every year. In formulating its recommendation on this proposal, the Board considered that an annual advisory vote on executive compensation is consistent with our policy of seeking input from our stockholders on corporate governance matters and our executive compensation philosophy, policies and practices on a routine basis. An annual vote will give our stockholders the opportunity to react promptly to emerging trends in compensation, provide feedback before those trends become pronounced over time and give the Board and the Compensation Committee the opportunity to evaluate advisory votes on executive compensation each year. An annual vote also complements our goal of creating and implementing compensation programs that enhance stockholder value and maximize accountability.
The advisory vote on the frequency of future advisory votes on executive compensation is non-binding on the Board. The Board understands that there are different views as to what is an appropriate frequency for future advisory votes on executive compensation. For the reasons described above, we believe that a majority of our stockholders would prefer an annual vote.
|
The Board of Directors recommends a vote of
“EVERY YEAR”
on the advisory vote on the frequency of future advisory votes on the compensation of our named executive officers.
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TopBuild Corp
. -
Proxy Statement -
47
|
PROPOSAL
5: VOTE TO APPROVE THE AMENDED AND RESTATED TOPBUILD CORP. 2015 LONG TERM STOCK INCENTIVE PLAN
On June 30, 2015, the Existing LTIP, which was previously approved by the Board and Masco, as our sole stockholder, became effective. We are asking the Company’s stockholders to approve the Amended LTIP primarily to secure the continued deductibility of performance-based compensation under Section 162(m) of the Code prior to the expiration of a transition rule for spinoff companies that only affords such deductibility for the transition period. The Amended LTIP also makes certain other changes as described further below. No additional shares are being requested under the Amended LTIP at this time.
Both the Existing LTIP and the Amended LTIP include the TopBuild Non-Employee Directors Equity Program under the 2015 Long Term Incentive Plan (the “Directors’ Program”).
The following is a summary of the Amended LTIP, which is qualified in its entirety by reference to the Amended LTIP, a copy of which is attached as Appendix A.
Reasons for
Amending
and Restating the Existing LTIP
The Amended LTIP includes a number of enhancements to the terms of the Existing LTIP. The more significant changes include the following:
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·
|
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The Amended LTIP will not permit recycling of shares withheld to satisfy withholding taxes;
|
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·
|
|
Time-based awards in excess of five (5) percent of the number of shares available for awards will be subject to a minimum vesting period of one (1) year, except in limited cases of an intervening event such as death, disability, retirement or a change in control; and
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·
|
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Awards to non-employee directors for any fiscal year may not exceed a value of $450,000 at the time of grant.
|
Operation of the Amended LTIP
The Amended LTIP authorizes us to issue up to a specified number of shares of our common stock pursuant to equity awards to eligible participants. The Amended LTIP would be administered by our Compensation Committee, each member of which is a “non-employee director” under Rule 16b-3 under the Exchange Act, an “outside director” under Section 162(m) of the Code and an “independent director” under our Categorical Standards, which are designed to track the rules of the New York Stock Exchange. Our Compensation Committee will approve the aggregate awards and the individual awards for executive officers and non-employee directors. The Compensation Committee may delegate some of its authority under the Amended LTIP to one (1) or more of our officers to approve awards for other employees. The Compensation Committee has the authority to interpret the Amended LTIP, to prescribe, amend and rescind rules and regulations relating to it and to make all other determinations deemed necessary or advisable for the administration of the Amended LTIP. The determinations of the
Compensation Committee pursuant to its authority under the Amended LTIP shall be conclusive and binding.
Eligible
Participants
Eligible participants include all employees of or consultants to the Company, any entity in which the Company’s direct or indirect equity interest is at least twenty percent, and any other entity in which the Company has a significant direct or indirect equity interest, whether more or less than twenty (20) percent, as determined by the Committee, and directors of the Company. The Compensation Committee has the authority to select participants and to determine the type and amount of their awards under the Amended LTIP. We have approximately 8,000 employees and zero (0) consultants and we have six (6) non-employee directors. In 2015, participants in the Existing LTIP consisted of forty-three (43) employees, zero (0) consultants and six (6) non-employee directors.
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TopBuild Corp
. -
Proxy Statement -
48
|
Authorized Shares under the Amended LTIP
The aggregate number of shares of our common stock that may be issued under the Amended LTIP will not exceed 4,000,000 (subject to the adjustment provisions set forth in the Amended LTIP). This does not represent a change to the number shares authorized for issuance under the Existing LTIP as originally approved by Masco as our sole stockholder. In addition, if a company acquired by the Company has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition to determine the consideration payable to the stockholders in such transaction) may be used for awards under the Amended LTIP, and will not reduce the shares authorized under the Amended LTIP. Any such awards may not, however, be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition, and may be made only to individuals who were not employees or directors of the Company prior to such acquisition.
Any shares that are subject to awards under the Amended LTIP that are forfeited, canceled, expired or settled in cash will again become available for issuance under the Amended LTIP, and such shares will not be charged against the maximum share limitation under the Amended LTIP. Any awards settled in cash will not be counted against the maximum share reserve under the Amended LTIP. However, shares delivered in payment of an option, shares that are repurchased by us with the proceeds from any option exercise, shares withheld to satisfy withholding taxes and any unissued shares resulting from the settlement of SARs in stock or net settlement of a stock option will not be returned to the number of shares available for issuance under the Amended LTIP. A participant may receive multiple awards under the Amended LTIP. Shares delivered under the Amended LTIP will be authorized but unissued shares of our common stock, treasury shares or shares purchased in the open market or otherwise.
Types of Award
s
Under the Amended LTIP, we may grant stock options, stock appreciation rights or SARs, restricted stock, restricted stock units, performance awards and dividend equivalents. Awards may be granted either alone, in addition to or in tandem with any award granted under the Amended LTIP or another plan of the Company or an affiliate. The Compensation Committee will determine the amounts, terms and conditions of all awards in accordance with the Amended LTIP. Awards will become exercisable or otherwise vest at the times and upon the conditions that the Compensation Committee may determine, as reflected in the applicable award agreement, except that the Amended LTIP provides for a minimum vesting period of one (1) year for time-based awards in excess of five (5) percent of the number of shares available for awards.
Restricted Stock
. A restricted stock award generally provides the recipient with shares of our common stock, subject to certain forfeiture conditions as specified by our Compensation Committee in the award agreement. Restricted s
t
ock may not be transferred by the recipient until those restrictions lapse. Forfeiture conditions could include, but are not limited to, the attainment of performance goals (as described below), continuous service with us, the passage of time or other conditions. However, with some exceptions (for example, in the event of death, disability or change in control or as noted in the first paragraph above under “Types of Awards”), restrictions on time-based restricted stock may not expire in less than one (1) year following the date of grant. Our Compensation Committee may impose restrictions on a recipient’s right to vote shares of restricted stock and may provide that dividend equivalents will be credited with respect to restricted stock, provided that no dividend equivalents shall be awarded on unearned performance awards. Non-employee directors may receive a portion of their annual retainers in the form of restricted stock issued under the Directors’ Program.
Restricted Stock Units
. Restricted stock units are rights to receive cash, other securities, other awards or other property, subject to the termination of a restricted period or conditions specified by our Compensation Committee in the award agreement. Restricted stock units are generally subject to forfeiture conditions and may not be transferred by the recipient until those restrictions lapse. Forfeiture conditions could include, but are not limited to, the attainment of performance goals (as described below), continuous service with us, the passage of time or other conditions. However, with some exceptions (for
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TopBuild Corp
. -
Proxy Statement -
49
|
example, in the event of death, disability or change in control or as noted in the first paragraph above under “Types of Awards”), restrictions on time-based restricted stock units may not expire in less than one (1) year following the date of grant. Restricted stock units are not outstanding shares of stock and do not entitle a participant to voting or other rights; however, an award of restricted stock units may provide for the crediting of additional restricted stock units based on the value of dividends paid on our common stock while the award is outstanding; however, no dividend equivalents shall be awarded on unearned performance awards.
Stock Options
. Stock options are rights to purchase a specified number of shares of our common stock at an exercise price of at least 100% of the fair market value on the date of grant, except in the case of options granted in substitution of options previously granted by a company we may acquire or as a result of the Spin-Off. Stock options may be either incentive stock options or nonqualified stock options. At the time of grant, our Compensation Committee in its sole discretion will determine when stock options are exercisable and when they expire, except that: (i) the term of a stock option cannot exceed ten (10) years and (ii) with some exceptions (for example, in the event of death, disability or change in control or as noted in the first paragraph above under “Types of Awards”), stock options may not become 100% exercisable in less than one (1) year following the date of grant. Payment for shares purchased upon exercise of a stock option must be made in full at the time of exercise, and may be made by cash payment, certification of ownership of previously acquired stock, a stock swap, cashless exercise through a broker, net exercise (with the Company retaining a number of shares otherwise issuable upon exercise having a value equal to the exercise price), or such other method as the Compensation Committee deems appropriate. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or
exchange of shares), the repricing of options without stockholder approval is prohibited under the Amended LTIP.
Stock Appreciation Rights (“SARs”)
. A SAR entitles a recipient to receive, upon surrender of the SAR, cash equal to the excess of the fair market value of a specified number of shares of our common stock on the date the SAR is surrendered over the fair market value of such shares on the date of grant. Our Compensation Committee will have the authority to grant SARs and to determine the number of shares subject to each SAR, the time or times at which the SAR may be exercised and all other terms and conditions of the SAR, except that: (i) the exercise price must be no less than the fair market value of the shares on the date of grant; (ii) the term of an SAR cannot exceed ten (10) years and (iii) with some exceptions (for example, in the event of death, disability or change in control or as noted above in the first paragraph under “Types of Awards”), SARs may not become 100% exercisable in less than one (1) year following the date of grant. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the repricing of SARs without stockholder approval is prohibited under the Amended LTIP.
Performance Awards
. Performance awards may be denominated in, or payable in, cash, our common stock, or other securities or awards under the Amended LTIP. Performance awards shall be payable to (or exercisable by) the recipient when the recipient achieves performance goals during a specified performance period. Performance awards to executive officers under the Amended LTIP that are intended to satisfy the requirements for performance-based compensation under Section 162(m) of the Code will be subject to meeting performance goals based on one (1) or more performance metrics with respect to the Company or any of its affiliates. Available performance measures will be based on the following performance measures (or an equivalent metric), each determined in accordance with generally accepted accounting principles, where
applicable, as consistently applied by the Company and with such adjustments as set forth in the Amended LTIP:
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TopBuild Corp
. -
Proxy Statement -
50
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Cash flow (before or after dividends)
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Quality measures
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Safety measures
|
Earnings per share
|
Return on assets
|
SG&A as a percent of sales
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EBIT
|
Return on equity
|
Total cost productivity
|
EBITDA
|
Return on invested capital
|
Total stockholder return
|
Gross margin
|
Return on net assets
|
Working capital
|
Gross profit
|
Return on net tangible assets
|
Working capital as a percent of sales
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Net income
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Return on sales
|
Working capital efficiency
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Operating margin
|
Revenue growth
|
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Operating profit
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Revenues
|
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Our Compensation Committee may select one (1) or more performance metrics and may apply those performance metrics on a corporate-wide or division/business segment basis. Performance metrics also may be applied to the performance of the Company and/or one (1) or more affiliates relative to a market index, a group of other companies or a combination thereof, all as determined by our Compensation Committee. Measurement of the attainment of performance metrics may exclude, if our Compensation Committee so provides in an award agreement, the impact of charges for restructurings, the effects of acquisitions and divestitures and related expenses, losses resulting from discontinued operations, extraordinary losses, the cumulative effects of tax or accounting changes and other unusual, non-recurring items of loss that are separately identified in our financial statements.
Unless our Compensation Committee determines otherwise, the performance period relating to any performance award shall be at least one (1) calendar year commencing January 1 and ending December 31 (except in the case of a change in control). Our Compensation Committee may provide that dividend equivalents will be credited with respect to any performance award, but no dividend equivalents will be awarded on options, SARs or on unearned performance awards.
Certain Limitation
s
The Amended LTIP provides the following limitations on awards under the Amended LTIP:
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·
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No participant may receive stock options or SARs in any calendar year related to more than 1,000,000 shares of common stock (subject to adjustment as provided in the Amended LTIP); however, such number may be increased with respect to any participant by any shares of common stock available for grant to such participant in accordance with this limitation in any prior year that were not granted in such prior year.
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·
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The maximum number of shares of common stock that may be awarded as incentive stock options is 4,000,000.
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·
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For awards intended to be performance-based compensation under Section 162(m) of the Code, the maximum amount that may be delivered or earned in settlement of all such awards granted in any year shall be (i) for awards denominated in shares, 1,000,000 shares of common stock (subject to adjustment as provided in the Amended LTIP), and (ii) for awards denominated in cash, $5,000,000.
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·
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Awards to non-employee directors with respect to any fiscal year of the Company may not exceed a value of $450,000 at the time of grant.
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A participant’s rights, payments and benefits with respect to an award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions. Such events may include failure to accept the terms of the award agreement, termination of service under certain or all circumstances, a restatement of the Company’s financials,
breach of noncompetition, confidentiality, nonsolicitation, noninterference, or other agreements that may apply to the participant, or other conduct by the participant that our Compensation Committee determines is detrimental to the business or reputation of the Company and its affiliates, including facts and circumstances discovered after termination of service.
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TopBuild Corp
. -
Proxy Statement -
51
|
Amendment and
Terminatio
n
Our Board has the authority to terminate, suspend or discontinue the Amended LTIP, and our Board or our Compensation Committee may amend any award agreement; however, no amendment of the Amended LTIP or an award agreement may impair the rights of a participant under any outstanding award without the participant’s consent. Moreover, our stockholders must approve any amendment when our Compensation Committee determines that approval is required for the Amended LTIP to continue to satisfy applicable rules and regulations and the amendment would materially:
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·
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increase the number of shares available under the Amended LTIP or issuable to a participant;
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·
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change the types of awards that may be granted under the Amended LTIP;
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·
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expand the class of persons eligible to receive awards under the Amended LTIP; or
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·
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directly or indirectly reduce the price at which an option or stock appreciation right is exercisable.
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In addition, outstanding awards may be equitably adjusted, without stockholder approval, in the event of any dividend or other distribution, change in the capital or shares of capital stock, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of shares or other securities of the Company, issuance of warrants or other rights to purchase shares or other securities of the Company or extraordinary transaction or event which affects the Company’s shares. Our Compensation Committee may also adjust outstanding awards in recognition of certain other unusual or nonrecurring events if the Compensation Committee determines that such adjustments are appropriate to prevent dilution or enlargement of the benefits or potential benefits to be made available under the Amended LTIP; provided, however, no such adjustment shall be made to an award intended to constitute “qualified performance-based compensation” unless such adjustment is permitted under Section 162(m) of the Code.
Change
in Contro
l
The treatment of outstanding awards upon the occurrence of a change in control, if any, shall be determined by the Compensation Committee at the time such awards are granted and set forth in the applicable award agreement. For purposes of the Amended LTIP, the term “change in control” shall mean at any time during a period of twenty-four (24) consecutive calendar months, the individuals who at the beginning of such period constituted our Board, and any new directors (other than excluded directors, as defined below), whose election by such Board or nomination for election by stockholders was approved by a vote of at least two-thirds of the members of such Board who were either directors on such Board at the beginning of the period or whose election or nomination for election as directors was previously so approved, for any reason cease to constitute at least a majority of the members thereof. For this purpose, “excluded directors” are directors whose (i) election by our Board or approval by our Board for stockholder election occurred within one (1) year after any “person” or “group of persons,” as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, commencing a tender offer for, or becoming the beneficial owner of, voting securities representing twenty-five (25) percent or more of the combined voting power of all outstanding voting securities of the Company, other than pursuant to a tender offer approved by the Board prior to its commencement or pursuant to stock acquisitions approved by the Board prior to their representing twenty-five (25) percent or more of such combined voting power or (ii) initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 or Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, corporation, partnership, group, associate or other entity or “person” other than the Board.
Certain Federal
Income
Tax Consequences
Stock Options
. There are no income tax consequences for us or the option holder upon the grant of either an incentive stock option or a nonqualified stock option. When a nonqualified stock option is exercised, the participant will recognize ordinary income equal to the excess of the fair market value of the shares of stock for which the option is exercised on the date of exercise over the aggregate exercise
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TopBuild Corp
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Proxy Statement -
52
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price, and we will be entitled to a corresponding deduction. Upon the sale of shares acquired from exercising an option, the participant will realize a capital gain (or loss) equal to the difference between the proceeds received and the fair market value of the shares on the date of exercise. The capital gain (or loss) will be a long-term capital gain (or loss) if the participant held the shares for more than a year after the exercise of the option, or otherwise a short-term capital gain (or loss).
When an incentive stock option is exercised, the option holder does not recognize income and we are not entitled to a deduction. However, the excess of the fair market value of the shares on the exercise date over the exercise price will be a preference item for purposes of the alternative minimum tax; accordingly, exercising an incentive stock option can trigger an alternative minimum tax. If the participant holds the shares acquired upon exercise for at least two (2) years after the grant date and at least one (1) year after exercise, the participant’s gain, if any, upon a subsequent disposition of such shares will be long-term capital gain. (Conversely, a loss will be a long-term capital loss.) The measure of the gain (or loss) is the difference between the proceeds received on disposition and the participant’s basis in the shares. In general, the participant’s basis equals the exercise price.
If a participant disposes of shares acquired by exercising an incentive stock option before satisfying the one (1) and two (2) year holding periods described above (a “disqualifying disposition”), then:
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·
|
|
If the proceeds received exceed the exercise price, the participant will (i) realize ordinary income equal to the excess, if any, of the lesser of the proceeds received or the fair market value of the shares on the date of exercise over the exercise price, and (ii) realize capital gain equal to the excess, if any, of the proceeds received over the fair market value of the shares on the date of exercise; or
|
|
·
|
|
If the proceeds received are less than the exercise price of the incentive stock option, the participant will realize a capital loss equal to the excess of the exercise price over the proceeds received.
|
In the event of a disqualifying disposition, we will be entitled to a deduction equal to the ordinary income recognized by the option holder.
Stock options can qualify as performance-based compensation that is exempt from the one (1) million dollar deduction limit of Section 162(m) of the Code if certain requirements (including stockholder approval of the Amended LTIP) are satisfied.
SARs
. When a SAR is granted, there are no income tax consequences for us or the recipient. When a SAR is exercised, the participant will recognize ordinary income equal to the excess of the fair market value of the shares of stock for which the option is exercised on the date of exercise over the aggregate exercise price, and we will be entitled to a corresponding deduction. Upon the sale of shares acquired from exercising a SAR, the participant will realize a capital gain (or loss) equal to the difference between the proceeds received and the fair market value of the shares on the date of exercise. The capital gain (or loss) will be a long-term capital gain (or loss) if the participant held the shares for more than a year after the exercise of the option, or otherwise a short-term capital gain (or loss).
SARs can qualify as performance-based compensation that is exempt from the one (1) million dollar deduction limit of Section 162(m) of the Code if certain requirements (including stockholder approval of the Amended LTIP) are satisfied.
Restricted Stock
. The federal income tax consequences of a grant of restricted stock depend on whether the participant elects to be taxed at the time of grant (an “83(b) election,” named for Section 83(b) of the Code). If the participant does not make an 83(b) election, the participant will not realize taxable income at the time of grant. When the shares become vested or transferable (whichever occurs first), the participant will realize ordinary income equal to the fair market value of the restricted stock at that time, and we will be entitled to a corresponding deduction. If the participant makes an 83(b) election, the participant will realize ordinary income at the time of grant in an amount equal to the fair market value of the shares at that time, determined without regard to any of the restrictions, and we will be entitled to a corresponding
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TopBuild Corp
. -
Proxy Statement -
53
|
deduction. If shares are forfeited before the restrictions lapse, the participant will not be entitled to a deduction or any other adjustment.
Unless the restricted stock is subject to achievement of performance criteria, restricted stock awards will not qualify as performance-based compensation for purposes of Section 162(m) of the Code. Accordingly, restricted stock granted to covered executives generally counts toward the one (1) million dollar deduction limit of Section 162(m).
Upon the sale of restricted stock, the participant will realize a capital gain (or loss) equal to the difference between the sale proceeds and the income previously realized with respect to the shares. The capital gain (or loss) will be a long-term capital gain (or loss) if the participant held the shares for more than one (1) year after realizing income attributable to the shares, or otherwise a short-term capital gain (or loss).
Other awards
. Restricted stock units and performance awards will not have tax consequences for us or the recipient at the time of grant. Income will be realized when the awards vest and are paid in cash or shares of stock. At that time, the participant will realize ordinary income equal to the fair market value of the shares or cash paid to the participant, and we will be entitled to a corresponding deduction. Awards that are not subject to the achievement of performance criteria as described above (such as time-based restricted stock units) will not qualify as performance-based compensation for purposes of Section 162(m) of the Code. Awards to covered executives that do not qualify as performance-based will count toward the $1 million deduction limit of Section 162(m).
Upon the sale of shares received in settlement of restricted stock units or performance awards, the participant will realize a capital gain (or loss) equal to the difference between the sale proceeds and income previously realized with respect to the shares. The capital gain (or loss) will be a long-term capital gain (or loss) if the participant held the shares for more than one (1) year after realizing income attributable to the shares, or otherwise a short-term capital gain (or loss).
Stockholder approval of the Amended LTIP is only one (1) of several requirements under Section 162(m) of the Code that must be satisfied for stock options, SARs and other performance-based awards under the Amended LTIP to qualify for the performance-based compensation exemption. Approval of the Amended LTIP by stockholders should not be viewed as a guarantee that all amounts paid under the Amended LTIP will, in practice, be deductible by the Company.
In addition to the ordinary income and capital gains consequences described above, the amount included in income upon the exercise of non-qualified stock options and SARs (but not income realized upon the exercise of an incentive stock option), and upon the vesting of restricted stock and the settlement of restricted stock units and performance awards will be treated as wages for purposes of employment taxes, including Social Security (up to the Social Security wage base) and Medicare taxes.
The foregoing is only a summary of the effect of federal income taxation upon employees and the Company with respect to amounts paid pursuant to the Amended LTIP. It does not purport to be complete and does not discuss the tax consequences arising in the context of the employee’s death or the income tax laws of any municipality, state or foreign country in which the employee’s income or gain may be taxable.
|
The Board of Directors recommends that you vote
“FOR”
the approval of the Amended and Restated TopBuild Corp. 2015 Long Term Stock Incentive Plan.
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TopBuild Corp
. -
Proxy Statement -
54
|
EQUITY
COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2015, about our common stock that may be issued upon the exercise of options, warrants and rights granted to employees or directors under the Existing LTIP.
|
|
|
|
|
|
|
|
Plan Category
|
|
Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
(#)
|
|
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights
($)
|
|
Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(#)
|
|
Equity compensation plans approved by stockholders
|
|
387,588
(1)
|
|
24.03
|
|
3,011,984
(2)
|
|
Equity compensation plans not approved by stockholders
|
|
-
|
|
n/a
|
|
-
|
|
TOTAL
|
|
387,588
|
|
24.03
|
|
3,011,984
|
|
(1) Amount includes 387,588 shares issuable upon exercise of outstanding options.
(2) Amount represents the total number of securities remaining available for future issuance under the Existing LTIP.
|
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TopBuild Corp
. -
Proxy Statement -
55
|
OTHER MATTER
S
Except as discussed in this proxy statement, the Board does not know of any matters that are to be properly presented at the Annual Meeting other than those stated in the Notice of 2016 Annual Meeting of Stockholders and referred to in this proxy statement.
If other matters properly come before the Annual Meeting, it is the intention of the persons named in the proxy card to vote thereon in accordance with their best judgment. Moreover, the Board reserves the right to adjourn or postpone the Annual Meeting for failure to obtain a quorum, for legitimate scheduling purposes or based on other circumstances that, in the Board’s belief, would cause such adjournments or postponements to be in the best interests of all of our stockholders.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANC
E
Section 16(a) of the Exchange Act requires our directors, certain executive officers, and persons who own more than ten (10) percent of our outstanding common stock to file reports of ownership and changes in ownership with the SEC and the NYSE. SEC regulations require the Company to identify anyone who failed to file a required report or filed a late report during the most recent fiscal year. To the Company’s knowledge, with respect to the fiscal year ended December 31, 2015, all applicable filings were timely filed.
ANNUAL REPOR
T
The Notice that you received in the mail contains instructions on how to access both the Company’s 2015 Annual Report to Stockholders, which includes the Company’s Annual Report on Form 10K for its fiscal year ended December 31, 2015, and this proxy statement.
Upon request, the Company will provide a copy of its 2015 Annual Report to Stockholders, which includes the Company’s Annual Report on Form 10K for its fiscal year ended December 31, 2015. Upon payment of a reasonable fee, stockholders may also obtain a copy of the exhibits to our Annual Report on Form 10K for our fiscal year ended December 31, 2015. All such requests should be directed to:
TopBuild Corp.
Investor Relations
260 Jimmy Ann Drive
Daytona Beach, Florida 32114
(386) 763-8801
STOCKHOLDER PROPOSALS FOR 2017 ANNUAL MEETIN
G
Stockholder Proposals
Proposals of stockholders intended to be included in the Company’s proxy statement and form of proxy for use in connection with the Company’s 2017 Annual Stockholder Meeting must be received by the Secretary at the Company’s principal executive offices at 260 Jimmy Ann Drive, Daytona Beach, Florida 32114, no later than November 23, 2016 (120 calendar days preceding the one (1) year anniversary of the date of this proxy statement), and must otherwise satisfy the procedures prescribed by Rule 14a8 under the Exchange Act. It is suggested that any such proposals be submitted by certified mail, return receipt requested.
Pursuant to Rule 14a4 under the Exchange Act, stockholder proxies obtained by our Board in connection with our 2017 Annual Stockholder Meeting will confer on the proxies and attorneysinfact named therein discretionary authority to vote on any matters presented at such Annual Meeting which were not included in the Company’s proxy statement in connection with such Annual Meeting, unless notice of the matter to be presented at the Annual Meeting is provided to the Company’s Secretary before February 6, 2017 (the 45th day preceding the one (1) year anniversary of the date on which we first sent this proxy statement for the 2016 Annual Stockholder Meeting).
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TopBuild Corp
. -
Proxy Statement -
56
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Director Nominations or Other Business
Under our Amended and Restated Bylaws, for nominations or other business to be properly brought by a stockholder at our 2017 Annual Stockholder Meeting, the stockholder must have given written notice of such nomination(s) or business, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Company, at the Company’s principal executive offices at 260 Jimmy Ann Drive, Daytona Beach, Florida 32114, not less than 120 days (or January 2, 2017) nor more than 150 days (or December 3, 2016) prior to the first anniversary of the Annual Meeting. Such notice must contain all of the information required by our Amended and Restated Bylaws, including, without limitation, all information that would be required in connection with nomination(s) under the SEC’s proxy rules if such nomination were the subject of a proxy solicitation and the written consent of each nominee for election to our Board named therein to serve if elected. The chairman of the meeting may refuse to acknowledge any nomination(s) or other business not properly brought pursuant to the procedures described above.
If you have any questions
, please contact Morrow & Co., LLC, the firm that is assisting us in connection with the Annual Meeting, at (203) 658-9400.
EXPENSES OF SOLICITATIO
N
The Company will bear the cost of the solicitation of proxies. In addition to mail and email, proxies may be solicited personally, via the Internet, by telephone, by facsimile, or by our employees without additional compensation. We will reimburse brokers and other persons holding shares of our common stock in their names, or in the names of nominees, for their expenses for forwarding proxy materials to principals and beneficial owners and obtaining their proxies. We have hired Morrow to assist us in the solicitation of proxies. We will pay Morrow a base fee of $8,500 plus customary costs and expenses for these services. We have agreed to indemnify Morrow against certain liabilities arising out of or in connection with these services.
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TopBuild Corp
. -
Proxy Statement -
57
|
IMPORTANT NOTICE REGARDING THE AVAILABILIT
Y OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 2, 2016
This proxy statement and our 2015 Annual Report, including the Annual Report on Form 10-K for our fiscal year ended December 31, 2015, are available to you on the Internet at
www.proxyvote.com
.
To view this material, you will need your control number from your proxy card.
The Annual Meeting (for stockholders as of the March 10, 2016, record date) will be held on May 2, 2016, at 10:00 AM Eastern Time at the Hyatt Regency Orlando International Airport, 9300 Jeff Fuqua Boulevard, Orlando, Florida 32827.
For directions to the Annual Meeting and to vote in person, please call Investor Relations at (386) 763-8801. Stockholders will vote at the Annual Meeting on whether to:
|
1)
|
|
elect Dennis W. Archer and Alec C. Covington as Class I Directors;
|
|
2)
|
|
ratify the Company’s appointment of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2016;
|
|
3)
|
|
approve, on an advisory basis, the compensation of our named executive officers as described in the proxy statement;
|
|
4)
|
|
approve, on an advisory basis, the frequency for future, nonbinding advisory votes on the compensation of our named executive officers; and
|
|
5)
|
|
approve the Amended and Restated TopBuild Corp. 2015 Long Term Stock Incentive Plan.
|
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The Board of Directors recommends that you vote
FOR
the election of each of Dennis W. Archer and Alec C. Covington as Class I Directors;
FOR
the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016;
FOR
the approval, on an advisory basis, of the compensation of the Company’s named executive officers;
EVERY YEAR
on the advisory vote on the frequency of future nonbinding advisory votes on the compensation of the Company’s named executive officers; and
FOR
the approval of the
Amended and Restated TopBuild Corp. 2015 Long Term Stock Incentive Plan.
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March 23, 2016
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TopBuild Corp
. -
Proxy Statement -
58
|
Appendix
A
TOPBUILD CORP.
2015 LONG TERM STOCK INCENTIVE PLAN Amended and Restated Effective [insert date], 2016
S
ECTI
O
N 1.
P
u
r
p
oses.
The
pur
p
oses of
t
h
e
2015
L
o
n
g
T
e
rm S
t
o
c
k
I
n
c
e
nt
i
ve
P
lan
(
the
“
P
lan
”
)
a
re to en
c
ourage s
e
le
c
ted
e
mp
l
o
y
e
e
s and non-employee directors of
a
n
d
c
onsultants to
Top
B
ui
l
d
Co
r
p. (the
“
Compa
n
y
”
)
a
nd i
t
s A
f
filiat
e
s to
ac
quire
a
pro
p
ri
e
t
a
r
y
in
te
r
e
st
i
n the Compa
n
y
in o
r
d
e
r to
c
r
ea
te
a
n inc
r
e
a
s
e
d
inc
e
nt
i
ve
to
c
ontribute
to
t
he
Compan
y
’
s
futu
r
e
su
c
ce
ss and
p
r
ospe
r
i
t
y
,
a
nd
e
nh
a
n
c
e
the
a
bi
l
i
t
y
of the Compa
n
y
a
nd i
t
s A
f
filiat
e
s to attr
a
c
t and
r
e
tain
e
x
ce
pt
i
on
a
l
l
y
q
u
a
l
i
fi
e
d ind
i
viduals upon whom the sustain
e
d pr
o
g
r
e
ss,
g
r
owth
a
nd p
r
o
f
i
t
a
bi
l
i
t
y
of
the Comp
a
n
y
d
e
p
e
nd, t
h
us e
n
h
a
n
c
i
n
g
the v
a
lue of
the Comp
a
n
y
f
o
r the
b
e
n
e
fit of its stockholde
r
s. The Plan is intended to provide Plan Participants with forms of long-term incentive compensation that are not subject to the deduction limitation rules prescribed under Section 162(m) of the Code, and should be construed to the extent possible as providing for remuneration which is “performance-based compensation” within the meaning of Section 162(m) of the Code and the regulations promulgated thereunder.
S
ECTI
O
N 2. D
e
f
i
n
iti
o
n
s.
As us
e
d in
t
he
P
lan, the
f
ol
l
owing
te
r
ms
s
h
a
ll
h
a
v
e
the m
ea
ni
n
g
s set
f
o
rth b
e
low:
(
a
)
“
Aff
i
l
i
ate”
shall m
ea
n
a
n
y
e
nt
i
t
y
in which t
h
e
Compa
n
y
’s di
r
ec
t or ind
i
r
e
c
t equi
t
y in
t
e
r
e
st
i
s at l
ea
st
tw
e
n
t
y
p
e
r
c
e
nt,
a
nd
a
n
y
oth
e
r
e
n
t
i
t
y
in wh
i
c
h the Compa
n
y
h
a
s
a si
g
nifi
ca
nt d
ir
ec
t or ind
i
r
ec
t equi
t
y
in
t
e
r
e
st, w
h
e
ther
more
or
l
e
ss
t
h
a
n
tw
e
n
t
y
p
e
r
ce
nt, as d
e
te
r
m
i
n
e
d
b
y
the Comm
i
t
t
ee
.
(b)
“
Award”
shall m
ea
n
a
n
y
Option,
S
tock
A
pp
r
ec
iation
R
i
g
ht,
R
e
strict
e
d
S
tock, R
e
strict
e
d
S
tock
U
ni
t
,
P
e
r
f
o
r
man
c
e
A
w
a
rd, or
Dividend Equiv
a
lent g
ra
nted
und
e
r
the P
l
a
n.
(
c
)
“
Award Agr
ee
m
e
nt”
shall m
ea
n
a
n
y
a
g
ree
m
e
n
t, cont
rac
t or oth
e
r instrum
e
nt or do
c
ument (including in an electronic medium)
e
viden
c
i
n
g
a
n
y
A
w
a
rd
g
r
a
nted und
e
r
t
he
P
lan
w
hich m
a
y
, but
n
ee
d not, be
e
x
ec
uted
b
y
t
h
e
P
a
rticip
a
nt.
(d)
“
Board”
shall m
ea
n the
B
o
a
rd of
Di
r
ec
tors of
the
Compa
n
y
.
(
e
)
“
Change
in
C
ontrol”
shall m
ea
n
a
t a
n
y
t
i
me
d
u
r
ing
a
p
e
riod of
t
w
e
n
t
y
-
four
c
onse
c
ut
i
ve
c
a
lend
a
r m
o
nths, the indiv
i
du
a
ls who
a
t
t
he
b
e
g
inn
i
ng
o
f su
c
h
p
e
riod
c
onsti
t
ute the Comp
a
n
y
’s
B
o
a
rd,
a
n
d
a
n
y
n
e
w di
r
ec
tors
(
oth
e
r th
a
n E
x
c
luded
D
ir
ec
to
r
s,
a
s he
re
in
a
ft
e
r d
e
fin
e
d
)
, who
s
e
e
l
e
c
t
i
on
b
y
such
B
o
a
rd or
nom
i
n
a
t
i
on f
o
r
e
le
c
t
i
on
b
y
stoc
k
holde
r
s w
a
s
a
ppro
ve
d
b
y
a
vote of
a
t
l
ea
st
t
w
o
-
th
i
rds of
the m
e
mbe
r
s of su
c
h
B
o
a
rd
w
h
o w
e
re
e
i
t
h
e
r dir
ec
tors on su
c
h
B
o
a
rd at
t
he
b
e
g
inn
i
n
g
of the
p
e
r
iod or whose
e
l
e
c
t
i
on or
nom
i
n
a
t
i
on f
o
r
e
le
c
t
i
on
a
s dire
c
tors w
a
s
p
re
vious
l
y
so
a
ppro
ve
d,
f
or
a
n
y
r
e
a
son
c
e
a
se
to c
o
nst
i
tu
t
e
a
t
l
ea
st a majo
r
i
t
y
of the
m
e
mbe
r
s
the
re
o
f
.
F
or
pur
p
o
s
e
s he
r
e
o
f
,
“
E
x
c
luded
D
ir
e
c
tor
s
”
a
re
d
i
r
e
c
tors whose
(
i)
e
l
e
c
t
i
on
b
y
t
h
e
B
o
a
rd
o
r
a
ppro
v
a
l
b
y
t
he
B
o
a
rd
for
stockhold
e
r
e
l
ec
t
i
on o
cc
u
r
r
e
d with
i
n one
y
e
a
r aft
e
r
a
n
y
“
p
e
rson”
o
r “
g
roup
o
f persons,”
a
s such t
e
rms
a
re used
in
S
ec
t
i
ons
13(d)
a
nd 14
(
d
)
of
the
E
x
c
h
a
nge
A
c
t,
c
o
m
m
e
n
c
ing a
tend
e
r
o
f
f
e
r
fo
r
, or
b
e
c
om
i
ng the b
e
n
e
fi
c
i
a
l own
e
r
o
f,
vot
i
ng
se
c
u
rit
i
e
s r
e
p
r
e
s
e
n
t
i
ng
25
p
e
r
ce
nt or mo
r
e
o
f the
c
omb
i
n
e
d vot
i
ng
pow
e
r of
a
ll
outs
t
a
nding
vot
i
n
g
se
c
u
rities of
the Comp
a
n
y
, ot
h
e
r t
h
a
n pu
r
suant to a tend
e
r o
f
f
e
r
a
ppro
ve
d
b
y
the
B
o
a
rd p
r
ior to its c
o
m
m
e
n
ce
ment or
purs
u
a
nt
t
o sto
c
k
ac
quis
i
t
i
ons
a
ppro
ve
d
b
y
the
B
o
a
rd p
r
ior to th
e
ir
r
e
p
re
s
e
nt
i
n
g
25
p
e
r
c
e
nt
o
r
more
of su
c
h
c
omb
i
n
e
d vot
i
ng
po
w
e
r
or
(
i
i
)
in
i
t
i
a
l assump
t
ion
of
of
f
ice
o
cc
u
rs
a
s a
r
e
s
u
lt
of
e
i
t
h
e
r
a
n
ac
tual or
th
r
ea
ten
e
d
e
le
c
t
ion cont
e
st (
a
s such t
e
r
m
s a
r
e
used
in
R
ule
14
a
-
11
or R
e
g
ulation
14A p
r
omu
l
g
a
ted und
e
r the
E
x
c
h
a
nge
A
c
t) or
other
ac
tual
o
r th
rea
te
n
e
d sol
i
c
i
t
a
t
i
on of
pro
x
ies or
c
onse
n
ts
b
y
o
r on
be
h
a
lf
of
a
n ind
i
vidual,
c
o
r
po
r
a
t
i
on, p
a
rtn
e
rship,
g
roup,
a
ssoci
a
te
o
r oth
e
r
e
nt
i
t
y
or
“
p
e
rson”
ot
h
e
r
t
h
a
n the
B
o
a
rd.
(f
)
“
Cod
e
”
shall m
ea
n the
I
nte
r
n
a
l
R
ev
e
nue
Co
d
e
of 1
9
86,
a
s a
m
e
nd
e
d
fr
om
t
i
m
e
to
t
i
me.
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
1
|
(g)
“
Com
m
i
t
te
e
”
shall m
ea
n a
c
om
m
i
t
tee
of t
h
e
Compa
n
y
’s di
r
ec
tors d
e
s
i
g
n
a
t
e
d
b
y
the
B
o
a
rd to
a
dm
i
nis
t
e
r the
P
lan
a
nd
c
ompos
e
d of
n
ot
less than two dir
e
c
tors,
e
ac
h of
w
hom
i
s a
“
non
-e
mp
l
o
y
e
e
d
i
r
e
c
tor
,
”
a
n
“
indep
e
n
d
e
nt d
i
r
e
c
t
o
r
”
a
nd
a
n
“
outs
i
de
dir
ec
t
o
r,”
with
i
n the me
a
ning
o
f
a
nd to
t
he
e
x
tent
re
quir
e
d
r
e
sp
e
c
t
i
v
e
l
y
b
y
Rule
16
b
-
3, the
a
ppl
ic
a
ble
r
ules of
the N
Y
S
E
a
nd
S
ec
t
i
on
162
(
m) of
the Code,
a
nd
a
n
y
re
g
ulations is
s
u
e
d the
re
u
nd
e
r.
(h)
“
Di
v
idend
E
quival
e
n
t”
shall m
ea
n
a
n
y
ri
g
ht
g
ra
nted und
e
r Se
c
t
i
on
6
(f
)
of the
P
lan.
(i)
“
E
xc
hange
A
c
t”
shall m
ea
n the Se
c
u
r
i
t
ies E
x
c
h
a
nge
A
c
t of
1934,
a
s a
m
e
nd
e
d.
(j)
“
E
xec
ut
iv
e
Group”
shall m
ea
n
e
v
e
r
y
p
e
rson
who the
Com
m
i
t
tee
b
e
l
i
e
v
e
s m
a
y
be both (i) a
“c
o
v
e
r
e
d
e
mp
l
o
y
e
e
”
a
s de
f
ined in
Se
c
t
i
on
162(m)
of the
Code
a
s
of the
e
nd of
the ta
x
a
ble
y
e
a
r in
w
hich the
Compa
n
y
e
x
p
ec
ts
t
o ta
k
e
a
d
e
d
u
c
t
i
on of
the
A
w
a
rd,
a
nd (ii)
the r
e
c
ip
i
e
nt of
c
ompens
a
t
i
o
n of mo
r
e
than $1,000,0
0
0 (
a
s such
a
mount
a
p
p
ea
r
ing
in
S
ec
t
i
on 162(m)
of the
C
o
de m
a
y
be
a
djus
t
e
d
b
y
a
n
y
subseq
u
e
nt
le
g
is
l
a
t
i
on)
f
or
that ta
x
a
ble
y
ea
r.
(k)
“Fair Market Value”
of a Share means the closing price of a Share as reported by the consolidated tape of the NYSE on the date in question
.
(l)
“
In
c
e
nt
iv
e
Stock
Opt
i
on”
shall m
ea
n
a
n Option
g
r
a
nted und
e
r Se
c
t
i
on
6
(a
) of
the
P
lan th
a
t
i
s in
t
e
nd
e
d to
mee
t
t
he
re
qu
i
r
e
ments of
S
ec
t
i
on
422 of
the Code,
o
r
a
n
y
succ
e
ssor p
r
ovis
i
on the
re
to.
(m)
“
Non
-
Quali
f
ied Sto
c
k
Option”
shall m
ea
n
a
n Option
g
r
a
nted und
e
r S
e
c
t
i
on
6
(a
) of the P
l
a
n that is not
i
nten
d
e
d to be
a
n
I
n
ce
nt
i
ve
S
tock
O
pt
i
on.
(n)
“
N
Y
SE”
shall m
ea
n
t
he
N
e
w
Y
o
rk Sto
c
k E
x
c
h
a
ng
e
.
(o)
“
Option”
shall m
ea
n
a
n
I
n
ce
nt
i
ve
S
tock
Opti
o
n or a
Non
-
Q
u
a
l
i
fi
e
d
S
tock Opt
i
on.
(p)
“
Part
i
c
ipan
t
”
shall
me
a
n
a
n
e
mp
l
o
y
e
e
of or
c
onsultant to
t
he
Compa
n
y
or
a
n
y A
f
filiate
or a
d
i
r
e
c
tor
o
f
t
he
Compa
n
y
d
e
si
g
n
a
ted
t
o be
gr
a
nted
a
n A
w
a
rd
u
nd
e
r the
P
lan o
r
, for
the pu
r
pose
o
f
g
r
a
nt
i
n
g
S
ubsti
t
ute
A
w
a
rds,
a
h
older
of o
p
t
i
ons or oth
e
r
e
qui
t
y
b
a
s
e
d
a
w
a
rds
r
e
lati
n
g
to
t
he
sh
a
r
e
s of a
c
ompa
n
y
a
c
quir
e
d
b
y
the Comp
a
n
y
or
with which the Compa
n
y
c
omb
i
n
e
s.
(q)
“
P
e
rfo
r
man
c
e
Awar
d
”
shall m
ea
n
a
n
y
r
i
g
ht g
r
a
nted und
e
r S
e
c
t
i
on
6
(e
)
of
the P
l
a
n.
(r
)
“
R
e
st
r
ict
e
d P
e
riod”
shall m
ea
n the p
e
riod of
t
i
m
e
during
whi
c
h
A
w
a
r
d
s of R
e
strict
e
d
S
tock or
R
e
st
r
ict
e
d
S
tock
U
ni
t
s a
r
e
su
b
je
c
t
t
o r
e
strictions.
(s)
“
R
e
st
r
ict
e
d Stoc
k
”
s
h
a
ll
me
a
n
a
n
y
S
h
a
r
e
g
r
a
n
t
e
d und
e
r Se
c
t
i
on
6
(
d
) of
the P
l
a
n.
(t)
“
R
e
st
r
ict
e
d Stock Un
i
t”
shall m
ea
n
a
n
y
ri
g
ht
g
ra
nted und
e
r Se
c
t
i
on
6
(
d)
of the
P
lan that is d
e
nom
i
n
a
ted in
S
h
a
r
e
s.
(u)
“
Rule 16
b
-
3”
shall m
ea
n Ru
l
e 16b
-
3 pr
o
mu
l
g
a
ted
b
y
the S
e
c
u
r
i
t
ies
a
nd
E
x
c
h
a
n
g
e Com
m
is
s
ion under
the
E
x
c
h
a
n
g
e
A
c
t, or
a
n
y
s
u
c
c
e
ssor
r
ule or
re
g
ulation.
(
v)
“
S
ec
t
i
on
16”
shall m
ea
n
S
ec
t
i
on
16 of
the
E
x
c
h
a
n
g
e
A
c
t,
t
he
r
ules
a
nd
r
e
g
ulations p
r
omu
l
g
a
ted
b
y
t
h
e
S
ec
u
rities
a
nd E
x
c
h
a
nge
Com
m
is
s
ion
t
h
e
r
e
und
e
r, or
a
n
y
su
c
ce
ssor p
r
ovis
i
on, r
u
le or
r
e
g
ulat
i
on.
(
w
)
“
Shar
e
s”
shall m
ea
n
the Comp
a
n
y
’s
c
om
m
on sto
c
k, p
a
r v
a
lue $0.01
p
e
r sh
a
r
e
,
a
nd such
other
secu
r
i
t
ies or
p
rop
e
r
t
y
a
s m
a
y
b
ec
ome
t
he
subj
ec
t of
A
w
a
rds, or
b
ec
ome subj
ec
t
t
o A
wa
rds, pu
r
s
u
a
nt
t
o
a
n
a
djus
t
ment made
und
e
r S
e
c
t
i
on
4
(c
) of
the P
l
a
n.
(
x
)
“
Stock
Appr
ec
ia
t
ion Right”
shall m
ea
n
a
n
y
r
i
g
ht
g
r
a
n
t
e
d und
e
r
Se
c
t
i
on
6
(c
) of
the
P
lan.
(
y
)
“
Substi
t
ute
A
wards”
shall m
ea
n A
w
a
rds
g
r
a
n
t
e
d in assump
t
ion of, or
in
subs
t
i
t
ut
i
on f
o
r, outstan
d
ing
a
w
a
rds p
r
e
vious
l
y
g
r
a
nted
b
y
a
c
om
p
a
n
y
ac
q
u
ir
e
d
b
y t
h
e Compa
n
y
or
w
i
t
h whi
c
h
t
he
Compa
n
y
c
omb
i
n
e
s
,
o
r
A
w
a
rds
g
ra
nted in
r
e
p
l
a
ce
ment or subs
t
i
t
ut
i
on of
a
w
a
rds p
r
e
vious
l
y
g
r
a
nted
b
y
Ma
s
c
o Corpo
ra
t
i
on p
r
ior to
t
h
e
ir
f
o
r
f
e
i
t
u
r
e
upon the
e
f
f
ec
t
i
ve
d
a
te
o
f the
s
pi
n
-
o
f
f of
the Comp
a
n
y
f
rom M
a
s
c
o
.
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
2
|
S
ECTI
O
N 3. Ad
m
i
n
ist
r
a
t
io
n
.
The
Com
m
i
t
tee
shall administer
the P
l
a
n,
a
nd subj
ec
t
t
o t
h
e
te
r
ms of the
P
lan
a
nd
a
ppl
i
ca
ble l
a
w, t
h
e
Com
m
i
t
te
e
’s
a
uthori
t
y
s
h
a
ll
include
without
l
i
m
i
tation
the po
we
r to:
(a)
d
e
si
g
n
a
te Pa
r
t
i
c
i
p
a
nts;
(b)
d
e
te
r
m
i
ne
the
t
y
p
e
s
o
f
A
w
a
rds to
b
e
g
r
a
nted;
(c)
d
e
te
r
m
i
ne
the numb
e
r of
S
h
a
r
e
s to be
c
ov
e
r
e
d
b
y
A
w
a
rds
a
nd
a
n
y
p
a
y
m
e
nts, ri
g
hts or
other
matte
r
s to be
ca
l
c
ulat
e
d in conn
e
c
t
i
on the
re
with;
(d)
d
e
te
r
m
i
ne
the
t
e
rms
a
nd
c
ondi
t
ions of
A
w
a
r
d
s and
a
mend the
t
e
rms
a
n
d
c
ondi
t
ions of
outs
t
a
nding
A
w
a
rds;
(e)
d
e
te
r
m
i
ne
h
o
w,
w
h
e
t
h
e
r, to
w
h
a
t e
x
tent,
a
nd
u
nd
e
r
w
h
a
t c
i
r
c
ums
t
a
n
c
e
s
A
wa
rds m
a
y be
settl
e
d or
e
x
e
r
c
ised in
ca
sh,
S
h
a
r
e
s, ot
h
e
r s
e
c
u
r
i
t
i
e
s, oth
e
r
A
w
a
rds or
ot
h
e
r p
r
op
e
r
t
y
,
o
r
ca
n
c
e
led,
f
o
r
f
e
i
t
e
d or su
s
p
e
nd
e
d;
(f)
d
e
te
r
m
i
ne
how,
wh
e
t
h
e
r, to
w
h
a
t e
x
tent,
a
nd
u
nd
e
r
w
h
a
t c
i
r
c
ums
t
a
n
c
e
s
ca
sh,
S
h
a
r
e
s, oth
e
r s
e
c
u
r
i
t
ies,
o
ther
A
w
a
rds, oth
e
r p
r
o
p
e
r
t
y
a
nd other
a
moun
t
s p
a
y
a
ble
w
i
t
h r
e
spe
c
t
t
o
a
n
A
w
a
rd sh
a
ll
be
d
e
fer
re
d
e
i
t
h
e
r
a
uto
m
a
t
i
ca
l
l
y
o
r
a
t
t
he
e
l
ec
t
i
on
of
the hold
e
r the
re
of
or
o
f the
Com
m
i
t
te
e
;
(g)
d
e
te
r
m
i
ne
the m
e
th
o
ds or p
r
o
ce
d
u
r
e
s f
o
r
e
st
a
bl
i
shing
the
fa
ir m
a
rk
e
t
v
a
lue of
a
n
y p
r
op
e
r
t
y
(
includi
n
g
, wit
h
out
l
i
m
i
t
a
t
i
on,
a
n
y
S
h
a
re
s or oth
e
r s
ec
u
rities)
tr
a
n
sf
e
r
r
e
d,
e
x
c
h
a
ng
e
d,
g
iven or
r
e
ce
ived
w
i
t
h r
e
spe
c
t
t
o the
P
lan or
a
n
y
A
w
a
rd;
(h)
p
re
s
c
ribe
a
nd
a
me
n
d the
f
o
r
ms of A
w
a
rd
A
g
ree
ments
a
nd ot
h
e
r instr
u
ments r
e
quir
e
d un
d
e
r or
a
dvis
a
ble
w
i
t
h r
e
spe
c
t
t
o the P
l
a
n;
(
i
)
d
e
si
g
n
a
te
O
pt
i
ons
g
r
a
nted to k
e
y
e
mp
l
o
y
e
e
s of the
Compa
n
y
o
r its subsidia
r
ies
a
s
I
n
ce
nt
i
ve
S
tock
O
pt
i
ons;
(
j
)
in
t
e
rp
re
t and
a
dm
i
nis
t
e
r the
P
lan,
A
w
a
rd
A
g
r
e
e
ments, A
wa
rds
a
nd
a
n
y
c
ontr
ac
t, do
c
ument, instr
u
ment or
a
g
ree
m
e
nt r
e
lati
n
g
the
r
e
t
o;
(
k
)
e
stablish, am
e
nd, suspend or
w
a
ive
such
r
ules
a
nd re
g
ulations
a
nd
a
pp
o
int
such
a
g
e
nts as it
shall de
e
m a
p
p
r
opri
a
te
f
o
r the
a
dm
i
nis
t
r
a
t
i
on of
the P
l
a
n;
(
l
)
d
ec
ide
a
ll
qu
e
st
i
ons
a
nd s
e
t
t
le
a
ll
c
ontrov
e
rsi
e
s and
d
i
sput
e
s which m
a
y
a
rise
in
c
onn
ec
t
i
on with
t
he
P
lan,
A
wa
rd
A
g
ree
m
e
nts and
A
wa
rds;
(m)
d
e
le
g
a
te to a
c
om
m
i
t
tee
of one or more di
r
e
c
t
o
r
s of the
Compa
n
y, subject to such terms and limitations as the Committee shall determine,
the
a
uthori
t
y
to d
e
si
g
n
a
t
e
P
a
rticip
a
nts a
n
d
g
r
a
nt Aw
a
rds,
a
nd to
a
mend
A
w
a
rds
g
ra
nted to
P
a
rticip
a
nts,
except
with r
e
s
p
ec
t
t
o
P
a
rticip
a
nts who
a
r
e
of
f
i
c
e
rs or
dir
e
c
tors of
the C
o
mpa
n
y
f
o
r purp
o
s
e
s of Se
c
t
i
on
16 of
the
E
x
c
h
a
n
g
e
A
c
t;
(n)
d
e
le
g
a
t
e
to one or
more
of
f
i
c
e
rs or
ma
n
a
g
e
r
s of the
Compa
n
y
,
o
r a
c
om
m
i
t
tee
of such
o
f
fi
c
e
rs
a
nd ma
n
a
g
e
rs, the
a
u
thori
t
y
, sub
j
ec
t
t
o su
c
h te
r
ms and lim
i
tations
a
s the Com
m
i
t
tee
shall det
e
rmin
e
, to c
a
n
c
e
l,
m
odi
f
y
,
w
a
ive
r
i
g
hts with r
e
s
p
ec
t
t
o,
a
l
t
e
r, discontinu
e
, suspend or
te
r
m
i
n
a
te
A
w
a
rds h
e
ld
b
y
e
mp
l
o
y
e
e
s, except employees who
a
re
o
f
fi
ce
rs
o
r dir
ec
tors of
the Comp
a
n
y
f
or
pur
p
os
e
s of S
e
c
t
i
on 16 of
the
E
x
c
h
a
nge
A
c
t;
p
r
ovided, how
e
v
e
r, th
a
t
a
n
y
d
e
l
e
g
a
t
i
on to
m
a
n
a
g
e
m
e
nt shall
c
onfo
r
m wi
t
h the
re
qu
i
rements of the N
Y
S
E
a
ppl
i
ca
ble to the
Compa
n
y
a
nd
D
e
la
w
a
re
c
o
r
por
a
t
e
la
w
;
a
nd
(o)
make
a
n
y
other
d
e
t
e
rmin
a
t
i
on
a
nd take
a
n
y
o
t
h
e
r
a
c
t
i
on
that the Comm
i
t
t
e
e
d
ee
ms n
ece
ss
a
r
y
or d
e
si
r
a
ble
f
o
r the
in
t
e
rp
re
t
a
t
i
on,
a
ppl
i
ca
t
i
on
a
nd
a
dm
i
nis
t
r
a
t
i
on of
the P
l
a
n, A
wa
rd
A
g
ree
m
e
nts and
A
wa
rds.
All desi
g
n
a
t
i
ons, d
e
t
e
rmin
a
t
i
ons, inte
r
p
re
tations
a
nd other
d
ec
is
i
ons und
e
r
or
with r
e
spe
c
t to
t
he
P
lan,
A
w
a
rd
A
g
r
e
e
ments or
a
n
y
A
w
a
rd sh
a
l
l be
w
i
t
hin
t
he
sole
disc
re
t
i
on of
the Com
m
i
t
te
e
, m
a
y
be
ma
d
e
a
t a
n
y
t
i
me
a
nd sh
a
ll
be
f
inal,
c
on
c
lus
i
ve
a
nd bi
n
ding
upon
a
ll
p
e
rsons, including
the Comp
a
n
y
,
A
f
filiat
e
s,
P
a
rticip
a
nts,
b
e
n
e
fi
c
i
a
ri
e
s of
A
w
a
rds
a
nd sto
c
kholde
r
s
o
f the Compa
n
y
.
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
3
|
S
ECTI
O
N 4.
S
h
a
re
s
Availa
b
le
f
or
A
w
a
rd
s.
(
a
)
Shar
e
s
A
v
ai
l
able.
S
ubje
c
t
t
o
a
djus
t
ment
a
s p
r
ovided in
S
ec
t
i
on
4
(c
), t
h
e
ma
x
i
m
um number
of Sh
a
r
e
s av
a
i
l
a
b
le
f
or
is
s
u
a
n
c
e
in r
e
sp
e
c
t
of
A
wa
rds
m
a
de
und
e
r the
P
lan sh
a
ll
be 4,000,000
S
h
a
r
e
s,
pr
o
v
i
d
e
d, how
eve
r,
that if
for
a
n
y
r
ea
son
a
n
y
A
w
a
rd u
n
d
e
r the
P
lan oth
e
r th
a
n a
S
ubsti
t
ute
A
w
a
rd is fo
r
f
e
i
t
e
d,
ca
n
ce
led,
e
x
pir
e
d, or settled in cash, the
numb
e
r of
S
h
a
r
e
s av
a
i
l
a
ble
for
is
s
u
a
n
c
e
in r
e
spe
c
t of
A
wa
rds und
e
r the
P
lan sh
a
ll
be
i
n
c
r
e
a
s
e
d
b
y
the numb
e
r
o
f
S
h
a
r
e
s so fo
r
f
e
i
t
e
d,
c
a
n
c
e
led,
e
x
pir
e
d or settled in cash.
Notwithstanding
a
n
y
th
i
n
g
to
t
he
c
ont
r
a
r
y
c
on
t
a
i
n
e
d h
e
r
e
in,
t
he
f
o
l
l
owing
shall not inc
rea
s
e
the numb
e
r
o
f Sh
a
r
e
s a
v
a
i
l
a
ble
f
o
r issu
a
n
c
e
in r
e
s
p
ec
t of
A
w
a
rds
u
nd
e
r the
P
lan: (i)
S
h
a
r
e
s deliv
e
r
e
d in p
a
y
m
e
nt of
a
n Option,
(
i
i
)
S
h
a
r
e
s that a
r
e
re
p
u
rch
a
s
e
d
b
y
the Compa
n
y
with Opt
i
on p
r
o
cee
ds and (iii) Shares withheld to satisfy withholding taxes on any Award.
I
n
a
ddi
t
io
n
,
S
h
a
r
e
s co
ve
r
e
d
b
y
a
n
S
AR, to
the
e
x
tent that it
is
e
x
e
r
c
ised
a
nd s
e
t
t
led in
S
h
a
r
e
s, and
re
g
a
rdl
e
ss of
wh
e
ther
or n
o
t
S
h
a
r
e
s
a
re
ac
tual
l
y
is
s
u
e
d to
t
he
P
a
rticip
a
nt upon e
x
e
r
c
ise
of the
S
AR, shall be
c
o
n
side
re
d is
s
u
e
d or t
r
a
nsf
er
r
e
d pu
r
suant to the
P
lan.
S
ubje
c
t
t
o the
f
o
r
e
goin
g
,
S
h
a
r
e
s m
a
y
be
ma
d
e
a
v
a
i
l
a
ble
f
r
om
t
he
a
ut
h
o
r
i
z
e
d but un
i
ssued
S
h
a
r
e
s of the
Compa
n
y
o
r
f
rom Sh
a
r
e
s
r
e
a
c
quir
e
d
b
y
the Comp
a
n
y
.
Additionally, in the event that a corporation acquired by (or combined with) the Company or any subsidiary has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for awards under the Plan and shall not reduce the Shares authorized for grant under the Plan; provided that awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the Company or any subsidiary prior to such acquisition or combination.
(b)
Indi
v
idual
Stoc
k
-
Bas
e
d Awards.
S
ubje
c
t
t
o
a
djus
t
ment
a
s provid
e
d in
S
ec
t
i
on
4
(c
), no
P
a
rticip
a
nt
ma
y
re
ce
ive
Options or Sto
c
k App
re
c
iation
R
i
g
hts und
e
r the
P
lan in
a
n
y
ca
l
e
nd
a
r
y
ea
r th
a
t
r
e
late
to
m
o
r
e
t
h
a
n
1,000,000
S
h
a
r
e
s in
t
he
a
g
g
reg
a
te;
provid
e
d,
h
owe
ve
r,
that su
c
h number
m
a
y
be
in
c
r
e
a
s
e
d with r
e
spe
c
t
t
o
a
n
y
P
a
r
t
icip
a
nt
b
y
a
n
y
S
h
a
r
e
s
a
v
a
i
l
a
ble
f
or
g
r
a
nt
t
o such
P
a
rticip
a
nt
i
n
a
c
c
o
r
d
a
n
c
e
with
t
his
S
ec
t
i
on
4
(
b)
in a
n
y
prior
y
e
a
rs th
a
t
w
e
re
not
g
r
a
nted in such
p
r
ior
y
e
a
r.
N
o pr
o
v
i
sion of this
S
ec
t
i
on
4
(
b)
shall be
c
onstru
e
d
a
s l
i
m
i
t
i
ng
the
a
mount
of any
ot
h
e
r sto
c
k
-
b
a
s
e
d or
ca
s
h
-
b
a
s
e
d
a
w
a
rd
w
hich
m
a
y
b
e
g
r
a
nted to
a
n
y
Pa
rticip
a
nt. In any fiscal year of the Company, no Participant who is a non-employee director of the Company may be granted Awards valued at more than $450,000
at the time of grant.
(
c
)
Adjus
t
m
e
nts.
Upon t
h
e
o
cc
u
r
r
e
n
c
e
of
a
n
y
div
i
d
e
nd or
other
dis
t
ribution (
w
h
e
ther
in
t
he fo
r
m of
ca
sh,
S
h
a
r
e
s, ot
h
e
r s
ec
u
rities or
other
pr
o
p
e
r
t
y
)
,
c
h
a
n
g
e
in
t
he
c
a
p
i
tal or
sha
re
s
o
f
c
a
pi
t
a
l stock,
re
c
a
pi
t
a
l
iz
a
t
i
on, s
t
o
c
k s
p
l
i
t, r
e
v
e
rse
stock
s
pl
i
t, r
e
o
r
g
a
ni
z
a
t
i
on, me
r
g
e
r,
c
onsolidation, spl
it
-
up, spin
-
o
f
f,
c
omb
i
n
a
t
i
on, r
e
pur
c
h
a
s
e
, or
e
x
c
h
a
nge
of Sh
a
r
e
s or oth
e
r
s
ec
u
r
i
t
ies of
the Compa
n
y
, is
s
u
a
n
c
e
of
w
a
r
ra
nts or ot
h
e
r
r
i
g
hts
t
o pu
rc
h
a
se
S
h
a
r
e
s or ot
h
e
r
s
ec
u
r
i
t
ies of
the Compa
n
y
or
e
x
tr
a
o
r
dina
r
y
tr
a
n
s
ac
t
i
on or
e
v
e
nt w
h
ich
a
f
f
ec
ts
t
he
S
h
a
r
e
s, then the
Com
m
i
t
tee shall m
a
ke
such
a
djus
t
ment, if
a
n
y
, in su
c
h man
n
e
r
a
s it
d
ee
ms ap
p
rop
r
ia
t
e
to pr
e
v
e
nt d
i
lu
t
ion or
e
nla
r
g
e
ment
o
f the
b
e
n
e
f
i
t
s or pot
e
nt
i
a
l ben
e
fits
i
ntend
e
d to be m
a
de
a
v
a
i
la
ble und
e
r the
P
lan, in (i)
the numb
e
r
a
nd
t
y
p
e
o
f Sh
a
r
e
s (
o
r oth
e
r s
e
c
u
r
i
t
ies or
pro
p
e
r
t
y
)
whi
c
h th
e
r
e
a
f
t
e
r m
a
y
be
m
a
de the subje
c
t of
A
w
a
rds b
o
th
t
o
a
n
y
ind
i
vidual
a
nd
t
o
a
ll
P
a
rticip
a
nts, (i
i
)
outs
t
a
nding
A
w
a
rds including
without
l
i
m
i
tat
i
on the number
a
nd
t
y
pe
o
f Sh
a
r
e
s (
o
r oth
e
r s
e
c
u
r
i
t
ies or
pro
p
e
r
t
y
) subj
ec
t
t
h
e
r
e
to, and
(iii)
the g
ra
nt, pu
r
c
h
a
se
o
r
e
x
e
r
c
ise p
r
i
c
e
with r
e
sp
e
c
t
t
o outstanding
A
w
a
rds
a
nd, if d
ee
med
a
ppro
p
r
i
a
te, m
a
ke
pro
v
is
i
on f
o
r
c
a
sh p
a
y
m
e
nts
t
o the hold
e
rs of
outs
t
a
nding A
wa
rds;
pro
v
ided, how
e
ve
r,
that the numb
e
r
o
f Sh
a
r
e
s sub
j
ec
t
t
o
a
n
y
A
w
a
rd d
e
nom
i
n
a
ted in
S
h
a
r
e
s shall alw
a
y
s
b
e
a
whole
numbe
r
.
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
4
|
(d)
Substi
t
ute
A
wards.
S
h
a
r
e
s und
e
r
l
y
i
n
g
S
ubsti
t
ute
A
w
a
rds sh
a
ll
not r
e
du
c
e
the numb
e
r of sha
re
s
r
e
maining
a
v
a
i
l
a
b
l
e
f
or
is
s
u
a
n
c
e
und
e
r
t
he
P
lan
f
or
a
n
y
pur
p
ose.
S
ECTI
O
N 5. E
l
ig
ib
i
l
i
ty.
A
n
y
e
mp
l
o
y
e
e
of
o
r
c
on
s
ul
t
a
nt
t
o the Compa
n
y
or
a
n
y
A
f
filiat
e
, or
a
n
y
dir
e
c
tor of
the
Compa
n
y
, is el
i
g
ib
l
e
to be d
e
si
g
n
a
ted a
Pa
rticip
a
n
t.
S
ECTI
O
N 6. A
w
a
r
d
s.
(
a
)
Options.
(i)
Grant.
T
h
e
Com
m
i
t
tee
is
a
uthori
z
e
d to
g
r
a
nt
Options to
P
a
rticip
a
nts with such
te
r
ms and
c
ondi
t
io
n
s, not inconsis
t
e
nt wi
t
h
t
he
pro
v
is
i
ons of the
P
lan,
a
s the Co
m
m
i
t
t
e
e shall d
e
te
r
m
i
n
e, as specified in the applicable Award Agreement
. The
Aw
a
rd
A
g
r
ee
ment sh
a
ll
sp
ec
i
f
y
:
(
A
)
the pu
r
c
h
a
se
p
ri
c
e
p
e
r Sh
a
re
und
e
r
e
a
c
h Opti
o
n,
provid
e
d
, how
eve
r,
th
a
t such p
r
ice shall be
not
l
e
ss
t
h
a
n 100%
of the
fa
i
r m
a
rk
e
t
v
a
lue of
the Sha
r
e
s und
e
r
l
y
i
n
g
such
Option on the d
a
te of
g
r
a
nt (
e
x
c
e
pt
i
n the
ca
se
of Subs
t
i
t
ute
A
w
a
rds
)
;
(
B
)
the
t
e
rm of
e
ac
h Opt
i
on (
n
ot
t
o
e
x
cee
d ten
y
e
a
rs
)
;
(C)
the ti
m
e
o
r tim
e
s at
w
hich
a
n Option
m
a
y
be
e
x
e
r
c
ised, in whole or
in
p
a
rt, the method or
methods
b
y
w
hich
a
nd the
f
o
r
m or
fo
r
ms (includin
g
, without
l
i
m
i
tation, c
a
sh,
S
h
a
r
e
s, oth
e
r
A
w
a
rds or
other
pro
pe
r
t
y
,
o
r
a
n
y
c
o
mb
i
n
a
t
i
on the
re
o
f
, h
a
vi
n
g
a
f
a
ir m
a
rk
e
t v
a
lue on the
e
x
e
r
c
ise
d
a
t
e
e
qu
a
l
t
o the
r
e
lev
a
nt e
x
e
r
c
ise p
r
i
ce
) in
w
h
i
c
h p
a
y
m
e
nt of the
e
x
e
r
c
ise p
r
ice
with r
e
sp
e
c
t
t
h
e
r
e
to
m
a
y
be
m
a
de
o
r d
e
e
med to h
a
v
e
b
e
e
n mad
e;
(i)
vesting requirements including, for time-based Awards in excess of 5% of the number of Shares available for Awards pursuant to Section 4, a vesting period of no less than one year, except with respect to substitute awards for grants made under a plan of an acquired business entity or in limited cases of an intervening event related to death, disability, retirement, or a Change in Control, and
(E)
all other terms and conditions applicable to the Option as shall be determined by the Committee in its discretion, including provisions applicable in the event the Participant terminates employment
.
A P
a
rticip
a
nt shall h
a
ve
the
ri
g
h
ts of a
stockholder
on
l
y
a
s and
wh
e
n
S
h
a
r
e
s ha
v
e
b
ee
n
ac
tual
l
y
is
s
u
e
d to
t
he
P
a
rticip
an
t pursu
a
nt
t
o the P
l
a
n.
(ii)
ISOs
.
T
h
e
te
r
ms of
a
n
y
I
n
c
e
nt
i
ve
S
tock
O
pt
i
on
g
r
a
n
ted und
e
r the
P
lan sh
a
ll
c
omp
l
y
in all r
e
spe
c
ts with
t
he
pro
v
is
i
ons of Se
c
t
i
on
422 of
the
Cod
e
, or
a
n
y
su
c
ce
ssor
p
rovision
t
h
e
r
e
to,
a
nd
a
n
y
r
e
g
u
l
a
t
i
ons promul
g
a
ted t
h
e
r
e
un
d
e
r.
T
he
ma
x
i
m
um n
u
mber
of Sh
a
r
e
s that m
a
y
be
a
w
a
r
d
e
d
a
s
I
n
ce
nt
i
ve
S
tock
O
pt
i
ons is
4,000,000. Each Award Agreement shall specify whether (or the extent to which) the Option is an Incentive Stock Option or a Non-Qualified Stock Option. Notwithstanding any such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by an Participant during any calendar year (under all plans of the Company) exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options. Options failing to qualify as Incentive Stock Options for any reason will be treated as Non-Qualified Stock Options, rather than forfeited.
(b)
R
e
sto
r
at
i
on Options.
The
Com
m
i
t
tee m
a
y
not
g
r
a
nt r
e
sto
r
a
t
i
on opt
i
ons.
(
c
)
Sto
c
k
Appr
ec
ia
t
ion R
i
ghts.
The
Com
m
i
t
tee
is authori
z
e
d to
g
r
a
nt
S
tock
App
rec
iation Ri
g
hts
t
o
P
a
rticip
a
nts.
S
ubje
c
t
t
o the t
e
rms of
the
P
lan, a
S
tock
A
ppr
e
c
iati
o
n R
i
g
ht gr
a
nted un
d
e
r the P
l
a
n sh
a
ll
c
onf
e
r on
t
he
holder
the
r
e
of
a
r
i
g
ht
t
o r
e
ce
i
v
e
, upon
e
x
e
r
c
ise
t
h
e
r
e
o
f
, t
h
e
e
x
ce
ss of (i)
the
fa
ir
m
a
rk
e
t
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
5
|
val
u
e
of
one
S
h
a
re
on t
h
e
d
a
te
of
e
x
e
r
c
ise o
r
, if the
Co
m
m
i
t
t
e
e
shall so d
e
te
r
m
i
ne
in
t
he
c
a
se
of
a
n
y
s
u
c
h r
i
g
ht o
t
h
e
r th
a
n
one
re
lat
e
d to
a
n
y
I
n
c
e
nt
i
ve
S
tock
O
pt
i
on,
a
t
a
n
y
t
i
me du
r
i
n
g a
spe
c
if
i
e
d p
e
riod b
e
fo
r
e
o
r
a
ft
e
r
the d
a
te of
e
x
e
r
c
ise ov
e
r
(ii)
the
fa
ir m
a
rk
e
t v
a
lue on the
d
a
te
o
f
g
r
a
n
t
.
S
ubje
c
t
t
o the t
e
rms of
the P
l
a
n, the Com
m
i
t
tee
shall det
e
rmine
the
g
r
a
nt p
r
ic
e
, whi
c
h sh
a
ll not be l
e
ss
t
h
a
n 100%
of
the
fa
ir m
a
r
k
e
t value
o
f the
S
h
a
r
e
s und
e
r
l
y
i
n
g
the
S
tock
A
ppr
e
c
iation Ri
g
ht on
t
he
d
a
te of
g
ra
n
t,
t
e
rm
(
not
t
o
e
x
cee
d ten
y
e
a
rs
). The Committee shall also determine, in its discretion
, me
t
hods
o
f
e
x
e
rcise
a
nd s
e
t
t
lem
e
nt and
a
n
y
ot
h
e
r t
e
rms
a
nd
c
on
d
i
t
ions of
a
n
y
S
tock
A
pp
r
ec
iation
R
i
g
ht and m
a
y
i
mpose
such
c
ondi
t
ions or
re
strictions on the
e
x
e
r
c
ise of
a
n
y
S
tock
A
p
p
r
e
c
iation
R
i
g
ht as it m
a
y
d
e
e
m app
r
opri
a
t
e, which terms and conditions shall be described in the applicable Award Agreement
. The Award Agreement shall set forth applicable
vesting requirements including, for time-based Awards in excess of 5% of the number of Shares available for Awards pursuant to Section 4, a vesting period of no less than one year, except with respect to substitute awards for grants made under a plan of an acquired business entity or in limited cases of an intervening event related to death, disability, retirement, or a Change in Control.
(d)
R
e
st
r
ict
e
d Sto
c
k
and
R
e
st
r
ic
t
e
d Stock
Unit
s
.
(i)
Issuan
ce
.
T
h
e
Com
m
i
t
tee
is authori
z
e
d to
g
r
a
nt
t
o
P
a
rticip
a
nts Aw
a
rds
o
f R
e
strict
e
d
S
tock,
w
hich sh
a
ll
c
onsist of
S
h
a
r
e
s, and
R
e
stric
t
e
d
S
tock
U
ni
t
s which sh
a
ll
g
ive the
P
a
rtici
p
a
nt the
r
i
g
ht
t
o
r
ece
i
v
e
ca
sh,
S
h
a
r
e
s, oth
e
r s
e
c
u
r
i
t
ies,
other
A
w
a
rds or
other
p
r
op
e
r
t
y
, in
eac
h
ca
s
e subj
ec
t
t
o the t
e
rmin
a
t
i
on of
the Restri
c
ted Pe
r
iod
d
e
te
r
m
i
n
e
d
b
y
the Comm
i
t
t
ee
. Notwithstanding
the
f
ol
l
owing
te
r
ms,
t
he
Com
m
i
t
tee
m
a
y
i
m
pose
other
t
e
r
ms
t
h
a
t
ma
y
be
mo
r
e or
less
fa
vo
r
a
ble to the
C
ompa
n
y
a
s it
d
ee
ms fi
t
.
In the
a
bsence
of
a
n
y
s
u
c
h dif
fe
ri
n
g
pro
v
is
i
ons, A
wa
rds of
R
e
str
i
c
ted S
t
o
c
k
a
nd Restri
c
ted S
t
o
c
k
Units shall have
the p
r
o
v
is
i
ons d
e
s
c
rib
e
d b
e
low.
(ii)
R
e
st
r
ictions.
The
R
e
strict
e
d
P
e
riod m
a
y
dif
f
e
r
a
mong
P
a
rticip
a
nts and
m
a
y
h
a
ve dif
fe
r
e
nt
e
x
pir
a
t
i
on d
a
tes
w
i
t
h r
e
spe
c
t
t
o po
r
t
i
ons
of
S
h
a
r
e
s co
v
e
r
e
d
b
y
t
h
e
s
a
me
A
w
a
rd. Subj
ec
t to
t
he
te
r
ms of the P
l
a
n, A
wa
rds of
R
e
str
i
c
ted S
t
o
c
k
a
nd Restri
c
ted S
t
o
c
k
Units shall have
such r
e
strictions
a
s the Co
m
m
i
t
t
e
e
m
a
y
i
m
pose
(in
c
lud
i
n
g
, without
l
i
m
i
tation,
l
i
m
i
t
a
t
i
ons on the
r
i
g
ht to vo
t
e
R
e
strict
e
d
S
tock or
the
r
i
g
ht
t
o r
e
c
e
ive
a
n
y
div
i
d
e
nd or
oth
e
r
r
i
g
ht
or
pro
pe
r
t
y
),
whi
c
h r
e
strictions m
a
y
lapse
s
e
p
a
r
a
te
l
y
or in
c
omb
i
n
a
t
i
on
a
t such time or
t
i
mes, in installments or othe
r
wise
(in
c
lud
i
n
g
the
ac
hiev
e
m
e
nt of p
e
r
fo
r
m
a
n
c
e
me
a
s
u
r
e
s as
s
e
t fo
r
th
in
S
ec
t
i
on
6
(e
) h
e
r
e
o
f
),
a
s the Co
m
m
i
t
t
e
e
m
a
y
d
ee
m
a
ppro
p
ri
a
t
e. The a
ppl
i
ca
ble
A
wa
rd
A
g
ree
m
e
nt shall set forth all such restrictions, as well as such other terms and conditions applicable to the Award as shall be determined by the Committee in its discretion, including provisions related to vesting and the provisions applicable in the event the Participant terminates employment. The Award Agreement shall set forth applicable
vesting requirements including, for time-based Awards in excess of 5% of the number of Shares available for Awards pursuant to Section 4, a vesting period of no less than one year, except with respect to substitute awards for grants made under a plan of an acquired business entity or in limited cases of an intervening event related to death, disability, retirement, or a Change in Control.
S
ubje
c
t
t
o the
a
fo
r
e
mentioned
r
e
strictions
a
nd the p
r
ov
i
sions
of the
P
lan, including
the p
r
ovis
i
ons
of
S
ec
t
i
on 4
(c
)
h
e
r
e
o
f,
a
P
a
rticip
a
nt shall h
a
ve
a
ll
of
the
r
i
g
hts of a stockhold
e
r
w
i
t
h r
e
sp
e
c
t
to
R
e
strict
e
d
S
tock.
(iii)
R
e
gis
t
ra
t
ion.
R
e
str
i
c
ted S
t
o
c
k gr
a
nted un
d
e
r
the P
l
a
n m
a
y
b
e
e
vide
n
c
e
d in su
c
h mann
e
r
a
s the Co
m
m
i
t
t
e
e
m
a
y
d
ee
m
a
ppro
p
ri
a
t
e
,
includin
g
, without
l
i
m
i
ta
t
ion, boo
k
-e
nt
r
y re
g
is
t
r
a
t
i
on or
is
s
u
a
n
c
e
o
f sto
c
k
ce
rtif
i
ca
tes.
(
e
)
P
e
rfo
r
ma
n
c
e
Award
s
.
(i)
The
Com
m
i
t
tee
is he
r
e
b
y
a
uthori
z
e
d to gr
a
nt
P
e
r
f
o
r
ma
n
c
e
A
w
a
rds to
Pa
rticip
a
nts.
(ii)
S
ubje
c
t
t
o the t
e
rms of
the P
l
a
n, a
P
e
r
f
o
rm
a
n
c
e
A
wa
rd
g
r
a
nted und
e
r the
P
lan
(
A)
m
a
y be
d
e
nom
i
n
a
ted or
p
a
y
a
b
le in
ca
sh,
S
h
a
r
e
s
(in
c
lu
d
in
g
, without
l
i
m
i
tation,
Re
strict
e
d
S
tock or
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
6
|
R
e
strict
e
d
S
tock
U
ni
t
s), oth
e
r s
ec
u
r
i
t
ies or
ot
h
e
r
A
wa
rds,
a
nd
(B)
shall
c
o
n
fe
r on the
hold
e
r the
re
of
r
i
g
hts val
u
e
d
a
s
d
e
te
r
m
i
n
e
d
b
y
the Comm
i
t
t
e
e
a
nd p
a
y
a
ble to, or
e
x
e
r
c
isable
b
y
, t
h
e holder
of the
P
e
r
fo
r
man
c
e
A
w
a
rd, in
w
hole or
in
p
a
rt, upon the
a
c
h
i
e
v
e
m
e
nt of su
c
h p
e
r
f
o
r
ma
n
c
e
g
o
a
ls during
such
p
e
r
f
o
rm
a
n
c
e
p
e
ri
o
ds as the
Com
m
i
t
tee
shall est
a
bl
i
sh.
S
ubje
c
t
t
o the t
e
rms of
the P
l
a
n, the
p
e
r
f
o
r
ma
n
c
e
g
o
a
ls
t
o be
ac
hiev
e
d d
u
ring
a
n
y
p
e
r
f
o
r
man
c
e
p
e
riod, the len
g
th of
a
n
y
p
e
r
fo
r
ma
n
c
e
p
e
riod, the
a
mount
of
a
n
y
P
e
r
fo
r
ma
n
c
e
A
w
a
rd
g
ra
nted
a
nd the
a
mount
of
a
n
y
p
a
y
ment
o
r t
ra
nsf
e
r to be
made
p
u
r
suant to a
n
y
Pe
r
f
o
r
ma
n
c
e
A
wa
rd sh
a
ll
be d
e
te
r
m
i
n
e
d
b
y
the Comm
i
t
t
ee
. Unl
e
ss
t
he
Com
m
i
t
t
e
e
d
e
t
e
rmin
e
s ot
h
e
r
w
ise,
the p
e
r
f
o
r
m
a
n
c
e p
e
riod
re
lati
n
g
to a
n
y
P
e
r
fo
r
man
c
e
A
w
a
rd sh
a
ll
be
a
t
l
ea
st one
c
a
lend
a
r
y
ea
r
c
om
m
e
n
c
i
n
g
J
a
nu
a
r
y
1
a
nd
e
ndi
n
g
D
e
ce
mber 31
(
e
x
ce
pt
i
n
c
ir
c
ums
t
a
n
ce
s in conn
e
c
t
i
on with a Ch
a
nge
in Control, in whi
c
h
e
v
e
nt
t
he
p
e
r
f
o
rm
a
n
c
e
p
e
riod
m
a
y
b
e
s
hort
e
r t
h
a
n one
y
e
a
r
)
.
(iii)
If the
Com
m
i
t
tee in
t
e
nds th
a
t a Performance
A
w
a
rd
to a member of the Executive Group
should
c
onsti
t
ute
“
qu
a
l
i
fi
e
d p
e
r
f
o
rm
a
n
c
e
-
b
a
s
e
d
c
o
mpens
a
t
i
on”
f
or purp
o
s
e
s of Se
c
t
i
on
162
(
m) of
the Code,
then such award
sh
a
l
l
include
a
pr
e-e
stablished
fo
r
mu
l
a
,
such
that p
a
y
m
e
nt, r
e
tention or v
e
st
i
n
g
of t
h
e
A
w
a
rd is subj
ec
t
t
o the
ac
hiev
e
m
e
nt during a
p
er
fo
r
man
c
e
p
e
riod or p
e
riods,
a
s det
e
rmin
e
d
b
y
the Comm
i
t
t
ee
, of a
le
v
e
l or l
e
v
e
ls, as d
e
t
e
rmin
e
d
b
y
the Comm
i
t
t
ee
, of
one
or mo
r
e
p
e
r
fo
r
m
a
n
c
e me
a
s
u
r
e
s with
re
s
p
e
c
t
t
o the Compa
n
y
or
a
n
y
of
i
t
s A
f
filiat
e
s. Available performance measures shall be based on the
f
ol
l
owi
n
g performance measures (or an equivalent metric)
eac
h
det
e
rmin
e
d in
a
c
c
o
r
d
a
n
c
e
with
g
e
n
e
r
a
l
l
y
ac
c
e
pted
a
cc
ount
i
ng
p
ri
n
c
ip
l
e
s, wh
e
r
e
a
ppl
i
ca
ble,
a
s
c
onsistently
a
ppl
i
e
d
b
y
t
h
e
Compan
y
:
C
a
sh flow (before or after dividends)
|
R
e
turn on n
e
t ass
e
ts
|
E
a
rni
n
g
s per
s
h
a
re
|
R
e
turn on n
e
t
t
a
n
g
ib
l
e
a
s
s
e
ts
|
EB
I
T
|
R
e
turn on s
a
les
|
EB
I
T
D
A
|
R
e
v
e
nue
g
ro
w
th
|
G
r
oss
m
a
r
g
in
|
R
e
v
e
nu
e
s
|
G
r
oss pro
f
it
|
S
a
f
e
t
y
m
ea
su
r
e
s
|
N
e
t
i
n
c
ome
|
S
G
&
A
a
s
a
p
e
r
ce
nt of s
a
l
e
s
|
Op
e
r
a
t
i
n
g
ma
r
g
in
|
Tot
a
l cost produ
c
t
i
vi
t
y
|
Op
e
r
a
t
i
n
g
pr
o
fit
|
Tot
a
l sha
re
hold
e
r
re
turn
|
Qu
a
l
i
t
y
m
e
a
sur
e
s
|
W
o
r
king
ca
pi
t
a
l
|
R
e
turn on
a
ssets
|
W
o
r
king
ca
pi
t
a
l as
a
p
e
rc
e
nt of s
a
les
|
R
e
turn on
e
qui
t
y
|
W
o
r
king
ca
pi
t
a
l
e
f
f
ici
e
n
c
y
|
R
e
turn on invest
e
d
ca
pi
ta
l
|
|
The Applicable performance measures shall be described in the Award Agreement.
If the Committee so provides in an Award Agreement, t
he
following
may
be
e
x
c
luded in d
e
te
r
m
i
ning
w
h
e
ther
a
n
y
p
e
r
f
o
r
ma
n
c
e
c
rite
r
ion h
a
s be
e
n
a
t
t
a
ined:
impact of charges for restructurings, the effects of acquisitions and divestitures and related expenses,
loss
e
s
r
e
sul
t
ing
f
rom discontinu
e
d op
e
r
a
t
i
ons,
e
x
tr
a
o
r
dina
r
y
los
s
e
s (in
a
cc
o
r
d
a
n
c
e
with
g
e
n
e
r
a
l
l
y
ac
c
e
pted
a
cc
ount
i
ng p
r
inciples,
a
s cu
r
r
e
nt
l
y
in e
f
fe
c
t), the
c
umu
l
a
t
i
ve
e
f
fec
t of
c
h
a
n
g
e
s in a
c
c
o
u
nt
i
ng
prin
c
ip
l
e
s and other
unusual, non
-
r
ec
u
rr
ing
i
t
e
ms of loss that a
r
e
s
e
p
a
r
a
t
e
l
y
i
d
e
nt
i
fi
e
d
a
nd
qu
a
nt
i
fi
e
d in
t
he Compa
n
y
’s
a
udi
t
e
d fin
a
n
c
ial st
a
tem
e
nts.
P
e
r
f
o
r
m
a
n
c
e
me
a
s
u
r
e
s m
a
y
v
a
r
y
f
rom P
e
r
f
o
r
ma
n
c
e A
wa
rd to P
e
r
fo
r
man
c
e
A
w
a
rd
a
nd
f
r
om
P
a
rticip
a
n
t
t
o
P
a
rticip
a
nt and m
a
y
be
e
stabli
s
h
e
d on a stand
-a
lone b
a
si
s
, in
t
a
n
d
e
m or in the
a
l
t
e
r
n
a
t
i
v
e; in addition, performance measures may be applied on a corporate-wide or division/business segment basis, and may be applied to the performance of the Company and/or one or more Affiliates relative to a market index, a group of other companies or a combination thereof, all as determined by the Committee
. To the extent a Performance Award is designed to constitute performance-based compensation under Section 162(m) of the Code, performance measures shall be established within 90 days of the beginning of the period of service to which the performance measures relate.
F
or
a
n
y
Pe
r
f
o
r
ma
n
c
e
Aw
a
rd, the
ma
x
i
m
um
a
mount
that m
a
y
b
e
d
e
l
i
v
e
r
e
d or
ea
r
n
e
d in s
e
t
t
le
m
e
nt of
a
ll
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
7
|
such
A
w
a
rds
g
r
a
nted in
a
n
y
y
e
a
r shall be
(
x
) if
a
nd to
t
he
e
x
tent that su
c
h A
wa
rds
a
re
d
e
nom
i
n
a
t
e
d in
S
h
a
res,
1,000,000
S
h
a
r
e
s (subj
ec
t
t
o
a
djus
t
ment
a
s
p
r
ovided in
S
ec
t
i
on
4
(c
)
)
a
nd
(
y
) if
a
nd
to
t
he
e
x
tent that su
c
h A
wa
rds
a
re
d
e
nom
i
n
a
t
e
d in c
a
sh,
$
5,000,000. Notwithstanding
a
n
y
p
rovision of the
P
lan to the
c
ontr
a
r
y
, the Comm
i
t
t
e
e
shall not
be
a
ut
h
o
r
i
z
e
d to
i
n
c
r
e
a
s
e
the
a
mount
p
a
y
a
ble un
d
e
r
a
n
y
A
w
a
rd to
w
hich th
i
s
S
ec
t
i
on
6
(e
)
(
i
i
i)
a
pp
l
ies upon
a
t
t
a
in
m
e
nt of su
c
h pre
-
e
stablished
fo
r
mu
l
a
.
(f
)
Di
v
idend
Equi
v
alents.
The
Com
m
i
t
tee
is authori
z
e
d to
g
r
a
nt
t
o
P
a
rticip
a
nts Aw
a
rds und
e
r
w
hich the
hold
e
rs t
h
e
r
e
of
s
h
a
ll
be
e
nt
i
t
l
e
d to r
ece
i
v
e
p
a
y
ments
e
qui
v
a
lent to d
i
vidends or in
t
e
r
e
st with r
e
sp
e
c
t
t
o a
number
of Sh
a
r
e
s det
e
r
m
ined
b
y
the Comm
i
t
t
ee
,
a
nd the Comm
i
t
t
e
e m
a
y
pro
v
i
d
e
that su
c
h
a
moun
t
s (if
a
n
y
)
shall be
d
ee
med to h
a
v
e
b
ee
n
r
e
i
n
v
e
sted in ad
d
i
t
ional
S
h
a
r
e
s or oth
e
r
wise
r
e
in
v
e
sted. Subje
c
t
t
o the t
e
r
m
s of the
P
lan, su
c
h A
w
ar
ds m
a
y
h
a
ve
such te
r
ms and
c
ondi
t
ions as the Comm
i
t
t
e
e
shall det
e
r
m
i
n
e, as set forth in the Award Agreement
, but sh
a
ll
not be
a
w
a
rd
e
d on Options or Stock Appreciation Rights, or on un
e
a
r
n
e
d
P
e
r
f
o
r
man
c
e
A
w
a
rds.
(g)
T
e
rmination of
Em
p
loy
me
nt.
E
x
ce
pt as othe
r
wise
p
rovid
e
d in
t
he
P
lan or the applicable Award Agreement,
or as d
e
te
r
m
i
n
e
d
b
y the Comm
i
t
t
ee:
(i)
A
w
a
rds g
ra
nted to, or
othe
r
wise
h
e
ld
b
y
,
e
mp
l
o
y
ee
s will
te
r
m
i
n
a
te,
e
x
pire
a
nd be fo
r
f
e
i
t
e
d upon t
e
rmin
a
t
i
on of
e
mp
l
o
y
ment, wh
i
c
h
shall in
c
lude a
c
h
a
n
ge
in
status f
r
om empl
o
y
e
e to consult
a
nt and t
e
rm
i
n
a
t
i
on
b
y
r
e
a
son of the
f
ac
t
that
a
n
e
nt
i
t
y
is no lo
n
g
e
r
a
n A
f
filiat
e
,
a
nd
(ii)
a
P
a
rticip
a
nt’s
e
mp
l
o
y
m
e
nt shall not be
c
onsi
d
e
r
e
d to be t
e
rmin
a
ted
(
A
)
in
t
he
ca
se
of
a
ppro
ve
d si
c
k l
e
a
ve
or o
t
h
e
r
a
ppro
v
e
d le
a
v
e
of
a
b
s
e
n
c
e
(
not
t
o
e
x
c
e
e
d one
y
ea
r or
s
u
c
h
o
ther p
e
riod
a
s the Co
m
m
i
t
t
e
e
m
a
y
d
e
te
r
m
i
n
e
),
o
r
(
B
)
i
n the
ca
se
o
f a
tr
a
n
s
f
e
r
a
mong
the Comp
a
n
y
a
nd i
t
s A
f
filiat
e
s.
(h)
Section 409A Compliance.
To the extent an Award constitutes “deferred compensation” within the meaning of Section 409A of the Code, the Committee shall establish Award Agreement terms and provisions that comply with Section 409A of the Code and regulations thereunder.
S
ECTI
O
N 7.
G
e
n
er
a
l
.
(
a
)
No Ca
s
h Considerat
i
on for Awards.
A
wa
rds m
a
y
b
e
g
r
a
nted
for
no
ca
sh c
o
nside
ra
t
i
on or for
such
m
i
ni
m
a
l c
a
sh c
o
nside
ra
t
i
on
a
s m
a
y
be
r
e
q
uir
e
d
b
y
a
ppl
i
ca
ble
l
a
w.
(b)
Awards May
Be
Gra
n
ted S
e
parat
e
ly or Tog
e
t
h
e
r.
Subject to the provisions of Section 7(h), a
wa
rds
m
a
y
, in
t
he
disc
re
t
i
on of
the
C
om
m
i
t
te
e
, be
g
r
a
nted
e
i
ther
a
lone or
in
a
ddi
t
ion
t
o, in
t
a
nd
e
m wi
t
h or in substi
t
ut
i
on f
o
r
a
n
y other
A
w
a
rd or
a
n
y
a
w
ar
d
g
r
a
nted und
e
r
a
n
y
oth
e
r Pl
a
n of the
Compa
n
y
o
r
a
n
y
A
f
filiat
e
. A
wa
rds
g
r
a
nted in
a
ddi
t
ion
t
o or in ta
n
d
e
m wi
t
h other
A
w
a
rds or
in addit
i
o
n to or in t
a
nd
e
m wi
t
h
a
w
a
rds
g
ra
nted un
d
e
r
a
n
other
P
lan of
the Comp
a
n
y
or
a
n A
f
filiat
e
, m
a
y
b
e
gr
a
nted
e
i
t
h
e
r
a
t
t
he s
a
me ti
m
e
a
s or
a
t a d
i
f
f
e
r
e
nt
t
i
m
e
f
rom the
g
r
a
nt of su
c
h other
A
w
a
rds or
a
w
a
rds.
(
c
)
Forms of Pa
y
m
e
nt U
n
d
e
r Awards.
S
ubje
c
t
t
o the t
e
rms of the
P
lan
a
nd
o
f
a
n
y
a
ppl
i
ca
b
l
e A
wa
rd
A
g
ree
m
e
nt, p
a
y
m
e
nts or tr
a
nsf
e
rs to be
m
a
de
b
y
t
h
e
Compa
n
y
o
r
a
n
A
f
filiate
upon the
g
r
a
nt, e
x
e
r
c
ise, or
p
a
y
m
e
nt of
a
n A
w
a
rd m
a
y
be
m
a
de
in su
c
h f
o
rm or
f
o
r
m
s as the
Com
m
i
t
tee shall d
e
te
r
m
i
n
e
, includin
g
, without
l
i
m
i
t
a
t
i
on,
ca
sh,
S
h
a
r
e
s, oth
e
r s
e
c
u
r
i
t
i
e
s, oth
e
r
A
w
a
rds, or other
pro
pe
r
t
y
,
o
r
a
n
y
c
o
mb
i
n
a
t
i
on the
re
o
f
,
a
nd
m
a
y
b
e
made
in
a
sin
g
le
p
a
y
m
e
nt or t
r
a
nsf
e
r, in ins
t
a
l
l
ments, or on a
d
e
fer
re
d b
a
si
s
, in
e
ac
h
c
a
se
in
acc
o
r
d
a
n
c
e
with rul
e
s a
n
d pr
oce
du
r
e
s
e
stablished
b
y
t
h
e
Com
m
i
t
te
e
.
S
u
c
h rul
e
s and
pr
oc
e
dur
e
s m
a
y
inclu
d
e
, without
l
i
m
i
tation, p
r
ovis
i
ons for
the p
a
y
m
e
nt or
c
r
e
di
t
i
n
g
of
r
ea
son
a
ble inte
re
st on ins
t
a
l
l
ment or
d
e
f
e
r
r
e
d p
a
y
m
e
nts or the
g
r
a
nt
o
r
c
r
e
di
t
ing
o
f
D
iv
i
d
e
nd E
q
uival
e
nts
i
n r
e
spe
c
t of in
s
tall
m
e
nt or
d
e
f
e
r
r
e
d p
a
y
m
e
nts.
(d)
L
imi
t
s on
T
rans
f
e
r of
Awards.
A
wa
rds
ca
nnot
be
tr
a
nsf
e
r
re
d,
e
x
ce
pt
t
he
Com
m
i
t
tee
is h
e
r
e
b
y
a
uth
o
ri
z
e
d to pe
r
m
i
t
t
he
tr
a
nsf
e
r of
A
w
a
r
d
s und
e
r the
f
ol
l
owi
n
g
te
r
ms and
c
ondi
t
ions and with
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
8
|
su
c
h
a
ddi
t
ional te
r
ms and
c
ondi
t
ions, in either
ca
se
not
i
n
c
onsistent w
i
th
t
he
pro
v
is
i
ons of the P
l
a
n,
a
s the Co
m
m
i
t
te
e
shall det
e
rmin
e
:
(i)
No
A
w
a
rd or
r
i
g
ht u
n
d
e
r
a
n
y
A
w
a
rd m
a
y
b
e
s
old, en
c
umbe
re
d, p
l
e
d
g
e
d,
a
l
i
e
n
a
ted,
a
t
t
ac
h
e
d,
a
ss
i
g
n
e
d or t
ra
n
sf
e
r
r
e
d in a
n
y
mann
e
r
a
n
d
a
n
y
a
t
t
e
mpt
to do a
n
y
o
f the
f
o
r
e
g
oi
n
g shall be
void and un
e
n
f
o
r
cea
ble
a
g
a
inst
the Comp
a
n
y
.
(ii)
Notwithstanding
the
p
r
ovis
i
ons of Se
c
t
i
on
7
(
d
)
(i)
a
bov
e
:
(
A
)
An
O
pt
i
on m
a
y
be
t
r
a
nsf
e
r
r
e
d:
(1)
to a b
e
n
e
fi
c
i
a
r
y
d
e
s
i
gn
a
ted
b
y
the Pa
r
t
i
c
ipant
i
n w
r
i
t
ing
on a
fo
r
m app
r
ov
e
d
b
y
the Comm
i
t
t
ee
;
(2)
b
y
will
or the
a
ppl
i
c
a
ble l
a
ws of
d
e
s
ce
nt and
d
is
t
ribution to
t
he
p
e
rson
a
l r
e
p
re
s
e
ntative,
e
x
ec
utor
or
a
dm
i
nis
t
r
a
tor of
the P
a
rticip
a
nt’s
e
stat
e
;
or
(3)
to a
re
v
o
ca
ble
g
ra
ntor
trust esta
b
l
i
shed
b
y
the
P
a
rticip
a
nt for
the sole b
e
n
e
fit of the
P
a
rt
i
c
i
p
a
nt during
the P
a
rticip
a
nt’s l
i
f
e
,
a
nd und
e
r the
te
r
ms
o
f
w
hich the Pa
r
t
i
c
ipant is
a
nd r
e
m
a
ins
t
he
sole
trustee
unt
i
l de
a
th or p
h
y
sic
a
l or
m
e
ntal inc
a
p
ac
i
t
y
.
S
u
c
h
a
ss
i
g
n
m
e
nt shall be
e
f
f
ec
ted
b
y
a
w
r
i
t
ten instrum
e
nt
i
n fo
r
m and
c
ontent s
a
t
i
sf
ac
to
r
y
to
th
e
Com
m
i
t
te
e
,
a
nd the Pa
r
t
i
c
ipant sh
a
ll
d
e
l
i
v
e
r to the Com
m
i
t
tee
a
true
c
o
p
y
of
the
a
g
re
e
ment or
other
d
o
c
ument
e
viden
c
i
n
g
such
trust.
I
f in
t
he
jud
g
ment of
the
C
om
m
i
t
tee
the t
r
ust
t
o wh
i
c
h a
P
a
rticip
a
nt
m
a
y
a
t
te
mpt
to
a
ss
i
g
n r
i
g
hts und
e
r su
c
h
a
n A
w
a
rd d
o
e
s not me
e
t
the
c
rite
r
ia
o
f a
trust
t
o
w
hich
a
n
a
ss
i
g
nment is p
e
rmit
t
e
d
b
y
the t
e
rms h
e
r
e
o
f, or
if
a
ft
e
r
a
ss
i
g
nment,
b
eca
u
s
e
of
a
mendm
e
nt,
b
y
f
o
r
c
e
of
l
a
w or
a
n
y
ot
h
e
r
r
e
a
son
s
u
c
h trust no
l
on
g
e
r m
ee
ts
such
c
rite
r
ia, su
c
h
a
t
t
e
mp
t
e
d
a
ss
i
g
nment sh
a
ll
be
void
a
nd m
a
y
b
e
disr
e
g
a
rd
e
d
b
y
the Com
m
i
t
tee
a
nd the Co
m
p
a
n
y
a
nd
a
ll
r
i
g
hts
t
o
a
n
y
such
Options shall r
e
v
e
rt
to and r
e
main sol
e
l
y
with
t
he
Pa
rticip
a
nt. Notwi
t
hstanding
a
q
u
a
l
i
fi
e
d
a
ss
i
g
nment,
f
or
the purp
o
se
of d
e
t
e
rmining
c
ompens
a
t
i
on
a
rising
b
y
r
ea
son of the
Option,
t
he
P
a
rticip
a
nt, and not the t
r
ust
t
o whi
c
h ri
g
hts und
e
r
such
a
n Option
m
a
y
be
a
ss
i
g
n
e
d, shall
c
ont
i
nue
to be
c
ons
i
d
e
r
e
d
a
n
e
mp
l
o
y
e
e
o
r
c
o
nsultant,
a
s the
ca
se
m
a
y
b
e
, of the Comp
a
n
y
or
a
n A
f
filiat
e
, but su
c
h trust and the
P
a
rticip
a
nt shall be
bou
n
d
b
y
a
ll of
the t
e
rms
a
nd
c
ondi
t
i
o
ns of the
A
w
a
rd
A
g
re
e
m
e
nt and this
P
lan. Sha
re
s i
s
sued
in the n
a
me of
a
nd
d
e
l
i
v
e
re
d to su
c
h trust sh
a
ll
be
c
o
n
c
lus
i
v
e
l
y
c
onsi
d
e
r
e
d is
s
u
a
n
c
e
a
nd d
e
l
i
v
e
r
y
to
t
he
P
a
rti
c
ipant.
(
B
)
A Pa
r
t
i
c
ipant m
a
y
a
s
si
g
n or t
r
a
nsf
e
r
r
i
g
hts
und
e
r
a
n
A
w
a
rd
o
f R
e
stric
t
e
d
S
tock or
R
e
strict
e
d
S
tock
U
ni
t
s:
(1)
to a b
e
n
e
fi
c
i
a
r
y
d
e
s
i
gn
a
ted
b
y
the Pa
r
t
i
c
ipant
i
n w
r
i
t
ing
on a
fo
r
m
a
ppro
ve
d
b
y
the Comm
i
t
t
ee
;
(2)
b
y
will
or the
a
ppl
i
c
a
ble l
a
ws of
d
e
s
ce
nt and
d
is
t
ribution to
t
he
p
e
rson
a
l r
e
p
re
s
e
ntative,
e
x
ec
utor
or
a
dm
i
nis
t
r
a
tor of
the P
a
rticip
a
nt’s
e
stat
e
;
or
(3)
to a
re
v
o
ca
ble
g
ra
ntor
trust esta
b
l
i
shed
b
y
the
P
a
rticip
a
nt for
the sole b
e
n
e
fit of the
P
a
rtici
p
a
nt during
the P
a
rticip
a
nt’s l
i
f
e
,
a
nd und
e
r the
te
r
ms
o
f whi
c
h the Pa
r
t
i
c
ipant is
a
nd r
e
mains
the sole t
r
ust
e
e
unt
i
l de
a
th or p
h
y
sic
a
l
or ment
a
l
i
n
ca
p
ac
i
t
y
.
S
u
c
h
a
ss
i
g
nment sh
a
ll
be
e
f
f
e
c
ted
b
y
a
w
r
i
t
ten instrum
e
nt
i
n fo
r
m and
c
ontent s
a
t
i
s
f
a
c
to
r
y
to
t
he
Com
m
i
t
te
e
,
a
nd the Pa
r
t
i
c
ipant sh
a
ll
d
e
l
i
v
e
r to
t
he
Com
m
i
t
tee
a
true
c
o
p
y
of t
h
e
a
g
r
ee
ment or
o
ther
do
c
ument
e
vide
n
c
i
ng such
trust.
I
f in the
judg
m
e
nt of the Com
m
i
t
tee
the t
r
ust
t
o whi
c
h a
P
a
rti
c
ipant m
a
y
a
t
t
e
mpt
to assi
g
n r
i
ghts und
e
r su
c
h
a
n
A
w
a
rd
do
e
s not me
e
t
t
he
c
rit
e
ria
of a trust
t
o whi
c
h
a
n
a
ss
i
g
n
m
e
nt
i
s pe
r
m
i
t
t
e
d
b
y
the t
e
rms h
e
r
e
o
f
,
o
r if
a
ft
e
r
a
ss
i
g
nment, b
e
ca
use
o
f amendm
e
nt,
b
y
f
o
rce
of l
a
w or
a
n
y
other
r
e
a
son s
u
c
h trust no
l
on
g
e
r m
e
e
ts
s
u
c
h
c
rite
r
ia, su
c
h
a
t
t
e
mp
t
e
d
a
ss
i
g
nment sh
a
ll
be
void
a
nd m
a
y
b
e
disr
e
g
a
rd
e
d
b
y
t
h
e
Com
m
i
t
tee
a
nd the Comp
a
n
y
a
nd
a
ll
r
i
g
hts
t
o
a
n
y such
A
wa
rds s
h
a
ll
r
ev
e
rt to
a
nd r
e
main sol
e
l
y
with
the Pa
r
t
i
c
ipant. Notwithstanding
a
qu
a
l
i
f
i
e
d
a
ss
i
g
n
m
e
nt, for
the p
u
rpose
of d
e
t
e
rmining
c
ompens
a
t
i
on
a
risi
n
g
b
y
r
e
a
son of the
A
w
a
rd, the
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
9
|
P
a
rticip
a
nt, and not the t
r
ust to which
r
i
g
hts und
e
r su
c
h
a
n A
w
a
rd m
a
y
be
a
ss
i
gn
e
d, sh
a
l
l continue to be
c
onsid
e
r
e
d
a
n
e
mp
l
o
y
e
e
or
c
onsultant,
a
s the
c
a
se
m
a
y
b
e
, of the
Compa
n
y
or
a
n A
f
filiat
e
, but su
c
h trust
a
nd the Pa
r
t
i
c
ipant sh
a
ll
be
bound
b
y
a
ll
of the
te
r
ms and
c
ondi
t
ions of the
A
wa
rd
Ag
ree
ment
a
nd th
i
s
P
lan. Sha
re
s i
s
sued
in
t
he
n
a
m
e
of
a
nd d
e
l
i
v
e
r
e
d to s
u
c
h tr
u
st
s
h
a
ll
be
c
on
c
lus
i
v
e
l
y
c
onsid
e
r
e
d is
s
u
a
n
c
e
a
nd d
e
l
i
v
e
r
y
to
t
he
P
a
rticip
a
n
t.
(iii)
The
Com
m
i
t
te
e
, the Comp
a
n
y
a
nd i
t
s of
f
i
ce
r
s
,
a
g
e
nts and
e
mp
l
o
y
e
e
s
m
a
y
r
e
l
y upon
a
n
y
b
e
n
e
fi
c
ia
r
y
d
e
si
g
n
a
t
i
on,
a
ss
i
g
nment or
o
ther
ins
t
rum
e
nt of
tr
a
ns
f
e
r,
c
opies of
trust
a
g
ree
m
e
nts and
a
n
y
oth
e
r do
c
uments d
e
l
i
v
e
r
e
d to
t
h
e
m
b
y
or on
b
e
h
a
lf of
t
he
P
a
rticip
a
nt whi
c
h th
e
y
b
e
l
i
e
ve
g
e
nu
i
ne
a
nd
a
n
y
ac
t
i
on tak
e
n
b
y
them in r
e
l
i
a
n
c
e
th
e
r
e
o
n sh
a
ll
be
c
on
c
lus
i
ve
a
nd bind
i
n
g
u
pon the Pa
r
t
i
c
ipant,
a
n
y
t
rust
ee
,
the p
e
rson
a
l r
e
p
res
e
ntatives of
the
P
a
rticip
a
nt’s
e
state
a
nd
a
ll
p
e
rsons
a
sse
r
t
i
n
g
a
c
l
a
im
b
a
s
e
d on
a
n A
w
a
rd.
T
he
d
e
l
i
v
e
r
y
b
y
a
P
a
rticip
a
nt of a
b
e
n
e
fi
c
i
a
r
y
d
e
si
g
n
a
t
i
on, or
a
n
a
ss
i
g
nment of
ri
g
hts und
e
r an A
wa
rd
a
s p
e
rmit
t
e
d h
e
r
e
un
d
e
r, sh
a
l
l constitu
t
e
t
h
e
P
a
rticip
a
nt’s ir
re
vo
c
a
ble und
e
r
t
a
king
to ho
l
d the Com
m
i
t
te
e
, the Comp
a
n
y
a
nd i
t
s o
f
fi
ce
rs,
a
g
e
nts
a
nd
e
mp
l
o
y
e
e
s h
a
rml
e
ss
a
g
a
inst
c
laims, including
a
n
y
c
ost or
e
x
p
e
nse in
c
u
r
r
e
d in de
f
e
ndi
n
g
a
g
a
inst
c
laims, of
a
n
y
p
e
rson (in
c
lud
i
ng
the P
a
rticip
a
nt)
w
hich
m
a
y
be
a
sse
r
ted
or
a
l
le
g
e
d to be
b
a
s
e
d on
a
n A
w
a
rd subj
ec
t
t
o a
b
e
n
e
fi
c
ia
r
y
d
e
si
g
n
a
t
i
on or
a
n
a
ss
i
g
n
m
e
nt.
I
n
a
ddi
t
ion,
t
he
Compa
n
y
m
a
y d
ec
l
i
ne
to deliver
S
h
a
r
e
s
to a b
e
n
e
fi
c
i
a
r
y
, h
e
ir
o
r t
r
ustee
unt
i
l
i
t r
ece
ives in
d
e
mn
i
t
y
a
g
a
inst
c
laims of third p
a
rties sa
t
isf
ac
to
r
y
to
t
he
Compa
n
y
.
(
e
)
Share
C
e
rt
i
f
i
c
ates.
A
l
l c
e
rtifi
ca
tes
fo
r
, or
o
t
h
e
r
ind
i
c
ia o
f
,
S
h
a
r
e
s or ot
h
e
r s
ec
u
r
i
t
ies d
e
l
i
v
e
r
e
d und
e
r the
P
lan
pursu
a
nt
t
o
a
n
y
A
w
a
rd or
the
e
x
e
r
c
ise th
e
r
e
of
shall
be
subj
ec
t
t
o su
c
h stop
t
r
a
nsf
e
r o
r
d
e
rs
a
nd
o
ther
re
stri
c
t
i
ons
a
s the C
o
m
m
i
t
tee
m
a
y
d
e
e
m advi
s
a
ble und
e
r the
P
lan or
the
r
ules,
re
g
ulations
a
nd other
re
qui
r
e
ments of
the Se
c
u
r
i
t
ies
a
nd E
x
c
h
a
n
g
e
Com
m
is
s
ion, a
n
y stock
e
x
c
h
a
nge
upon wh
i
c
h su
c
h
S
h
a
r
e
s
o
r oth
e
r
s
ec
u
r
i
t
ies
a
r
e
then listed
a
nd
a
n
y
a
ppl
i
ca
ble f
e
d
e
r
a
l or state
s
ec
u
r
i
t
ies
la
w
s, and
the Comm
i
t
t
e
e
m
a
y
ca
use
a
l
e
g
e
nd
o
r l
e
g
e
nds to
b
e
put on
a
n
y
s
u
c
h
c
e
rtifi
ca
tes to
m
a
ke
a
ppro
p
ri
a
te
r
e
f
e
r
e
n
c
e
to su
c
h r
e
strictions.
(f
)
Change
in
C
ontro
l
. The vesting and payment terms applicable to an Award following a Change in Control, if any, shall be determined by the Committee at the time the Award is granted and shall be specified in the applicable Award Agreement.
(g)
Cash S
e
t
t
le
me
nt.
No
t
withstanding
a
n
y
pro
v
is
i
on of
th
i
s
P
lan or
of
a
n
y
A
wa
rd Ag
ree
ment to
t
he
c
ontr
a
r
y
,
but subject to provisions of Section 409A of the Code,
a
n
y
A
w
a
rd o
u
ts
t
a
nding
h
e
r
e
und
e
r m
a
y
a
t
a
n
y
t
i
me be
ca
n
ce
l
l
e
d in
t
he Com
mi
t
t
ee
’s sole dis
c
r
e
t
i
on upon p
a
y
m
e
nt of the
v
a
lue of
such
A
w
a
rd to
t
he
holder
the
r
e
of
in
ca
sh or in
a
noth
e
r
A
w
a
rd
h
e
r
e
und
e
r, su
c
h
v
a
lue to be
d
e
te
r
m
i
n
e
d
b
y
the C
o
m
m
i
t
tee
in
i
ts
s
ole disc
re
t
i
on.
(h)
R
e
pricing.
E
x
ce
pt in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of outstanding awards may not be amended to reduce the exercise price of outstanding Options or Stock Appreciation Rights or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other awards or Options or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Options or Stock Appreciation Rights without stockholder approval.
(i)
Cla
w
ba
c
k
Upon
Re
st
a
te
me
nt.
I
n the
e
v
e
nt
t
he
Compa
n
y
h
a
s
a
re
sta
t
e
ment of
i
t
s fin
a
n
c
ial stat
e
ments, other
than
a
s
a
re
sult
of
c
h
a
n
g
e
s to
a
c
c
ount
i
ng
r
ules
a
nd
re
g
ula
t
ions, the Comm
i
t
t
e
e shall h
a
ve
the dis
c
r
e
t
i
on
a
t a
n
y
t
i
me
(
notwi
t
hstanding
a
n
y
e
x
pir
a
t
i
on of
th
i
s
P
lan or
of the
r
i
g
hts or
obl
i
g
a
t
i
ons oth
e
r
w
i
s
e
a
rising
h
e
r
e
un
d
e
r)
to
r
e
q
uire
a
n
y
P
a
rticip
a
nt
to
r
e
turn
a
ll
ca
sh or Sh
a
r
e
s whi
c
h he
m
a
y
h
a
v
e
a
c
quir
e
d (or
whi
c
h he
is d
e
e
med to h
a
ve
a
c
quir
e
d
)
a
s a
r
e
sult
of
a
n
y
P
e
r
f
o
r
man
c
e
A
w
a
rd p
a
y
ment or
a
s a
r
e
sult
of the
s
a
le of
S
h
a
r
e
s
whi
c
h m
a
y
h
a
ve
v
e
sted un
d
e
r
a
n
y
A
w
a
rd,
a
nd to w
a
i
v
e
,
f
o
r
f
e
it
a
nd s
u
r
re
n
d
e
r to
the Comp
a
n
y
the
ri
g
ht
t
o
a
n
y
u
n
r
e
a
l
iz
e
d
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
10
|
P
e
r
f
o
r
man
c
e
A
w
a
rd p
a
y
ments
a
nd to all unso
l
d v
e
sted Sh
a
r
e
s
a
nd
a
ll
unv
e
sted Sh
a
r
e
s made und
e
r
a
n
y
A
w
a
rd
(
w
h
e
t
h
e
r or
not su
c
h
P
a
rtici
p
a
nt
ma
y
then
b
e
a
n
e
mp
l
o
y
e
e
,
c
onsultant or dir
ec
tor of
the Comp
a
n
y
or
a
n
y
of its
af
filiat
e
s, a
n
d wh
e
ther
or n
o
t s
u
c
h
Pa
rticip
a
nt’s or
a
n
y other
p
e
rson
’
s m
i
s
c
ond
u
c
t
ma
y
h
a
ve
ca
used
s
u
c
h
r
e
stat
e
ment
)
,
p
rovid
e
d t
h
a
t such p
a
y
ment or ri
g
ht
t
o p
a
y
ment or
A
wa
r
d w
a
s earn
e
d, p
a
id
o
r
g
ranted du
r
ing
the t
h
r
e
e
-
y
e
a
r p
e
riod p
r
e
ce
di
n
g the d
a
te of
r
e
s
t
a
tem
e
nt of
such
re
stat
e
d
fin
a
n
c
ial
re
sul
t
s and
pro
v
ided,
f
u
r
th
e
r, th
a
t a
n
y
such r
e
c
ov
e
r
y
shall be
o
f
fs
e
t
b
y
r
ec
ov
e
r
y
othe
r
wi
s
e
obtain
e
d h
e
r
e
und
e
r.
T
h
e
C
o
m
m
i
t
tee
re
tains disc
re
t
i
on re
g
a
rdi
n
g
the
a
ppl
i
ca
t
i
on of
these
pro
v
i
s
ion
s
.
S
ECTI
O
N 8. A
m
e
n
d
me
n
t and
T
er
m
i
n
a
t
io
n
.
E
x
ce
pt
t
o the
e
x
tent p
r
o
h
ib
i
ted
b
y
a
ppl
ic
a
ble l
a
w
a
nd unless othe
r
wise
e
x
p
re
ss
l
y
p
rovid
e
d in an
A
w
a
rd
A
g
re
e
ment
or
in
t
he
P
lan:
(
a
)
A
m
e
ndm
e
nts
t
o the
P
l
an.
The
B
o
a
rd m
a
y
a
m
e
n
d the P
l
a
n
a
nd the
B
o
a
rd
or
the Com
m
i
t
tee
m
a
y
a
mend
a
n
y
outs
t
a
nd
i
n
g
A
w
a
rd;
p
rovid
e
d, how
eve
r,
that:
(
I)
no
P
lan
a
mendm
e
nt shall be
e
f
f
e
c
t
i
ve
unt
i
l app
r
ov
e
d
b
y
s
t
o
c
kholde
r
s of the
Comp
an
y
(
i)
if
a
n
y stockhold
e
r
a
ppro
v
a
l
t
h
e
r
e
of
is r
e
qui
r
e
d in ord
e
r
f
or
the P
l
a
n to continue to s
a
t
i
s
f
y
the
c
ondi
t
ions of the
a
ppl
i
c
a
ble
r
ul
e
s and
re
g
ulations that the Comm
i
t
t
e
e
h
a
s det
e
rmin
e
d to be n
ece
ss
a
r
y
to comp
l
y
with, and
(
i
i
)
if su
c
h
P
lan
a
m
e
ndment would mat
e
ri
a
l
l
y
(
A)
inc
r
ea
se
t
h
e number
of Sh
a
r
e
s av
a
i
l
a
b
le und
e
r the
P
lan or
is
s
u
a
ble to a
P
a
rticip
a
nt (other
than a
c
h
a
n
ge
in the numb
e
r
of
S
h
a
r
e
s m
a
de
in conn
ec
t
i
on with an
e
v
e
nt des
c
rib
e
d in
S
ec
t
i
o
n
4
(c
) her
e
o
f
), (
B
)
c
h
a
n
g
e
t
h
e
t
y
p
e
s of
A
wa
rds th
a
t
m
a
y
b
e
g
r
a
n
ted und
e
r the
P
lan,
(
C)
e
x
p
a
nd the
c
lass of p
e
rsons
e
l
i
g
ib
l
e
to r
e
c
e
i
v
e
A
w
a
rds und
e
r the
P
lan,
or
(
D)
di
r
ec
t
l
y
or indir
ec
t
l
y
(
incl
u
di
n
g throu
g
h
a
n
e
x
c
h
a
n
g
e
of
u
nd
e
r
wa
t
e
r options or SARs for
ca
sh or oth
e
r
A
w
a
rds)
r
e
d
u
c
e
the p
r
ice
a
t which
a
n Option
or
S
tock
A
ppr
e
c
i
a
t
i
on R
i
g
ht
i
s e
x
e
r
c
isable
(oth
e
r
t
h
a
n in conn
ec
t
i
on with an
e
v
e
nt des
c
rib
e
d
i
n
S
ec
t
i
on
4
(c
) her
e
of
o
r the
gr
a
nt
i
n
g
of a
S
u
bst
i
tu
t
e
A
w
a
rd
)
,
a
nd
(
I
I
) without
the
c
onse
n
t of
a
f
f
e
c
ted P
a
rticip
a
nts, no
a
m
e
ndment of
the P
l
a
n or
(
o
ther
than
a
s
re
qui
r
e
d h
e
r
e
in) of
a
n
y
A
w
a
rd
m
a
y
i
m
p
a
ir the
r
i
g
hts of
P
a
rti
c
ipants und
e
r outs
t
a
nding
A
w
a
rds.
(b)
W
aiv
e
rs.
T
h
e
Com
m
i
t
tee
m
a
y
waive
a
n
y
c
on
d
i
t
ions
t
o the Compa
n
y
’s
obl
i
g
a
t
i
ons or
r
i
g
hts of t
h
e
Compa
n
y
und
e
r
a
n
y
A
w
a
rd th
e
r
e
t
o
fo
r
e
g
r
a
nted, p
r
os
p
ec
t
i
v
e
l
y
or r
e
tro
a
c
t
i
v
e
l
y
,
without
the
c
onse
n
t of
a
n
y
Pa
rticip
a
nt.
(
c
)
Adjus
t
m
e
nts of
Awards Upon the
Occ
ur
r
e
n
c
e
o
f
C
e
rta
i
n Unusual or
N
o
nr
e
c
urr
i
ng E
ve
nts.
The
Com
m
i
t
tee
shall be
a
uthori
z
e
d to
m
a
ke
a
djus
t
ments in the t
e
rms
a
nd
c
ondi
t
ions o
f
,
a
nd the
c
rite
r
ia in
c
lu
d
e
d in, Aw
a
rds in
r
ec
o
g
ni
t
ion of unusu
a
l or non
r
ec
u
r
ring
e
v
e
nts (in
c
lud
i
n
g
, without
l
i
m
i
tation,
t
he
e
v
e
nts des
c
rib
e
d in
S
ec
t
i
on
4
(c
)
h
e
r
e
o
f
)
a
f
f
e
c
t
i
ng
t
h
e Compa
n
y
,
a
n
y
A
f
filiat
e
,
or
the
f
inan
c
i
a
l s
t
a
tem
e
n
t
s of the
Compa
n
y
o
r
a
n
y
A
f
filiat
e
, or
o
f
c
h
a
n
g
e
s in appli
c
a
ble l
a
ws,
r
e
g
ulations, or a
cc
o
u
nt
i
ng
prin
c
ip
l
e
s, w
h
e
n
e
v
e
r the
Com
m
i
t
tee d
e
te
r
m
i
n
e
s that such
a
dj
u
st
m
e
nts a
r
e
a
ppro
p
ri
a
te
i
n
o
r
d
e
r to p
r
e
v
e
nt d
i
lu
t
ion or
e
nla
r
g
e
ment of
the b
e
n
e
fits or pot
e
nt
i
a
l ben
e
fits
t
o be
ma
d
e
a
v
a
i
l
a
ble und
e
r the
P
lan;
p
r
o
v
ided, how
eve
r,
no su
c
h
a
djus
t
ment sh
a
ll
be
made
to an
A
w
a
rd
g
r
a
nted und
e
r Se
c
t
i
on
6
(
e
)
(
i
i
i
) if
the Com
m
i
t
tee
in
t
e
nds such
A
w
a
rd to
c
ons
t
i
t
ute
“
q
u
a
l
i
fi
e
d p
e
r
f
o
r
m
a
n
c
e
-
b
a
s
e
d
c
ompens
a
t
i
on” unless su
c
h
a
djus
t
ment is p
e
rmit
t
e
d und
e
r Se
c
t
i
on
162(m)
of the
Cod
e
.
S
ECTI
O
N 9. Co
rrec
ti
o
n
of
D
e
f
ec
ts, O
m
is
s
io
n
s, a
n
d
I
n
c
o
n
s
i
st
e
n
c
ies.
The
Com
m
i
t
tee
m
a
y
c
o
r
r
ec
t a
n
y
d
e
f
e
c
t, supp
l
y
a
n
y
om
i
ss
i
on or
r
e
c
on
c
i
le
a
n
y
inconsis
t
e
n
c
y in
t
he
P
lan or
a
n
y
A
w
a
rd
in
t
he
mann
e
r
a
nd to
t
he
e
x
tent it
shall de
e
m desir
a
ble to
e
f
f
ec
tuate
t
h
e
P
lan.
S
ECTI
O
N 10.
G
e
n
er
al
P
r
ovis
i
o
n
s.
(
a
)
No Rights to A
w
ards.
No Pa
r
t
i
c
ipant or
other
p
e
rson sh
a
ll
h
a
ve
a
n
y
c
la
i
m
t
o be
g
r
a
nted
a
n
y
A
w
a
rd u
n
d
e
r the
P
l
a
n,
a
nd the
r
e
is no obl
i
g
a
t
i
on f
o
r uni
f
o
r
m
i
t
y
o
f t
r
e
a
t
m
e
nt of P
a
rticip
a
nts or
holde
r
s or b
e
n
e
fi
c
i
a
ri
e
s of
A
w
a
rds un
d
e
r the
P
l
a
n. The
te
r
ms and
c
ondi
t
ions of
A
w
a
rds
o
f the s
a
me
t
y
p
e
a
nd the
d
e
te
r
m
ination of the
Com
m
i
t
tee
to
g
r
a
nt
a
w
a
iv
e
r
or
mo
d
ific
a
t
i
on of
a
n
y A
wa
rd
a
nd the t
e
rms
a
nd
c
ondi
t
ions
t
h
e
r
e
of
n
e
e
d
not be the
same
with r
e
s
p
ec
t
t
o
e
a
c
h
P
a
rticip
a
nt.
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
11
|
(b)
W
i
t
hhold
i
ng.
The
Compa
n
y
or
a
n
y
A
f
filiate
s
h
a
ll
be
a
uthori
z
e
d to wi
t
hhold f
r
om a
n
y A
wa
rd
g
r
a
nted or
a
n
y
p
a
y
m
e
nt due
o
r t
ra
ns
f
e
r
m
a
de
und
e
r
a
n
y
A
w
a
rd or
u
nd
e
r the
P
lan the
a
mount
(
in c
a
sh,
S
h
a
r
e
s,
other
se
c
u
r
i
t
ies, oth
e
r
A
w
a
rds or
oth
e
r p
r
op
e
r
t
y
)
of
withho
l
ding
ta
x
e
s due
(limited to the minimum statutory amount)
in r
e
sp
e
c
t of
a
n
A
w
a
rd, its e
x
e
r
c
ise or
a
n
y
p
a
y
m
e
nt or t
r
a
nsf
e
r un
de
r
s
u
c
h A
w
a
rd or
und
e
r the P
l
a
n
a
nd to
t
a
ke
such
other
ac
t
i
on
a
s m
a
y
b
e
n
e
ce
ssa
r
y
in
t
he
opin
i
on of
the Comp
a
n
y
or A
f
filiate
to satis
f
y
a
ll
obl
i
g
a
t
i
ons for
the
p
a
y
ment
of
such
ta
x
e
s.
(
c
)
No
L
imit
on Oth
e
r
C
omp
e
nsation Arrange
me
n
t
s.
Nothing
c
ontain
e
d in
t
he
P
lan sh
a
ll p
re
v
e
nt
t
he
Compa
n
y
or
a
n
y
A
f
fili
a
te
f
rom
a
dopt
i
ng
or
c
ont
i
nuing
in
e
f
f
e
c
t o
t
h
e
r or
a
ddi
t
ional
c
ompens
a
t
i
on
a
r
r
a
n
g
e
m
e
nts,
i
n
c
lud
i
ng
the
g
r
a
nt
o
f options and oth
e
r sto
c
k
-
b
a
s
e
d
a
w
a
rds,
a
nd such
a
r
r
a
n
g
e
ments m
a
y
b
e
e
i
t
h
e
r
g
e
n
e
r
a
l
l
y
a
ppl
ica
ble or
a
ppl
i
ca
ble on
l
y
in
spe
c
ific c
a
s
e
s.
(d)
No Right
t
o E
m
ploy
me
nt or S
e
r
v
ic
e
.
T
h
e
g
r
a
nt of
a
n A
w
a
rd sh
a
ll
not be
c
onstru
e
d
a
s
g
iv
i
n
g
a
P
a
rticip
a
nt
t
he
ri
g
ht
t
o be
r
e
tain
e
d in
t
he
e
mp
l
o
y
or s
e
rvi
c
e
of t
h
e
Compa
n
y
o
r
a
n
y A
f
filiat
e
.
F
u
rth
e
r, the
C
o
mpa
n
y
or
a
n A
f
filiate
m
a
y
a
t
a
n
y
t
i
me dismiss
a
Pa
rticip
a
nt
f
r
om
e
mp
l
o
y
ment or
s
e
rvi
ce
,
f
r
e
e
f
rom
a
n
y
l
i
a
bi
l
i
t
y
, or
a
n
y
c
laim under
the P
l
a
n,
unless othe
r
wise
e
x
p
re
ss
l
y
pro
v
ided in the
P
lan or
in a
n
y
A
wa
rd
A
g
r
ee
ment or
in
a
n
y
other
a
g
ree
m
e
nt b
i
nding
the p
a
rties.
(
e
)
G
o
ve
rning
L
aw.
The
v
a
l
i
di
t
y
,
c
onstru
c
t
i
on
a
nd
e
f
f
e
c
t of the
P
lan
a
nd
a
n
y
rul
e
s
a
nd re
g
ulations
re
lati
n
g
to
t
he
P
lan sh
a
ll
be
d
e
te
r
m
i
n
e
d in a
cc
o
r
d
a
n
c
e
with
t
he
la
w
s of the
S
tate
of
F
lorida (without regard to any state’s conflict of laws principles)
and
a
ppl
i
ca
ble
F
e
d
e
r
a
l
l
a
w. Any legal action related to this Plan shall be brought only in a federal or state court located in Florida.
(f
)
S
e
ve
rabil
i
ty.
I
f
a
n
y
p
r
ovis
i
on of
the P
l
a
n or
a
ny
A
w
a
rd is or
b
ec
omes
o
r is d
ee
med
to be invalid,
i
l
l
e
g
a
l or un
e
n
fo
r
cea
ble in
a
n
y
jurisd
i
c
t
i
on or
a
s to a
n
y
p
e
rson or
A
w
a
rd, or
would disqu
a
l
if
y
the P
l
a
n or
a
n
y
A
w
a
rd u
n
d
e
r
a
n
y
l
a
w
d
ee
med
a
ppl
ic
a
ble
b
y
the
Com
m
i
t
te
e
, such p
r
ovis
i
on sh
a
ll
be
c
onstru
e
d or
dee
m
e
d
a
men
d
e
d
to con
f
o
r
m
t
o
a
ppl
i
c
a
ble
la
w
s, or if
it
ca
nnot be so c
o
nstru
e
d or
d
e
e
med
a
mend
e
d withou
t
, in
t
he
d
e
te
r
m
i
n
a
t
i
on of
the Comm
i
t
t
ee
, mat
e
ri
a
l
l
y
a
l
t
e
ring
t
h
e
in
t
e
nt of the
P
lan or
the
A
w
a
rd, s
u
c
h
p
r
ovis
i
on sh
a
ll
be
strick
e
n
a
s to
s
u
c
h jurisd
i
c
t
i
on, p
e
rson or
A
w
a
rd,
a
nd the
r
e
main
d
e
r
of
the P
l
a
n
a
nd
a
n
y
such
A
wa
rd sh
a
ll
r
e
main in full fo
rc
e
a
nd
e
f
f
e
c
t.
(g)
No
T
rust
or Fund
Cr
e
ated.
N
e
i
t
h
e
r the
P
lan n
o
r
a
n
y
A
w
a
rd sh
a
ll
c
r
ea
te
or
be
c
onstrued to c
rea
te
a
trust or s
e
p
a
rate
f
und of
a
n
y
kind or
a
f
iduci
a
r
y
re
l
a
t
i
onship b
e
tw
ee
n the Compa
n
y
or
a
n
y
A
f
filiate
a
nd a
P
a
rti
c
ipant or
a
n
y
other
p
e
rso
n
. To the
e
x
tent that
a
n
y
p
e
rson
ac
qui
r
e
s a
r
i
g
ht to r
ece
ive
p
a
y
ments f
r
om
the Comp
a
n
y
or
a
n
y
A
ff
i
l
iate
pursu
a
nt
t
o
a
n A
w
a
rd, su
c
h r
i
g
ht shall be no
g
r
ea
t
e
r th
a
n the
r
i
g
ht
of
a
n
y
uns
ec
u
r
e
d
g
e
n
e
r
a
l c
re
d
i
t
or
of the
Compa
n
y
or
a
n
y
A
f
filiat
e
.
(h)
No Fra
c
t
i
onal Shar
e
s.
No
f
ra
c
t
i
on
a
l
S
h
a
r
e
s s
h
a
ll
be
is
s
u
e
d or
de
l
i
v
e
r
e
d
pursu
a
nt
t
o the
P
lan or
a
n
y
A
w
a
rd,
a
nd
t
he
Com
m
i
t
tee
shall det
e
r
m
i
ne
wh
e
ther
c
a
sh, oth
e
r
se
c
u
r
i
t
ies, or
other p
r
op
e
r
t
y
shall be
pa
id
o
r
tr
a
n
s
f
e
r
r
e
d in
l
ieu of
a
n
y
f
rac
t
i
on
a
l
S
h
a
r
e
s, or
w
h
e
ther
such
f
r
ac
t
i
on
a
l
S
h
a
r
e
s or
a
n
y
ri
g
hts
t
h
e
reto shall be
ca
n
c
e
l
l
e
d, te
r
m
i
n
a
ted or
othe
r
wise
e
l
i
m
i
n
a
ted.
(i)
H
e
adings.
H
e
a
di
n
g
s
a
re
g
iven to the Se
c
t
i
ons
a
nd subse
c
t
i
ons of the
P
lan sole
l
y
a
s
a
c
onv
e
nien
c
e
t
o fa
c
i
l
i
t
a
te
re
fer
e
n
c
e
.
S
u
c
h h
e
a
din
g
s
shall not be
d
ee
med in
a
n
y
w
a
y
mat
e
ri
a
l
o
r r
e
lev
a
nt
t
o the
c
onstr
u
c
t
i
on or
in
t
e
rp
re
tation of t
h
e
P
lan or
a
n
y
pro
v
is
i
on the
re
o
f
.
S
ECTI
O
N 11. T
er
m
.
The
P
lan sh
a
ll
be
restated e
f
f
e
c
t
i
v
e
a
s of the
d
a
te of
i
t
s ap
p
rov
a
l
b
y
t
h
e
C
ompa
n
y
’s
stockhold
e
rs
a
nd no A
wa
rds sh
a
ll
be
m
a
de
und
e
r the
P
lan
ten years after the restatement date
.
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
12
|
TOPBUILD CORP.
NON-EMPLOYEE DIRECTORS EQUITY PROGRAM UNDER THE 2015 LONG TERM STOCK INCENTIVE PLAN
Amended and Restated Effective [insert date], 2016
For
purposes
of
the
TopBuild
Corp.
(the
“Company”
)
Non-Employee
Directors
Equity Program
(the
“Program”),
an
“Eligible
Director”
is
any
director
of
the
Company
who
is
not
an employee
of
the
Company
and
who
receives
a
fee
for
services
as
a director.
Terms
not
defined herein
have
the
meaning
given
to
them
in
the
Company’s 2015
Long
Term
Stock
Incentive Plan
,
as
amended
from
time
to
time
(the
“
Plan”).
Section
1. Restricted
Stock
Award
(a)
(i)
Eligibility
for
Award
.
Effective
on
July
1,
2015
(the
“Effective
Date”
),
and thereafter
on
the
date
of
each
of
the
Company’s annual
stockholders’
meetings
(the
“Annual Meeting”),
each
person
who
is
or
becomes
an
Eligible
Director
on
the
Effective
Date
or
at
such
Annual
Meetings
shall
be
granted
an
Award
of Restricted
Stock.
(ii)
Amount
of
Award
.
The
amount
of the
Award
of Restricted
Stock
shall
be
equal
to
one-half
of
the
annual
retainer
then
paid
to
non-employee
directors
as
compensation
for their
service
as
a
director,
rounded
to
the
nearest
ten
Shares
and
disregarding
any
retainer
provided
as
compensation
for
service
on
a
Board
committee,
or
as
Chair
of
a
Board
committee
or
the
Board (if
awarded
at
the
Effective
Date,
the
“Initial
Award”
and
if
awarded
at
an
Annual
Meeting,
the
“Annual
Retainer”).
If
an
Eligible
Director
begins
serving
as
a
director
other
than
as
of
the
Effective
Date
or
as
of
the
date
of
an
Annual
Meeting,
Awards
of
Restricted Stock granted hereunder shall be granted on the date of the meeting of the Corporate
Governance
and
Nominating
Committee
that
takes
place
on
or
after
such
Eligible
Director
is first
elected
or
appointed
to
the
Board,
and
such
Awards
shall
be
pro-rated
to
reflect
the
partial service
to
be
provided
by
such
Eligible
Director
in
the
period
between
Annual
Meetings.
(iii)
Adjustment
to
Amount
or
Terms
of
Award
.
The
Board
shall
have
sole
discretion
to
adjust
the
amount
of
the
Initial
Award
or
the
Annual
Retainer
to
be
paid
in
the for
m
of
Shares
and
the
terms
of
any
such
Award
of
Shares.
Except
as the
Board
may
otherwise
determine,
any
increase
or
decrease
in
an
Eligible
Director’s Initial
Award
or
the
Annual
Retainer
during
a
period
with
respect
to
which
such
Eligible
Director
has
already
been
granted an
Award
of Restricted
Stock
shall
be
implemented
by increasing
or
decreasing
the
cash
portion of
such
Eligible
Director’s
Annual
Retainer; provided that any such increase or decrease shall comply with Section 409A of the Code and regulations thereunder to the
extent an Award constitutes “deferred compensation” within the meaning of Section 409A of the Code
.
(b)
Each
Award
of
Restricted
Stock
granted hereunder
shall
vest
on
such
schedule
as
determined
by
the
Board
at
the
time
the
Award
is
granted. The applicable Award Agreement shall set forth vesting conditions as well as such other terms and conditions applicable to the Award as shall be determined by the Board in its discretion, including provisions applicable upon the termination of the Eligible Director’s term of service as a director.
(c)
The
price
of
the
Shares
used
in
determining
the
number
of
Shares
subject
to
an Award
of Restricted
Stock
granted
hereunder
shall
be
calculated
in
accordance
with
the
Company’s
pricing
policy
or,
if
a
pricing
policy
has
not
been
adopted
by
the
Company,
shall
be the
fair
market
value
of
the
Shares
as
determined
by
the
Board
on
the
effective
grant
date
of
suc
h
Award.
(d)
Each
Eligible
Director
shall
be
entitled
to
vote
and
receive
dividends
on
the
Share
s
subject
to
the
Award
of
Restricted
Stock,
but
will
not
be
able
to
obtain
a
stock
certificate
or
sell,
encumber
|
|
|
TopBuild Corp
. -
Proxy Statement
-
A-
13
|
or
otherwise
transfer
such
Shares
of
Restricted
Stock
except
in
accordance with
the
terms
of
the
Plan.
Section
2.
Non-Compete
Provision
Each
Award
of Restricted Stock
granted
hereunder
shall
contain
a
provision
whereby
the
Award
holder
shall
agree,
in
consideration
for
the
Award
and
regardless
of
whether
restrictions
on
Shares
of Restricted
Stock
have
lapsed,
as
follows:
(a)
While
the
holder
is a
director
of
the
Company
and
for
a
period
of
one
year
following
the
later
of
the
last
date
of
vesting
of
any
Shares
or
the
termination
of
such
holder’s
term
as
a
director
of
the
Company,
other
than
a
termination
following
a
Change
in
Control,
the
Award
holder
shall
agree
not
to
engage
in,
and
not
to
become
associated
in
a
“Prohibited
Capacity”
(as
hereinafter
defined)
with any
other
entity
engaged
in,
any
‘‘Business
Activities”
(as
hereinafter
defined)
and
not
to
encourage
or
assist
others
in
encouraging
any
employee
of
the
Company
or
any
of
its
subsidiaries
to
terminate
employment
or
to
become
engaged
in
any
such
Prohibited
Capacity
with
an
entity
engaged
in
any
Business
Activities.
“Business
Activities”
shall
mean
the
design,
development,
manufacture,
sale,
marketing
or
servicing
of
any
product,
or
providing
of
services
competitive
with
the
products
or
services,
of
the
Company
or
any
subsidiary
at
any
time
while
the
Award
is
outstanding,
to
the
extent
that
such
competitive
products
or
services
are
distributed
or
provided
either
(1)
in
the
same
geographic
area
as
are
such
products
or
services
of the
Company
or
any
of
its
subsidiaries
or
(2)
to
any
of the
same
customers
as
such
products
or
services
of the
Company
or
any
of
its
subsidiaries
are
distributed
or
provided.
“Prohibited
Capacity”
shall
mean
being
associated
with
an
entity
as
a
director,
employee,
consultant,
investor
or
in
another
capacity
where
(1)
confidential
business
information
of the
Company
or
any
of
its
subsidiaries
could
be
used
in
fulfilling
any
of the
holder’s
duties
or
responsibilities
with
such
other
entity,
or
(2)
an
investment
by
the
Award
holder
in
such
other
entity
represents
more
than
1%
of
such
other
entity’s capital
stock,
partnership
or
other
ownership
interests.
(b)
Should
the
Award
holder
breach
any
of
the
restrictions
contained
in
the
preceding
paragraph,
by
accepting
an
Award,
the
Award
holder
shall
agree,
independent
of
any
equitable
or
legal
remedies
that
the
Company
may
have
and
without
limiting
the
Company’s
right
to
any
other
equitable
or
legal
remedies,
to
pay
to
the
Company
in
cash
immediately
upon
the
demand
of
the
Company
(1)
the
amount
of
income
realized
for
income
tax
purposes
from
the
Award,
net of
all
federal,
state
and
other
taxes
payable
on
the
amount
of
such
income,
but
only
to
the
extent
that
such
income is realized from restrictions lapsing on Shares or exercises occurring, as the case may be, on or after the termination of the Award
holder’s
term
as
a
director
of
the
Company
or
within
the
two-year
period
prior
to
the
date
of
such
termination,
plus
(2)
all
costs
and
expenses
of
the
Company
in
any
effort
to
enforce
its
rights
under
this
or
the
preceding
paragraph.
The
Company
shall
have
the
right
to
set
off
or
withhold
any
amount
owed
to
the
Award
holder
by
the
Company
or
any
of
its subsidiaries
or
affiliates
for
any
amount
owed
to
the
Company
by
the
Award
holder
hereunder.
Section
3.
Termination, Modification
or
Suspension
The
Board
may
terminate, modify
or
suspend
the
Program
at any
time
as
it
may
deem
advisable.
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TopBuild Corp
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Proxy Statement
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A-
14
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ADMISSION TO THE 2016 ANNUAL MEETING
You will need an admission card (or other proof of stock ownership) and proper identification for admission to the Annual Meeting of Stockholders at the Hyatt Regency Orlando International Airport, 9300 Jeff Fuqua Boulevard, Orlando, Florida 32827 on May 2, 2016. If you plan to attend the Annual Meeting, please be sure to request an admittance card by:
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if you requested to receive printed proxy materials, marking the appropriate box on the proxy card and mailing the card using the enclosed envelope;
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indicating your desire to attend the meeting through our Internet voting procedure; or
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calling our Investor Relations department at (386) 763-8801.
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An admission card will be mailed to you if:
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your TopBuild shares are registered in your name; or
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your TopBuild shares are held in the name of a broker or other nominee and you provide written evidence of your stock ownership as of the March 10, 2016, record date, such as a brokerage statement or letter from your broker.
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Your admission card will serve as verification of your ownership.
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TopBuild Corp
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Proxy Statement
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the
Internet
to
transmit
your
voting
instructions
and
for
electr
onic
delivery
of
information
up
until
11:59
p.m.
Eastern
Time
the
day
befor
e
the
cut-off
date
or
meeting
date.
Have
your
proxy
car
d
in
hand
when
you
access
the
web
site
and
follow
the
instructions
to
obtain
your
recor
ds
and
to
create
an
electr
onic
voting
instruction
form.
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VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
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TOPBUILD CORP.
260
JIMMY
ANN
DRIVE
DAYTONA
BEACH,
FL
32114
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ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
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VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
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VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO
VOTE,
MARK
BLOCKS
BELOW
IN
BLUE
OR
BLACK
INK
AS
FOLLOWS:
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E04890-P74135
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KEEP
THIS
PORTION
FOR
YOUR
RECORDS
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THIS
PROXY
CARD
IS
VALID
ONL
Y
WHEN
SIGNED
AND
DA
TED.
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DETACH
AND
RETURN
THIS
PORTION
ONLY
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TOPBUILD
COR
P.
The
Boar
d
of
Dir
ectors
recommends
you
vote
FOR
the
following:
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For
All
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Withhold
All
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For
All
Except
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To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
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1. Election of Directors
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☐
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☐
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☐
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Nominees:
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01) Dennis W. Archer
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02) Alec C. Covington
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The
Board
of
Directors
recommends
you
vote
FOR
Pr
oposals
2
and
3.
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For
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Against
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Abstain
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2.
T
o
ratify the appointment
of PricewaterhouseCoopers LLP
as the Company's
independent
register
ed
public
accounting firm for
the
Company's
fiscal
year
ending
December
31,
2016.
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☐
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☐
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☐
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3.
T
o
appr
ove,
on
an
advisory
basis,
the
compensation
of
the
Company's
named
executive
officers.
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☐
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☐
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☐
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The
Board
of
Directors
recommends
you
vote
EVERY
YEAR
on
Proposal
4.
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Every
Year
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Every
Two
Years
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Every
Three
Years
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Abstain
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4.
T
o
appr
ove,
on
an
advisory
basis,
the
fr
equency
of
futur
e
advisory
votes
on
the
compensation
of
the
Company's
named
executive
officers.
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☐
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☐
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☐
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☐
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The
Board
of
Directors
recommends
you
vote
FOR
Pr
oposal
5.
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For
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Against
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Abstain
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5.
To
approve
the
Amended
and
Restated
TopBuild
Corp.
2015
Long
Term
Stock
Incentive
Plan.
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☐
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☐
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NOTE:
In
their
discretion,
the
Pr
oxies
are
authorized
to
vote
upon
such
other
business
as
may
properly
come
befor
e
the
Annual
Meeting
and
any
adjournments
or
postponements
thereof.
This
proxy,
when
properly
executed,
will
be
voted
in
the
manner
directed
herein
by
the
undersigned
stockholder.
If
no
direction
is
made,
this
proxy
will
be
voted
FOR
the
election
of
the
nominees
for
Class
I
Directors
named
in
Pr
oposal
1
in
this
proxy
card,
FOR
each
of
Pr
oposals
2,
3
and
5
in
this
proxy
card,
and
EVERY
YEAR
for
proposal
4
in
this
proxy
card.
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For address changes and/or comments, please check this box and write them on the back where indicated.
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☐
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Please
indicate
if
you
plan
to
attend
this
meeting.
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☐
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☐
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Yes
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No
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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Important
Notice
Regarding
the
Availability
of
Pr
oxy
Materials
for
the
Annual
Meeting:
The
Notice
and
Proxy
Statement
and
Annual
Report
are
available
at
www.proxyvote.com.
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PROXY
TOPBUILD
COR
P
.
260
JIMMY
ANN
DRIVE
DAYTONA
BEACH,
FLORIDA
32114
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THIS
PROXY
IS
SOLICITED
ON
BEHALF
OF
THE
BOARD
OF
DIRECTORS
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The undersigned hereby appoints Michelle A. Friel and Gerald Volas as Proxies, each with the power to appoint his or her substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side, all the shares of the Common Stock of TopBuild Corp. held of record by the undersigned on March 10, 2016 at the Annual Meeting of Stockholders to be held on May 2, 2016 and any adjournments or postponements thereof.
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The shares represented by this proxy, when properly executed and returned, will be voted as directed herein.
IF THIS PROXY IS DULY EXECUTED AND RETURNED, AND NO VOTING DIRECTIONS ARE GIVEN HEREIN, SUCH SHARES WILL BE VOTED “FOR” THE ELECTION OF THE NOMINEES FOR CLASS I DIRECTORS NAMED IN PROPOSAL 1 IN THIS PROXY CARD, “FOR” EACH OF PROPOSALS 2, 3 AND 5 IN THIS PROXY CARD, AND “EVERY YEAR” FOR PROPOSAL 4 IN THIS PROXY CARD.
The undersigned hereby acknowledges receipt of notice of, and the proxy statement for, the aforesaid Annual Meeting of Stockholders.
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(If
you
noted
any
Addr
ess
Changes/Comments
above,
please
mark
corr
esponding
box
on
the
reverse
side.)
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Continued
and
to
be
signed
on
reverse
side
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*** Exercise Your Right to Vote *** Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on May 2, 2016. TOPBUILD CORP. You are receiving this communication because you hold shares in the company named above. This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of TOPBUILD CORP. 260 JIMMY ANN DRIVE DAYTONA BEACH, FL 32114 the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online at www.proxyvote.com or easily request a paper copy (see reverse side). We encourage you to access and review all of the important information contained in the proxy materials before voting. proxy materials and voting instructions. E04903-P74135 See the reverse side of this notice to obtain Meeting Information Meeting Type:Annual Meeting For holders as of:March 10, 2016 Date: May 2, 2016Time: 10:00 AM EDT Location: Hyatt Regency Orlando International Airport 9300 Jeff Fuqua Boulevard Orlando, Florida 32827
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Before You Vote How to Access the Proxy Materials Have the information that is printed in the box marked by the arrow
XXXX XXXX XXXX XXXX (located on the by the arrow
XXXX XXXX XXXX XXXX (located on the following page) in the subject line. How To Vote Please Choose One of the Following Voting Methods marked by the arrow
XXXX XXXX XXXX XXXX (located on the following page) available and follow the instructions. E04904-P74135 Vote In Person: Many stockholder meetings have attendance requirements including, but not limited to, the possession of an attendance ticket issued by the entity holding the meeting. Please check the meeting materials for any special requirements for meeting attendance. At the meeting, you will need to request a ballot to vote these shares. Vote By Internet: To vote now by Internet, go to www.proxyvote.com. Have the information that is printed in the box Vote By Mail: You can vote by mail by requesting a paper copy of the materials, which will include a proxy card. Proxy Materials AAvvaaiillaabbllee ttooVVIEIEWWoorrRREECCEEIVIVEE: : NOTICE AND PROXY STATEMENTANNUAL REPORT How to View Online: following page) and visit: www.proxyvote .com. How to Request and Receive a PAPER or E-MAIL Copy: If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request: 1) BY INTERNET:www.proxyvote.com 2) BY TELEPHONE: 1-800-579-1639 3) BY E-MAIL*:sendmaterial@proxyvote.com * If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before April 18, 2016 to facilitate timely delivery.
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The Board of Directors recommends you vote FOR the following: 1. Election of Directors Nominees: 01) Dennis W. Archer 02) Alec C. Covington The Board of Directors recommends you vote FOR Proposals 2 and 3. 2. To ratify the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the Company's fiscal year ending December 31, 2016. 3. To approve, on an advisory basis, the compensation of the Company's named executive officers. The Board of Directors recommends you vote EVERY YEAR for Proposal 4. 4. To approve, on an advisory basis, the frequency of future advisory votes on the compensation of the Company's named executive officers. The Board of Directors recommends you vote FOR Proposal 5. 5. To approve the Amended and Restated TopBuild Corp. 2015 Long Term Stock Incentive Plan. NOTE: In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof. THIS IS NOT A PROXY CARD. To vote the shares on a proxy card, you must request that a paper copy of the proxy materials be mailed to you by following the instructions in this notice. E04905-P74135 Voting Items
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E04906-P74135
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