Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
As previously disclosed, on December 14, 2020, BMC Stock Holdings, Inc., a
Delaware corporation ("BMC"), took certain actions to preserve
compensation-related corporate income tax deductions for BMC that might
otherwise be disallowed through the operation of Sections 280G and 4999 of the
Internal Revenue Code of 1986, as amended, in connection with completing the
transactions contemplated by that certain Agreement and Plan of Merger, dated as
of August 26, 2020 (the "Merger Agreement"), by and among BMC, Builders
FirstSource, Inc., a Delaware corporation ("Builders FirstSource"), and Boston
Merger Sub I Inc., a Delaware corporation and a direct, wholly owned subsidiary
of Builders FirstSource. As a result of the appreciation in the BMC common stock
share price since taking these actions, the compensation committee of the BMC
board of directors determined that it was necessary to take certain additional
actions to preserve such tax deductions. On December 27, 2020, the compensation
committee of the BMC board of directors approved the accelerated vesting and
settlement, as of December 28, 2020, of (i) 19,444 restricted stock units
("RSUs") granted on September 26, 2018 to Mr. David E. Flitman, President and
Chief Executive Officer of BMC, and (ii) 16,836 RSUs granted on February 28,
2019 to Mr. Flitman. All of these RSUs would have otherwise vested and settled
in connection with the completion of the transactions contemplated by the Merger
Agreement, which is expected to occur on or about January 1, 2021, subject to
the satisfaction or waiver of certain conditions set forth in the Merger
Agreement.
* * *
Cautionary Notice Regarding Forward-Looking Statements
This report, in addition to historical information, contains "forward-looking
statements" (as defined in the Private Securities Litigation Reform Act of 1995)
regarding, among other things, future events or the future financial performance
of BMC Stock Holdings, Inc. ("BMC") and Builders FirstSource, Inc. ("Builders
FirstSource"). Words such as "may," "will," "should," "plans," "estimates,"
"predicts," "potential," "anticipate," "expect," "project," "intend," "believe,"
or the negative of these terms, and words and terms of similar substance used in
connection with any discussion of future plans, actions or events identify
forward-looking statements. Any forward-looking statements involve risks and
uncertainties that are difficult to predict or quantify, and such risks and
uncertainties could cause actual events or results to differ materially from the
events or results described in the forward-looking statements, including risks,
or uncertainties related to the novel coronavirus disease 2019 (also known as
"COVID-19") pandemic and its impact on the business operations of BMC and
Builders FirstSource and on local, national and global economies, the growth
strategies of BMC and Builders FirstSource, fluctuations of commodity prices and
prices of the products of BMC and Builders FirstSource as a result of national
and international economic and other conditions, or the significant dependence
of both companies' revenues and operating results on, among other things, the
state of the homebuilding industry and repair and remodeling activity, lumber
prices and the economy. Neither BMC nor Builders FirstSource may succeed in
addressing these and other risks or uncertainties.
Forward-looking statements relating to the proposed business combination between
BMC and Builders FirstSource include, but are not limited to: statements about
the benefits of the proposed business combination between BMC and Builders
FirstSource, including future financial and operating results; the plans,
objectives, expectations and intentions of BMC and Builders FirstSource; the
expected timing of completion of the proposed business combination; and other
statements relating to the proposed merger that are not historical facts.
Forward-looking statements are based on information currently available to BMC
and Builders FirstSource and involve estimates, expectations and projections.
Investors are cautioned that all such forward-looking statements are subject to
risks and uncertainties, and important factors could cause actual events or
results to differ materially from those indicated by such forward-looking
statements. With respect to the proposed business combination between BMC and
Builders FirstSource, these factors could include, but are not limited to: the
risk that a condition to closing of the business combination may not be
satisfied, including as a result of the failure to obtain approval of
stockholders of BMC and Builders FirstSource on the expected terms and schedule
or at all; the length of time necessary to consummate the proposed business
combination, which may be longer than anticipated for various reasons; the risk
that the businesses will not be integrated successfully; the risk that the cost
savings, synergies and growth from the proposed business combination may not be
fully realized or may take longer to realize than expected; the assumptions on
which the parties' estimates of future results of the combined business have
been based may prove to be incorrect in a number of material ways, which could
result in an inability to realize the expected benefits of the proposed business
combination or exposure to material liabilities; the diversion of management
time on issues related to the business combination; the effect of future
regulatory or legislative actions on the companies or the industries in which
they operate; the risk that the credit ratings of the combined company may be
different from what the parties expect; economic and foreign exchange rate
volatility; changes in the general economic environment, or social or political
conditions, that could affect the businesses; the potential effect of the
announcement or consummation of the proposed business combination on
relationships with customers, suppliers, competitors, lenders, landlords,
management and other employees; the ability to attract new customers and retain
existing
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customers in the manner anticipated or at all; the ability to hire and retain
key personnel; reliance on and integration of information technology systems;
the risks associated with assumptions the parties make in connection with the
parties' critical accounting estimates and legal proceedings; certain
restrictions during the pendency of the business combination that may affect the
ability of BMC and Builders FirstSource to pursue certain business opportunities
or strategic transactions; and the potential of international unrest, economic
downturn or effects of anticipated tax rates, raw material costs or
availability, benefit or retirement plan costs, or other regulatory compliance
costs.
Additional information concerning other risk factors pertaining to BMC and
Builders FirstSource is also contained in the parties' respective most recently
filed Annual Reports on Form 10-K, subsequent Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, and other information filed with the Securities and
Exchange Commission (the "SEC"). Many of these risks and uncertainties are
beyond BMC's or Builders FirstSource's ability to control or predict. Because of
these risks and uncertainties, you should not place undue reliance on these
forward-looking statements. It is not possible to anticipate or foresee all
risks and uncertainties, and investors should not consider any list of risks and
uncertainties to be exhaustive or complete. Furthermore, neither BMC nor
Builders FirstSource undertakes any obligation to update publicly or revise any
forward-looking statements to reflect events or circumstances that may arise
after the date of this report. Nothing in this report is intended, or is to be
construed, as a profit forecast or to be interpreted to mean that the earnings
per share of the common stock of BMC or of the common stock of Builders
FirstSource for the current or any future financial years, or the earnings per
share of the common stock of the combined company, will necessarily match or
exceed the historical published earnings per share of the common stock of BMC or
Builders FirstSource, as applicable. Annualized, pro forma, projected and
estimated numbers are used for illustrative purpose only, are not forecasts and
may not reflect actual results. All subsequent written and oral forward-looking
statements concerning BMC, Builders FirstSource, the proposed business
combination, the combined company or other matters and attributable to BMC,
Builders FirstSource or any person acting on their behalf are expressly
qualified in their entirety by the cautionary statements above.
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