9. Employee Stock-Based Compensation

2026 Equity Incentive Plan

On May 14, 2026, the Company’s stockholders approved the Builders FirstSource, Inc. 2026 Equity Incentive Plan (the “2026 Plan”). Under the 2026 Plan, the Company is authorized to grant awards in the form of incentive stock options, non-qualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), other stock-based awards, and cash-based awards. As of June 30, 2026, the Company had reserved 3.6 million shares of common stock for the grant of awards under the 2026 Plan, subject to adjustment as provided by the 2026 Plan, and less one share for every one share subject to an award granted under the Builders FirstSource, Inc. 2014 Incentive Plan (the “2014 Plan”) after March 1, 2026 and prior to May 14, 2026. All shares under the 2026 Plan may be made subject to options, SARs, or full value stock awards. Stock options and SARs granted under the 2026 Plan may not have a term exceeding 10 years from the date of grant. The 2026 Plan also provides that all awards will become fully vested and/or exercisable upon a change in control (as defined in the 2026 Plan) if those awards (i) are not assumed or equitably substituted by the surviving entity or (ii) have been assumed or equitably substituted by the surviving entity, and the grantee’s employment is terminated under certain circumstances. Other specific terms for awards granted under the 2026 Plan shall be determined by our board of directors’ compensation committee (or the board of directors if so determined by the board of directors). Awards granted under the 2026 Plan generally vest ratably over a three-year period or cliff vest after a period of three years. As of June 30, 2026, 2.5 million shares were available for issuance under the 2026 Plan. If it is assumed that shares will be issued at the target vesting amount (rather than at maximum potential payout) for outstanding RSUs with variable payout provisions, an additional 0.3 million shares would be included in the shares available for future issuance under the 2026 Plan.

Employee Stock Purchase Plan

On May 14, 2026, the Company’s stockholders approved the Builders FirstSource, Inc. Employee Stock Purchase Plan (the “ESPP”). Eligible employees may purchase shares through payroll deductions at a purchase price equal to 85% of the lesser of the fair market value of the Company’s common stock on the first or last day of the offering period. A total of 2.5 million shares have been reserved for issuance under the ESPP. The initial offering period under the ESPP commences during the third quarter of 2026. No shares had been purchased or issued under the ESPP as of June 30, 2026.

Time Based Restricted Stock Unit Grants

In the first six months of 2026, our board of directors granted 575,000 RSUs to employees under the 2014 Plan for which vesting is based solely on continuous employment over the requisite service period. These grants vest over a service period between one and three years. The weighted average grant date fair value for these RSUs was $89.18 per unit, which was based on the closing stock price on the respective grant dates.

Performance, Market and Service Condition Based Restricted Stock Unit Grants

In the first six months of 2026, our board of directors granted 218,500 RSUs to employees under the 2014 Plan, which cliff vest on the third anniversary of the grant date based on the Company’s level of achievement of performance goals relating to return on invested capital over a three-year period (the “performance condition”) and continued employment during the performance period (the “service condition”). The total number of shares of common stock that may be earned from the performance condition ranges from zero to 200% of the RSUs granted. The number of shares earned from the performance condition may be further increased or decreased by 10% based on the Company’s total shareholder return relative to a peer group during the performance period (the “market condition”). The grant date fair value for these RSUs, with consideration of the market condition, was $88.88 per unit, which was determined using the Monte Carlo simulation model, applying the following assumptions:

The expected volatilities and correlation are based on the historical daily returns of our common stock and the common stocks of the constituents of our peer group over the most recent period equal to the measurement period. The expected dividend yield is based on our history of not paying regular dividends in the past and our current intention to not pay regular dividends in the foreseeable future. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant and has a term equal to the measurement period.