Item 1.01. Entry into a Material Definitive Agreement.
The information set forth in Item 2.04 of this Current Report on Form 8-K is
incorporated by reference into this Item 1.01.
Item 1.02. Termination of a Material Definitive Agreement.
The information set forth in Item 2.04 of this Current Report on Form 8-K is
incorporated by reference into this Item 1.02.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On January 1, 2021, Builders FirstSource, Inc., a Delaware corporation
("Builders FirstSource"), completed its previously announced all stock merger
transaction with BMC Stock Holdings, Inc., a Delaware corporation ("BMC"),
pursuant to the Agreement and Plan of Merger, dated as of August 26, 2020 (as
amended, restated, supplemented, or otherwise modified from time to time, the
"Merger Agreement"), by and among Builders FirstSource, Boston Merger Sub I
Inc., a Delaware corporation and a direct wholly owned subsidiary of Builders
FirstSource ("Merger Sub"), and BMC. On the terms and subject to the conditions
set forth in the Merger Agreement, at the effective time of the Merger on
January 1, 2021 (the "Effective Time"), Merger Sub merged with and into BMC,
with BMC continuing as the surviving corporation and a wholly owned subsidiary
of Builders FirstSource (the "Merger").
On the terms and subject to the conditions set forth in the Merger Agreement, at
the Effective Time, each issued and outstanding share of the common stock, par
value $0.01 per share, of BMC (the "BMC Common Stock") was automatically
converted into the right to receive 1.3125 shares (the "Exchange Ratio") of
common stock, par value $0.01 per share, of Builders FirstSource (the "BLDR
Common Stock"). No fractional shares of BLDR Common Stock were issued in the
Merger, and holders of shares of BMC Common Stock are entitled to receive cash
in lieu of any such fractional shares.
Each outstanding BMC stock option held by an individual who was, as of
immediately prior to the Effective Time, an employee or other service-provider
of BMC or its subsidiaries became, at the Effective Time, an option to purchase,
on the same terms and conditions (including applicable vesting, exercise and
expiration provisions) applicable to each such BMC stock option as of
immediately prior to the Effective Time, shares of BLDR Common Stock, with the
number of shares subject to such option and the exercise price adjusted by the
Exchange Ratio. Each outstanding BMC stock option held by an individual who was
not, as of immediately prior to the Effective Time, an employee or other
service-provider of BMC or its subsidiaries was cancelled and converted at the
Effective Time into the right to receive cash in an amount equal to the product
of (i) the number of shares of BMC Common Stock subject to such BMC stock option
as of immediately prior to the Effective Time and (ii) the excess, if any, of
the average closing market value of 1.3125 shares of BLDR Common Stock for the
ten trading days ending one trading day preceding January 1, 2021, over the
applicable exercise price per share of such BMC stock option, subject to
applicable withholding taxes. Each outstanding BMC time-based and
performance-based restricted stock unit vested at the Effective Time and settled
in a number of shares of BLDR Common Stock equal to the number of shares of BMC
Common Stock otherwise issuable upon settlement of such BMC restricted stock
unit (assuming target level of performance for performance-based awards),
multiplied by the Exchange Ratio, and subject to applicable withholding taxes.
The issuance of the shares of BLDR Common Stock as consideration in the Merger
as described above was registered under the Securities Act of 1933, as amended
(the "Securities Act"), pursuant to the registration statement on Form S-4 (File
No. 333-249376), filed with the SEC by Builders FirstSource and declared
effective on November 18, 2020. The joint proxy statement/prospectus, dated
November 18, 2020, included in the registration statement contains additional
information about the above-described transactions.
The foregoing description of the Merger and the Merger Agreement does not
purport to be complete and is qualified in its entirety by reference to the full
text of the Merger Agreement, which is attached as Exhibit 2.1 to this Current
Report on Form 8-K and is incorporated by reference into this Item 2.01. A copy
of the press release announcing the completion of the Merger is filed as Exhibit
99.1 to this Current Report and incorporated herein by reference.
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The Merger Agreement is incorporated by reference to provide security holders
with information regarding its terms. It is not intended to provide any other
factual information about Builders FirstSource or any of its subsidiaries or
affiliates, including BMC. The Merger Agreement contains representations,
warranties, and covenants by each of the parties to the Merger Agreement. These
representations, warranties, and covenants were made solely for the benefit of
the other parties to the Merger Agreement, are subject to limitations agreed
. . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 2.04 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
In connection with the completion of the Merger, on December 7, 2020, BMC caused
to be issued a conditional notice of redemption for all of the outstanding 5.50%
Senior Secured Notes due 2024 (the "Notes"), issued by BMC East, LLC (the "Notes
Issuer") under the Indenture, dated as of September 15, 2016 (as amended,
restated, supplemented, or otherwise modified from time to time, the
"Indenture"), among the Notes Issuer, the guarantors party thereto from time to
time, and Wilmington Trust, National Association, as trustee and notes
collateral agent, governing the Notes, providing that the Notes Issuer intended
to conditionally redeem all outstanding aggregate principal amount of the Notes
on January 4, 2021, subject to and conditioned upon the completion of the
Merger. On January 4, 2021, following deposit of the redemption amount and other
applicable amounts with the trustee, the obligations of BMC and the Notes Issuer
under the Indenture and the Notes will be paid in full and terminated.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers: Compensatory Arrangements of Certain
Officers.
Resignations and Appointment of Directors
As contemplated by the Merger Agreement, at the Effective Time, the size of the
Board of Directors of Builders FirstSource (the "Board") was increased to
consist of twelve directors. Each of David A. Barr, M. Chad Crow, and Janice L.
Davis resigned from the Board and from all committees of the Board of which such
individual was a member, effective as of immediately prior to the Effective
Time, but conditioned on, and subject to, consummation of the Merger.
Effective as of the Effective Time, the Board consists of twelve directors:
(i) seven directors designated by Builders FirstSource (the "BLDR Designees"),
and (ii) five directors designated by BMC (the "BMC Designees"). The BLDR
Designees are Paul S. Levy, who will serve as Chairman of the Board, Daniel
Agroskin, Cleveland A. Christophe, W. Bradley Hayes, Brett N. Milgrim, Floyd F.
Sherman, and Craig A. Steinke. The BMC Designees are David E. Flitman, Mark
Alexander, Cory J. Boydston, David W. Bullock, and James O'Leary.
The members of the Board have been appointed to the following classes, as of the
Effective Time: Cleveland A. Christophe, David E. Flitman, W. Bradley Hayes, and
Brett N. Milgrim serve in Class I of the Board; Daniel Agroskin, Mark Alexander,
David W. Bullock, and Floyd F. Sherman serve in Class II of the Board; and Paul
S. Levy, Cory J. Boydston, James O'Leary, and Craig A. Steinke serve in
Class III of the Board.
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The composition of the standing committees of the Board, as of the Effective
Time, are as follows: (i) the Audit Committee of the Board consists of Mark
Alexander, Cory J. Boydston, W. Bradley Hayes, and Craig A. Steinke, with W.
Bradley Hayes as the chairman of the committee; (ii) the Nominating and
Corporate Governance Committee of the Board consists of David W. Bullock,
Cleveland A. Christophe, and Craig A. Steinke, with Craig A. Steinke as the
chairman of the committee; and (iii) the Compensation Committee of the Board
consists of Daniel Agroskin, Cleveland A. Christophe, Brett N. Milgrim, and
James O'Leary, with Cleveland A. Christophe as the chairman of the committee.
Cory J. Boydston is the Chief Financial Officer of Ashton Woods Homes, a
homebuilder headquartered in Atlanta, Georgia and a customer of Builders
FirstSource. Ashton Woods Homes purchases building materials from Builders
FirstSource from time to time in the ordinary course of business pursuant to
pricing arrangements determined in local markets in connection with competitive
bid processes involving other third parties. Activity associated with those
transactions was not significant in 2020. Other than pursuant to the Merger
Agreement and the previously disclosed Flitman Employment Agreement (as defined
below), Builders FirstSource is not aware of any transactions involving the BMC
Designees that would be required to be disclosed pursuant to Item 404(a) of
Regulation S-K. Other than pursuant to the Merger Agreement and the Flitman
Employment Agreement, there are no arrangements or understandings between any of
the BMC Designees and any other persons pursuant to which a BMC Designee was
selected as a director of Builders FirstSource.
Under Builders FirstSource's Amended and Restated Director Compensation Policy
(the "Policy") effective January 15, 2021, eligible directors will receive an
annual cash retainer of $100,000 and an annual grant of restricted stock units
with a value of $150,000. Committee members will also receive a fee of $5,000
per year. Eligible directors may elect to receive shares of BLDR Common Stock in
lieu of any cash fees accrued under the Policy. As eligible directors, the BMC
Designees (excluding David E. Flitman) will receive compensation under the
Policy beginning on January 15, 2021.
In connection with their appointment to the Board, the BMC Designees will enter
into indemnification agreements with Builders FirstSource, the form of which is
filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein
by reference.
Resignation & Appointment of Officers
In connection with the Merger and effective at the Effective Time, Mr. M. Chad
Crow, the current Chief Executive Officer of Builders FirstSource, ceased to
serve as President of Builders FirstSource, and, pursuant to the previously
disclosed Flitman Employment Agreement, Mr. David E. Flitman was appointed
President of Builders FirstSource. Effective on the ninety-first (91st) day
following the Effective Time and following the retirement of Mr. Crow as Chief
Executive Officer of Builders FirstSource, Mr. Flitman will also be appointed to
serve as the Chief Executive Officer of Builders FirstSource.
In connection with the Merger and effective prior to the Effective Time, as
previously announced, Mr. Donald F. McAleenan resigned as Senior Vice President,
General Counsel, and Secretary of Builders FirstSource. Mr. McAleenan remains an
employee of Builders FirstSource.
In connection with the Merger and effective at the Effective Time, Mr. David E.
Rush, the current Senior Vice President & Chief Operating Officer - East of
Builders FirstSource, was elected by the Board to serve as the Executive Vice
President - Integration of Builder FirstSource and will cease to serve as Senior
Vice President & Chief Operating Officer - East.
In connection with the Merger and effective at the Effective Time, Mr. Scott
Robins, the current Senior Vice President & Chief Operating Officer - West of
Builders FirstSource, was elected by the Board to serve as the President - West
Division of Builder FirstSource and will cease to serve as Senior Vice
President & Chief Operating Officer - West.
In connection with the Merger and effective at the Effective Time, Mr. Peter
Jackson, the current Senior Vice President and Chief Financial Officer of
Builders FirstSource, was elected by the Board to serve as the Executive Vice
President and Chief Financial Officer of Builder FirstSource.
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Employment Agreements
David E. Flitman
As previously disclosed, on August 26, 2020, in connection with the parties'
entrance into the Merger Agreement, Builders FirstSource entered into an amended
and restated employment agreement with Mr. Flitman (the "Flitman Employment
Agreement"). The Flitman Employment Agreement became effective at the Effective
Time on January 1, 2021.
The foregoing description of the Flitman Employment Agreement does not purport
to be complete and is qualified in its entirety by reference to the full text of
the Flitman Employment Agreement, which is filed as Exhibit 10.2 to this Current
Report on Form 8-K and incorporated herein by reference.
David E. Rush
In connection with Mr. Rush's appointment as Executive Vice President -
Integration, Builders FirstSource entered into an Amended and Restated
Employment Agreement with Mr. Rush, effective at the Effective Time (the "Rush
Employment Agreement"). The material terms of the Rush Employment Agreement are
as follows:
• The term of the Rush Employment Agreement shall commence as of the
Effective Time and end on the second anniversary of the Effective Time,
and thereafter shall automatically renew on a month-to-month basis for up
. . .
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On December 31, 2020, Builders FirstSource amended its Amended and Restated
Certificate of Incorporation to increase the number of authorized shares of BLDR
Common Stock from 200,000,000 shares of BLDR Common Stock to 300,000,000 shares
of BLDR Common Stock, by replacing that reference to "200,000,000" in the first
full paragraph of Article FOURTH of the Amended and Restated Certificate of
Incorporation with "300,000,000."
The foregoing description of the amendment to the Amended and Restated
Certificate of Incorporation is qualified in its entirety by reference to the
full text of the amendment to the Amended and Restated Certificate of
Incorporation, which is attached as Exhibit 3.1 to this Current Report on Form
8-K and incorporated herein by reference.
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Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
The following exhibits are filed as part of this Current Report:
Exhibits
Number Description
2.1 Agreement and Plan of Merger, dated as of August 26, 2020, by and
among Builders FirstSource, Inc., Boston Merger Sub I Inc., and BMC
Stock Holdings, Inc. (incorporated by reference to Exhibit 2.1 to
Builders FirstSource's Current Report on Form 8-K filed with the SEC
on August 27, 2020, File No. 000-51357).
3.1 Amendment to Amended and Restated Certificate of Incorporation of
Builders FirstSource, Inc.
10.1 Builders FirstSource, Inc. Form of Director Indemnification
Agreement (incorporated by reference to Exhibit 10.13 to Amendment
No. 3 to the Registration Statement of the Company on Form S-1, filed
with the Securities and Exchange Commission on May 26, 2005, File
Number 333-122788).
10.2 Amended and Restated Employment Agreement, dated as of August 26,
2020, between David E. Flitman, Builders FirstSource, Inc., and BMC
Stock Holdings, Inc. (incorporated by reference to Exhibit 10.1 to
Builders FirstSource's Current Report on Form 8-K filed with the SEC
on August 27, 2020, File No. 000-51357).
99.1 Press Release, dated January 4, 2021.
104 Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL document
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