Core & Main, Inc 10-Q for FY2026 Q1
Core & Main, Inc. (CNM)
10-Q
2025-06-10
For: 2025-05-04
View Original
Added on
April 07, 2026
About this 10-Q
Core & Main, Inc filed this 10-Q on June 10, 2025, covering the quarter ended May 4, 2025 (FY2026 Q1).
Headline figures
Quarter ended May 4, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.91B
- up 9.8% from $1.74B a year earlier
- Net income
- $100M
- up 5.3% from net income of $95M a year earlier
- Diluted EPS
- $0.52
- up 6.1% from $0.49 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended May 4, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For transition period from to
Commission File Number 001-40650
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
(314 ) 432-4700
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
As of June 6, 2025, there were 189,654,473 shares of the registrant’s Class A common stock, par value $0.01 per share, and 7,472,733 shares of the registrant’s Class B common stock, par value $0.01 per share, outstanding.
Table of Contents
| PAGE | |||||
2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include, without limitation, all statements other than statements of historical facts contained in this Quarterly Report, including statements relating to our intentions, beliefs, assumptions or current expectations concerning, among other things, our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding expected growth, future capital expenditures, capital allocation and debt service obligations, and the anticipated impact on our business.
Some of the forward-looking statements can be identified by the use of forward-looking terms such as “believes,” “expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,” “anticipates” or the negative versions of these words or other comparable terms.
Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be outside our control. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if our results of operations, financial condition, cash flows and the development of the market in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods. A number of important factors, including, without limitation, the risks and uncertainties discussed under the captions “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended February 2, 2025 (the “2024 Annual Report on Form 10-K”) and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q, could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements. Furthermore, new risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. Factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation:
•declines, volatility and cyclicality in the U.S. residential and non-residential construction markets;
•slowdowns in municipal infrastructure spending and delays in appropriations of federal funds;
•our ability to competitively bid for contracts;
•price fluctuations in our product costs (including effects of tariffs);
•our ability to manage our inventory effectively, including during periods of supply chain disruptions;
•risks involved with acquisitions and other strategic transactions, including our ability to identify, acquire, close or integrate acquisition targets successfully;
•the fragmented and highly competitive markets in which we compete and consolidation within our industry;
•the development of alternatives to distributors of our products in the supply chain;
•our ability to hire, engage and retain key personnel, including sales representatives, qualified branch, district and regional managers and senior management;
•our ability to identify, develop and maintain relationships with a sufficient number of qualified suppliers and the potential that our exclusive or limited supplier distribution rights are terminated;
•changes in supplier rebates or other terms of our supplier agreements;
•the availability of freight;
•the ability of our customers to make payments on credit sales;
•our ability to identify and introduce new products and product lines effectively;
•the spread of, and response to public health crises and the inability to predict the ultimate impact on us;
•costs and potential liabilities or obligations imposed by environmental, health and safety laws and requirements;
•regulatory change and the costs of compliance with regulation;
•changes in stakeholder expectations in respect of environmental, social and governance (“ESG”) and sustainability practices;
3
•exposure to product liability, construction defect and warranty claims and other litigation and legal proceedings;
•potential harm to our brand or reputation;
•difficulties with or interruptions of our fabrication services;
•safety and labor risks associated with the distribution of our products;
•interruptions in the proper functioning of the Company’s and our third-party service providers’ information technology systems, including from cybersecurity threats;
•impairment in the carrying value of goodwill, intangible assets or other long-lived assets;
•our ability to continue our customer relationships with short-term contracts;
•risks associated with operating internationally including exporting and importing of certain products;
•our indebtedness and the potential that we may incur additional indebtedness that might restrict our operating flexibility;
•the limitations and restrictions in the agreements governing our indebtedness, the Amended and Restated Limited Partnership Agreement of Holdings, as amended, and the Tax Receivable Agreements (each as defined herein);
•increases in interest rates on our variable rate indebtedness;
•changes in our credit ratings and outlook;
•our ability to generate the significant amount of cash needed to service our indebtedness;
•our organizational structure, including our payment obligations under the Tax Receivable Agreements, which may be significant;
•our ability to sustain an active, liquid trading market for our Class A common stock; and
•risks related to other factors discussed under “Risk Factors” in our 2024 Annual Report on Form 10-K.
You should read this Quarterly Report on Form 10-Q and our 2024 Annual Report on Form 10-K completely and with the understanding that actual future results may be materially different from expectations. All forward-looking statements made in this Quarterly Report on Form 10-Q are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this Quarterly Report on Form 10-Q, and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise.
4
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CORE & MAIN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Amounts in millions (except share and per share data), unaudited
| May 4, 2025 | February 2, 2025 | |||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
Receivables, net of allowance for credit losses of $ | ||||||||||||||
| Inventories | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Property, plant and equipment, net | ||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Goodwill | ||||||||||||||
| Deferred income taxes | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Current maturities of long-term debt | $ | $ | ||||||||||||
| Accounts payable | ||||||||||||||
| Accrued compensation and benefits | ||||||||||||||
| Current operating lease liabilities | ||||||||||||||
| Other current liabilities | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt | ||||||||||||||
| Non-current operating lease liabilities | ||||||||||||||
| Deferred income taxes | ||||||||||||||
Tax receivable agreement liabilities | ||||||||||||||
| Other liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
| Commitments and contingencies | ||||||||||||||
Class A common stock, par value $ | ||||||||||||||
Class B common stock, par value $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Retained earnings | ||||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
| Total stockholders’ equity attributable to Core & Main, Inc. | ||||||||||||||
| Non-controlling interests | ||||||||||||||
| Total stockholders’ equity | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
CORE & MAIN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Amounts in millions (except share and per share data), unaudited
| Three Months Ended | ||||||||||||||||||||||||||
| May 4, 2025 | April 28, 2024 | |||||||||||||||||||||||||
| Net sales | $ | $ | ||||||||||||||||||||||||
| Cost of sales | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Income before provision for income taxes | ||||||||||||||||||||||||||
| Provision for income taxes | ||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Less: net income attributable to non-controlling interests | ||||||||||||||||||||||||||
| Net income attributable to Core & Main, Inc. | $ | $ | ||||||||||||||||||||||||
| Earnings per share (“EPS”) | ||||||||||||||||||||||||||
| Basic | $ | $ | ||||||||||||||||||||||||
| Diluted | $ | $ | ||||||||||||||||||||||||
| Number of shares used in computing EPS | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
CORE & MAIN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Amounts in millions, unaudited
| Three Months Ended | ||||||||||||||||||||||||||
| May 4, 2025 | April 28, 2024 | |||||||||||||||||||||||||
| Net income | $ | $ | ||||||||||||||||||||||||
Net comprehensive (loss) gain, net of tax benefit (expense) of $ | ( | |||||||||||||||||||||||||
| Total comprehensive income | ||||||||||||||||||||||||||
| Less: comprehensive income attributable to non-controlling interests | ||||||||||||||||||||||||||
| Total comprehensive income attributable to Core & Main, Inc. | $ | $ | ||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
CORE & MAIN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Amounts in millions (except share data), unaudited
| Class A Common Stock | Class B Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Additional Paid In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Non-Controlling Interests | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances at February 2, 2025 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net comprehensive loss, net of tax | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interest holders | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase and Retirement of equity interests | ( | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Exchange of Partnership Interests and Class B Shares for Class A Shares | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Establishment/adjustment of deferred tax asset associated with Core & Main investment in Core & Main Holdings, LP | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Establishment of Tax receivable agreement liabilities | — | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Activity under equity-based compensation plans, net of tax withholdings | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances at May 4, 2025 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Additional Paid In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Non-Controlling Interests | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances at January 28, 2024 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net comprehensive gain, net of tax | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interest holders | — | — | — | — | ( | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Exchange of Partnership Interests and Class B Shares for Class A Shares | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Establishment/adjustment of deferred tax asset associated with Core & Main investment in Core & Main Holdings, LP | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Establishment of Tax receivable agreement liabilities | — | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Activity under equity-based compensation plans, net of tax withholdings | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances at April 28, 2024 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
CORE & MAIN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Amounts in millions, unaudited
| Three Months Ended | |||||||||||
| May 4, 2025 | April 28, 2024 | ||||||||||
| Cash Flows From Operating Activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net cash from operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Equity-based compensation expense | |||||||||||
Deferred income tax expense | |||||||||||
| Other | |||||||||||
| Changes in assets and liabilities: | |||||||||||
| (Increase) decrease in receivables | ( | ( | |||||||||
| (Increase) decrease in inventories | ( | ( | |||||||||
| (Increase) decrease in other assets | ( | ( | |||||||||
| Increase (decrease) in accounts payable | |||||||||||
Increase (decrease) in accrued liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Cash Flows From Investing Activities: | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Acquisitions of businesses, net of cash acquired | ( | ||||||||||
| Other | ( | ( | |||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash Flows From Financing Activities: | |||||||||||
Repurchase and retirement of equity interests | ( | ||||||||||
| Distributions to non-controlling interest holders | ( | ( | |||||||||
| Payments pursuant to Tax Receivable Agreements | ( | ( | |||||||||
| Borrowings on asset-based revolving credit facility | |||||||||||
| Repayments on asset-based revolving credit facility | ( | ( | |||||||||
| Issuance of long-term debt | |||||||||||
| Repayments of long-term debt | ( | ( | |||||||||
| Debt issuance costs | ( | ||||||||||
| Other | ( | ( | |||||||||
| Net cash (used in) provided by financing activities | ( | ||||||||||
| Increase in cash and cash equivalents | |||||||||||
| Cash and cash equivalents at the beginning of the period | |||||||||||
| Cash and cash equivalents at the end of the period | $ | $ | |||||||||
| Cash paid for interest (excluding effects of interest rate swap) | $ | $ | |||||||||
| Cash paid for income taxes | |||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
9
CORE & MAIN, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Dollars in millions, except as noted, unaudited
1) BASIS OF PRESENTATION & DESCRIPTION OF BUSINESS
Business and Organization
Core & Main, Inc. (“Core & Main” and collectively with its subsidiaries, the “Company”) is a leading specialty distributor dedicated to advancing reliable infrastructure with local service, nationwide. With a focus on water, wastewater, storm drainage and fire protection products, and related services, the Company provides solutions to municipalities, private water companies and professional contractors across municipal, non-residential and residential end markets. The Company’s specialty products and services are used in the maintenance, repair, replacement, and construction of water and fire protection infrastructure. The Company reaches customers through a network of approximately 370 branches across 49 United States (“U.S.”) states. The Company’s products include pipes, valves, fittings, storm drainage products, fire protection products, meter products and other products. The Company has complemented its core products through additional offerings, including fusible high-density polyethylene (“fusible HDPE”) piping solutions, specifically engineered treatment plant products and geosynthetics and erosion control products. The Company’s services and capabilities allow for integration with customers and form part of their sourcing and procurement function. Substantially all of the Company’s long-lived assets are located within the U.S.
Core & Main is a holding company that indirectly owns Core & Main LP through its ownership interest in Core & Main Holdings, LP (“Holdings”). Core & Main’s primary material assets are its direct and indirect ownership interest in Holdings and deferred tax assets associated with such ownership.
Repurchase Program
On June 12, 2024, the Company’s board of directors authorized a share repurchase program (the “Repurchase Program”), pursuant to which the Company may purchase up to $500 million of the Company’s Class A common stock. Shares repurchased under the Repurchase Program are retired immediately and are accounted for as a decrease to stockholders’ equity. For the three months ended May 4, 2025, the Company repurchased 837,268 shares of Class A common stock for a total of $39 million through open market transactions. As of May 4, 2025, $285 million of the authorized amount remained available for use under the Repurchase Program.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements present the results of operations, financial position and cash flows of Core & Main and its subsidiaries, which includes the consolidated financial statements of Holdings and its consolidated subsidiary, Core & Main LP, as the legal entity that conducts the operations of the Company. All intercompany balances and transactions have been eliminated in consolidation. The limited partner interests of Holdings (“Partnership Interests”) not held by Core & Main are reflected as non-controlling interests in the consolidated financial statements.
In management’s opinion, the unaudited condensed consolidated financial information for the interim periods presented include all normal recurring adjustments necessary for a fair statement of the Company's results of operations, financial position and cash flows, which include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim unaudited condensed consolidated financial statements may not be the same as those for the full year. The February 2, 2025 condensed consolidated Balance Sheet was derived from audited financial statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the fiscal year ended February 2, 2025 included in our Annual Report on Form 10-K for the fiscal year ended February 2, 2025 (the “2024 Annual Report on Form 10-K”).
10
Segments
Fiscal Year
Estimates
Accounting Policies
2) RECENT ACCOUNTING PRONOUNCEMENTS
Income Tax Disclosures - In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). The new guidance requires, on an annual basis, disclosure of specific categories in the rate reconciliation and disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The adoption of ASU 2023-09 is expected to result in additional disclosures, but not have a material impact on the consolidated financial statements.
Disaggregation of Income Statement Expenses - In November 2024, the FASB issued ASU No. 2024-03, “Disaggregation of Income Statement Expenses” (“ASU 2024-03”). The new guidance requires additional disclosure related to the disaggregation of income statement expense categories. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The adoption of ASU 2024-03 is expected to result in additional disclosures and the Company is currently evaluating the effect this standard will have on the consolidated financial statements.
11
3) REVENUE
Disaggregation of Revenue
The following table represents net sales disaggregated by product category:
| Three Months Ended | |||||||||||||||||||||||
| Product Category | May 4, 2025 | April 28, 2024 | |||||||||||||||||||||
| Pipes, valves & fittings products | $ | $ | |||||||||||||||||||||
| Storm drainage products | |||||||||||||||||||||||
| Fire protection products | |||||||||||||||||||||||
| Meter products | |||||||||||||||||||||||
| Total net sales | $ | $ | |||||||||||||||||||||
4) ACQUISITIONS
The Company did not complete any acquisitions during the three months ended May 4, 2025. The Company made various acquisitions during the three months ended April 28, 2024 (the "Fiscal 2024 Acquisitions") with an aggregate transaction value of $585 million, subject to working capital adjustments, respectively. These transactions were funded with cash and borrowings under the Senior Term Loan Credit Facility (as defined in Note 6).
Fiscal 2024 Acquisitions
•On April 1, 2024, the Company acquired all of the outstanding shares of NW Geosynthetics Inc. (“ACF West”). ACF West has six locations and is a distributor of geosynthetic products and provider of soil stabilization solutions.
•On March 7, 2024, the Company acquired all of the membership interests of DKC Group Holdings, LLC, and associated entities (collectively, “Dana Kepner”). Dana Kepner has twenty-one locations and is a distributor of water, wastewater, and storm drainage products.
•On February 12, 2024, the Company acquired certain assets and assumed certain liabilities of Eastern Supply Inc. and a related entity (collectively, “Eastern Supply”). Eastern Supply has two locations and is a distributor of a broad range of storm drainage products, with custom fabrication capabilities.
The following table represents the final allocation of the transaction price to the fair value of identifiable assets acquired and liabilities assumed in the Fiscal 2024 Acquisitions.
Fiscal 2024 Acquisitions (1) | ||||||||||||||||||||
| Cash | $ | |||||||||||||||||||
| Receivables | ||||||||||||||||||||
| Inventories | ||||||||||||||||||||
| Intangible assets | ||||||||||||||||||||
| Goodwill | ||||||||||||||||||||
| Property, plant and equipment | ||||||||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||||||||
| Other assets, current and non-current | ||||||||||||||||||||
| Total assets acquired | ||||||||||||||||||||
| Accounts payable | ||||||||||||||||||||
| Deferred income taxes | ||||||||||||||||||||
| Operating lease liabilities, current and non-current | ||||||||||||||||||||
| Deferred consideration | ||||||||||||||||||||
| Other liabilities, current and non-current | ||||||||||||||||||||
| Net assets acquired | $ | |||||||||||||||||||
(1) Amounts include the purchase price allocation of Dana Kepner net assets of $263 million to goodwill, $184 million to intangible assets, $89 million to net working capital, $29 million to cash and $8 million to fixed assets. Additionally, includes a deferred income tax liability of $36 million for the Dana Kepner acquisition.
12
The net outflow of cash in respect of the purchase of businesses is as follows:
Fiscal 2024 Acquisitions | ||||||||||||||||||||
| Net assets acquired | $ | |||||||||||||||||||
Less: Cash acquired in acquisition | ( | |||||||||||||||||||
| Total consideration, net of cash; investing cash outflow | $ | |||||||||||||||||||
In the above transactions, to the extent applicable, the excess of purchase price over net tangible and intangible assets acquired resulted in goodwill, which represents the assembled workforce and anticipated long-term growth in new markets, customers and products. Goodwill of $195 million associated with the Fiscal 2024 Acquisitions is fully deductible by the Company for U.S. income tax purposes.
Intangible Assets
For the Fiscal 2024 Acquisitions, the intangible assets acquired consist of customer relationships and other intangible assets.
The customer relationship intangible assets represent the value associated with those customer relationships in place at the date of each transaction included in the Fiscal 2024 Acquisitions. The Company valued the customer relationships using an excess earnings method including various inputs such as customer attrition rate, revenue growth rate, gross margin percentage and discount rate. Cash flows associated with the existing relationships are expected to diminish over time due to customer turnover. The Company reflected this expected diminishing cash flow through the utilization of an annual customer attrition rate assumption and in its method of amortization.
The other intangible assets primarily consist of trademark intangible assets that represent the value associated with the brand names in place at the date of the applicable closing.
A summary of the intangible asset acquired and assumptions utilized in the valuation for the Fiscal 2024 Acquisitions is as follows:
| Intangible Asset Amount | Weighted Average Amortization Period | Weighted Average Discount Rate | Weighted Average Attrition Rate | ||||||||||||||||||||
| Customer Relationships | |||||||||||||||||||||||
Fiscal 2024 Acquisitions (1) | % | % | |||||||||||||||||||||
| Other Intangible Assets | |||||||||||||||||||||||
Fiscal 2024 Acquisitions | % | N/A | |||||||||||||||||||||
Pro Forma Financial Information
The following pro forma information presents a summary of the results of operations for the periods indicated as if the Dana Kepner acquisition had been completed as of January 30, 2023. The pro forma financial information is based on the historical financial information for the Company and Dana Kepner, along with certain pro forma adjustments. These pro forma adjustments consist primarily of:
•increased amortization and depreciation expense related to the intangible assets and fixed assets acquired, respectively, in the Dana Kepner acquisition;
•increased interest expense to reflect the borrowings under the Senior Term Loan Credit Facility including the interest and amortization of deferred financing costs;
•reclassification of direct acquisition transaction costs, retention bonuses and inventory fair value adjustments from the period incurred to periods these expenses would have been recognized given the assumed transaction date identified above; and
•the related income tax effects of the aforementioned adjustments to the provision for income taxes for Core & Main.
13
The following pro forma information has been prepared for comparative purposes only and is not necessarily indicative of the results of operations as they would have been had the Dana Kepner acquisition occurred on the assumed date, nor is it necessarily an indication of future operating results. In addition, the pro forma information does not reflect the cost of any integration activities, benefits from any synergies that may be derived from the Dana Kepner acquisition or revenue growth that may be anticipated.
| Three Months Ended | ||||||||||||||||||||||||||
| April 28, 2024 | ||||||||||||||||||||||||||
| Net sales | $ | |||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||
As a result of integration of the Dana Kepner acquisition with existing operations of the Company it is impracticable to identify the discrete financial performance associated with the Dana Kepner acquisition. As such, the Company has not presented the post-acquisition net sales and net income for the Dana Kepner acquisition.
5) GOODWILL AND INTANGIBLE ASSETS
Goodwill
The changes in the carrying amount of goodwill are as follows:
| Three Months Ended | |||||
| May 4, 2025 | |||||
| Beginning Balance | $ | ||||
Goodwill adjusted during the three months ended May 4, 2025 | |||||
| Ending balance | $ | ||||
Goodwill adjusted during the three months ended May 4, 2025 was related to the Fiscal 2024 acquisitions, as further discussed in Note 4.
Goodwill represents the excess of purchase price over the fair value of net assets acquired. The Company does not amortize goodwill but does assess the recoverability of goodwill on an annual basis during the fourth quarter. If an event occurs or circumstances change that would “more likely than not” reduce the fair value of a reporting unit below its carrying value, an interim impairment test would be performed between annual tests.
Intangible Assets
The Company’s intangible assets included in its Balance Sheets consist of the following:
| May 4, 2025 | February 2, 2025 | ||||||||||||||||||||||||||||||||||
| Gross Intangible | Accumulated Amortization | Net Intangible | Gross Intangible | Accumulated Amortization | Net Intangible | ||||||||||||||||||||||||||||||
| Customer relationships | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Internal use software | |||||||||||||||||||||||||||||||||||
| Other intangible assets | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Amortization expense related to intangible assets was as follows:
| Three Months Ended | |||||||||||||||||||||||
| May 4, 2025 | April 28, 2024 | ||||||||||||||||||||||
| Amortization expense | $ | $ | |||||||||||||||||||||
14
The estimated aggregate amortization expense on intangible assets owned by the Company for the remainder of fiscal 2025 and the next four full fiscal years is expected to be as follows:
Fiscal 2025 | $ | ||||
Fiscal 2026 | |||||
Fiscal 2027 | |||||
Fiscal 2028 | |||||
Fiscal 2029 | |||||
6) DEBT
Debt consisted of the following:
| May 4, 2025 | February 2, 2025 | ||||||||||||||||||||||
| Principal | Unamortized Discount and Debt Issuance Costs | Principal | Unamortized Discount and Debt Issuance Costs | ||||||||||||||||||||
| Current maturities of long-term debt: | |||||||||||||||||||||||
| Senior Term Loan due July 2028 | $ | $ | — | $ | $ | — | |||||||||||||||||
| Senior Term Loan due February 2031 | — | — | |||||||||||||||||||||
| — | — | ||||||||||||||||||||||
| Long-term debt: | |||||||||||||||||||||||
| Senior ABL Credit Facility due February 2029 | |||||||||||||||||||||||
| Senior Term Loan due July 2028 | |||||||||||||||||||||||
| Senior Term Loan due February 2031 | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
The Company’s debt obligations as of May 4, 2025 include the following debt agreements:
Senior Term Loan Credit Facility
Core & Main LP has entered into a Senior Term Loan Credit Facility (as defined herein) under which it can incur tranches of indebtedness. Pursuant to the Senior Term Loan Credit Facility, Core & Main LP entered into a $1,500 million senior term loan (the “2028 Senior Term Loan”), which matures on July 27, 2028. The 2028 Senior Term Loan requires quarterly principal payments on the last business day of each fiscal quarter in an amount equal to approximately 0.25 % of the original principal amount. The remaining balance is payable upon final maturity of the 2028 Senior Term Loan on July 27, 2028. The 2028 Senior Term Loan bears interest at a rate equal to (i) term secured overnight financing rate (“Term SOFR”) plus, in each case, an effective applicable margin of 2.00 % or (ii) the base rate, which will be the highest of (x) the corporate base rate established by the administrative agent as its prime rate in effect at its principal office in New York City from time to time, (y) the overnight federal funds rate plus 0.50 % per annum and (z) one-month Term SOFR (adjusted for maximum reserves) plus 1.00 % per annum, plus, in each case, an applicable margin of 1.50 %. The 2028 Senior Term Loan is subject to a Term SOFR “floor” of 0.00 %. The weighted average interest rate, excluding the effect of the interest rate swap, of Core & Main LP’s outstanding borrowings under the 2028 Senior Term Loan as of May 4, 2025 was 6.27 %. See further discussion of the interest rate swap below. Based on quotes from financial institutions (i.e., level 2 of the fair value hierarchy), the fair value of the 2028 Senior Term Loan was $1,237 million as of May 4, 2025.
Pursuant to the Senior Term Loan Credit Facility, Core & Main LP also entered into an additional $944 million senior term loan (the “2031 Senior Term Loan” and, together with the 2028 Senior Term Loan, the “Senior Term Loan Credit Facility”), which matures on February 9, 2031. The 2031 Senior Term Loan requires quarterly principal payments, payable on the last business day of each fiscal quarter, in an amount equal to approximately 0.25 % of the principal amount of the 2031 Senior Term Loan. The remaining balance is payable upon final maturity of the 2031 Senior Term Loan on February 9, 2031. The 2031 Senior Term Loan bears interest at a rate equal to (i) Term SOFR plus, in each case, an applicable margin of 2.00 % or (ii) an alternate base rate plus an applicable margin of 1.00 %. The 2031 Senior Term Loan is subject to a Term SOFR “floor” of 0.00 %. The weighted average interest rate, excluding the effect of the interest rate swap, of Core & Main LP’s outstanding borrowings under the 2031 Senior Term Loan as of May 4, 2025 was 6.27 %. See further discussion of the interest rate swap below. Based on quotes from financial institutions (i.e., level 2 of the fair value hierarchy), the fair value of the 2031 Senior Term Loan was $938 million as of May 4, 2025.
15
Asset-Based Credit Facility
Core & Main LP has a senior asset-based revolving credit facility with a borrowing capacity of up to $1,250 million, subject to borrowing base availability, with a maturity date of February 9, 2029 (the “Senior ABL Credit Facility”). Borrowings under the Senior ABL Credit Facility bear interest at either a Term SOFR rate plus an applicable margin ranging from 1.25 % to 1.75 %, or an alternate base rate plus an applicable margin ranging from 0.25 % to 0.75 %, depending on the borrowing capacity under the Senior ABL Credit Facility. Additionally, Core & Main LP pays a fee of 0.25 % on unfunded commitments under the Senior ABL Credit Facility. As of May 4, 2025 and February 2, 2025 there was $100 million and $93 million outstanding, respectively, under the Senior ABL Credit Facility with a weighted average interest rate of 5.57 % as of May 4, 2025.
The aforementioned debt agreements include customary affirmative and negative covenants, which include, among other things, restrictions on Core & Main LP’s ability to make distributions, pay dividends, create liens, incur additional indebtedness, make investments, dispose of assets and merge or consolidate with any other person. The Senior Term Loan Credit Facility may require accelerated repayment based upon cash flows generated in excess of operating and investing requirements when the Consolidated Secured Leverage Ratio (as defined in the agreement governing the Senior Term Loan Credit Facility) is greater than or equal to 3.25 . In addition, the Senior ABL Credit Facility requires Core & Main LP to comply with a consolidated fixed charge coverage ratio of greater than or equal to 1.00 when availability under the Senior ABL Credit Facility is less than 10.0 % of the lesser of (i) the then applicable borrowing base or (ii) the then aggregate effective commitments. The Company was in compliance with all debt covenants as of May 4, 2025.
Substantially all of Core & Main LP’s assets are pledged as collateral for the Senior Term Loan Credit Facility and the Senior ABL Credit Facility.
The aggregate amount of debt payments for the remainder of fiscal 2025 and the next four full fiscal years are as follows:
Fiscal 2025 | $ | ||||
Fiscal 2026 | |||||
Fiscal 2027 | |||||
Fiscal 2028 | |||||
Fiscal 2029 | |||||
Interest Rate Swaps
Core & Main LP entered into an instrument in which it makes payments to a third party based upon a fixed interest rate of 0.693 % and receives payments based upon the one-month Term SOFR rate. The interest rate swap has a notional amount of $800 million as of May 4, 2025. The notional amount decreases to $700 million on July 27, 2025 through the instrument maturity on July 27, 2026. This instrument is intended to reduce the Company's exposure to variable interest rates under the Senior Term Loan Credit Facility. As of May 4, 2025, this instrument resulted in an effective fixed rate of 2.693 %, based upon the 0.693 % fixed rate plus an effective applicable margin of 2.00 %.
Core & Main LP entered into an additional instrument pursuant to which it will make payments to a third party based upon a fixed interest rate of 3.913 % and receive payments based upon the one-month Term SOFR rate. The interest rate swap has a starting notional amount of $750 million that increases to $1,500 million on July 27, 2026 through the instrument maturity on July 27, 2028. The instrument is intended to reduce the Company’s exposure to variable interest rates under the Senior Term Loan Credit Facility. As of May 4, 2025, this instrument resulted in an effective fixed rate of 5.913 %, based upon the 3.913 % fixed rate plus an effective applicable margin of 2.00 %.
The fair value of these cash flow interest rate swaps was a $28 million asset and a $17 million liability as of May 4, 2025, which is included within other assets and other current liabilities, respectively, in the Balance Sheet. The aggregate fair value of these cash flow interest rate swaps was a $40 million asset as of February 2, 2025, which is included within other assets in the Balance Sheet.
16
| Three Months Ended | |||||||||||||||||||||||
| Accumulated Other Comprehensive Income | May 4, 2025 | April 28, 2024 | |||||||||||||||||||||
| Beginning of period balance | $ | $ | |||||||||||||||||||||
| Measurement adjustment (loss) gain for interest rate swap | ( | ||||||||||||||||||||||
| Reclassification of (income) to interest expense | ( | ( | |||||||||||||||||||||
| Tax benefit (expense) on interest rate swap adjustments | |||||||||||||||||||||||
| Measurement adjustment (loss) gain for interest rate swap | ( | ||||||||||||||||||||||
| Reclassification of (income) to interest expense | |||||||||||||||||||||||
| End of period balance | $ | $ | |||||||||||||||||||||
The cash flows related to settlement of the interest rate swaps are classified in the consolidated statements of cash flows based on the nature of the underlying hedged items. Fair value is based upon the present value of future cash flows under the terms of the contract and observable market inputs (level 2). Significant inputs used in determining fair value include forward-looking one-month Term SOFR rates and the discount rate applied to projected cash flows.
As of May 4, 2025, the Company estimates $23 million of the cash flow interest rate swap gains will be reclassified from accumulated other comprehensive income into earnings over the next 12 months.
7) INCOME TAXES
For the three months ended May 4, 2025 and April 28, 2024, the Company's effective tax rate was 25.5 % and 24.6 %, respectively. The effective tax rate for the three months ended May 4, 2025 increased primarily due to a decrease in the non-controlling interest ownership that increased the allocation of net income to taxable entities.
Tax Receivable Agreements
The Company is party to a tax receivable agreement with certain stockholders affiliated with Clayton, Dublier & Rice (“CD&R”) that transferred all of their Partnership Interests at the time of the initial public offering (the “Former Limited Partners Tax Receivable Agreement”) and a tax receivable agreement with certain stockholders affiliated with CD&R and Core & Main Management Feeder, LLC (“Management Feeder”) that continued to own Partnership Interests beyond the time of the initial public offering (the “Continuing Limited Partners Tax Receivable Agreement”) (collectively, the “Tax Receivable Agreements”). The Company has generated tax attributes, and expects to generate additional tax attributes with future exchanges of Partnership Interests, that will reduce amounts that it would otherwise pay in the future to various tax authorities. The Tax Receivable Agreements provide payments to the parties subject to the Tax Receivable Agreements, or their permitted transferees, of 85 % of the tax benefits realized by the Company, or in some circumstances are deemed to be realized.
The Company recorded payables to related parties pursuant to the Tax Receivable Agreements of $710 million and $725 million as of May 4, 2025 and February 2, 2025, respectively. Payments under the Tax Receivable Agreements within the next 12 months are expected to be $41 million, which is included within other current liabilities in the Balance Sheet.
The actual amount and timing of any payments under the Tax Receivable Agreements will vary depending upon a number of factors, including the timing of exchanges by the holders of Partnership Interests, the amount of gain recognized by such holders of Partnership Interests, the amount and timing of the taxable income the Company generates in the future and the federal tax rates then applicable. Assuming (i) that Management Feeder exchanged all of its remaining Partnership Interests at $53.88 per share of our Class A common stock (the closing stock price on May 2, 2025), (ii) no material changes in relevant tax law, (iii) a constant corporate tax rate of 25.1 %, which represents a pro forma tax rate that includes a provision for U.S. federal income taxes and assumes the highest statutory rate apportioned to each state and local jurisdiction and (iv) that the Company earns sufficient taxable income in each year to realize on a current basis all tax benefits, the Company would recognize an additional deferred tax asset (subject to offset with existing deferred tax liabilities) of approximately $118 million and a liability of approximately $100 million, payable over the life of the Continuing Limited Partners Tax Receivable Agreement. The full exchange will also decrease Core & Main's aforementioned deferred tax asset associated with its investment in Holdings by $5 million. The foregoing amounts are estimates and subject to change.
17
8) SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION
Receivables
Receivables consisted of the following:
| May 4, 2025 | February 2, 2025 | ||||||||||
| Trade receivables, net of allowance for credit losses | $ | $ | |||||||||
| Supplier rebate receivables | |||||||||||
| Receivables, net of allowance for credit losses | $ | $ | |||||||||
Accrued Compensation and Benefits
Accrued compensation and benefits consisted of the following:
| May 4, 2025 | February 2, 2025 | ||||||||||
| Accrued bonuses and commissions | $ | $ | |||||||||
| Other compensation and benefits | |||||||||||
| Accrued compensation and benefits | $ | $ | |||||||||
Leases
The table below presents cash and non-cash impacts associated with leases:
| Three Months Ended | ||||||||||||||
| May 4, 2025 | April 28, 2024 | |||||||||||||
| Operating cash flow payments for operating lease liabilities | $ | $ | ||||||||||||
| Operating cash flow payments for non-lease components | ||||||||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ | ||||||||||||
The non-cash impact related to right-of-use assets obtained in exchange for new operating lease liabilities in the table above excludes the impact from acquisitions.
Depreciation Expense
Depreciation expense is classified within cost of sales and depreciation and amortization within the Statement of Operations. Depreciation expense related to property, plant and equipment, including capitalized software, was as follows:
| Three Months Ended | |||||||||||||||||||||||
| May 4, 2025 | April 28, 2024 | ||||||||||||||||||||||
| Depreciation expense | $ | $ | |||||||||||||||||||||
9) NON-CONTROLLING INTERESTS
18
10) BASIC AND DILUTED EARNINGS PER SHARE
The following table presents the calculation of basic and diluted earnings per share for the three months ended May 4, 2025 and April 28, 2024.
Basic earnings per share is computed by dividing net income attributable to Core & Main for the period by the weighted average number of shares of Class A common stock outstanding during the same period. Shares of Class A common stock issued during the period were weighted for the portion of the period in which the shares of Class A common stock were outstanding. The Company did not apply the two-class method because shares of Class B common stock do not participate in earnings of Core & Main. As a result, the shares of Class B common stock are not considered participating securities and are not included in the weighted average shares outstanding for purposes of basic earnings per share. Net income allocated to holders of non-controlling interests was excluded from net income available to the Class A common stock. There were no preferred dividends and no shares of preferred stock outstanding for the period.
The diluted earnings per share calculation includes the basic weighted average number of shares of Class A common stock outstanding plus the dilutive impact of potential outstanding shares of Class A common stock that would be issued upon exchange of Partnership Interests, together with the retirement of a corresponding number of shares of Class B common stock, under the if-converted method, if dilutive. The treasury stock method is applied to outstanding awards, including unvested Partnership Interests and outstanding stock appreciation rights, restricted stock units and stock options.
| Three Months Ended | ||||||||||||||||||||||||||
| Basic earnings per share: | May 4, 2025 | April 28, 2024 | ||||||||||||||||||||||||
| Net income | $ | $ | ||||||||||||||||||||||||
| Net income attributable to non-controlling interests | ||||||||||||||||||||||||||
| Net income available to Class A common stock | ||||||||||||||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||||||||
| Net income per share | $ | $ | ||||||||||||||||||||||||
| Diluted earnings per share: | ||||||||||||||||||||||||||
| Net income available to common shareholders - basic | $ | $ | ||||||||||||||||||||||||
| Increase to net income attributable to dilutive instruments | ||||||||||||||||||||||||||
| Net income available to common shareholders - diluted | ||||||||||||||||||||||||||
| Weighted average shares outstanding - basic | ||||||||||||||||||||||||||
| Incremental shares of common stock attributable to dilutive instruments | ||||||||||||||||||||||||||
| Weighted average shares outstanding - diluted | ||||||||||||||||||||||||||
| Net income per share - diluted | $ | $ | ||||||||||||||||||||||||
11) RELATED PARTIES
The Company has entered into the Tax Receivable Agreements and the Exchange Agreement, dated as of July 22, 2021 (as amended, the “Exchange Agreement”) with related parties, that are discussed in Note 14 to the audited consolidated financial statements in our 2024 Annual Report on Form 10-K. There have been no significant changes to these related party agreements.
12) SUBSEQUENT EVENTS
19
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information should be read in conjunction with the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto of Core & Main, Inc. for the fiscal year ended February 2, 2025 included in our 2024 Annual Report on Form 10-K. The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed below and elsewhere in this Quarterly Report on Form 10-Q for a number of important factors, particularly those described under the caption “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Part I, Item 1A of the 2024 Annual Report on Form 10-K.
Overview
Core & Main, Inc. (“Core & Main” and collectively with its subsidiaries, the “Company”) is a leading specialty distributor dedicated to advancing reliable infrastructure with local service, nationwide. With a focus on water, wastewater, storm drainage and fire protection products, and related services, we provide solutions to municipalities, private water companies and professional contractors across municipal, non-residential and residential end markets, nationwide. Our specialty products and services are used primarily in the maintenance, repair, replacement and new construction of water, wastewater, storm drainage and fire protection infrastructure. We reach customers through a network of over 370 branches across 49 United States (“U.S.”) states. Our products include pipes, valves, fittings, storm drainage products, fire protection products, meter products and other products. We complement our core products through additional offerings, including fusible high-density polyethylene (“fusible HDPE “) piping solutions, specifically engineered treatment plant products, geosynthetics and erosion control products.
Basis of Presentation
The Company is a holding company and its primary material assets are its direct and indirect ownership interest in Core & Main Holdings, LP, a Delaware limited partnership (“Holdings”) and deferred tax assets associated with this ownership. Holdings has no operations and no material assets of its own other than its indirect ownership interest in Core & Main LP, a Florida limited partnership, the legal entity that conducts the operations of Core & Main. The condensed consolidated financial information of Core & Main, within this Quarterly Report on Form 10-Q, includes the consolidated financial information of Holdings and its subsidiaries. The limited partner interests of Holdings (“Partnership Interests”) not held by Core & Main are reflected as non-controlling interests in the condensed consolidated financial statements.
Fiscal Year
The Company’s fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31st. Quarters within the fiscal year include 13-week periods, unless a fiscal year includes a 53rd week, in which case the fourth quarter of the fiscal year will be a 14-week period. Each of the three months ended May 4, 2025 and three months ended April 28, 2024 included 13 weeks. The current fiscal year ending February 1, 2026 (“fiscal 2025”) will include 52 weeks.
Key Factors Affecting Our Business
End-Markets and General Economic Conditions
Historically, demand for our products has been tied to municipal infrastructure spending, non-residential construction and residential construction in the U.S. We estimate that, based on net sales for the fiscal year ended February 2, 2025 (“fiscal 2024”), our exposure by end market was approximately 42% municipal, 38% non-residential and 20% residential. Infrastructure spending and the non-residential and residential construction markets are subject to cyclical market pressures. Municipal demand has been relatively steady over the long term due to the consistent and immediate need to replace broken infrastructure; however, activity levels are subject to the availability of funding for municipal projects. Non-residential and residential construction activities are primarily driven by availability of credit, interest rates, general economic conditions, consumer confidence and other factors that are beyond our control. The length and magnitude of these cycles have varied over time and by market. Cyclicality can also have an impact on the products we procure for our customers or our related services, as further discussed under “—Price Fluctuations” below. Interest rate increases in the fiscal year ended January 28, 2024 (“fiscal 2023”) slowed home buying and new lot development, which was a contributing factor to a decline in the residential end market in fiscal 2023. In the second half of 2024 certain benchmark interest rates were cut, if interest rates continue to decline this may result in increased levels of activity in the U.S. residential and non-residential construction markets.
20
In November 2021, the Infrastructure Investment and Jobs Act (“IIJA”) was signed into law, which includes $55 billion to invest in water infrastructure across the U.S. In January 2025, President Trump issued an executive order to pause funding disbursements under IIJA; however this funding pause was not related to funding for water or road projects. While this pause is temporary, a more permanent reduction in IIJA funding may have an adverse effect on our business or financial condition. In the coming years, including as a result of the IIJA, we expect, but cannot provide any assurance that, increased federal infrastructure investment to have a core focus on the upgrade, repair and replacement of municipal waterworks systems and to address demographic shifts and serve the growing population. We believe these dynamics, coupled with expanding municipal budgets, create the backdrop for a favorable funding environment and accelerated investment in projects that will benefit our business.
Seasonality
Our operating results within a fiscal year are typically impacted by seasonality. Colder weather and shorter daylight hours historically have reduced construction, maintenance and repair activity. As a result, net sales are typically lower in our first and fourth fiscal quarters, especially in northern geographic regions. Abnormal levels of precipitation may negatively impact our operating results as it may result in the delay of construction projects across fiscal quarters. Our operating results may also be adversely affected by hurricanes, which typically occur during our third fiscal quarter. Our cash flows from operating activities are typically lower during the first and second fiscal quarters due to investment in working capital and annual incentive compensation payments and are typically higher during the third and fourth fiscal quarters due to cash inflows associated with receivable collections and reduced inventory purchases.
Price Fluctuations
Our financial performance is impacted by price fluctuations in the cost to procure substantially all the products we sell and our ability to reflect these changes, in a timely manner, in our customer pricing.
The costs to procure the products we sell are historically volatile and subject to fluctuations arising from changes in supply and demand, national and international economic conditions, labor and material costs, competition, market speculation, government regulation, weather events, trade policies and periodic delays in the delivery of our products. If we are able to pass through price increases to our customers, our net sales will increase; conversely, during periods of deflation, our customer pricing may decrease to remain competitive, resulting in decreased net sales. During the fiscal year ended January 29, 2023 (“fiscal 2022”), we experienced supply chain disruption that contributed to significant price inflation and product surcharges with respect to certain products we sell. The supply chain disruption was due to several factors, including, but not limited to, unpredictable lead times and delays from our suppliers, labor availability, global logistics and the availability of raw materials. In fiscal 2023, we saw improvements in the supply chain and more predictable lead times for certain products, but for other products the supply chain remained constrained. This led to price stability in fiscal 2023 compared to the price inflation we experienced during fiscal 2022. In fiscal 2024, certain suppliers and product lines experienced greater product availability that slightly lowered selling prices for these product lines. Additional supply chain disruptions may result in increases in product costs which we may not be able to pass on to our customers, loss of sales due to lack of product availability or potential customer claims from the inability to provide products in accordance with contractual terms. Greater product availability from supply chain improvements may lead to increased competition that may result in price and volume declines. We continue to monitor all of these factors and the resulting price impacts. In addition, the cost of products we purchase and sell may be impacted by the imposition of additional tariffs on imported goods from several geographic regions.
In recent months, the U.S. government has announced tariffs and trade restrictions on certain goods produced outside the United States. We believe our exposure to tariffs is limited as over three-quarters of products that we purchase are manufactured domestically. In addition, when price increases occur, we proactively evaluate our customer pricing and strategic buying opportunities. The potential direct and indirect impacts of tariffs on the broad economy and our end markets are uncertain and we continue to closely monitor and evaluate the ongoing situation.
We are also exposed to fluctuations in costs for petroleum as we distribute a substantial portion of our products by truck. In addition, we are exposed to fluctuations in prices for imported products due to logistical challenges and changes in labor, fuel, shipping container and other importation-related costs. We may also face price fluctuations on other products due to constrained labor availability and manufacturing capacity of our suppliers. Our ability to reflect these changes, in a timely manner, in our customer pricing may impact our financial performance.
21
Interest Rates
Certain of our indebtedness, including borrowings under the Senior Term Loan Credit Facility (as defined in Note 6 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q) and the Senior ABL Credit Facility, are subject to variable rates of interest and expose us to interest rate risk. The Senior Term Loan Credit Facility and the Senior ABL Credit Facility each bear interest based on term secured overnight financing rate (“Term SOFR”). If interest rates increase, our debt service obligations on our variable-rate indebtedness will increase and our net income would decrease, even though the amount borrowed under the facilities remains the same. As of May 4, 2025, we had $2,284 million of outstanding variable-rate debt. We seek to mitigate our exposure to interest rate volatility through the entry into interest rate swap instruments, such as our interest rate swap, associated with borrowings under the Senior Term Loan Credit Facility, which effectively converts $800 million of our variable rate debt to fixed rate debt, with notional amount decreases to $700 million on July 27, 2025 through the instrument maturity on July 27, 2026. On February 12, 2024, Core & Main LP entered into an additional interest rate swap, associated with borrowings under the Senior Term Loan Credit Facility, that has a starting notional amount of $750 million that increases to $1,500 million on July 27, 2026 through the instrument maturity on July 27, 2028. Despite these efforts, unfavorable movement in interest rates may further result in higher interest expense and cash payments.
Acquisitions
In addition to our organic growth strategy, we opportunistically pursue strategic asset and business acquisitions to grow our business. Below is a summary of the acquisitions that closed during the fiscal year ended February 2, 2025 (the "Fiscal 2024 Acquisitions") with an aggregate transaction value of $769 million, subject to working capital adjustments, respectively.
| Product Lines | Closing Date | |||||||||||||
| Fiscal 2024 | ||||||||||||||
| ARGCO Northeast LLC | Fire Protection | November 2024 | ||||||||||||
| Eastcom Associates, Inc. | Pipes, Valves & Fittings; Meter products | October 2024 | ||||||||||||
| Green Equipment Company | Pipes, Valves & Fittings; Meter products | September 2024 | ||||||||||||
| GroGreen Solutions Georgia, LLC | Storm Drainage | September 2024 | ||||||||||||
HM Pipe Products LP and HM Pipe Products Kitchner LP | Pipes, Valves & Fittings; Storm Drainage | August 2024 | ||||||||||||
Geothermal Supply Company Inc. | Pipes, Valves & Fittings | May 2024 | ||||||||||||
EGW Utilities Inc. | Pipes, Valves & Fittings; Meter products | April 2024 | ||||||||||||
| NW Geosynthetics Inc. | Storm Drainage | April 2024 | ||||||||||||
DKC Group Holdings, LLC | Pipes, Valves & Fittings; Storm Drainage; Meter products | March 2024 | ||||||||||||
Eastern Supply Inc. | Storm Drainage | February 2024 | ||||||||||||
As we integrate these and other acquisitions into our existing operations, we may not be able to identify the specific financial statement impacts associated with these acquisitions. There can be no assurance that the anticipated benefits of the acquisitions will be realized on the timeline we expect, or at all.
Key Business Metrics
Net Sales
We generate net sales primarily from the sale of water, wastewater, storm drainage and fire protection products and the provision of related services to over 60,000 customers, as of February 2, 2025, including municipalities, private water companies and professional contractors. We recognize sales, net of sales tax, customer incentives, returns and discounts. Net sales fluctuate as a result of changes in product costs as we seek to reflect these changes in our customer pricing in a timely manner. This will increase net sales if we are able to pass along price increases and decrease net sales if we are required to reduce our customer prices as a result of competitive dynamics.
We categorize our net sales into pipes, valves & fittings, storm drainage products, fire protection products and meter products:
•Pipe, valves, hydrants, fittings include these products and other complementary products and services. Pipe includes PVC, ductile iron, fusible HDPE and copper tubing.
•Storm drainage products primarily include corrugated piping systems, retention basins, manholes, grates, geosynthetics, erosion control and other related products.
•Fire protection products primarily include fire protection pipe, sprinkler heads, fittings, valves and devices as well as custom fabrication services.
22
•Meter products primarily include smart meter products, meter sets, meter accessories, installation, software and other services.
Gross Profit
Gross profit represents the difference between the product cost inclusive of material costs from suppliers (net of earned rebates and discounts and including the cost of inbound freight), labor and overhead costs and depreciation and the net sale price to our customers. Gross profit may be impacted by the time between changes in supplier costs and changes in our customer pricing. Gross profit may not be comparable to those of other companies, as other companies may include all of the costs related to their distribution network in cost of sales.
Operating Expenses
Operating expenses are primarily comprised of selling, general and administrative costs, which include personnel expenses (salaries, wages, incentive compensation, benefits and payroll taxes), rent, insurance, utilities, professional fees, outbound freight, fuel and repair and maintenance.
Net Income
Net income represents net sales less cost of sales, operating expenses, depreciation and amortization, interest expense, other expense and the provision for income taxes.
Net Income Attributable to Core & Main, Inc.
Net income attributable to Core & Main, Inc. represents net income less income attributable to non-controlling interests. Non-controlling interests represent owners of Partnership Interests of Holdings other than Core & Main, Inc.
Adjusted EBITDA
We define Adjusted EBITDA as EBITDA further adjusted for certain items management believes are not reflective of the underlying operations of our business, including but not limited to (a) loss on debt modification and extinguishment, (b) equity-based compensation, (c) expenses associated with the public offerings and (d) expenses associated with acquisition activities. Adjusted EBITDA includes amounts otherwise attributable to non-controlling interests as we manage the consolidated Company and evaluate operating performance in a similar manner. We use Adjusted EBITDA to assess the operating results and effectiveness of our business. See “—Non-GAAP Financial Measures” below for further discussion of Adjusted EBITDA and a reconciliation to net income or net income attributable to Core & Main, Inc., the most directly comparable measure under U.S. generally accepted accounting principles (“GAAP”), as applicable.
Earnings Per Share
Earnings per share represents the Class A common stock basic and diluted earnings per share. For a further description of basic and diluted earnings per share, refer to Note 10 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
23
Results of Operations
Three Months Ended May 4, 2025 Compared with Three Months Ended April 28, 2024
Amounts in millions (except per share data)
| Three Months Ended | |||||||||||
| May 4, 2025 | April 28, 2024 | ||||||||||
Net sales | $ | 1,911 | $ | 1,741 | |||||||
Cost of sales | 1,401 | 1,273 | |||||||||
| Gross profit | 510 | 468 | |||||||||
| Operating expenses: | |||||||||||
| Selling, general and administrative | 293 | 257 | |||||||||
Depreciation and amortization | 46 | 43 | |||||||||
Total operating expenses | 339 | 300 | |||||||||
Operating income | 171 | 168 | |||||||||
Interest expense | 30 | 34 | |||||||||
Income before provision for income taxes | 141 | 134 | |||||||||
Provision for income taxes | 36 | 33 | |||||||||
Net income | 105 | 101 | |||||||||
| Less: net income attributable to non-controlling interests | 5 | 6 | |||||||||
| Net income attributable to Core & Main, Inc. | $ | 100 | $ | 95 | |||||||
| Earnings per share: | |||||||||||
| Basic | $ | 0.53 | $ | 0.49 | |||||||
| Diluted | $ | 0.52 | $ | 0.49 | |||||||
| Non-GAAP Financial Data: | |||||||||||
| Adjusted EBITDA | $ | 224 | $ | 217 | |||||||
Net Sales
Net sales for the three months ended May 4, 2025 increased $170 million, or 9.8%, to $1,911 million compared with $1,741 million for the three months ended April 28, 2024. Net sales increased primarily due to higher volumes and acquisitions. Net sales increased for pipes, valves & fittings, storm drainage and meter products due to higher volumes and acquisitions. Net sales for fire protection products declined due to lower end-market volumes and lower selling prices partially offset by acquisitions.
| Three Months Ended | |||||||||||||||||
| May 4, 2025 | April 28, 2024 | Percentage Change | |||||||||||||||
Pipes, valves & fittings products | $ | 1,297 | $ | 1,169 | 10.9 | % | |||||||||||
Storm drainage products | 295 | 253 | 16.6 | % | |||||||||||||
Fire protection products | 152 | 167 | (9.0) | % | |||||||||||||
Meter products | 167 | 152 | 9.9 | % | |||||||||||||
Total net sales | $ | 1,911 | $ | 1,741 | |||||||||||||
Gross Profit
Gross profit for the three months ended May 4, 2025 increased $42 million, or 9.0%, to $510 million compared with $468 million for the three months ended April 28, 2024. Gross profit as a percentage of net sales for the three months ended May 4, 2025 was 26.7% compared with 26.9% for the three months ended April 28, 2024. The overall decrease in gross profit as a percentage of net sales was primarily attributable to a higher average cost of inventory this year compared to the prior year partially offset by favorable impacts from the execution of our gross margin initiatives and accretive acquisitions.
24
Selling, General & Administrative (“SG&A”) Expenses
SG&A expenses for the three months ended May 4, 2025 increased $36 million, or 14.0%, to $293 million compared with $257 million during the three months ended April 28, 2024. The increase is primarily attributable to higher personnel expenses, primarily attributable to acquisitions, inflation and other distribution-related costs due to an increase in sales volume. SG&A expenses as a percentage of net sales were 15.3% for the three months ended May 4, 2025 compared with 14.8% for the three months ended April 28, 2024. The increase was primarily attributable to acquisitions and inflationary cost impacts.
Depreciation and Amortization (“D&A”) Expense
D&A expense was $46 million for the three months ended May 4, 2025 compared with $43 million for the three months ended April 28, 2024. The increase was primarily attributable to recent acquisitions.
Operating Income
Operating income for the three months ended May 4, 2025 increased $3 million, or 1.8%, to $171 million compared with $168 million during the three months ended April 28, 2024. The increase in operating income was primarily attributable to higher gross profit partially offset by higher SG&A and D&A expenses.
Interest Expense
Interest expense was $30 million for the three months ended May 4, 2025 compared with $34 million for the three months ended April 28, 2024. The decrease was primarily attributable to a decrease in interest rates and decreased average borrowings under the Senior ABL Credit Facility.
Provision for Income Taxes
The provision for income taxes for the three months ended May 4, 2025 increased $3 million, or 9.1%, to $36 million compared with $33 million for the three months ended April 28, 2024. The increase was primarily attributable to an increase in operating income and an increase in the effective tax rate. For the three months ended May 4, 2025 and April 28, 2024, our effective tax rate was 25.5% and 24.6%, respectively. The effective tax rate for each period reflects only the portion of net income that is attributable to taxable entities. The increase in the effective tax rate was primarily attributable to a decrease in the non-controlling interest ownership that increased the allocation of net income to taxable entities.
Net Income
Net income for the three months ended May 4, 2025 increased $4 million, or 4.0% to $105 million compared with $101 million for the three months ended April 28, 2024. The increase in net income was primarily attributable to a 1.8% increase in operating income and a decrease in interest expense partially offset by an increase in income tax expense.
Net Income Attributable to Non-controlling Interests
Net income attributable to non-controlling interests for the three months ended May 4, 2025 decreased $1 million to $5 million compared with $6 million for the three months ended April 28, 2024. The decrease was primarily attributable to exchanges of Partnership Interests by non-controlling interest holders partially offset by an increase in net income.
Net Income Attributable to Core & Main, Inc.
Net income attributable to Core & Main, Inc. for the three months ended May 4, 2025 increased $5 million, or 5.3%, to $100 million compared with $95 million for the three months ended April 28, 2024. The increase was primarily attributable to a 4.0% increase in net income and a decreased allocation to non-controlling interest holders following exchanges of Partnership Interests.
Earnings Per Share
The Class A common stock basic earnings per share for the three months ended May 4, 2025 increased 8.2% to $0.53 compared with $0.49 for the three months ended April 28, 2024. The Class A common stock diluted earnings per share for the three months ended May 4, 2025 increased 6.1% to $0.52 compared with $0.49 for the three months ended April 28, 2024. The basic earnings per share increased due to an increase in net income attributable to Core & Main, Inc. and lower Class A share counts following the share repurchase transactions executed throughout fiscal 2024 and fiscal 2025. Diluted earnings per share increased due to an increase in net income and lower Class A share counts following the share repurchase transactions executed throughout fiscal 2024 and fiscal 2025.
25
Adjusted EBITDA
Adjusted EBITDA for the three months ended May 4, 2025 increased $7 million, or 3.2%, to $224 million compared with $217 million for the three months ended April 28, 2024. The increase in Adjusted EBITDA was primarily attributable to higher gross profit partially offset by higher SG&A expenses. For a reconciliation of Adjusted EBITDA to net income or net income attributable to Core & Main, Inc., the most comparable GAAP financial metric, as applicable, see “—Non-GAAP Financial Measures.”
Liquidity and Capital Resources
Historically, we have financed our liquidity requirements through cash flows from operating activities, borrowings under our credit facilities, issuances of equity and debt securities and working capital management activities. Our principal historical liquidity requirements have been for working capital, capital expenditures, acquisitions, servicing indebtedness, payments under the Tax Receivable Agreements and share repurchases (including under the Repurchase Program).
As of May 4, 2025, our cash and cash equivalents totaled $8 million. We maintain our cash deposits according to a banking policy that requires diversification across a variety of highly-rated financial institutions. However, this could result in a concentration of cash and cash equivalents across these financial institutions in excess of Federal Deposit Insurance Corporation-insured limits.
As of May 4, 2025, we had $100 million outstanding borrowings on our Senior ABL Credit Facility, which provides for borrowings of up to $1,250 million, subject to borrowing base availability. As of May 4, 2025, after giving effect to approximately $15 million of letters of credit issued under the Senior ABL Credit Facility, Core & Main LP would have been able to borrow approximately $1,135 million under the Senior ABL Credit Facility, subject to borrowing base availability. Our short term debt obligations of $24 million are related to quarterly principal payments on the Senior Term Loan Credit Facility.
In fiscal 2025 and fiscal 2024, the Company had a financing cash outflow related to the payment of $18 million and $11 million, respectively, under the Tax Receivable Agreements. The annual payments under the Tax Receivable Agreements increased as a result of exchanges of Partnership Interests completed in fiscal 2023. Payments under the Tax Receivable Agreements are only required to be made to the extent that we realize or are deemed to have realized the benefit of the corresponding tax deductions to reduce payments to federal, state and local taxing authorities. These payments are in an amount that represents 85% of the reduction in payments to federal, state and local taxing authorities. As such, the cash savings from the incremental tax deductions are expected to exceed the payments under the Tax Receivable Agreements over the life of these arrangements. Based on the anticipated filing date of income tax returns and contractual payment terms in the Tax Receivable Agreements, we expect these payments to occur two fiscal years after we utilize the corresponding tax deductions.
Further exchanges of Partnership Interest by Management Feeder will result in additional tax deductions to us and require additional payables pursuant to Tax Receivable Agreements. The actual amount and timing of the additional payments under the Tax Receivable Agreements will vary depending upon a number of factors as discussed further in Note 7 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Payments under the Tax Receivable Agreements may be accelerated if we elect an early termination in accordance with the terms of the Tax Receivable Agreements or negotiate a settlement of the Tax Receivable Agreements. An early termination or negotiated settlement of our obligations, or our successor’s obligations, under such Tax Receivable Agreement to make payments thereunder would be based on certain assumptions, including an assumption that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to such Tax Receivable Agreement.
We believe that our current sources of liquidity, which include cash generated from operations, existing cash and cash equivalents and available borrowing capacity under the Senior ABL Credit Facility, will be sufficient to meet our working capital, capital expenditures and other cash commitments, including obligations relating to our indebtedness and the Tax Receivable Agreements, over the next 12 months, at minimum. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. Our growth strategy contemplates future acquisitions for which we will need sufficient access to capital. To finance future acquisitions, particularly larger acquisitions, we may issue additional equity or incur additional indebtedness. Any such additional indebtedness would increase our debt leverage. See “Risk Factors” in Part I, Item 1A of the 2024 Annual Report on Form 10-K.
26
Additionally, we regularly evaluate our approach to our capital allocation, which may include acquisitions, capital expenditures, greenfields, debt reduction (including through open market debt repurchases, negotiated repurchases, other retirements of outstanding debt and opportunistic refinancing of debt), stock repurchases, dividends, payments on Tax Receivable Agreements or other distributions. During the three months ended May 4, 2025, we completed $39 million of repurchases of Class A common stock under the Repurchase Program. For further details, refer to Note 1 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. We may continue to return capital to our shareholders through share repurchases, including pursuant to the Repurchase Program or initiating dividend payments. The execution of these, and other, capital allocation activities may be at the discretion of, and subject to the approval by, our board of directors and will depend on our financial condition, earnings, liquidity and capital requirements, market conditions, level of indebtedness, contractual restrictions, compliance with our debt covenants, restrictions imposed by applicable law, general business conditions and any other factors that our board of directors deems relevant in making any such determination. Therefore, there can be no assurance that we will engage in any or all of these actions or to what amount of capital we will allocate to each option.
The execution of certain initiatives under our capital allocation policy may require distributions by Holdings and Core & Main LP. These entities’ ability to make distributions may be limited as a practical matter by our growth plans as well as Core & Main LP’s Senior Term Loan Credit Facility and Senior ABL Credit Facility. The Senior Term Loan Credit Facility may require accelerated repayment based upon cash flows generated in excess of operating and investing requirements when Core & Main LP’s net total leverage ratio (as defined in the agreement governing the Senior Term Loan Credit Facility) is greater than or equal to 3.25. In addition, the Senior ABL Credit Facility requires us to comply with a consolidated fixed charge coverage ratio of greater than or equal to 1.00 when availability is less than 10.0% of the lesser of (i) the then applicable borrowing base and (ii) the then aggregate effective commitments under the Senior ABL Credit Facility. Substantially all of Core & Main LP’s assets secure the Senior Term Loan Credit Facility and the Senior ABL Credit Facility.
Information about our cash flows, by category, is presented in the Condensed Consolidated Statements of Cash Flows and is summarized as follows:
| Three Months Ended | |||||||||||
| May 4, 2025 | April 28, 2024 | ||||||||||
| Cash flows provided by operating activities | $ | 77 | $ | 78 | |||||||
| Cash flows used in investing activities | (16) | (574) | |||||||||
| Cash flows (used in) provided by financing activities | (61) | 525 | |||||||||
| $ | — | $ | 29 | ||||||||
Operating Activities
Net cash provided by operating activities was $77 million for the three months ended May 4, 2025 compared with $78 million for the three months ended April 28, 2024. The $1 million decrease in cash provided by operating activities was due to a higher investment in working capital in the three months ended May 4, 2025 partially offset by the timing of interest payments, lower tax payments and an increase in net income.
Investing Activities
Net cash used in investing activities decreased by $558 million to $16 million for the three months ended May 4, 2025 compared with $574 million for the three months ended April 28, 2024, primarily attributable to $564 million in cash outflows for acquisitions during fiscal 2024.
Financing Activities
Net cash used in financing activities was $61 million for the three months ended May 4, 2025 compared with net cash provided by financing activities of $525 million for the three months ended April 28, 2024. The change of $586 million was primarily attributed to a $542 million decrease in net borrowings and debt issuance costs, $39 million increase in outflows related to the repurchases of Class A common stock under the Repurchase Program and a $7 million increase in payments under the Tax Receivable Agreements during fiscal 2025.
27
Financing
As of May 4, 2025, our debt obligations (in millions) consist of the following:
| Aggregate Principal/Borrowing Capacity | Maturity Date | Interest | ||||||||||||||||||
| 2028 Senior Term Loan | $ | 1,245 | July 27, 2028 | (i) Term SOFR plus, in each case, an effective applicable margin of 2.00%, or (ii) the base rate (described in Note 6 included elsewhere in this Quarterly Report on Form 10-Q). The weighted average interest rate, excluding the effects of the interest rate swaps, was 6.27% as of May 4, 2025. | ||||||||||||||||
2031 Senior Term Loan | 939 | February 9, 2031 | (i) Term SOFR plus, in each case, an applicable margin of 2.00%, or (ii) the base rate (described elsewhere in this Form 10-Q). The weighted average interest rate, excluding the effects of the interest rate swaps, was 6.27% as of May 4, 2025. | |||||||||||||||||
Senior ABL Credit Facility(1) | 1,250 | February 9, 2029 | Term SOFR rate plus an applicable margin ranging from 1.25% to 1.75%, or an alternate base rate plus an applicable margin ranging from 0.25% to 0.75%, depending on the borrowing capacity under the Senior ABL Credit Facility. | |||||||||||||||||
Interest Rate Swap(2) | 800 | July 27, 2026 | Effective fixed rate of 2.693%, based upon the 0.693% fixed rate plus an applicable margin of 2.00% associated with the Senior Term Loan Credit Facility. | |||||||||||||||||
Interest Rate Swap(3) | 750 | July 27, 2028 | Effective fixed rate of 5.913%, based upon the 3.913% fixed rate plus an applicable margin of 2.00% associated with the Senior Term Loan Credit Facility. | |||||||||||||||||
(1)Aggregate amount of commitments under the asset-based revolving credit facility of $1,250 million overall, subject to borrowing base availability. There were $100 million outstanding under the Senior ABL Credit Facility as of May 4, 2025.
(2)Notional amount of $800 million as of May 4, 2025. The notional amount decreases to $700 million on July 27, 2025 through the instrument maturity on July 27, 2026.
(3)Interest rate swap entered into on February 12, 2024 for a notional amount of $750 million. The notional amount increases to $1,500 million on July 27, 2026 through the instrument maturity on July 27, 2028.
Refer to Note 6 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a description of our debt obligations and the timing of future principal and interest payments including impacts from our interest rate swap.
Purchase Obligations
As of May 4, 2025, the Company had agreements in place with various suppliers to purchase goods and services, primarily inventory, in the aggregate amount of $1,262 million. These purchase obligations are generally cancellable, but the Company foresees no intent to cancel. Payments are generally expected to be made during fiscal 2025 and the fiscal year ended January 31, 2027.
Non-GAAP Financial Measures
In addition to providing results that are determined in accordance with GAAP, we present EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. These measures are not considered measures of financial performance or liquidity under GAAP and the items excluded therefrom are significant components in understanding and assessing our financial performance or liquidity. These measures should not be considered in isolation or as alternatives to GAAP measures such as net income or net income attributable to Core & Main, Inc., as applicable, cash provided by or used in operating, investing or financing activities or other financial statement data presented in our financial statements as an indicator of our financial performance or liquidity.
28
We define EBITDA as net income, or net income attributable to Core & Main, Inc., as applicable, adjusted for non-controlling interests, depreciation and amortization, provision for income taxes and interest expense. We define Adjusted EBITDA as EBITDA as further adjusted for certain items management believes are not reflective of the underlying operations of our business, including but not limited to (a) loss on debt modification and extinguishment, (b) equity-based compensation, (c) expenses associated with the initial public offering and subsequent secondary offerings and (d) expenses associated with acquisition activities. Net income attributable to Core & Main, Inc. is the most directly comparable GAAP measure to EBITDA and Adjusted EBITDA.
We use EBITDA and Adjusted EBITDA to assess the operating results and effectiveness and efficiency of our business. Adjusted EBITDA includes amounts otherwise attributable to non-controlling interests as we manage the consolidated Company and evaluate operating performance in a similar manner. We present these non-GAAP financial measures because we believe that investors consider them to be important supplemental measures of performance, and we believe that these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Non-GAAP financial measures as reported by us may not be comparable to similarly titled metrics reported by other companies and may not be calculated in the same manner. These measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. For example, EBITDA and Adjusted EBITDA:
• do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on debt;
• do not reflect income tax expenses, the cash requirements to pay taxes or related distributions;
• do not reflect cash requirements to replace in the future any assets being depreciated and amortized; and
• exclude certain transactions or expenses as allowed by the various agreements governing our indebtedness.
In evaluating Adjusted EBITDA, you should be aware that, in the future, we may incur expenses similar to those eliminated in this presentation.
The following table sets forth a reconciliation of net income or net income attributable to Core & Main, Inc. to EBITDA and Adjusted EBITDA for the periods presented:
| Three Months Ended | |||||||||||||||||||||||
| May 4, 2025 | April 28, 2024 | ||||||||||||||||||||||
| Net income attributable to Core & Main, Inc. | $ | 100 | $ | 95 | |||||||||||||||||||
| Plus: net income attributable to non-controlling interest | 5 | 6 | |||||||||||||||||||||
| Net income | 105 | 101 | |||||||||||||||||||||
Depreciation and amortization (1) | 47 | 44 | |||||||||||||||||||||
| Provision for income taxes | 36 | 33 | |||||||||||||||||||||
| Interest expense | 30 | 34 | |||||||||||||||||||||
| EBITDA | $ | 218 | $ | 212 | |||||||||||||||||||
| Equity-based compensation | 5 | 3 | |||||||||||||||||||||
Acquisition expenses (2) | 1 | 2 | |||||||||||||||||||||
| Adjusted EBITDA | $ | 224 | $ | 217 | |||||||||||||||||||
(1)Includes depreciation of certain assets which are reflected in “cost of sales” in our Statement of Operations.
(2)Represents expenses associated with acquisition activities, including transaction costs, post-acquisition employee retention bonuses, severance payments and expense recognition of purchase accounting fair value adjustments (excluding amortization).
Recently Issued and Adopted Accounting Pronouncements and Accounting Pronouncements Issued But Not Yet Adopted
Refer to Note 2 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
29
Critical Accounting Policies and Estimates
A summary of our significant accounting policies are discussed in Note 2 to the audited consolidated financial statements in our 2024 Annual Report on Form 10-K. The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Our estimates and assumptions are based on historical experiences and changes in the business environment. However, actual results may differ from estimates under different conditions, sometimes materially. Critical accounting policies and estimates are defined as those that are both most important to the portrayal of our financial condition and results of operations and require management judgment. There have been no significant changes to these policies which have had a material impact on the Company’s interim unaudited condensed consolidated financial statements and related notes during the three months ended May 4, 2025.
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements as of May 4, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
In the normal course of conducting business, we are exposed to certain risks associated with potential changes in market conditions. These risks include fluctuations in interest rates, foreign currency exchange rates and prices, including price fluctuations related to substantially all of our products.
Interest Rate Risk
Our credit facilities bear interest at a floating rate. The Senior Term Loan Credit Facility and the Senior ABL Credit Facility bear interest generally equal to Term SOFR plus an applicable margin. As a result, we are exposed to fluctuations in interest rates to the extent of our net borrowings under the Senior Term Loan Credit Facility and the Senior ABL Credit Facility. As of May 4, 2025, our net borrowings under the Senior Term Loan Credit Facility and the Senior ABL Credit Facility were $2,284 million. As such, excluding the impact of any interest rate swap, each one percentage point change in interest rates would result in an approximately $22 million change in the annual interest expense on the Senior Term Loan Credit Facility. As of May 4, 2025, assuming availability under our Senior ABL Credit Facility was fully utilized, each one percentage point change in interest rates would result in an approximately $12 million change in annual interest expense. See “Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Key Factors Affecting Our Business—Interest Rates.”
Credit Risk
We are exposed to credit risk on accounts receivable balances. This risk is mitigated due to our large, diverse customer base. In fiscal 2024, our 50 largest customers accounted for approximately 12% of our net sales, with our largest customer accounting for less than 1% of net sales. We maintain provisions for potential credit losses and such losses to date have normally been within our expectations. We evaluate the solvency of our customers on an ongoing basis to determine if additional allowances for doubtful accounts receivable need to be recorded. We have historically not been exposed to a material amount of uncollectible receivable balances.
Price Risk
We are exposed to price fluctuations in the cost to procure substantially all the products we sell and our ability to reflect these changes, in a timely manner, in our customer pricing. Our operating performance may be affected by both upward and downward price fluctuations. We have a limited ability to control the timing and amount of changes in the cost to procure our products including supplier pricing, transportation and governmental fees. We seek to recover increases in our product costs by passing product cost increases on to our customers. Conversely, decreases in our product costs can correspondingly lower the price levels of the products we sell in order to remain competitive in our markets. Changes to product costs may lead to a reduction to our gross profit margins. We seek to minimize this risk through strategic inventory investments ahead of announced price increases, management of our inventory levels, our variable compensation plans for associates and the execution of our gross margin initiatives. We are also exposed to fluctuations in petroleum costs as we deliver a substantial portion of the products we sell by truck and fluctuations in prices for imported products due to logistical challenges. Such price fluctuations have from time to time produced volatility in our financial performance and could do so in the future.
Foreign Currency Risk
We are exposed to risks from foreign currency exchange rate fluctuations on the translation of our foreign operations into U.S. dollars. As of May 4, 2025, our foreign currency operations were not material and a hypothetical 10% change in the relative value of the U.S. dollar would not materially impact the Company’s net earnings.
30
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports under the Exchange Act that we file with the U.S. Securities and Exchange Commission (the “SEC”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) concluded that, as of May 4, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this Quarterly Report on Form 10-Q relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost–effective control system, misstatements due to error or fraud may occur and not be detected.
31
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently party to any material legal proceedings. Nevertheless, we are from time to time involved in litigation incidental to the ordinary conduct of our business, including personal injury, workers’ compensation and business operations. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Like other companies in our industry, we have been subject to personal injury and property damage claims arising from the types of products that we distribute. As a distributor in this industry, we face an inherent risk of exposure to product liability claims in the event that the use of the products we have distributed in the past or may in the future distribute is alleged to have resulted in economic loss, personal injury or property damage or violated environmental, health or safety or other laws. Such product liability claims in the past have included, and may in the future include, allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. In particular, we have been and continue to be a defendant in asbestos-related litigation matters. See Item 1A. “Risk Factors—Risks Related to Our Business—The nature of our business exposes us to product liability, construction defect and warranty claims and other litigation and legal proceedings” in our Fiscal 2024 Annual Report on Form 10-K.
Item 1A. Risk Factors
There have been no material changes from the risk factors disclosed in Part I, Item1A "Risk Factors” in our Fiscal 2024 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
a. Sales of Unregistered Securities
None.
b. Use of Proceeds from Public Offering of Common Stock
None.
c. Issuer Purchases of Equity Securities
The following is a summary of our repurchases of shares of Class A common stock during the three months ended May 4, 2025:
| Period | Total Number of Shares (or Units) Purchased | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) or Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (in millions) | ||||||||||||||||||||||
February 3 - February 28(1) | 837 | $ | 56.25 | — | $ | 324 | ||||||||||||||||||||
March 1 - March 31(1) | 46,192 | 46.91 | — | 324 | ||||||||||||||||||||||
April 1 - May 5(1)(2) | 850,992 | 46.64 | — | 285 | ||||||||||||||||||||||
| 898,021 | $ | 46.66 | — | $ | 285 | |||||||||||||||||||||
(1) Reflects repurchases by the Company of shares of our Class A common stock pursuant to employee tax withholding obligations and strike price settlement upon exercise of unit appreciation rights and vesting of restricted stock units pursuant to terms of the Company’s 2021 Omnibus Equity Incentive Plan.
(2) Includes the repurchase by the Company of 837,268 shares of our Class A common stock for an average price per share of $46.64 through open market transactions during the three months ended May 4, 2025 as part of the Repurchase Program (as defined in Note 1 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q).
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
32
Item 5. Other Information
Director and Officer Trading Arrangements
Item 408(a) of Regulation S-K requires the Company to disclose whether any of its directors or officers have adopted or terminated
The James G. Castellano Revocable Trust, affiliated with James G. Castellano , Director , adopted a new trading arrangement on April 18, 2025 providing for the sale of up to 43,994 aggregate shares of the Company’s Class A common stock between July 18, 2025 and January 16, 2026.
Each of the above trading arrangements is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act and the Company’s Policy on Trading in Securities.
33
Item 6. Exhibits
Exhibit Number | Description | |||||||
| 10.1 | ||||||||
| 10.2 | ||||||||
| 10.3 | ||||||||
| 10.4 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.* | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document.* | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document.* | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document.* | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document.* | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document.* | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document).* | |||||||
* Filed herewith.
** Furnished herewith.
† | Identifies each management contract or compensatory plan or arrangement. | ||||
34
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: June 10, 2025 | CORE & MAIN, INC. | |||||||
By: | /s/ Mark R. Witkowski | |||||||
Name: Mark R. Witkowski | ||||||||
Title: Chief Executive Officer and Director | ||||||||
(Principal Executive Officer) | ||||||||
By: | /s/ Robyn L. Bradbury | |||||||
Name: Robyn L. Bradbury | ||||||||
Title: Chief Financial Officer | ||||||||
(Principal Financial Officer) | ||||||||
35
Exhibit 10.1
Portions of this exhibit have been redacted pursuant to Item 601(a)(6) of Regulation S-K. The Company undertakes to furnish a copy of all unredacted and omitted schedules and exhibits to the SEC upon its request.
Employment Agreement
This Employment Agreement (this “Agreement”) is made and entered into as of March 20, 2025, by and between Core & Main LP, a Florida limited partnership (the “Company”), and Mark Witkowski (the “Executive”) (together the Company and the Executive are referred to as the “Parties”).
WHEREAS, the Parties desire to enter into an employment agreement which shall memorialize the terms and conditions of the Executive’s employment; and
WHEREAS, this Agreement supersedes all prior agreements or understandings regarding the terms of the Executive’s employment with the Company, whether written or otherwise, including, but not limited to, that certain Employment Agreement, dated as of February 9, 2018, by and between the Parties (the “Prior Employment Agreement”).
NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein contained, together with other good and valuable consideration the receipt of which is hereby acknowledged, the Parties hereby agree as follows:
1. Services and Duties. Effective as of March 31, 2025 (the “Effective Date”), the Executive shall, pursuant to the terms of this Agreement, be employed by the Company as its Chief Executive Officer and shall report to the Board of Directors of Core & Main, Inc. (the “Board”). The Executive shall have no other employment and no other business ventures which are undisclosed to the Board or which conflict with the Executive’s duties under this Agreement. The Executive may not participate on the board of directors of any other company without the prior written consent of the Board. The Executive’s responsibilities shall include such responsibilities, duties, and authority as are customary for the Executive’s position, and may have such additional duties and responsibilities as may be assigned to the Executive by the Board. The Executive shall carry out the duties and responsibilities hereunder in good faith in a diligent, competent and professional manner, consistent and in compliance with all applicable federal and state laws and regulations and Company policies and to the best of the Executive’s ability in a manner he reasonably believes is in the best interests of the Company.
2. Term of Employment. The Executive’s employment with the Company pursuant to this Agreement shall be for an indefinite term commencing as of the Effective Date and shall be treated as “at-will” employment, subject to termination by either the Company or the Executive as provided for in Section 6. The period of the Executive’s employment with the Company pursuant to this Agreement is referred to herein as the “Term.”
3. Location. The Executive shall be employed by the Company at its executive headquarters, which is currently located at 1830 Craig Park Court, Maryland Heights, Missouri 63146.
4. Compensation
a.Base Salary. In consideration of the Executive’s full and faithful satisfaction of the Executive’s duties under this Agreement, the Company agrees to pay the Executive an annual base salary in the amount of $825,000 (the “Base Salary”), paid in accordance with the Company’s regular payroll schedule as in effect from time to time and subject to all applicable tax and other permitted withholdings. The Executive’s Base Salary may be reviewed and adjusted from time to time by the Board or by the Talent and Compensation Committee of the Board (the “Compensation Committee”).
b.Annual Bonus. The Executive shall be eligible to receive an annual bonus under the terms of the Company’s annual management incentive compensation plan (the “Bonus Plan”) as may be in effect from time to time. The Executive’s target bonus for these purposes is equal to 125% of the Executive’s Base Salary in effect for the year for which the bonus is paid (the “Annual Bonus Opportunity”). The actual amount payable as a bonus is determined based on the terms and conditions of the Bonus Plan document, and by reference to such performance metrics as are established for the relevant year. Performance metrics are established by the Compensation Committee and information regarding such performance metrics will be communicated generally during the first quarter of the year. The amount of the bonus payable for any particular year will be determined on the basis of the terms and conditions established for such year by the Compensation Committee. The terms of the Bonus Plan are subject to modification by the Compensation Committee or the Board at any time and from time to time. The Company is under no obligation to continue the Bonus Plan or to establish a different annual bonus or annual incentive plan if the Bonus Plan is terminated. Under the terms of the Bonus Plan as currently in effect, it is possible that, based on performance, the actual amount payable as an annual bonus may be less than the target described above, and there may be no bonus payable at all if performance is not achieved at a required threshold level. To be eligible to receive the bonus payable under the Bonus Plan, the Executive must be employed by the Company through the date of payment (which is generally during the second calendar quarter following the year for which such bonus is payable).
c.Equity Incentive. Awards under the Core & Main, Inc. 2021 Omnibus Equity Incentive Plan or a successor plan (the “Equity Incentive Plan”) may be made to the Executive, but any such awards are made at the discretion of the Compensation Committee and there is not a guarantee that awards under the Equity Incentive Plan will be made.
5. Benefits and Perquisites.
a.Employee Benefits. The Executive shall be eligible to participate in all employee benefit plans made available generally to the Company’s employees and those benefit plans that are available to the Company’s executives, subject to the applicable limitations and requirements imposed by the terms and conditions of the governing plan documents for such plans. The Company reserves the right to modify any of its employee benefit plans from time to time and to terminate such plans at any time, subject to any limitations imposed by law on such actions.
2
b.Paid Time Off. The Executive shall be eligible to participate in the paid time off policy generally applicable to the Company’s employees, as in effect from time to time.
c.Reimbursement of Expenses. The Company shall reimburse the Executive for any expenses reasonably incurred by the Executive during the Term, in furtherance of the Executive’s duties hereunder, including business travel, meals and accommodations, upon submission by the Executive of such evidence as may be required under the terms of the Company’s business expense reimbursement policy as in effect from time to time.
d.Executive Car Program. The Executive will be eligible to participate in the Company’s executive car program.
6. Termination of Employment
a.Termination without Cause. The Company may terminate the Executive’s employment without Cause at any time; subject to providing to the Executive 60 days’ advance written notice of such termination. Notwithstanding the foregoing, the Company may terminate the Executive’s employment without Cause without such advance written notice; provided, however, that the Company shall pay to the Executive the Executive’s Base Salary, as then in effect, for the period such advance written notice requirement exceeds the period of actual written notice of the Executive’s termination.
b.Death or Disability. The Executive’s employment shall terminate immediately upon the Executive’s death. The Executive’s employment may also be terminated by the Company in the event of the Executive’s Disability. For these purposes, “Disability” means the Executive is eligible for disability benefits under the Company’s long-term disability plan; provided, however, that if there is no such plan in effect, Disability means that the Executive is unable to perform the Executive’s duties under the terms of this Agreement, with or without a reasonable accommodation for a period of not less than three months (subject to any longer period that may be required under applicable law) by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a period of not less than 12 months. Nothing in this Agreement shall be construed to waive or limit the Executive’s rights under existing law, including, without limitation, the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., and the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq.
c.Termination for Cause. The Company may terminate the Executive’s employment for Cause without any advance notice except as expressly provided for in this Section 6(c). For these purposes, “Cause” means any of the following:
i.The Executive’s indictment for, commission of, conviction of or plea of nolo contendere to a felony or a crime involving moral turpitude;
ii.The Executive’s commission of fraud, theft, embezzlement, self-dealing, dishonesty, misappropriation or other malfeasance against the Company;
iii.The Executive’s material and persistent failure to perform Executive’s lawful duties or responsibilities under the terms of this Agreement or other agreement between the Parties (other than by reason of disability);
3
iv.The Executive’s failure to comply with any lawful policy of the Company;
v.The Executive’s commission of acts or omissions constituting gross negligence or material misconduct in the performance of any aspect of the Executive’s lawful duties or responsibilities which have or may be expected to have an adverse effect on the Company;
vi.The Executive’s breach of any fiduciary duty owed to the Company;
vii.The Executive’s material violation or material breach of any restrictive covenant or any material term of this Agreement or material term of another agreement between the Parties;
viii.The Executive’s failure or refusal to cooperate in good faith with a governmental or internal investigation; or
ix.The Executive’s commission of any act or omission that materially damages or is reasonably likely to materially damage the financial condition or business of the Company or materially damages or is reasonably likely to materially damage the reputation, public image, goodwill, assets or prospects of the Company.
Notwithstanding the foregoing, Cause for the Executive’s termination of employment shall not exist with respect to any of the above matters to the extent the situation is reasonably susceptible to cure (as determined at the discretion of the Board) unless the Company has provided the Executive with written notice detailing the event constituting Cause and the Executive fails to cure such condition within 15 days of the Executive’s receipt of such notice.
d.Resignation by the Executive. The Executive may resign at any time without Good Reason (as defined below); subject to provision to the Company of 60 days’ advance notice of such termination.
e.Resignation by the Executive for Good Reason. The Executive may resign for “Good Reason” in the following circumstances:
i.The Company materially reduces the Executive’s Base Salary (except for any across-the-board reduction impacting substantially all executives of the Company where such reduction does not represent a greater than 10% reduction);
ii.The Company materially reduces the percentage of Base Salary that constitutes the Executive’s Target Bonus;
iii.The Company materially reduces the Executive’s duties, authorities and responsibilities;
iv.The Company makes any material adverse change to the Executive’s title or reporting line;
v.The Company requires that the Executive report to a different principal work location that increases the Executive’s commute by more than 40 miles; or
vi.The Company engages in a material violation or material breach of any restrictive covenant or any material term of this Agreement or material term of another agreement between the Parties.
4
Notwithstanding the foregoing, in no event shall the Executive’s resignation be deemed to be for Good Reason unless the Executive provides the Company with written notice of the condition claimed to constitute Good Reason for the Executive’s resignation within 30 days of the initial existence of such condition, the Company must have failed to correct such condition within 30 days of the Company’s receipt of the aforementioned written notice and the Executive must then resign and separate from employment no later than 90 days following the initial existence of the condition that is claimed to constitute Good Reason for the Executive’s resignation.
f.Obligations of the Executive on Termination of Employment. In addition to the post-termination covenants described in Section 8 of this Agreement, the Executive shall, following any termination of employment with the Company:
i.Return to the Company all property of the Company in the Executive’s possession and shall take appropriate measures to return or destroy any files or confidential information in the Executive’s possession that may be in electronic form; and
ii.Resign each position (if any) that the Executive then holds as an officer or director of the Company and any affiliate of the Company. The Executive’s execution of this Agreement shall be deemed the grant by the Executive to the officers of the Company of a limited power of attorney to sign in the Executive’s name and on the Executive’s behalf any such documentation as may be required to be executed solely for the limited purposes of effectuating such resignations.
7. Compensation Payable Following Termination of Employment.
a.Accrued Obligations. In the event of any termination of employment, the Executive shall be entitled to: (i) all amounts of unpaid Base Salary through the date of termination; (ii) benefits or payments from any Company sponsored employee benefit plan, in accordance with the terms and conditions of the governing plan documents; and (iii) reimbursement of any unpaid business related expenses incurred prior to the Executive’s termination of employment, provided the Executive has complied with the requirements for such reimbursements under the terms of the Company’s business expense reimbursement policy (collectively, the “Accrued Obligations”). For purposes of clarity and avoidance of doubt, only the Accrued Obligations will be paid to the Executive in the event of the Executive’s termination of employment under any circumstances other than a termination by the Company without Cause or a resignation for Good Reason, including where the termination of employment is due to the Executive’s death or Disability. Nothing in this Section 7(a), however, shall be interpreted to deny payment to the Executive of any death or disability benefits that are provided for under the Company’s employee benefit plans.
b.Termination by the Company without Cause or Resignation by the Executive for Good Reason. If the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason, in addition to the Accrued Obligations, the Company shall provide to the Executive, as severance pay, an amount equal to two times: (i) the Executive’s Base Salary; and (ii) the Executive’s Annual Bonus Opportunity, to be paid in substantially equal payments in accordance with the Company’s regular payroll schedule, commencing as soon as practicable following the date the Release (as defined
5
below) becomes irrevocable (with the first such payment including any amounts that would have been paid had the Executive’s Base Salary continued following the Executive’s termination of employment without interruption pending the Release being executed and becoming irrevocable) and payable for a period of 24 months (the “Severance Pay”), subject to the Executive executing a release of claims in a form determined by the Company to be acceptable (the “Release”) and the Release, thereafter, becoming irrevocable pursuant to its terms; provided, however, that if the period for the Executive to consider, sign and not revoke the Release spans two taxable years, the Severance Pay shall commence in the second such taxable year. In addition, subject to the Executive enrolling in COBRA continuation coverage, the Company shall, over the 12 months following the date of termination, pay the Executive an amount equal to the monthly cost of the Executive purchasing COBRA coverage for the Executive and the Executive’s covered dependents (the “Benefit Continuation”), except that the Benefit Continuation shall cease in the event that the Executive becomes eligible for coverage from a subsequent employer. Further, the Company shall provide the Executive with customary outplacement services (the “Outplacement Services”), except that the maximum cost to the Company of providing such outplacement services shall not exceed $10,000. For purposes of clarity and avoidance of doubt, if the Company does not receive the Release within the specified deadline for its execution, the Executive shall not be entitled to any of the Severance Pay, the Benefit Continuation or the Outplacement Services.
8. Covenants. The Executive’s employment is conditioned upon his execution of the Confidentiality, Non-Solicitation and Non-Compete Agreement in substantially the form attached hereto as Exhibit A (as it may be amended, restated or modified from time to time and together with any similar agreement entered into by the Executive and the Company or any affiliate thereof, the “PCA”). In the event the Executive violates any of his obligations set forth in the PCA, any unpaid Severance Pay or other separation benefits shall terminate.
9. Assignment. This Agreement, and any rights and obligations hereunder, may not be assigned by the Executive and may be assigned by the Company to (i) a successor by merger, (ii) purchasers of substantially all of the assets of the Company or its affiliates, or (iii) in connection with any other acquisition, reorganization or restructuring of the Company.
10. Code Section 409A. In general, it is intended that all compensation provided for under the terms of this Agreement be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), by reason of the “short-term deferral” and “separation pay” exemptions found in Treasury Regulation Sections 1.409A-1(b)(4) and (9) (or any successor to such exemptions). Notwithstanding the foregoing, however, if any payments are deemed to be a form of nonqualified deferred compensation for purposes of Code Section 409A, the Parties intend that such compensation arrangements be structured so as to comply with the requirements of Code Section 409A and shall make reasonable efforts to cause such arrangements to comply with Code Section 409A. In this regard, all payments that are deemed to be subject to Code Section 409A will be considered to be separate payments and not a form of installment payments, any such payments that are triggered by a termination of employment will be paid when there has been a “separation from service” (as that phrase is used for purposes of Code Section 409A), and no such payments will be subject to offset by any other amount unless otherwise permitted by Section 409A. Whenever a payment that is subject to Code Section 409A has a specified
6
payment date, payment will be made at such time as is deemed to be a timely payment for purposes of Code Section 409A and any discretion as the time of payment will be exercised solely by the Company. If the Executive is a “specified employee” within the meaning of Code Section 409A at the time of his “separation from service”, then any payments that are triggered by such separation from service that would otherwise be payable within the six-month period following the separation from service will be paid in a lump sum on the date that is the first day of the calendar month following the six-month anniversary of the Executive’s separation from service.
If and to the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (A) all such expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred, (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (C) the amount of expenses eligible for reimbursement, or the in-kind benefits provided, during any taxable year will not affect the expenses eligible for reimbursement, or the in-kind benefits to be provided, in any other taxable year, and (D) any reimbursement shall be for expenses incurred during the period of time specified in this Agreement and if no time period is specified, shall be for expenses incurred during the Executive’s lifetime. It is the intent of this Agreement to comply with, or be exempt from, the requirements of Code Section 409A so that none of the payments and benefits to be provided hereunder shall be subject to the additional tax imposed under Code Section 409A, and any ambiguities herein shall be interpreted to so comply.
11. Code Section 280G.
a.Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary (including the Equity Incentive Plan), if there is a change of ownership or effective control or change in the ownership of a substantial portion of the assets of a corporation (within the meaning of Code Section 280G) and any payment or benefit (including payments and benefits pursuant to this Agreement) that the Executive would receive from the Company or otherwise (“Transaction Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Code Section 4999 (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Transaction Payment are paid to the Executive, which of the following two alternative forms of payment would result in the Executive’s receipt, on an after-tax basis, of the greater amount of the Transaction Payment notwithstanding that all or some portion of the Transaction Payment may be subject to the Excise Tax: (1) payment in full of the entire amount of the Transaction Payment (a “Full Payment”), or (2) payment of only a part of the Transaction Payment so that the Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”). For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, the reduction in payments and/or benefits will occur in the following order: (1) first, reduction of cash payments, in
7
reverse order of scheduled payment date (or if necessary, to zero), (2) then, reduction of non-cash and non-equity benefits provided to the Executive, on a pro rata basis (or if necessary, to zero), and (3) then, cancellation of the acceleration of vesting of equity award compensation in the reverse order of the date of grant of the Executive’s equity awards.
b.Unless the Executive and the Company otherwise agree in writing, any determination required under this section shall be made in good faith in writing by an independent accounting firm selected by the Company which is reasonably acceptable to the Executive (the “Accountants”), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes absent manifest error. For purposes of making the calculations required by this section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Code Sections 280G and 4999. The Accountants shall provide detailed supporting calculations to the Company and the Executive as requested by the Company or the Executive. The Executive and the Company shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this section. The Company shall bear all costs of the Accountants in connection with any calculations contemplated by this Section 11(b).
c.Notwithstanding the foregoing, in the event that no stock of the Company or its Affiliates is readily tradable on an established securities market or otherwise (within the meaning of Code Section 280G) at the time of the change in control, the Company shall, upon request of the Executive, submit to a vote of shareholders for approval the portion of the Transaction Payments that exceeds three times the Executive’s “base amount” (within the meaning of Code Section 280G) (the “Excess Parachute Payments”) in accordance with Treas. Reg. §1.280G-1, and the Parties shall cooperate with such vote of shareholders, including the execution of any required documentation subjecting the Executive’s entitlement to all Excess Parachute Payments to such shareholder vote.
12. General Provisions.
a.Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of one business day following email delivery, or the third business day after mailing by FedEx or UPS to the addresses set forth below or to such other address or to the attention of such other person as the recipient Party will have specified by prior written notice to the sending Party:
To the Company
Core & Main LP
Attn: Lead Independent Director
1830 Craig Park Court
St. Louis, MO 63146
Email: [Redacted]
With a copy to:
8
Core & Main LP
Attn: General Counsel
1830 Craig Park Court
St. Louis, MO 63146
Email: [Redacted]
To the Executive:
At the address shown in the Company’s personnel records.
(b)Severability. Any provision of this Agreement which is deemed by a court of competent jurisdiction to be invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this paragraph be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable by a court of competent jurisdiction because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. If any benefit or treatment is stated in form or substance as to be in actual or possible conflict with applicable law, the applicable law shall prevail in the stead of any statements contained in this Agreement.
(c)Entire Agreement. This document, together with any attachments hereto, the indemnification agreement previously entered into by and between the Executive, the Company and certain other affiliates, and all restrictive covenants in any and all agreements between the Executive and the Company or any of the Company’s affiliates constitute the final, complete, and exclusive embodiment of the entire agreement and understanding between the Parties related to the subject matter hereof and to the compensatory arrangements between the Company and the Executive and supersedes and preempts any prior or contemporaneous understandings, agreements, term sheets, or prior drafts or representations by or between the Parties, written or oral. For the avoidance of doubt, from and after the Effective Date, this Agreement supersedes and replaces the Prior Employment Agreement in its entirety and such Prior Employment Agreement shall have no further force or effect from and after the Effective Date.
(d)Counterparts. This Agreement may be executed on separate counterparts, any one of which need not contain signatures of more than one Party, but all of which taken together will constitute one and the same agreement.
(e)Amendments. No amendments or other modifications to this Agreement may be made except by a writing signed by all Parties. No amendment or waiver of this Agreement requires the consent of any individual, partnership, corporation or other entity not a party to this Agreement, with the possible exception of the Board. Nothing in this Agreement, express or implied, is intended to confer upon any third person any rights or remedies under or by reason of this Agreement.
9
(f)Dispute Resolution. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE ANY RIGHTS THAT THEY MAY HAVE TO A JURY TRIAL FOR ANY SUCH DISPUTES, CONTROVERSIES OR CLAIMS. In the event of any dispute arising under or including any provisions of this Agreement, the Executive and the Company agree to submit the dispute to binding arbitration before a mutually agreed upon arbitrator in accordance with the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1, et seq. Disputes between the Parties that may not be subject to pre-dispute arbitration agreement as provided by an Act of Congress are excluded from the coverage of this Agreement. The arbitration shall be conducted in St. Louis, Missouri by JAMS, Inc. (“JAMS”) or its successors, under JAMS’ then applicable rules. A neutral arbitrator (the “Arbitrator”) shall be selected by both Parties, and shall: (a) have the authority to compel adequate discovery for the resolution of the dispute; (b) have the authority to award monetary damages and any and all other remedies that would be available in court, governed by the substantive laws of the State of Missouri; and (c) issue a written arbitration decision including the arbitrator’s essential findings of fact and conclusions of law and a statement of the award. The Parties shall be entitled to all rights and remedies that either would be entitled to pursue in a court of law; provided, however, that either Party may seek to obtain injunctive relief in court to prevent irreparable harm pending the conclusion of arbitration. Each Party will pay the fees for their own counsel, subject to any remedies to which that Party may later be entitled under this Agreement or applicable law. However, in all cases where required by law, the Company will pay the Arbitrator’s and arbitration fees. If under applicable law the Company is not required to pay all of the Arbitrator’s and/or arbitration fees, such fee(s) will be apportioned between the Parties in accordance with said applicable law, and any disputes in that regard will be resolved by the Arbitrator. The decision of the Arbitrator shall be final and binding on the Parties.
(g)Choice of Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the laws of the State of Missouri without giving effect to principles of conflicts of law of such state.
(h)Survivorship. The provisions of this Agreement necessary to carry out the intention of the Parties as expressed herein shall survive the termination or expiration of this Agreement.
(i)Waiver. The waiver by either Party of the other Party’s prompt and complete performance, or breach or violation, of any provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation, and the failure by any Party hereto to exercise any right or remedy which it may possess hereunder shall not operate nor be construed as a bar to the exercise of such right or remedy by such Party upon the occurrence of any subsequent breach or violation. No waiver shall be deemed to have occurred unless set forth in a writing executed by or on behalf of the waiving Party. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.
(j)Captions. The captions of this Agreement are for convenience and reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision hereof.
10
(k)Construction. The Parties acknowledge that this Agreement is the result of arm’s-length negotiations between sophisticated parties, each afforded representation by legal counsel. Each and every provision of this Agreement shall be construed as though both Parties participated equally in the drafting of the same, and any rule of construction that a document shall be construed against the drafting Party shall not be applicable to this Agreement.
(l)This Agreement Controls. If there is any conflict or dispute between this Agreement and any other agreement between the Executive and the Company, the terms of this Agreement shall control. If there is any conflict or dispute between this Agreement and any other agreement between the Executive and the Company, the terms of this Agreement shall control.
(m)Compensation Clawback. Any incentive based or other compensation paid to the Executive under this Agreement or any other agreement between the Parties shall be subject to recovery by the Company under the Company’s Dodd-Frank Clawback Policy or any other clawback or other such recovery policy adopted by the Company from time to time.
[Remainder of page is intentionally left blank.]
11
IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREBY, the Parties hereto have executed and delivered this Agreement as of the year and date first written.
COMPANY:
Core & Main LP
By:/s/ Stephen O. LeClair
Name: Stephen O. LeClair
Title: Chief Executive Officer
EXECUTIVE:
/s/ Mark Witkowski
Name: Mark Witkowski
12
Exhibit A
Form of PCA
See attached.
13
CONFIDENTIALITY, NON-SOLICITATION, AND NONCOMPETE AGREEMENT
THIS CONFIDENTIALITY, NON-SOLICITATION, AND NON-COMPETE AGREEMENT (“Agreement”) is made as of the date this Agreement is executed by and between the undersigned employee (“Employee”) and Core & Main LP (“Employer”).
WHEREAS, Employee acknowledges that the business in which Employer is engaged is highly competitive, that Employer devotes a substantial amount of time and effort to the development and maintenance of Confidential Information (defined below) and that Confidential Information constitutes a valuable asset of Employer; and
WHEREAS, due to, among other things, the nature of Employee’s position with Employer, Employee has been and will continue to be provided with Confidential Information and may be responsible for developing and maintaining customer relationships and goodwill and Employer has placed Employee in a position of trust and confidence with Employer; and
WHEREAS, Employee receives training, experience, and expertise from Employer that make Employee’s services of special, unique and extraordinary value to Employer; and
WHEREAS, it would be detrimental to Employer for Employee to disclose Confidential Information or unfairly compete with Employer in a manner prohibited by this Agreement.
NOW, THEREFORE, in consideration of Employee’s continued employment and service as an executive officer, additional consideration in the form of participation in the Core & Main Inc. 2021 Omnibus Equity Incentive Plan and the receipt of equity (in any form) under the plan, compensation, and the equipment, materials, facilities, resources, and Confidential Information (as defined below) that have been supplied to Employee, and the mutual promises contained herein, and intending to be legally bound, Employee and Employer agree as follows:
1.Whereas Clauses.
The Whereas Clauses contained in the paragraphs above hereby are incorporated and made a part of this Agreement.
2.Definitions
a.The term “Competitor” as used herein shall mean any business, person, entity or group of business entities, regardless of whether organized as a corporation, partnership (general or limited), joint venture, association or other organization, that provides a product or service that competes with the products or services of Employer that Employee was involved in or was provided Confidential Information (defined below) about during the Look Back Period.
14
b.The term “Covered Customer” as used herein shall mean any customer of Employer (i) with whom Employee had business-related contact or (ii) about which Employee received or learned Confidential Information during the Look Back Period.
c.The term “Covered Employee” as used herein shall mean any employee of Employer that Employee worked with, supervised, or received Confidential Information about during the Look Back Period.
d.The term “Employer” as used herein shall mean Employer, its predecessors, designees and successors and its past, present and future operating companies, divisions, subsidiaries, affiliates and other business units, including businesses acquired by purchase of assets, stock, merger or otherwise.
e.The term “Look Back Period” as used herein shall mean (i) the last two (2) years of Employee’s employment with Employer as of the Termination Date (defined below), or such shorter period of time as Employee has been employed by Employer; or, if the foregoing period is not enforceable then, (ii) such lesser period as would be enforceable under applicable law.
f.The term “Termination Date” as used herein shall mean the last day Employee actively performs services for Employer, regardless of the reason for Employee’s separation from employment with Employer, including any and all voluntary and involuntary reasons for termination.
g.The term “Territory” as used herein will depend upon Employee’s position as follows: (i) if Employee is in a position where Employee’s responsibilities are not geographically limited to an assigned location or territory or where Employee is provided Confidential Information that is not geographically limited to an assigned location or territory (such as, by way of example but not limitation, management positions, marketers, and operations employees), then Territory means the United States (including state and state-equivalents and county and county-equivalents within the United States); (ii) if Employee is in a position with responsibilities and Confidential Information that are limited to an assigned territory or territories during the Look Back Period, then Territory shall be the specific geographic territory or territories assigned to Employee during the Look Back Period; and (iii) in the event that neither (i) or (ii) apply, then the Territory is the county or counties that Employee performed services in or on behalf of Employer during the Look Back Period.
3. Confidential Information.
a.Employee acknowledges that in the course of Employee’s employment with Employer, Employee has been and will continue to become familiar with Confidential Information concerning Employer, its businesses, customers and employees, which may be disclosed
15
to Employee or which Employee may learn, observe, discover or otherwise acquire during, or as a result of, Employee’s employment by Employer and which may include, but is not limited to, information in any form (tangible or intangible) related to the business of Employer which Employer has not made public or authorized public disclosure of, and that is not generally known to the public through proper means, including, without limitation, any information, whether patentable, patented or not, relating to any (1) trade secrets; (2) any information Employee has reason to know that Employer treats as confidential for any purpose; (3) financial records; (4) sales information or events; (5) confidential products or promotional lines; (6) customer account information; (7) vendor pricing agreements; (8) marketing and forecasting information; and (9) pricing, proposals, and plans (collectively, “Confidential Information”). Private disclosure of otherwise Confidential Information to parties the Company is doing business with for business purposes shall not cause the information to lose its protected status under this Agreement.
b.Employee further acknowledges and agrees that Employee will not, directly or indirectly, at any time during or after Employee’s employment with Employer (for so long thereafter as the information is maintained as Confidential Information), except in the course of performing Employee’s duties for Employer, disclose, disseminate, make available or use Employer’s Confidential Information. Employee further agrees not to make copies of such Confidential Information except as authorized by Employer.
c.Confidential Information does not include information lawfully acquired by a nonmanagement employee about wages, hours or other terms and conditions of employment when used for purposes protected by §7 of the National Labor Relations Act such as joining or forming a union, engaging in collective bargaining, or engaging in other concerted activity for mutual aid or protection of laborers. For purpose of clarity, it shall still be a violation of this Agreement for a non-management employee to compete wrongfully by sharing Confidential Information with a competitor about other employees’ compensation and benefits that Employee obtained through the course of employment with Employer for purposes of assisting such competitor in soliciting Employer’s employees.
d.Nothing in this Agreement prohibits Employee from reporting an event that Employee reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the Securities and Exchange Commission, Equal Employment Opportunity Commission, or Department of Labor), or from cooperating in an investigation conducted by such a government agency. This may include disclosure of trade secret or Confidential Information within the limitations permitted by the 2016 Defend Trade Secrets Act (DTSA). Employee is hereby provided notice that under the DTSA, (1) no individual will be held criminally or civilly liable under Federal or State trade secret law for the disclosure of a trade secret (as defined in the Economic Espionage Act) that: (A) is made in confidence to a Federal, State, or local government official,
16
either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and, (2) an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.
4. Noncompetition.
In order to protect, among other things, Employer’s interests and investment in Confidential Information, its relationships with its customers, vendors and other employees, and its goodwill, and as a material inducement to Employer to compensate Employee as well as provide Employee with additional benefits and other good and valuable consideration, and subject to the State Specific Modifications provided for in Exhibit A, if applicable to Employee, Employee covenants and agrees that:
During Employee’s employment and for a period of two (2) years following the Termination Date, Employee will not, (i) for the benefit of a Competitor’s operations or sales within the Territory, directly or through others, alone or with others, individually or as an owner, operator, shareholder, principal, director, officer, consultant, partner, employee, contractor, or agent, (other than on behalf of Employer) provide services that are the same or similar in function or purpose to the services Employee provided to Employer during the Look Back Period; or (ii) provide such services that are otherwise likely or probable to result in the use or disclosure of Confidential Information to a business whose products and services include products and services offered by Employer regarding which Employee had material involvement or about which Employee received Confidential Information during the Look Back Period.
Nothing in this Paragraph 4 shall prohibit Employee from passively investing in a publicly held business that competes with Employer provided Employee’s investment is less than 2% of the outstanding stock or market value of the business and Employee does not otherwise violate this Agreement.
5. Non-Solicitation.
a.Subject to the State Specific Modifications provided for in Exhibit A, if applicable to Employee, Employee will not during the term of Employee’s employment, other than in the performance of Employee’s work for Employer, and for the two (2) year period following the Termination Date, (i) participate, directly or through others, in soliciting or communicating with a Covered Customer of Employer for the purpose of soliciting business from a Covered Customer; or, (ii) for the benefit of a Competitor, request,
17
induce, or advise any Covered Customer to withdraw, curtail, modify, or cancel their business with Employer.
b.Subject to the State Specific Modifications provided for in Exhibit A, if applicable to Employee, Employee will not during the term of Employee’s employment with Employer and for the two (2) year period following the Termination Date (i) participate in soliciting or communicating with any Covered Employee to leave the employment of Employer; or, (ii) hire, attempt to hire, or assist in hiring any Covered Employee on behalf of a Competitor. This Paragraph 5(b) shall exclude any employee who performs only secretarial or clerical services.
c.Paragraphs 5(a) and 5(b) are reasonably limited by geography to those locations where the Covered Customers and Covered Employees referred to are located, and if this is not sufficient for enforcement, then Paragraphs 5(a) and 5(b) are limited to the Territory.
6. Return of Property.
All reports, manuals, memoranda, electronic information and data and other materials made available to Employee by Employer during the performance of Employee’s duties are the property of Employer, and Employee will use all such property exclusively for Employer’s benefit and will return it, including all copies, to Employer upon Employer’s request, and in any event, without the requirement of a request, on the Termination Date. Employee agrees to take reasonable security precautions and measures to maintain and protect the confidentiality of Confidential Information, and shall follow all policies and procedures of Employer regarding the handling, use, access, distribution, maintenance, and disclosure of Confidential Information.
7. Tolling.
In the event Employee breaches any or all subparagraphs of Paragraphs 4 or 5 of this Agreement and Employer seeks injunctive relief to enforce those provisions, the time period for Employee’s obligations will be extended by one day for each day Employee’s violation thereof, up to a maximum of one (1) year, or to the extent permitted by law; however, this extension of time shall be capped so that the extension of time itself does not exceed the original one (1) year restriction, and if this extension would make the restriction unenforceable under applicable law it will not be enforced.
8. Reasonableness of Restrictions /Severability.
a.Employee agrees that the terms of this Agreement are reasonable and do not impose a greater restraint than necessary to protect Employer’s legitimate protectable business interests, including, but not limited to, the protection of its Confidential Information and trade secrets. Employee agrees and acknowledges that the restrictions contained in this Agreement do not preclude Employee from earning a livelihood, nor do they
18
unreasonably impose limitations on Employee’s ability to earn a living. Employee further agrees and acknowledges that the potential harm to Employer of the non-enforcement of this Agreement outweighs any potential harm to Employee from its enforcement by injunction or otherwise. It is the desire and intent of the parties hereto that the provisions of this Agreement shall be enforced to the fullest extent legally permissible.
b.If a court finds any provision, paragraph or subparagraph of this Agreement to be void or unenforceable in whole or in part, such a determination shall not affect the validity of the remainder of the Agreement, including any other provision, paragraph or subparagraph. Each provision, paragraph, and subparagraph of this Agreement is separable from every other provision, paragraph and subparagraph and constitutes a separate and distinct covenant. The parties agree, however, that should a court construing this Agreement determine that any provision of the Agreement is overbroad or unenforceable, the court shall reform any overbroad or unenforceable provision in a manner that provides Employer with the greatest level of protection permissible by applicable law.
9. Remedies.
Employee acknowledges that a remedy at law for any breach or threatened breach of the provisions of this Agreement would be inadequate and therefore agrees that Employer shall be entitled to injunctive relief in case of any such breach or threatened breach of this Agreement. Employee acknowledges and agrees that Employer may apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief (without posting a bond or other security) in order to enforce or prevent any violation of the provisions of this Agreement, and that money damages would not be an adequate remedy for any breach of the provisions of this Agreement. Employee acknowledges and agrees that a violation of this Agreement would cause irreparable harm to Employer, and Employee covenants that Employee will not assert in any proceeding that a violation or further violation of this Agreement: (i) will not result in irreparable harm to Employer; or (ii) could be remedied adequately at law. Nothing contained herein shall be construed as prohibiting Employer from pursuing any other remedies available for any such breach or threatened breach against Employee’s or any of Employee’s subsequent employers, which may also include, but not be limited to, contract damages, lost profits, and punitive damages.
10. Entire Agreement.
This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes any previous communications, representations, arrangements or agreements, whether written or oral. However, Employee acknowledges that the provisions of this Agreement are in addition to, and in no way intended to limit, restrict or narrow any prior or existing employment or other agreement with Employer. This Agreement does not replace or supersede any prior or existing employment or other agreement Employee has with Employer, but rather, shall be read in conjunction with such prior or existing agreements and shall be
19
interpreted in a manner to provide Employer the maximum protection provided by all agreements Employee has with Employer.
11. Assignment.
This Agreement shall be binding and inure to the benefit of Employer, its successors and assigns, and to the benefit of Employee. Employer may assign this Agreement to any party, without the consent of Employee.
12. Amendment; Waiver.
This Agreement only may be amended by a written agreement signed by Employee and the Chief Human Resources Officer for Employer. No waiver of this Agreement will be effective unless it is in writing and signed by Employer’s Chief Human Resources Officer.
13. Effectiveness of Agreement.
This Agreement becomes effective when Employee signs it. The obligations under it continue throughout the entire period of time Employee is employed by Employer, without regard to the business within Employer with which Employee is associated and these obligations will continue after and survive the end of Employee’s employment with Employer as described herein.
14. Notice to Future Employers.
For the period of two (2) years immediately following the Termination Date, Employee agrees to inform each new prospective employer, prior to accepting employment, of the existence of this Agreement and provide that prospective employer with a copy of it. Employee also agrees that Employer has the right to inform any of Employee’s future employers of the existence of this Agreement and to provide any of Employee’s future employers with a copy of it. Employee hereby consents to the notification of Employee’s future employers of Employee’s rights and obligations under this Agreement and will not assert that Employer’s doing so constitutes actionable interference or wrongdoing.
15. Governing Law and Venue.
This Agreement shall be governed by and construed in accordance with the laws of the state of Missouri without regard to its principles of conflicts of law. The parties agree that all actions or proceedings that arise out of, are associated with, require the interpretation of, or that are in any way directly or indirectly related to the subject matter covered in this Agreement or to any matter related to Employee’s employment with Employer, shall be tried and litigated exclusively in the courts of Missouri, specifically the courts located in St. Louis County. This choice of venue is intended by the parties to be mandatory and not permissive in nature.
20
Therefore, the parties hereby waive any right to assert lack of personal jurisdiction or the doctrine of forum non conveniens or a similar doctrine or to object to venue or jurisdiction with respect to any action or proceeding brought in accordance with this Paragraph. THE PARTIES IRREVOCABLY CONSENT AND AGREE THAT MISSOURI COURTS (SPECIFICALLY THOSE IN ST. LOUIS COUNTY) HAVE PERSONAL JURISDICTION OVER EMPLOYEE AND EMPLOYER FOR PURPOSES OF LITIGATING ANY DISPUTE, CONTROVERSY, OR PROCEEDING CONCERNING THE MATTERS DESCRIBED IN THIS AGREEMENT.
16. Attorneys’ Fees.
In the event a court determines that Employee has breached or threatened to breach this Agreement, Employee agrees to reimburse Employer for all attorneys’ fees and costs incurred by Employer to establish that breach or threatened breach, to obtain injunctive relief, and/or to otherwise enforce the terms of this Agreement. However, if Employee resides in and is subject to the law of a state that would convert this recovery of attorney’s fees provision into a reciprocal obligation or an obligation where the prevailing party would recover fees and costs, then this recovery of attorneys’ fees and costs provision shall not apply and each party will bear its or their own attorneys’ fees and costs.
17. At-Will Statement.
Nothing in this Agreement shall be construed to create a term or tenure of employment or to alter or create limitations on either party’s right to terminate the employment relationship between Employer and Employee at either party’s discretion.
18. Reporting of Fraud or Waste.
Under Section 743 of the Consolidated and Further Continuing Appropriations Act, the U.S. Government is prohibited from using certain appropriated funds for a contract with any entity that requires employees or subcontractors to sign internal confidentiality agreements or statements that would prohibit or otherwise restrict such employees or subcontractors from lawfully reporting waste, fraud or abuse to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive such information.
Accordingly, nothing in this Agreement—or in any other internal Employer confidentiality agreements, statements, or policies—prohibits or otherwise restricts Employee from lawfully reporting any waste, fraud or abuse to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive such information. The provisions contained in this Agreement that prohibit or restrict disclosing internal Confidential Information do not apply to communications by Employee lawfully seeking to report waste, fraud or abuse to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive such information.
21
19. Headings.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of this Agreement.
Employee acknowledges that Employee has read and understands this Agreement, believes it to be reasonable, and is signing it voluntarily. Employee acknowledges that Employee’s obligations under this Agreement will not impose an unreasonable economic hardship on Employee and are reasonable and necessary to protect Employer’s legitimate business interests. Employee understands and agrees that Employee will continue to be bound by the provisions of this Agreement after Employee’s employment with Employer has ended. Employee is directed to Exhibit A, which is incorporated herein by reference, for important state limitations on the scope of this Agreement.
IN WITNESS WHEREOF, Employee has executed this Agreement as of the date above written.
Mark Witkowski March 20, 2025
Employee Name Date
Employee Signature
22
EXHIBIT A - State Specific Modifications
The following shall apply to modify provisions of the Agreement, where applicable, if the governing law provision in Paragraph 15 does not apply to Employee because either (a) a modification based on Employee’s primary state of employment controls pursuant to the terms below, or (b) a different state’s law is deemed by a binding adjudicator to control.
Confidential Information Supplement. If, and only if, the controlling state law applicable to Employee requires a time limit to be placed on restrictions concerning the post-employment use of Confidential Information in order for the restriction to be enforceable, then this Agreement’s restriction on Employee’s use of Confidential Information that is not a trade secret will expire two (2) years after the Termination Date. This time limit will not apply to (a) Confidential Information that qualifies as a trade secret, or (b) confidential information of third parties. Employer’s trade secrets will remain protected for as long as they qualify as trade secrets under applicable law. Items of confidential information of third parties will remain protected for as long as allowed under the laws and/or separate agreements that make them confidential. Nothing in the foregoing shall be construed to permit Employee to recreate records of Confidential Information from memory or retain copies of Confidential Information in any form after Employee’s employment with Employer ends. Employee understands that Employee should have no records of this kind in Employee’s possession or control with which to refresh Employee’s memory after Employee’s employment with Employer ends.
Alabama
If Alabama law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: Paragraph 5(b) is limited in scope to solicitation and hiring of Covered Employees holding Sensitive Positions. An employee in a “Sensitive Position” refers to an employee who is uniquely essential to the management, organization, or service of the business.
The definition of “Covered Customer” shall be limited to those persons and entities with active (not former) business-relationships with Employer.
California
If California law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: The restrictions in Paragraph 4 shall not apply.
23
Paragraph 5: Paragraph 5(a) shall be limited to situations where Employee is aided in their conduct by the use or disclosure of Employer’s trade secrets (as defined by applicable law). The restrictions in Paragraph 5(b) shall not apply.
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Colorado
If Colorado law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: If Employee is not an officer, executive or management employee, or an employee who constitutes professional staff to executive and management personnel, within the meaning of § 8-2-113(2)(d) of Colorado Revised Statutes § 8-2-113, et. seq. (the “Colorado Noncompete Act”), then: (a) Paragraph 5(a) shall be modified to read as follows: “For one (1) year after the Termination Date (“Restricted Period”), Employee will not (directly or through the direction or control of others) solicit business from a Covered Customer that would compete with Employer’s business opportunities with the Covered Customer or cause Employer to lose the patronage of a Covered Customer, in order to protect Employer from misuse of trade secrets related to Employer’s Covered Customers that Employee received access to during the Look Back Period; provided, further, that the definition of Covered Customer shall be limited to only those persons or entities that Employee had access to trade secrets about in the Look Back Period.”; and (b) Employee stipulates that the restrictions in Paragraphs 4 and 5 are reasonable and necessary for the protection of trade secrets within the meaning § 8-2-113(2)(b) of Colorado Revised Statutes.
District of Columbia
If Employee is an employee in the District of Columbia, as long as Employee perform works in the District of Columbia within the meaning of the “Ban on Non-Compete Agreements Amendment Act of 2020,” then no restriction in this Agreement (including, but not limited to, the noncompetition, client nonsolicitation, business vendor nonsolicitation, and employee nonsolicitation restrictions) will be applied to Employee in a way that would prohibit Employee from being simultaneously or subsequently employed by another person, performing work or providing services for pay for another person, or operating Employee’s own business. However, Employee understands that nothing in this exception to this Agreement’s restrictions shall be construed to permit Employee to take any action that involves or may result in the use or disclosure of Confidential Information, proprietary, or sensitive information, client lists, or a trade secret, as that term is defined in section 2(4) of the Uniform Trade Secrets Act of 1988 (D.C. Law 7-216; D.C. Official Code §36-401(4)). Such actions shall remain prohibited and nothing in this Agreement shall be construed to limit or eliminate any rights or remedies
24
Employer would have against Employee under trade secret law, unfair competition law, agency law or other laws applicable in the District of Columbia absent this Agreement.
NOTICE: “No employer operating in the District of Columbia may request or require any employee working in the District of Columbia to agree to a non-compete policy or agreement, in accordance with the Ban on Non-Compete Agreements Amendment Act of 2020.”
Georgia
If Georgia law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 2(g): The definition of “Territory” shall be modified to mean “the territory where Employee was working at the time Employee’s employment with Employer ended” and allows Employee to reasonably determine the maximum reasonable scope of the restraint as of the Termination Date.
The definition of “Confidential Information” shall not include data or information (a) which has been voluntarily disclosed to the public by the employer, except where such public disclosure has been made by the employee without authorization from the employer; (b) which has been independently developed and disclosed by others; or (c) which has otherwise entered the public domain through lawful means, and shall be applied consistent with the definition of “Confidential Information” under Ga. Code Ann. § 13-8-53(e).
Paragraph 7: Paragraph 7 regarding extension of post-employment restrictions shall not apply.
Employee agrees, represents, and warrants that Employee’s duties with Employer, and/or skill as a professional, satisfy the requirements of Georgia law for covenants that restrict competition under Official Code of Georgia Annotated Section 13-8-53(a).
Idaho
If Idaho law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Employee stipulates and agrees that employee is a “key” employee within the meaning of Idaho Code §44-2701, et seq.
25
Illinois
If Employee resides in Illinois at the time Employee enters into this Agreement, as additionally mutually agreed upon consideration for the noncompetition and nonsolicitation restrictions in Paragraphs 4 and 5, Employer shall allow Employee to participate in the Core & Main, Inc. 2021 Omnibus Equity Incentive Plan. Employee stipulates that this is adequate consideration to make the provisions of this Agreement immediately binding upon Employee. Additionally, Employee acknowledges that Employee received a copy of this Agreement at least 14 days before the effective date and was advised to consult with an attorney about this Agreement and has been given an opportunity to do so.
If Illinois law is deemed to apply, then the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: The restrictions in Paragraph 4 shall not apply if Employee is paid $75,000.00/year (or as otherwise adjusted by law) or less.
Paragraph 5: The restrictions in Paragraph 5 shall not apply if Employee is paid $45,000.00 (or as otherwise adjusted by law) or less.
Indiana
If Indiana law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: Paragraph 5(b) shall be modified to further limit the restriction on solicitation of employees to those who have access to or possess any Confidential Information that would give a Competitor an unfair advantage.
Louisiana
If Louisiana law is deemed to apply, then the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 2(g): The “Territory” shall specifically include the following Louisiana parishes: Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Bienville, Bossier, Caddo, Calcasieu, Caldwell, Cameron, Catahoula, Claiborne, Concordia, De Soto, East Baton Rouge, East Carroll, East Feliciana, Evangeline, Franklin, Grant, Iberia, Iberville, Jackson, Jefferson, Jefferson Davis, Lafayette, Lafourche, La Salle, General, Livingston, Madison, Morehouse, Natchitoches, Orleans, Ouachita, Plaquemines, Pointe Coupee, Rapides, Red River, Richland, Sabine, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Landry, St. Martin, St. Mary, St. Tammany, Tangipahoa, Tensas, Terrebonne, Union, Vermilion, Vernon, Washington, Webster, West Baton Rouge, West Carroll, West Feliciana, and Winn.
26
The “Territory” shall also specifically include the following Texas counties: Cass, Marion, Harrison, Panola, Shelby, Sabine, Newton, Orange, and Jefferson.
The “Territory” shall also specifically include the following Arkansas counties: Miller, Lafayette, Columbia, Union, Ashley and Chicot.
The “Territory” shall also specifically include the following Mississippi Counties: Issaquena, Warren, Clairborne, Jefferson, Adams, Wilkinson, Amite, Pike, Walthall, Marion, Pearl River and Hancock.
Employee agrees that the foregoing provides Employee with adequate notice of the geographic scope of the restrictions contained in the Agreement by name of specific parish or parishes (and equivalents), municipality or municipalities, and/or parts thereof.
Paragraphs 4 and 5: The restrictions in Paragraphs 4 and 5 are limited to the parishes and counties identified in the preceding paragraphs.
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Maine
If Maine law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not apply if Employee’s earned wages are at or below 400% of the federal poverty level. Paragraph 4 also will not take effect until one year of employment or a period of six months from the date the Agreement is signed, whichever is later.
Employee acknowledges that, if Employer is hiring Employee, Employee received a copy of this Agreement prior to receiving a formal offer of employment from Employer and was given at least three (3) business days to consider the Agreement before signing.
Maryland
If Maryland law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not apply if Employee earns less than $15.00 an hour or $31,200 a year.
Massachusetts
27
If Employee resides in Massachusetts at the time this Agreement is entered into, then Employee stipulates that an award of equity pursuant to the Core & Main, Inc. 2021 Omnibus Equity Incentive Plan is adequate consideration to make the noncompetition restrictions of this Agreement immediately binding upon them.
If Massachusetts law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 shall be limited to a period of one (1) year following the Termination Date (as well as while Employee is employed by Employer); however, if Employee breaches Paragraph 4 of this Agreement, and also breaches Employee’s fiduciary duty to Employer and/or has unlawfully taken, physically or electronically, any Employer records, then the restricted period in Paragraphs 4 and 7 shall be extended to a period of two (2) years from the Termination Date. Additionally, Paragraph 4 will not apply post-employment if Employee is classified as a nonexempt employee under the Federal Labor Standards Act (FLSA).
Paragraph 4 will not apply if Employee’s employment is terminated without Cause or if Employee is terminated as part of a reduction in force. As used in this Paragraph herein, “Cause” is: (i) a material breach by Employee of any of their material obligations under any applicable employment, confidentiality, non-solicitation or noncompetition agreement with Employer; (ii) Employee’s conviction of or entering a plea of guilty or nolo contendere to, or admission to facts sufficient for a finding of guilt for, any crime constituting a felony or any misdemeanor involving fraud, dishonesty and/or moral turpitude under federal, state, local or foreign law; (iii) Employee’s neglect, refusal, or failure to meet the performance expectations for their position, discharge their duties (other than due to physical or mental illness) commensurate with his/her title and function, or their failure to comply with a lawful direction of Employer; (iv) the commission of any act or omission involving dishonesty, disloyalty or fraud with respect to Employer; (v) Employee’s breach of a statutory or common law duty of loyalty or fiduciary duty to Employer; (vi) Employee’s violation of Employee Policies and Procedures; (vii) any other willful misconduct by Employee which is or intends to be materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, Employer; or (viii) any other reason recognized under the common law.
Paragraph 7: The tolling language in Paragraph 7 shall only apply to any breach of Paragraph 5 (i.e., the tolling language shall not apply to Paragraph 4, except as indicated above).
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Employee acknowledges that they were provided a copy of this Agreement and Exhibit at least ten (10) business days before the effective date of this Agreement.
28
Employee also acknowledges that Employee has been advised to consult with an attorney about this Agreement and has been given an opportunity to do so.
Minnesota
If Minnesota law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Employee acknowledges that they were provided a copy of this Agreement and Exhibit when they were offered employment and Employee was aware that execution of an agreement with noncompetition and nonsolicitation restrictions was a requirement of employment when Employee accepted Employer’s offer.
Montana
If Montana law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: The prohibited acts set forth in Paragraph 5(a) shall be limited to situations where Employee’s conduct is aided by the use or disclosure of Confidential Information or trade secrets.
Paragraph 17: Paragraph 17 shall not apply to the extent it conflicts with Montana law. Nebraska
If Nebraska law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 2(b): The definition of “Covered Customer” is modified so that it is limited only to Employer customer’s (person or entity) that Employee had material business-related contact or dealings with during the Look Back Period.
Paragraph 4: Paragraph 4 shall not apply.
Nevada
If Nevada law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not take effect until Employer has employed Employee for sixty (60) days or Employee has received $5,000 in wages from Employer.
29
The noncompetition restrictions in Paragraph 4 shall not apply to Employee if Employee is paid solely on an hourly wage basis, exclusive of any tips or gratuities.
Additionally, if Employer terminates Employee’s employment as a result of a reduction in force, reorganization or similar restructuring, the noncompete restrictions in Paragraph 4 only will be enforceable during the period in which Employer is paying Employee’s salary, benefits, or equivalent compensation, including without limitation, severance pay, if it elects to make such payments.
Paragraph 5: Paragraph 5(a) does not preclude Employee from providing services to any former client or customer of Employer if: (a) Employee did not solicit the former customer or client; (b) the customer or client voluntarily chose to leave and seek services from Employee; and (c) Employee is otherwise complying with the limitations in this Agreement as to time, geographical area, and scope of activity to be restrained.
New Hampshire
If New Hampshire law is deemed to apply the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
By signature hereto, Employee acknowledges that they been given a minimum of two (2) weeks advance notice of the need to execute this Agreement and they received this Agreement prior to accepting their offer of employment.
Paragraph 4: Paragraph 4 will not apply if Employee earns less than or equal to 200% of the federal minimum wage.
New York
If New York law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 2(b): The definition of “Covered Customer” is modified so that “Covered Customer” excludes those customers who became a client of Employer as a result of Employee’s independent contact and business development efforts with the client prior to and independent from their employment with Employer.
North Carolina
If North Carolina law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition, Agreement is modified as follows:
30
Paragraph 2(e): The “Look Back Period” shall be calculated looking back two (2) years from the date of enforcement and not from the Termination Date.
North Dakota
If North Dakota law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraphs 4: The restrictions in Paragraph 4 shall not apply.
Paragraph 5: The restrictions in Paragraph 5(a), including all subparts, are modified so that they only restrict Employee from engaging in the activities described therein after the Termination Date if they also involve the unauthorized use or disclosure of Confidential Information or trade secrets.
Oklahoma
If Oklahoma law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not apply.
Paragraph 5: Paragraph 5(a) is modified to state that Employee is prohibited only from directly soliciting established customers of Employer for the purpose of doing any business with a Competitor.
Oregon
If Oregon law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
By signature hereto, Employee acknowledges that they have been given a minimum of two (2) weeks advance notice of the need to execute this Agreement. Employee further acknowledges that this Agreement is a condition of employment, if entered into at the time employment commences.
Paragraph 4: The noncompete restrictions in Paragraph 4 will not apply to Employee if as of the Termination Date: (a) the total amount of Employee’s gross salary and commissions, calculated on an annual basis does not exceed $100,533.00 (or as otherwise adjusted), or (b) Employee does not otherwise qualify under O.R.S. § 653.295; unless, Employer chooses to compensate Employee as provided for under O.R.S. § 653.295 (6).
31
Rhode Island
If Rhode Island law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not apply if Employee earns less than 250% of the federal poverty level based on Employee’s regular (non-overtime, non-weekend, non-holiday) hour or if Employee is classified as a nonexempt employee under the Federal Labor Standards Act (FLSA).
South Dakota
If South Dakota law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: The restrictions in Paragraph 5(a) regarding prospective customers of Employer shall not apply.
Texas
If Texas law is deemed to apply, Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Virginia
If Virginia law is deemed to apply, Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4(ii) regarding noncompetition restrictions on the use of Confidential Information shall not apply.
Paragraphs 4 and 5(a): Paragraphs 4 and 5(a) will not apply to Employees earning less than approximately $52,000 annually (or as otherwise provided by Code of Virginia §40.1-28.7:7 (the “Virginia Act”)), or those Employees who otherwise qualifies as a low-wage employee under the Virginia Act, unless Employee’s earnings are derived, in whole or in predominant part, from sales commissions, incentives, or bonuses.
Paragraph 5(a): The restrictions in Paragraph 5(a) of the Agreement shall not restrict Employee from providing a service to a Covered Customer of Employer if Employee does not initiate contact with or solicit the Covered Customer. However, Employee acknowledges that they understand they still are prohibited from using or disclosing Employer’s Confidential Information.
32
The parties agree that the restrictive covenants in Paragraphs 4 and 5 are reasonably limited in nature and do not prohibit employment with a competing business in a non-competitive position.
Washington
If Washington law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not apply unless and until Employee earns less than $101,390 annually (or the otherwise adjusted equivalent in accordance with the requirements of Washington Noncompete Act (Chapter of Title 49 RCW enacting ESHB 1450 of the 66th Legislature, 2019 Regular Session) (the “Washington Act”)). Employee further agrees that if, at the time Employee signs this Agreement, Employee does not earn from Employer at least $101,390 in Box 1 W-2 annual compensation (or as otherwise adjusted), then the noncompetition restrictions in Paragraph 4 will automatically become enforceable against Employee if and when Employee begins earning at least $101,390 annually (or as otherwise adjusted).
Employee also understands that Paragraph 4 will not be enforced against Employee if Employee is laid off, unless Employer pays Employee during the noncompetition period an amount equal to Employee’s base salary as of the Termination Date, less any compensation earned by Employee during the Restricted Period. For purposes of this section, “layoff” means termination of Employee’s employment by Employer for reasons of Employer’s insolvency or other purely economic factors, and specifically excludes termination of Employee’s employment for any other reason, either with or without cause. Paragraph 5: The restrictions in Paragraph 5(a)(i) shall not apply. The restrictions in Paragraph 5(b)(ii) shall not apply.
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Employee acknowledges that they received notice of this Agreement before accepting any offer of employment or before this Agreement becomes effective (whichever applies). If Employee is an existing employee, Employee acknowledges that Employee was given ten (10) business days to consider this Agreement before accepting it.
Wisconsin
If Wisconsin law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: Paragraph 5(b) will be limited to the solicitation of an employee who is in a “Sensitive Employee Position.” “Sensitive Employee Position” refers to an employee of Employer who is in a management, supervisory, sales, research and development, or similar role
33
where the employee is provided Confidential Information or is involved in business dealings with Employer’s customers.
Paragraph 7: Paragraph 7 regarding extension of post-employment restrictions shall not apply.
34
Exhibit 10.2
Portions of this exhibit have been redacted pursuant to Item 601(a)(6) of Regulation S-K. The Company undertakes to furnish a copy of all unredacted and omitted schedules and exhibits to the SEC upon its request.
Employment Agreement
This Employment Agreement (this “Agreement”) is made and entered into as of March 20, 2025, by and between Core & Main LP, a Florida limited partnership (the “Company”), and Robyn Bradbury (the “Executive”) (together the Company and the Executive are referred to as the “Parties”).
WHEREAS, the Parties desire to enter into an employment agreement which shall memorialize the terms and conditions of the Executive’s employment; and
WHEREAS, this Agreement supersedes all prior agreements or understandings regarding the terms of the Executive’s employment with the Company, whether written or otherwise.
NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein contained, together with other good and valuable consideration the receipt of which is hereby acknowledged, the Parties hereby agree as follows:
1. Services and Duties. Effective as of March 31, 2025 (the “Effective Date”), the Executive shall, pursuant to the terms of this Agreement, be employed by the Company as its Chief Financial Officer and shall report to the Company’s Chief Executive Officer (“CEO”). The Executive shall have no other employment and no other business ventures which are undisclosed to the Board of Directors of Core & Main, Inc. (the “Board”) or which conflict with the Executive’s duties under this Agreement. The Executive may not participate on the board of directors of any other company without the prior written consent of the Board. The Executive’s responsibilities shall include such responsibilities, duties, and authority as are customary for the Executive’s position, and may have such additional duties and responsibilities as may be assigned to the Executive by the CEO or the Board. The Executive shall carry out the duties and responsibilities hereunder in good faith in a diligent, competent and professional manner, consistent and in compliance with all applicable federal and state laws and regulations and Company policies and to the best of the Executive’s ability in a manner she reasonably believes is in the best interests of the Company.
2. Term of Employment. The Executive’s employment with the Company pursuant to this Agreement shall be for an indefinite term commencing as of the Effective Date and shall be treated as “at-will” employment, subject to termination by either the Company or the Executive as provided for in Section 6. The period of the Executive’s employment with the Company pursuant to this Agreement is referred to herein as the “Term.”
3. Location. The Executive shall be employed by the Company at its executive headquarters, which is currently located at 1830 Craig Park Court, Maryland Heights, Missouri 63146.
4. Compensation
a.Base Salary. In consideration of the Executive’s full and faithful satisfaction of the Executive’s duties under this Agreement, the Company agrees to pay the Executive an annual base salary in the amount of $500,000 (the “Base Salary”), paid in accordance with the Company’s regular payroll schedule as in effect from time to time and subject to all applicable tax and other permitted withholdings. The Executive’s Base Salary may be reviewed and adjusted from time to time by the Board or by the Talent and Compensation Committee of the Board (the “Compensation Committee”).
b.Annual Bonus. The Executive shall be eligible to receive an annual bonus under the terms of the Company’s annual management incentive compensation plan (the “Bonus Plan”) as may be in effect from time to time. The Executive’s target bonus for these purposes is equal to 75% of the Executive’s Base Salary in effect for the year for which the bonus is paid (the “Annual Bonus Opportunity”). The actual amount payable as a bonus is determined based on the terms and conditions of the Bonus Plan document, and by reference to such performance metrics as are established for the relevant year. Performance metrics are established by the Compensation Committee and information regarding such performance metrics will be communicated generally during the first quarter of the year. The amount of the bonus payable for any particular year will be determined on the basis of the terms and conditions established for such year by the Compensation Committee. The terms of the Bonus Plan are subject to modification by the Compensation Committee or the Board at any time and from time to time. The Company is under no obligation to continue the Bonus Plan or to establish a different annual bonus or annual incentive plan if the Bonus Plan is terminated. Under the terms of the Bonus Plan as currently in effect, it is possible that, based on performance, the actual amount payable as an annual bonus may be less than the target described above, and there may be no bonus payable at all if performance is not achieved at a required threshold level. To be eligible to receive the bonus payable under the Bonus Plan, the Executive must be employed by the Company through the date of payment (which is generally during the second calendar quarter following the year for which such bonus is payable).
c.Equity Incentive. Awards under the Core & Main, Inc. 2021 Omnibus Equity Incentive Plan or a successor plan (the “Equity Incentive Plan”) may be made to the Executive, but any such awards are made at the discretion of the Compensation Committee and there is not a guarantee that awards under the Equity Incentive Plan will be made.
5. Benefits and Perquisites.
a.Employee Benefits. The Executive shall be eligible to participate in all employee benefit plans made available generally to the Company’s employees and those benefit plans that are available to the Company’s executives, subject to the applicable limitations and requirements imposed by the terms and conditions of the governing plan documents for such plans. The Company reserves the right to modify any of its employee benefit plans from time to time and to terminate such plans at any time, subject to any limitations imposed by law on such actions.
2
b.Paid Time Off. The Executive shall be eligible to participate in the paid time off policy generally applicable to the Company’s employees, as in effect from time to time.
c.Reimbursement of Expenses. The Company shall reimburse the Executive for any expenses reasonably incurred by the Executive during the Term, in furtherance of the Executive’s duties hereunder, including business travel, meals and accommodations, upon submission by the Executive of such evidence as may be required under the terms of the Company’s business expense reimbursement policy as in effect from time to time.
d.Executive Car Program. The Executive will be eligible to participate in the Company’s executive car program.
6. Termination of Employment
a.Termination without Cause. The Company may terminate the Executive’s employment without Cause at any time; subject to providing to the Executive 60 days’ advance written notice of such termination. Notwithstanding the foregoing, the Company may terminate the Executive’s employment without Cause without such advance written notice; provided, however, that the Company shall pay to the Executive the Executive’s Base Salary, as then in effect, for the period such advance written notice requirement exceeds the period of actual written notice of the Executive’s termination.
b.Death or Disability. The Executive’s employment shall terminate immediately upon the Executive’s death. The Executive’s employment may also be terminated by the Company in the event of the Executive’s Disability. For these purposes, “Disability” means the Executive is eligible for disability benefits under the Company’s long-term disability plan; provided, however, that if there is no such plan in effect, Disability means that the Executive is unable to perform the Executive’s duties under the terms of this Agreement, with or without a reasonable accommodation for a period of not less than three months (subject to any longer period that may be required under applicable law) by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a period of not less than 12 months. Nothing in this Agreement shall be construed to waive or limit the Executive’s rights under existing law, including, without limitation, the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., and the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq.
c.Termination for Cause. The Company may terminate the Executive’s employment for Cause without any advance notice except as expressly provided for in this Section 6(c). For these purposes, “Cause” means any of the following:
i.The Executive’s indictment for, commission of, conviction of or plea of nolo contendere to a felony or a crime involving moral turpitude;
ii.The Executive’s commission of fraud, theft, embezzlement, self-dealing, dishonesty, misappropriation or other malfeasance against the Company;
iii.The Executive’s material and persistent failure to perform Executive’s lawful duties or responsibilities under the terms of this Agreement or other agreement between the Parties (other than by reason of disability);
3
iv.The Executive’s failure to comply with any lawful policy of the Company;
v.The Executive’s commission of acts or omissions constituting gross negligence or material misconduct in the performance of any aspect of the Executive’s lawful duties or responsibilities which have or may be expected to have an adverse effect on the Company;
vi.The Executive’s breach of any fiduciary duty owed to the Company;
vii.The Executive’s material violation or material breach of any restrictive covenant or any material term of this Agreement or material term of another agreement between the Parties;
viii.The Executive’s failure or refusal to cooperate in good faith with a governmental or internal investigation; or
ix.The Executive’s commission of any act or omission that materially damages or is reasonably likely to materially damage the financial condition or business of the Company or materially damages or is reasonably likely to materially damage the reputation, public image, goodwill, assets or prospects of the Company.
Notwithstanding the foregoing, Cause for the Executive’s termination of employment shall not exist with respect to any of the above matters to the extent the situation is reasonably susceptible to cure (as determined at the discretion of the Board) unless the Company has provided the Executive with written notice detailing the event constituting Cause and the Executive fails to cure such condition within 15 days of the Executive’s receipt of such notice.
d.Resignation by the Executive. The Executive may resign at any time without Good Reason (as defined below); subject to provision to the Company of 60 days’ advance notice of such termination.
e.Resignation by the Executive for Good Reason. The Executive may resign for “Good Reason” in the following circumstances:
i.The Company materially reduces the Executive’s Base Salary (except for any across-the-board reduction impacting substantially all executives of the Company where such reduction does not represent a greater than 10% reduction);
ii.The Company materially reduces the percentage of Base Salary that constitutes the Executive’s Target Bonus;
iii.The Company materially reduces the Executive’s duties, authorities and responsibilities;
iv.The Company makes any material adverse change to the Executive’s title or reporting line;
v.The Company requires that the Executive report to a different principal work location that increases the Executive’s commute by more than 40 miles; or
vi.The Company engages in a material violation or material breach of any restrictive covenant or any material term of this Agreement or material term of another agreement between the Parties.
4
Notwithstanding the foregoing, in no event shall the Executive’s resignation be deemed to be for Good Reason unless the Executive provides the Company with written notice of the condition claimed to constitute Good Reason for the Executive’s resignation within 30 days of the initial existence of such condition, the Company must have failed to correct such condition within 30 days of the Company’s receipt of the aforementioned written notice and the Executive must then resign and separate from employment no later than 90 days following the initial existence of the condition that is claimed to constitute Good Reason for the Executive’s resignation.
f.Obligations of the Executive on Termination of Employment. In addition to the post-termination covenants described in Section 8 of this Agreement, the Executive shall, following any termination of employment with the Company:
i.Return to the Company all property of the Company in the Executive’s possession and shall take appropriate measures to return or destroy any files or confidential information in the Executive’s possession that may be in electronic form; and
ii.Resign each position (if any) that the Executive then holds as an officer or director of the Company and any affiliate of the Company. The Executive’s execution of this Agreement shall be deemed the grant by the Executive to the officers of the Company of a limited power of attorney to sign in the Executive’s name and on the Executive’s behalf any such documentation as may be required to be executed solely for the limited purposes of effectuating such resignations.
7. Compensation Payable Following Termination of Employment.
a.Accrued Obligations. In the event of any termination of employment, the Executive shall be entitled to: (i) all amounts of unpaid Base Salary through the date of termination; (ii) benefits or payments from any Company sponsored employee benefit plan, in accordance with the terms and conditions of the governing plan documents; and (iii) reimbursement of any unpaid business related expenses incurred prior to the Executive’s termination of employment, provided the Executive has complied with the requirements for such reimbursements under the terms of the Company’s business expense reimbursement policy (collectively, the “Accrued Obligations”). For purposes of clarity and avoidance of doubt, only the Accrued Obligations will be paid to the Executive in the event of the Executive’s termination of employment under any circumstances other than a termination by the Company without Cause or a resignation for Good Reason, including where the termination of employment is due to the Executive’s death or Disability. Nothing in this Section 7(a), however, shall be interpreted to deny payment to the Executive of any death or disability benefits that are provided for under the Company’s employee benefit plans.
b.Termination by the Company without Cause or Resignation by the Executive for Good Reason. If the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason, in addition to the Accrued Obligations, the Company shall provide to the Executive, as severance pay, an amount equal to one times: (i) the Executive’s Base Salary; and (ii) the Executive’s Annual Bonus Opportunity, to be paid in substantially equal payments in accordance with the Company’s regular payroll
5
schedule, commencing as soon as practicable following the date the Release (as defined below) becomes irrevocable (with the first such payment including any amounts that would have been paid had the Executive’s Base Salary continued following the Executive’s termination of employment without interruption pending the Release being executed and becoming irrevocable) and payable for a period of 12 months (the “Severance Pay”), subject to the Executive executing a release of claims in a form determined by the Company to be acceptable (the “Release”) and the Release, thereafter, becoming irrevocable pursuant to its terms; provided, however, that if the period for the Executive to consider, sign and not revoke the Release spans two taxable years, the Severance Pay shall commence in the second such taxable year. In addition, subject to the Executive enrolling in COBRA continuation coverage, the Company shall, over the 12 months following the date of termination, pay the Executive an amount equal to the monthly cost of the Executive purchasing COBRA coverage for the Executive and the Executive’s covered dependents (the “Benefit Continuation”), except that the Benefit Continuation shall cease in the event that the Executive becomes eligible for coverage from a subsequent employer. Further, the Company shall provide the Executive with customary outplacement services (the “Outplacement Services”), except that the maximum cost to the Company of providing such outplacement services shall not exceed $10,000. For purposes of clarity and avoidance of doubt, if the Company does not receive the Release within the specified deadline for its execution, the Executive shall not be entitled to any of the Severance Pay, the Benefit Continuation or the Outplacement Services.
8. Covenants. The Executive’s employment is conditioned upon her execution of the Confidentiality, Non-Solicitation and Non-Compete Agreement in substantially the form attached hereto as Exhibit A (as it may be amended, restated or modified from time to time and together with any similar agreement entered into by the Executive and the Company or any affiliate thereof, the “PCA”). In the event the Executive violates any of her obligations set forth in the PCA, any unpaid Severance Pay or other separation benefits shall terminate.
9. Assignment. This Agreement, and any rights and obligations hereunder, may not be assigned by the Executive and may be assigned by the Company to (i) a successor by merger, (ii) purchasers of substantially all of the assets of the Company or its affiliates, or (iii) in connection with any other acquisition, reorganization or restructuring of the Company.
10. Code Section 409A. In general, it is intended that all compensation provided for under the terms of this Agreement be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), by reason of the “short-term deferral” and “separation pay” exemptions found in Treasury Regulation Sections 1.409A-1(b)(4) and (9) (or any successor to such exemptions). Notwithstanding the foregoing, however, if any payments are deemed to be a form of nonqualified deferred compensation for purposes of Code Section 409A, the Parties intend that such compensation arrangements be structured so as to comply with the requirements of Code Section 409A and shall make reasonable efforts to cause such arrangements to comply with Code Section 409A. In this regard, all payments that are deemed to be subject to Code Section 409A will be considered to be separate payments and not a form of installment payments, any such payments that are triggered by a termination of employment will be paid when there has been a “separation from service” (as that phrase is used for purposes of Code Section 409A), and no such payments will be subject to offset by any other amount unless otherwise permitted by
6
Section 409A. Whenever a payment that is subject to Code Section 409A has a specified payment date, payment will be made at such time as is deemed to be a timely payment for purposes of Code Section 409A and any discretion as the time of payment will be exercised solely by the Company. If the Executive is a “specified employee” within the meaning of Code Section 409A at the time of his “separation from service”, then any payments that are triggered by such separation from service that would otherwise be payable within the six-month period following the separation from service will be paid in a lump sum on the date that is the first day of the calendar month following the six-month anniversary of the Executive’s separation from service.
If and to the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (A) all such expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred, (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (C) the amount of expenses eligible for reimbursement, or the in-kind benefits provided, during any taxable year will not affect the expenses eligible for reimbursement, or the in-kind benefits to be provided, in any other taxable year, and (D) any reimbursement shall be for expenses incurred during the period of time specified in this Agreement and if no time period is specified, shall be for expenses incurred during the Executive’s lifetime. It is the intent of this Agreement to comply with, or be exempt from, the requirements of Code Section 409A so that none of the payments and benefits to be provided hereunder shall be subject to the additional tax imposed under Code Section 409A, and any ambiguities herein shall be interpreted to so comply.
11. Code Section 280G.
a.Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary (including the Equity Incentive Plan), if there is a change of ownership or effective control or change in the ownership of a substantial portion of the assets of a corporation (within the meaning of Code Section 280G) and any payment or benefit (including payments and benefits pursuant to this Agreement) that the Executive would receive from the Company or otherwise (“Transaction Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Code Section 4999 (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Transaction Payment are paid to the Executive, which of the following two alternative forms of payment would result in the Executive’s receipt, on an after-tax basis, of the greater amount of the Transaction Payment notwithstanding that all or some portion of the Transaction Payment may be subject to the Excise Tax: (1) payment in full of the entire amount of the Transaction Payment (a “Full Payment”), or (2) payment of only a part of the Transaction Payment so that the Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”). For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, the reduction in payments and/
7
or benefits will occur in the following order: (1) first, reduction of cash payments, in reverse order of scheduled payment date (or if necessary, to zero), (2) then, reduction of non-cash and non-equity benefits provided to the Executive, on a pro rata basis (or if necessary, to zero), and (3) then, cancellation of the acceleration of vesting of equity award compensation in the reverse order of the date of grant of the Executive’s equity awards.
b.Unless the Executive and the Company otherwise agree in writing, any determination required under this section shall be made in good faith in writing by an independent accounting firm selected by the Company which is reasonably acceptable to the Executive (the “Accountants”), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes absent manifest error. For purposes of making the calculations required by this section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Code Sections 280G and 4999. The Accountants shall provide detailed supporting calculations to the Company and the Executive as requested by the Company or the Executive. The Executive and the Company shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this section. The Company shall bear all costs of the Accountants in connection with any calculations contemplated by this Section 11(b).
c.Notwithstanding the foregoing, in the event that no stock of the Company or its Affiliates is readily tradable on an established securities market or otherwise (within the meaning of Code Section 280G) at the time of the change in control, the Company shall, upon request of the Executive, submit to a vote of shareholders for approval the portion of the Transaction Payments that exceeds three times the Executive’s “base amount” (within the meaning of Code Section 280G) (the “Excess Parachute Payments”) in accordance with Treas. Reg. §1.280G-1, and the Parties shall cooperate with such vote of shareholders, including the execution of any required documentation subjecting the Executive’s entitlement to all Excess Parachute Payments to such shareholder vote.
12. General Provisions.
a.Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of one business day following email delivery, or the third business day after mailing by FedEx or UPS to the addresses set forth below or to such other address or to the attention of such other person as the recipient Party will have specified by prior written notice to the sending Party:
To the Company
Core & Main LP
Attn: Chief Executive Officer
1830 Craig Park Court
St. Louis, MO 63146
Email: [Redacted] prior to the Effective Date and [Redacted] after the Effective Date
8
With a copy to:
Core & Main LP
Attn: General Counsel
1830 Craig Park Court
St. Louis, MO 63146
Email: [Redacted]
To the Executive:
At the address shown in the Company’s personnel records.
(b)Severability. Any provision of this Agreement which is deemed by a court of competent jurisdiction to be invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this paragraph be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable by a court of competent jurisdiction because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. If any benefit or treatment is stated in form or substance as to be in actual or possible conflict with applicable law, the applicable law shall prevail in the stead of any statements contained in this Agreement.
(c)Entire Agreement. This document, together with any attachments hereto, the indemnification agreement previously entered into by and between the Executive, the Company and certain other affiliates, and all restrictive covenants in any and all agreements between the Executive and the Company or any of the Company’s affiliates constitute the final, complete, and exclusive embodiment of the entire agreement and understanding between the Parties related to the subject matter hereof and to the compensatory arrangements between the Company and the Executive and supersedes and preempts any prior or contemporaneous understandings, agreements, term sheets, or prior drafts or representations by or between the Parties, written or oral.
(d)Counterparts. This Agreement may be executed on separate counterparts, any one of which need not contain signatures of more than one Party, but all of which taken together will constitute one and the same agreement.
(e)Amendments. No amendments or other modifications to this Agreement may be made except by a writing signed by all Parties. No amendment or waiver of this Agreement requires the consent of any individual, partnership, corporation or other entity not a party to this Agreement, with the possible exception of the Board. Nothing in this Agreement, express or implied, is intended to confer upon any third person any rights or remedies under or by reason of this Agreement.
9
(f)Dispute Resolution. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE ANY RIGHTS THAT THEY MAY HAVE TO A JURY TRIAL FOR ANY SUCH DISPUTES, CONTROVERSIES OR CLAIMS. In the event of any dispute arising under or including any provisions of this Agreement, the Executive and the Company agree to submit the dispute to binding arbitration before a mutually agreed upon arbitrator in accordance with the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1, et seq. Disputes between the Parties that may not be subject to pre-dispute arbitration agreement as provided by an Act of Congress are excluded from the coverage of this Agreement. The arbitration shall be conducted in St. Louis, Missouri by JAMS, Inc. (“JAMS”) or its successors, under JAMS’ then applicable rules. A neutral arbitrator (the “Arbitrator”) shall be selected by both Parties, and shall: (a) have the authority to compel adequate discovery for the resolution of the dispute; (b) have the authority to award monetary damages and any and all other remedies that would be available in court, governed by the substantive laws of the State of Missouri; and (c) issue a written arbitration decision including the arbitrator’s essential findings of fact and conclusions of law and a statement of the award. The Parties shall be entitled to all rights and remedies that either would be entitled to pursue in a court of law; provided, however, that either Party may seek to obtain injunctive relief in court to prevent irreparable harm pending the conclusion of arbitration. Each Party will pay the fees for their own counsel, subject to any remedies to which that Party may later be entitled under this Agreement or applicable law. However, in all cases where required by law, the Company will pay the Arbitrator’s and arbitration fees. If under applicable law the Company is not required to pay all of the Arbitrator’s and/or arbitration fees, such fee(s) will be apportioned between the Parties in accordance with said applicable law, and any disputes in that regard will be resolved by the Arbitrator. The decision of the Arbitrator shall be final and binding on the Parties.
(g)Choice of Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the laws of the State of Missouri without giving effect to principles of conflicts of law of such state.
(h)Survivorship. The provisions of this Agreement necessary to carry out the intention of the Parties as expressed herein shall survive the termination or expiration of this Agreement.
(i)Waiver. The waiver by either Party of the other Party’s prompt and complete performance, or breach or violation, of any provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation, and the failure by any Party hereto to exercise any right or remedy which it may possess hereunder shall not operate nor be construed as a bar to the exercise of such right or remedy by such Party upon the occurrence of any subsequent breach or violation. No waiver shall be deemed to have occurred unless set forth in a writing executed by or on behalf of the waiving Party. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.
(j)Captions. The captions of this Agreement are for convenience and reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision hereof.
10
(k)Construction. The Parties acknowledge that this Agreement is the result of arm’s-length negotiations between sophisticated parties, each afforded representation by legal counsel. Each and every provision of this Agreement shall be construed as though both Parties participated equally in the drafting of the same, and any rule of construction that a document shall be construed against the drafting Party shall not be applicable to this Agreement.
(l)This Agreement Controls. If there is any conflict or dispute between this Agreement and any other agreement between the Executive and the Company, the terms of this Agreement shall control.
(m)Compensation Clawback. Any incentive based or other compensation paid to the Executive under this Agreement or any other agreement between the Parties shall be subject to recovery by the Company under the Company’s Dodd-Frank Clawback Policy or any other clawback or other such recovery policy adopted by the Company from time to time.
[Remainder of page is intentionally left blank.]
11
IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREBY, the Parties hereto have executed and delivered this Agreement as of the year and date first written.
COMPANY:
Core & Main LP
By:/s/ Stephen O. LeClair
Name: Stephen O. LeClair
Title: Chief Executive Officer
EXECUTIVE:
/s/ Robyn Bradbury
Name: Robyn Bradbury
12
Exhibit A
Form of PCA
See attached.
13
CONFIDENTIALITY, NON-SOLICITATION, AND NONCOMPETE AGREEMENT
THIS CONFIDENTIALITY, NON-SOLICITATION, AND NON-COMPETE AGREEMENT (“Agreement”) is made as of the date this Agreement is executed by and between the undersigned employee (“Employee”) and Core & Main LP (“Employer”).
WHEREAS, Employee acknowledges that the business in which Employer is engaged is highly competitive, that Employer devotes a substantial amount of time and effort to the development and maintenance of Confidential Information (defined below) and that Confidential Information constitutes a valuable asset of Employer; and
WHEREAS, due to, among other things, the nature of Employee’s position with Employer, Employee has been and will continue to be provided with Confidential Information and may be responsible for developing and maintaining customer relationships and goodwill and Employer has placed Employee in a position of trust and confidence with Employer; and
WHEREAS, Employee receives training, experience, and expertise from Employer that make Employee’s services of special, unique and extraordinary value to Employer; and
WHEREAS, it would be detrimental to Employer for Employee to disclose Confidential Information or unfairly compete with Employer in a manner prohibited by this Agreement.
NOW, THEREFORE, in consideration of Employee’s continued employment and service as an executive officer, additional consideration in the form of participation in the Core & Main Inc. 2021 Omnibus Equity Incentive Plan and the receipt of equity (in any form) under the plan, compensation, and the equipment, materials, facilities, resources, and Confidential Information (as defined below) that have been supplied to Employee, and the mutual promises contained herein, and intending to be legally bound, Employee and Employer agree as follows:
1.Whereas Clauses.
The Whereas Clauses contained in the paragraphs above hereby are incorporated and made a part of this Agreement.
2.Definitions
a.The term “Competitor” as used herein shall mean any business, person, entity or group of business entities, regardless of whether organized as a corporation, partnership (general or limited), joint venture, association or other organization, that provides a product or service that competes with the products or services of Employer that Employee was involved in or was provided Confidential Information (defined below) about during the Look Back Period.
14
b.The term “Covered Customer” as used herein shall mean any customer of Employer (i) with whom Employee had business-related contact or (ii) about which Employee received or learned Confidential Information during the Look Back Period.
c.The term “Covered Employee” as used herein shall mean any employee of Employer that Employee worked with, supervised, or received Confidential Information about during the Look Back Period.
d.The term “Employer” as used herein shall mean Employer, its predecessors, designees and successors and its past, present and future operating companies, divisions, subsidiaries, affiliates and other business units, including businesses acquired by purchase of assets, stock, merger or otherwise.
e.The term “Look Back Period” as used herein shall mean (i) the last two (2) years of Employee’s employment with Employer as of the Termination Date (defined below), or such shorter period of time as Employee has been employed by Employer; or, if the foregoing period is not enforceable then, (ii) such lesser period as would be enforceable under applicable law.
f.The term “Termination Date” as used herein shall mean the last day Employee actively performs services for Employer, regardless of the reason for Employee’s separation from employment with Employer, including any and all voluntary and involuntary reasons for termination.
g.The term “Territory” as used herein will depend upon Employee’s position as follows: (i) if Employee is in a position where Employee’s responsibilities are not geographically limited to an assigned location or territory or where Employee is provided Confidential Information that is not geographically limited to an assigned location or territory (such as, by way of example but not limitation, management positions, marketers, and operations employees), then Territory means the United States (including state and state-equivalents and county and county-equivalents within the United States); (ii) if Employee is in a position with responsibilities and Confidential Information that are limited to an assigned territory or territories during the Look Back Period, then Territory shall be the specific geographic territory or territories assigned to Employee during the Look Back Period; and (iii) in the event that neither (i) or (ii) apply, then the Territory is the county or counties that Employee performed services in or on behalf of Employer during the Look Back Period.
3. Confidential Information.
a.Employee acknowledges that in the course of Employee’s employment with Employer, Employee has been and will continue to become familiar with Confidential Information concerning Employer, its businesses, customers and employees, which may be disclosed
15
to Employee or which Employee may learn, observe, discover or otherwise acquire during, or as a result of, Employee’s employment by Employer and which may include, but is not limited to, information in any form (tangible or intangible) related to the business of Employer which Employer has not made public or authorized public disclosure of, and that is not generally known to the public through proper means, including, without limitation, any information, whether patentable, patented or not, relating to any (1) trade secrets; (2) any information Employee has reason to know that Employer treats as confidential for any purpose; (3) financial records; (4) sales information or events; (5) confidential products or promotional lines; (6) customer account information; (7) vendor pricing agreements; (8) marketing and forecasting information; and (9) pricing, proposals, and plans (collectively, “Confidential Information”). Private disclosure of otherwise Confidential Information to parties the Company is doing business with for business purposes shall not cause the information to lose its protected status under this Agreement.
b.Employee further acknowledges and agrees that Employee will not, directly or indirectly, at any time during or after Employee’s employment with Employer (for so long thereafter as the information is maintained as Confidential Information), except in the course of performing Employee’s duties for Employer, disclose, disseminate, make available or use Employer’s Confidential Information. Employee further agrees not to make copies of such Confidential Information except as authorized by Employer.
c.Confidential Information does not include information lawfully acquired by a nonmanagement employee about wages, hours or other terms and conditions of employment when used for purposes protected by §7 of the National Labor Relations Act such as joining or forming a union, engaging in collective bargaining, or engaging in other concerted activity for mutual aid or protection of laborers. For purpose of clarity, it shall still be a violation of this Agreement for a non-management employee to compete wrongfully by sharing Confidential Information with a competitor about other employees’ compensation and benefits that Employee obtained through the course of employment with Employer for purposes of assisting such competitor in soliciting Employer’s employees.
d.Nothing in this Agreement prohibits Employee from reporting an event that Employee reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the Securities and Exchange Commission, Equal Employment Opportunity Commission, or Department of Labor), or from cooperating in an investigation conducted by such a government agency. This may include disclosure of trade secret or Confidential Information within the limitations permitted by the 2016 Defend Trade Secrets Act (DTSA). Employee is hereby provided notice that under the DTSA, (1) no individual will be held criminally or civilly liable under Federal or State trade secret law for the disclosure of a trade secret (as defined in the Economic Espionage Act) that: (A) is made in confidence to a Federal, State, or local government official,
16
either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and, (2) an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.
4. Noncompetition.
In order to protect, among other things, Employer’s interests and investment in Confidential Information, its relationships with its customers, vendors and other employees, and its goodwill, and as a material inducement to Employer to compensate Employee as well as provide Employee with additional benefits and other good and valuable consideration, and subject to the State Specific Modifications provided for in Exhibit A, if applicable to Employee, Employee covenants and agrees that:
During Employee’s employment and for a period of two (2) years following the Termination Date, Employee will not, (i) for the benefit of a Competitor’s operations or sales within the Territory, directly or through others, alone or with others, individually or as an owner, operator, shareholder, principal, director, officer, consultant, partner, employee, contractor, or agent, (other than on behalf of Employer) provide services that are the same or similar in function or purpose to the services Employee provided to Employer during the Look Back Period; or (ii) provide such services that are otherwise likely or probable to result in the use or disclosure of Confidential Information to a business whose products and services include products and services offered by Employer regarding which Employee had material involvement or about which Employee received Confidential Information during the Look Back Period.
Nothing in this Paragraph 4 shall prohibit Employee from passively investing in a publicly held business that competes with Employer provided Employee’s investment is less than 2% of the outstanding stock or market value of the business and Employee does not otherwise violate this Agreement.
5. Non-Solicitation.
a.Subject to the State Specific Modifications provided for in Exhibit A, if applicable to Employee, Employee will not during the term of Employee’s employment, other than in the performance of Employee’s work for Employer, and for the two (2) year period following the Termination Date, (i) participate, directly or through others, in soliciting or communicating with a Covered Customer of Employer for the purpose of soliciting business from a Covered Customer; or, (ii) for the benefit of a Competitor, request,
17
induce, or advise any Covered Customer to withdraw, curtail, modify, or cancel their business with Employer.
b.Subject to the State Specific Modifications provided for in Exhibit A, if applicable to Employee, Employee will not during the term of Employee’s employment with Employer and for the two (2) year period following the Termination Date (i) participate in soliciting or communicating with any Covered Employee to leave the employment of Employer; or, (ii) hire, attempt to hire, or assist in hiring any Covered Employee on behalf of a Competitor. This Paragraph 5(b) shall exclude any employee who performs only secretarial or clerical services.
c.Paragraphs 5(a) and 5(b) are reasonably limited by geography to those locations where the Covered Customers and Covered Employees referred to are located, and if this is not sufficient for enforcement, then Paragraphs 5(a) and 5(b) are limited to the Territory.
6. Return of Property.
All reports, manuals, memoranda, electronic information and data and other materials made available to Employee by Employer during the performance of Employee’s duties are the property of Employer, and Employee will use all such property exclusively for Employer’s benefit and will return it, including all copies, to Employer upon Employer’s request, and in any event, without the requirement of a request, on the Termination Date. Employee agrees to take reasonable security precautions and measures to maintain and protect the confidentiality of Confidential Information, and shall follow all policies and procedures of Employer regarding the handling, use, access, distribution, maintenance, and disclosure of Confidential Information.
7. Tolling.
In the event Employee breaches any or all subparagraphs of Paragraphs 4 or 5 of this Agreement and Employer seeks injunctive relief to enforce those provisions, the time period for Employee’s obligations will be extended by one day for each day Employee’s violation thereof, up to a maximum of one (1) year, or to the extent permitted by law; however, this extension of time shall be capped so that the extension of time itself does not exceed the original one (1) year restriction, and if this extension would make the restriction unenforceable under applicable law it will not be enforced.
8. Reasonableness of Restrictions /Severability.
a.Employee agrees that the terms of this Agreement are reasonable and do not impose a greater restraint than necessary to protect Employer’s legitimate protectable business interests, including, but not limited to, the protection of its Confidential Information and trade secrets. Employee agrees and acknowledges that the restrictions contained in this Agreement do not preclude Employee from earning a livelihood, nor do they
18
unreasonably impose limitations on Employee’s ability to earn a living. Employee further agrees and acknowledges that the potential harm to Employer of the non-enforcement of this Agreement outweighs any potential harm to Employee from its enforcement by injunction or otherwise. It is the desire and intent of the parties hereto that the provisions of this Agreement shall be enforced to the fullest extent legally permissible.
b.If a court finds any provision, paragraph or subparagraph of this Agreement to be void or unenforceable in whole or in part, such a determination shall not affect the validity of the remainder of the Agreement, including any other provision, paragraph or subparagraph. Each provision, paragraph, and subparagraph of this Agreement is separable from every other provision, paragraph and subparagraph and constitutes a separate and distinct covenant. The parties agree, however, that should a court construing this Agreement determine that any provision of the Agreement is overbroad or unenforceable, the court shall reform any overbroad or unenforceable provision in a manner that provides Employer with the greatest level of protection permissible by applicable law.
9. Remedies.
Employee acknowledges that a remedy at law for any breach or threatened breach of the provisions of this Agreement would be inadequate and therefore agrees that Employer shall be entitled to injunctive relief in case of any such breach or threatened breach of this Agreement. Employee acknowledges and agrees that Employer may apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief (without posting a bond or other security) in order to enforce or prevent any violation of the provisions of this Agreement, and that money damages would not be an adequate remedy for any breach of the provisions of this Agreement. Employee acknowledges and agrees that a violation of this Agreement would cause irreparable harm to Employer, and Employee covenants that Employee will not assert in any proceeding that a violation or further violation of this Agreement: (i) will not result in irreparable harm to Employer; or (ii) could be remedied adequately at law. Nothing contained herein shall be construed as prohibiting Employer from pursuing any other remedies available for any such breach or threatened breach against Employee’s or any of Employee’s subsequent employers, which may also include, but not be limited to, contract damages, lost profits, and punitive damages.
10. Entire Agreement.
This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes any previous communications, representations, arrangements or agreements, whether written or oral. However, Employee acknowledges that the provisions of this Agreement are in addition to, and in no way intended to limit, restrict or narrow any prior or existing employment or other agreement with Employer. This Agreement does not replace or supersede any prior or existing employment or other agreement Employee has with Employer, but rather, shall be read in conjunction with such prior or existing agreements and shall be
19
interpreted in a manner to provide Employer the maximum protection provided by all agreements Employee has with Employer.
11. Assignment.
This Agreement shall be binding and inure to the benefit of Employer, its successors and assigns, and to the benefit of Employee. Employer may assign this Agreement to any party, without the consent of Employee.
12. Amendment; Waiver.
This Agreement only may be amended by a written agreement signed by Employee and the Chief Human Resources Officer for Employer. No waiver of this Agreement will be effective unless it is in writing and signed by Employer’s Chief Human Resources Officer.
13. Effectiveness of Agreement.
This Agreement becomes effective when Employee signs it. The obligations under it continue throughout the entire period of time Employee is employed by Employer, without regard to the business within Employer with which Employee is associated and these obligations will continue after and survive the end of Employee’s employment with Employer as described herein.
14. Notice to Future Employers.
For the period of two (2) years immediately following the Termination Date, Employee agrees to inform each new prospective employer, prior to accepting employment, of the existence of this Agreement and provide that prospective employer with a copy of it. Employee also agrees that Employer has the right to inform any of Employee’s future employers of the existence of this Agreement and to provide any of Employee’s future employers with a copy of it. Employee hereby consents to the notification of Employee’s future employers of Employee’s rights and obligations under this Agreement and will not assert that Employer’s doing so constitutes actionable interference or wrongdoing.
15. Governing Law and Venue.
This Agreement shall be governed by and construed in accordance with the laws of the state of Missouri without regard to its principles of conflicts of law. The parties agree that all actions or proceedings that arise out of, are associated with, require the interpretation of, or that are in any way directly or indirectly related to the subject matter covered in this Agreement or to any matter related to Employee’s employment with Employer, shall be tried and litigated exclusively in the courts of Missouri, specifically the courts located in St. Louis County. This choice of venue is intended by the parties to be mandatory and not permissive in nature.
20
Therefore, the parties hereby waive any right to assert lack of personal jurisdiction or the doctrine of forum non conveniens or a similar doctrine or to object to venue or jurisdiction with respect to any action or proceeding brought in accordance with this Paragraph. THE PARTIES IRREVOCABLY CONSENT AND AGREE THAT MISSOURI COURTS (SPECIFICALLY THOSE IN ST. LOUIS COUNTY) HAVE PERSONAL JURISDICTION OVER EMPLOYEE AND EMPLOYER FOR PURPOSES OF LITIGATING ANY DISPUTE, CONTROVERSY, OR PROCEEDING CONCERNING THE MATTERS DESCRIBED IN THIS AGREEMENT.
16. Attorneys’ Fees.
In the event a court determines that Employee has breached or threatened to breach this Agreement, Employee agrees to reimburse Employer for all attorneys’ fees and costs incurred by Employer to establish that breach or threatened breach, to obtain injunctive relief, and/or to otherwise enforce the terms of this Agreement. However, if Employee resides in and is subject to the law of a state that would convert this recovery of attorney’s fees provision into a reciprocal obligation or an obligation where the prevailing party would recover fees and costs, then this recovery of attorneys’ fees and costs provision shall not apply and each party will bear its or their own attorneys’ fees and costs.
17. At-Will Statement.
Nothing in this Agreement shall be construed to create a term or tenure of employment or to alter or create limitations on either party’s right to terminate the employment relationship between Employer and Employee at either party’s discretion.
18. Reporting of Fraud or Waste.
Under Section 743 of the Consolidated and Further Continuing Appropriations Act, the U.S. Government is prohibited from using certain appropriated funds for a contract with any entity that requires employees or subcontractors to sign internal confidentiality agreements or statements that would prohibit or otherwise restrict such employees or subcontractors from lawfully reporting waste, fraud or abuse to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive such information.
Accordingly, nothing in this Agreement—or in any other internal Employer confidentiality agreements, statements, or policies—prohibits or otherwise restricts Employee from lawfully reporting any waste, fraud or abuse to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive such information. The provisions contained in this Agreement that prohibit or restrict disclosing internal Confidential Information do not apply to communications by Employee lawfully seeking to report waste, fraud or abuse to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive such information.
21
19. Headings.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of this Agreement.
Employee acknowledges that Employee has read and understands this Agreement, believes it to be reasonable, and is signing it voluntarily. Employee acknowledges that Employee’s obligations under this Agreement will not impose an unreasonable economic hardship on Employee and are reasonable and necessary to protect Employer’s legitimate business interests. Employee understands and agrees that Employee will continue to be bound by the provisions of this Agreement after Employee’s employment with Employer has ended. Employee is directed to Exhibit A, which is incorporated herein by reference, for important state limitations on the scope of this Agreement.
IN WITNESS WHEREOF, Employee has executed this Agreement as of the date above written.
Robyn Bradbury March 20, 2025
Employee Name Date
Employee Signature
22
EXHIBIT A - State Specific Modifications
The following shall apply to modify provisions of the Agreement, where applicable, if the governing law provision in Paragraph 15 does not apply to Employee because either (a) a modification based on Employee’s primary state of employment controls pursuant to the terms below, or (b) a different state’s law is deemed by a binding adjudicator to control.
Confidential Information Supplement. If, and only if, the controlling state law applicable to Employee requires a time limit to be placed on restrictions concerning the post-employment use of Confidential Information in order for the restriction to be enforceable, then this Agreement’s restriction on Employee’s use of Confidential Information that is not a trade secret will expire two (2) years after the Termination Date. This time limit will not apply to (a) Confidential Information that qualifies as a trade secret, or (b) confidential information of third parties. Employer’s trade secrets will remain protected for as long as they qualify as trade secrets under applicable law. Items of confidential information of third parties will remain protected for as long as allowed under the laws and/or separate agreements that make them confidential. Nothing in the foregoing shall be construed to permit Employee to recreate records of Confidential Information from memory or retain copies of Confidential Information in any form after Employee’s employment with Employer ends. Employee understands that Employee should have no records of this kind in Employee’s possession or control with which to refresh Employee’s memory after Employee’s employment with Employer ends.
Alabama
If Alabama law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: Paragraph 5(b) is limited in scope to solicitation and hiring of Covered Employees holding Sensitive Positions. An employee in a “Sensitive Position” refers to an employee who is uniquely essential to the management, organization, or service of the business.
The definition of “Covered Customer” shall be limited to those persons and entities with active (not former) business-relationships with Employer.
California
If California law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: The restrictions in Paragraph 4 shall not apply.
Paragraph 5: Paragraph 5(a) shall be limited to situations where Employee is aided in their conduct by the use or disclosure of Employer’s trade secrets (as defined by applicable law). The restrictions in Paragraph 5(b) shall not apply.
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
23
Colorado
If Colorado law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: If Employee is not an officer, executive or management employee, or an employee who constitutes professional staff to executive and management personnel, within the meaning of § 8-2-113(2)(d) of Colorado Revised Statutes § 8-2-113, et. seq. (the “Colorado Noncompete Act”), then: (a) Paragraph 5(a) shall be modified to read as follows: “For one (1) year after the Termination Date (“Restricted Period”), Employee will not (directly or through the direction or control of others) solicit business from a Covered Customer that would compete with Employer’s business opportunities with the Covered Customer or cause Employer to lose the patronage of a Covered Customer, in order to protect Employer from misuse of trade secrets related to Employer’s Covered Customers that Employee received access to during the Look Back Period; provided, further, that the definition of Covered Customer shall be limited to only those persons or entities that Employee had access to trade secrets about in the Look Back Period.”; and (b) Employee stipulates that the restrictions in Paragraphs 4 and 5 are reasonable and necessary for the protection of trade secrets within the meaning § 8-2-113(2)(b) of Colorado Revised Statutes.
District of Columbia
If Employee is an employee in the District of Columbia, as long as Employee perform works in the District of Columbia within the meaning of the “Ban on Non-Compete Agreements Amendment Act of 2020,” then no restriction in this Agreement (including, but not limited to, the noncompetition, client nonsolicitation, business vendor nonsolicitation, and employee nonsolicitation restrictions) will be applied to Employee in a way that would prohibit Employee from being simultaneously or subsequently employed by another person, performing work or providing services for pay for another person, or operating Employee’s own business. However, Employee understands that nothing in this exception to this Agreement’s restrictions shall be construed to permit Employee to take any action that involves or may result in the use or disclosure of Confidential Information, proprietary, or sensitive information, client lists, or a trade secret, as that term is defined in section 2(4) of the Uniform Trade Secrets Act of 1988 (D.C. Law 7-216; D.C. Official Code §36-401(4)). Such actions shall remain prohibited and nothing in this Agreement shall be construed to limit or eliminate any rights or remedies Employer would have against Employee under trade secret law, unfair competition law, agency law or other laws applicable in the District of Columbia absent this Agreement.
NOTICE: “No employer operating in the District of Columbia may request or require any employee working in the District of Columbia to agree to a non-compete policy or agreement, in accordance with the Ban on Non-Compete Agreements Amendment Act of 2020.”
24
Georgia
If Georgia law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 2(g): The definition of “Territory” shall be modified to mean “the territory where Employee was working at the time Employee’s employment with Employer ended” and allows Employee to reasonably determine the maximum reasonable scope of the restraint as of the Termination Date.
The definition of “Confidential Information” shall not include data or information (a) which has been voluntarily disclosed to the public by the employer, except where such public disclosure has been made by the employee without authorization from the employer; (b) which has been independently developed and disclosed by others; or (c) which has otherwise entered the public domain through lawful means, and shall be applied consistent with the definition of “Confidential Information” under Ga. Code Ann. § 13-8-53(e).
Paragraph 7: Paragraph 7 regarding extension of post-employment restrictions shall not apply.
Employee agrees, represents, and warrants that Employee’s duties with Employer, and/or skill as a professional, satisfy the requirements of Georgia law for covenants that restrict competition under Official Code of Georgia Annotated Section 13-8-53(a).
Idaho
If Idaho law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Employee stipulates and agrees that employee is a “key” employee within the meaning of Idaho Code §44-2701, et seq.
Illinois
If Employee resides in Illinois at the time Employee enters into this Agreement, as additionally mutually agreed upon consideration for the noncompetition and nonsolicitation restrictions in Paragraphs 4 and 5, Employer shall allow Employee to participate in the Core & Main, Inc. 2021 Omnibus Equity Incentive Plan. Employee stipulates that this is adequate consideration to make the provisions of this Agreement immediately binding upon Employee. Additionally, Employee acknowledges that Employee received a copy of this Agreement at least 14 days before the effective date and was advised to consult with an attorney about this Agreement and has been given an opportunity to do so.
If Illinois law is deemed to apply, then the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: The restrictions in Paragraph 4 shall not apply if Employee is paid $75,000.00/year (or as otherwise adjusted by law) or less.
25
Paragraph 5: The restrictions in Paragraph 5 shall not apply if Employee is paid $45,000.00 (or as otherwise adjusted by law) or less.
Indiana
If Indiana law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: Paragraph 5(b) shall be modified to further limit the restriction on solicitation of employees to those who have access to or possess any Confidential Information that would give a Competitor an unfair advantage.
Louisiana
If Louisiana law is deemed to apply, then the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 2(g): The “Territory” shall specifically include the following Louisiana parishes: Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Bienville, Bossier, Caddo, Calcasieu, Caldwell, Cameron, Catahoula, Claiborne, Concordia, De Soto, East Baton Rouge, East Carroll, East Feliciana, Evangeline, Franklin, Grant, Iberia, Iberville, Jackson, Jefferson, Jefferson Davis, Lafayette, Lafourche, La Salle, General, Livingston, Madison, Morehouse, Natchitoches, Orleans, Ouachita, Plaquemines, Pointe Coupee, Rapides, Red River, Richland, Sabine, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Landry, St. Martin, St. Mary, St. Tammany, Tangipahoa, Tensas, Terrebonne, Union, Vermilion, Vernon, Washington, Webster, West Baton Rouge, West Carroll, West Feliciana, and Winn.
The “Territory” shall also specifically include the following Texas counties: Cass, Marion, Harrison, Panola, Shelby, Sabine, Newton, Orange, and Jefferson.
The “Territory” shall also specifically include the following Arkansas counties: Miller, Lafayette, Columbia, Union, Ashley and Chicot.
The “Territory” shall also specifically include the following Mississippi Counties: Issaquena, Warren, Clairborne, Jefferson, Adams, Wilkinson, Amite, Pike, Walthall, Marion, Pearl River and Hancock.
Employee agrees that the foregoing provides Employee with adequate notice of the geographic scope of the restrictions contained in the Agreement by name of specific parish or parishes (and equivalents), municipality or municipalities, and/or parts thereof.
Paragraphs 4 and 5: The restrictions in Paragraphs 4 and 5 are limited to the parishes and counties identified in the preceding paragraphs.
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
26
Maine
If Maine law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not apply if Employee’s earned wages are at or below 400% of the federal poverty level. Paragraph 4 also will not take effect until one year of employment or a period of six months from the date the Agreement is signed, whichever is later.
Employee acknowledges that, if Employer is hiring Employee, Employee received a copy of this Agreement prior to receiving a formal offer of employment from Employer and was given at least three (3) business days to consider the Agreement before signing.
Maryland
If Maryland law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not apply if Employee earns less than $15.00 an hour or $31,200 a year.
Massachusetts
If Employee resides in Massachusetts at the time this Agreement is entered into, then Employee stipulates that an award of equity pursuant to the Core & Main, Inc. 2021 Omnibus Equity Incentive Plan is adequate consideration to make the noncompetition restrictions of this Agreement immediately binding upon them.
If Massachusetts law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 shall be limited to a period of one (1) year following the Termination Date (as well as while Employee is employed by Employer); however, if Employee breaches Paragraph 4 of this Agreement, and also breaches Employee’s fiduciary duty to Employer and/or has unlawfully taken, physically or electronically, any Employer records, then the restricted period in Paragraphs 4 and 7 shall be extended to a period of two (2) years from the Termination Date. Additionally, Paragraph 4 will not apply post-employment if Employee is classified as a nonexempt employee under the Federal Labor Standards Act (FLSA).
Paragraph 4 will not apply if Employee’s employment is terminated without Cause or if Employee is terminated as part of a reduction in force. As used in this Paragraph herein, “Cause” is: (i) a material breach by Employee of any of their material obligations under any applicable employment, confidentiality, non-solicitation or noncompetition agreement with Employer; (ii) Employee’s conviction of or entering a plea of guilty or nolo contendere to, or admission to facts sufficient for a finding of guilt for, any crime constituting a felony or any misdemeanor involving fraud, dishonesty and/or moral turpitude under federal, state, local or foreign law; (iii) Employee’s neglect, refusal, or failure to meet the performance expectations for their position, discharge their duties (other than due to physical or mental illness) commensurate with his/her
27
title and function, or their failure to comply with a lawful direction of Employer; (iv) the commission of any act or omission involving dishonesty, disloyalty or fraud with respect to Employer; (v) Employee’s breach of a statutory or common law duty of loyalty or fiduciary duty to Employer; (vi) Employee’s violation of Employee Policies and Procedures; (vii) any other willful misconduct by Employee which is or intends to be materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, Employer; or (viii) any other reason recognized under the common law.
Paragraph 7: The tolling language in Paragraph 7 shall only apply to any breach of Paragraph 5 (i.e., the tolling language shall not apply to Paragraph 4, except as indicated above).
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Employee acknowledges that they were provided a copy of this Agreement and Exhibit at least ten (10) business days before the effective date of this Agreement.
Employee also acknowledges that Employee has been advised to consult with an attorney about this Agreement and has been given an opportunity to do so.
Minnesota
If Minnesota law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Employee acknowledges that they were provided a copy of this Agreement and Exhibit when they were offered employment and Employee was aware that execution of an agreement with noncompetition and nonsolicitation restrictions was a requirement of employment when Employee accepted Employer’s offer.
Montana
If Montana law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: The prohibited acts set forth in Paragraph 5(a) shall be limited to situations where Employee’s conduct is aided by the use or disclosure of Confidential Information or trade secrets.
Paragraph 17: Paragraph 17 shall not apply to the extent it conflicts with Montana law. Nebraska
If Nebraska law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 2(b): The definition of “Covered Customer” is modified so that it is limited only to Employer customer’s (person or entity) that Employee had material business-related contact or dealings with during the Look Back Period.
28
Paragraph 4: Paragraph 4 shall not apply.
Nevada
If Nevada law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not take effect until Employer has employed Employee for sixty (60) days or Employee has received $5,000 in wages from Employer.
The noncompetition restrictions in Paragraph 4 shall not apply to Employee if Employee is paid solely on an hourly wage basis, exclusive of any tips or gratuities.
Additionally, if Employer terminates Employee’s employment as a result of a reduction in force, reorganization or similar restructuring, the noncompete restrictions in Paragraph 4 only will be enforceable during the period in which Employer is paying Employee’s salary, benefits, or equivalent compensation, including without limitation, severance pay, if it elects to make such payments.
Paragraph 5: Paragraph 5(a) does not preclude Employee from providing services to any former client or customer of Employer if: (a) Employee did not solicit the former customer or client; (b) the customer or client voluntarily chose to leave and seek services from Employee; and (c) Employee is otherwise complying with the limitations in this Agreement as to time, geographical area, and scope of activity to be restrained.
New Hampshire
If New Hampshire law is deemed to apply the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
By signature hereto, Employee acknowledges that they been given a minimum of two (2) weeks advance notice of the need to execute this Agreement and they received this Agreement prior to accepting their offer of employment.
Paragraph 4: Paragraph 4 will not apply if Employee earns less than or equal to 200% of the federal minimum wage.
New York
If New York law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 2(b): The definition of “Covered Customer” is modified so that “Covered Customer” excludes those customers who became a client of Employer as a result of Employee’s
independent contact and business development efforts with the client prior to and independent from their employment with Employer.
North Carolina
29
If North Carolina law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition, Agreement is modified as follows:
Paragraph 2(e): The “Look Back Period” shall be calculated looking back two (2) years from the date of enforcement and not from the Termination Date.
North Dakota
If North Dakota law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraphs 4: The restrictions in Paragraph 4 shall not apply.
Paragraph 5: The restrictions in Paragraph 5(a), including all subparts, are modified so that they only restrict Employee from engaging in the activities described therein after the Termination Date if they also involve the unauthorized use or disclosure of Confidential Information or trade secrets.
Oklahoma
If Oklahoma law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not apply.
Paragraph 5: Paragraph 5(a) is modified to state that Employee is prohibited only from directly soliciting established customers of Employer for the purpose of doing any business with a Competitor.
Oregon
If Oregon law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
By signature hereto, Employee acknowledges that they have been given a minimum of two (2) weeks advance notice of the need to execute this Agreement. Employee further acknowledges that this Agreement is a condition of employment, if entered into at the time employment commences.
Paragraph 4: The noncompete restrictions in Paragraph 4 will not apply to Employee if as of the Termination Date: (a) the total amount of Employee’s gross salary and commissions, calculated on an annual basis does not exceed $100,533.00 (or as otherwise adjusted), or (b) Employee does not otherwise qualify under O.R.S. § 653.295; unless, Employer chooses to compensate Employee as provided for under O.R.S. § 653.295 (6).
Rhode Island
If Rhode Island law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
30
Paragraph 4: Paragraph 4 will not apply if Employee earns less than 250% of the federal poverty level based on Employee’s regular (non-overtime, non-weekend, non-holiday) hour or if Employee is classified as a nonexempt employee under the Federal Labor Standards Act (FLSA).
South Dakota
If South Dakota law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: The restrictions in Paragraph 5(a) regarding prospective customers of Employer shall not apply.
Texas
If Texas law is deemed to apply, Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Virginia
If Virginia law is deemed to apply, Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4(ii) regarding noncompetition restrictions on the use of Confidential Information shall not apply.
Paragraphs 4 and 5(a): Paragraphs 4 and 5(a) will not apply to Employees earning less than approximately $52,000 annually (or as otherwise provided by Code of Virginia §40.1-28.7:7 (the “Virginia Act”)), or those Employees who otherwise qualifies as a low-wage employee under the Virginia Act, unless Employee’s earnings are derived, in whole or in predominant part, from sales commissions, incentives, or bonuses.
Paragraph 5(a): The restrictions in Paragraph 5(a) of the Agreement shall not restrict Employee from providing a service to a Covered Customer of Employer if Employee does not initiate contact with or solicit the Covered Customer. However, Employee acknowledges that they understand they still are prohibited from using or disclosing Employer’s Confidential Information.
The parties agree that the restrictive covenants in Paragraphs 4 and 5 are reasonably limited in nature and do not prohibit employment with a competing business in a non-competitive position.
Washington
If Washington law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
31
Paragraph 4: Paragraph 4 will not apply unless and until Employee earns less than $101,390 annually (or the otherwise adjusted equivalent in accordance with the requirements of Washington Noncompete Act (Chapter of Title 49 RCW enacting ESHB 1450 of the 66th Legislature, 2019 Regular Session) (the “Washington Act”)). Employee further agrees that if, at the time Employee signs this Agreement, Employee does not earn from Employer at least $101,390 in Box 1 W-2 annual compensation (or as otherwise adjusted), then the noncompetition restrictions in Paragraph 4 will automatically become enforceable against Employee if and when Employee begins earning at least $101,390 annually (or as otherwise adjusted).
Employee also understands that Paragraph 4 will not be enforced against Employee if Employee is laid off, unless Employer pays Employee during the noncompetition period an amount equal to Employee’s base salary as of the Termination Date, less any compensation earned by Employee during the Restricted Period. For purposes of this section, “layoff” means termination of Employee’s employment by Employer for reasons of Employer’s insolvency or other purely economic factors, and specifically excludes termination of Employee’s employment for any other reason, either with or without cause. Paragraph 5: The restrictions in Paragraph 5(a)(i) shall not apply. The restrictions in Paragraph 5(b)(ii) shall not apply.
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Employee acknowledges that they received notice of this Agreement before accepting any offer of employment or before this Agreement becomes effective (whichever applies). If Employee is an existing employee, Employee acknowledges that Employee was given ten (10) business days to consider this Agreement before accepting it.
Wisconsin
If Wisconsin law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: Paragraph 5(b) will be limited to the solicitation of an employee who is in a “Sensitive Employee Position.” “Sensitive Employee Position” refers to an employee of Employer who is in a management, supervisory, sales, research and development, or similar role where the employee is provided Confidential Information or is involved in business dealings with Employer’s customers.
Paragraph 7: Paragraph 7 regarding extension of post-employment restrictions shall not apply.
32
Exhibit 10.3
Portions of this exhibit have been redacted pursuant to Item 601(a)(6) of Regulation S-K. The Company undertakes to furnish a copy of all unredacted and omitted schedules and exhibits to the SEC upon its request.
Employment and Transition Agreement
This Employment and Transition Agreement (this “Agreement”) is made and entered into as of March 20, 2025, by and between Core & Main LP, a Florida limited partnership (the “Company”), and Stephen O. LeClair (the “Executive”) (together the Company and the Executive are referred to as the “Parties”).
WHEREAS, the Parties desire to enter into an employment agreement which shall memorialize the terms and conditions of the Executive’s employment and transition; and
WHEREAS, this Agreement supersedes all prior agreements or understandings regarding the terms of the Executive’s employment with the Company, whether written or otherwise, including, but not limited to, that certain Employment Agreement, dated as of February 9, 2018, by and between the Parties (the “Prior Employment Agreement”).
NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein contained, together with other good and valuable consideration the receipt of which is hereby acknowledged, the Parties hereby agree as follows:
1.Services and Duties; Deemed Resignation; Continued Service.
a.Effective as of March 31, 2025 (the “Effective Date”), the Executive shall, pursuant to the terms of this Agreement, be employed by the Company as its Executive Chair and shall report to the Lead Independent Director (the “Lead Independent Director”) of the Board of Directors of Core & Main, Inc. (the “Board”). The Executive shall have no other employment and no other business ventures which are undisclosed to the Board or which conflict with the Executive’s duties under this Agreement. Except for the Executive’s service on the board of directors of AAON, Inc. as of the date hereof, the Executive may not participate on the board of directors of any other company without the prior written consent of the Board. The Executive’s responsibilities shall include such responsibilities, duties, and authority as are customary for the Executive’s position, and may have such additional duties and responsibilities as may be assigned to the Executive by the Lead Independent Director. The Executive shall carry out the duties and responsibilities hereunder in good faith in a diligent, competent and professional manner, consistent and in compliance with all applicable federal and state laws and regulations and Company policies and to the best of the Executive’s ability in a manner he reasonably believes is in the best interests of the Company.
b.By execution of this Agreement and effective as of the Effective Date, Employee shall automatically (without any further action required by the Company or the Executive) be deemed to have tendered his resignation as Chief Executive Officer of the Company and any and all other officer and director positions of the Company and any affiliate thereof, except that: (1) he will continue to serve as Executive Chair pursuant to the terms of this Agreement; and (2) his service as a member of the Board of Directors of Core & Main, Inc., and as Chair thereof, shall continue in accordance with the terms and conditions of its governing documents, as may be amended from time to time, and until his election and qualification of his successor or his earlier death, resignation or removal.
2. Term of Employment. The Executive’s employment with the Company pursuant to this Agreement shall commence on the Effective Date and shall terminate on April 1, 2026 (the “Term”). Unless extended by mutual written agreement, this Agreement shall automatically terminate on April 1, 2026, and the Executive shall be deemed to resign (without any further action required by the Company or the Executive) as Executive Chair on such date.
3. Location. The Executive shall be employed by the Company at its executive headquarters, which is currently located at 1830 Craig Park Court, Maryland Heights, Missouri 63146.
4. Compensation
a.Base Salary. In consideration of the Executive’s full and faithful satisfaction of the Executive’s duties under this Agreement, the Company agrees to pay the Executive an annual base salary in the amount of $935,000 (the “Base Salary”), paid in accordance with the Company’s regular payroll schedule as in effect from time to time and subject to all applicable tax and other permitted withholdings.
b.Annual Bonus. The Executive shall be eligible to receive an annual bonus under the terms of the Company’s annual management incentive compensation plan (the “Bonus Plan”) as may be in effect from time to time. The Executive’s target bonus for these purposes is equal to 135% of the Executive’s Base Salary in effect for the year for which the bonus is paid (the “Annual Bonus Opportunity”). The actual amount payable as a bonus is determined based on the terms and conditions of the Bonus Plan document, and by reference to such performance metrics as are established for the relevant year. Performance metrics are established by the Talent and Compensation Committee of the Board (the “Compensation Committee”) and information regarding such performance metrics will be communicated generally during the first quarter of the year. The amount of the bonus payable for any particular year will be determined on the basis of the terms and conditions established for such year by the Compensation Committee. The terms of the Bonus Plan are subject to modification by the Compensation Committee or the Board at any time and from time to time. The Company is under no obligation to continue the Bonus Plan or to establish a different annual bonus or annual incentive plan if the Bonus Plan is terminated. Under the terms of the Bonus Plan as currently in effect, it is possible that, based on performance, the actual amount payable as an annual bonus may be less than the target described above, and there may be no bonus payable at all if performance is not achieved at a required threshold level. To be eligible to receive the bonus payable under the Bonus Plan, if any, the Executive must be employed by the Company through
2
the date of payment (which is generally during the second calendar quarter following the year for which such bonus is payable).
c.Equity Incentive. Awards under the Core & Main, Inc. 2021 Omnibus Equity Incentive Plan or a successor plan (the “Equity Incentive Plan”) may be made to the Executive, but any such awards are made at the discretion of the Compensation Committee and there is not a guarantee that awards under the Equity Incentive Plan will be made.
5. Benefits and Perquisites.
a.Employee Benefits. The Executive shall be eligible to participate in all employee benefit plans made available generally to the Company’s employees and those benefit plans that are available to the Company’s executives, subject to the applicable limitations and requirements imposed by the terms and conditions of the governing plan documents for such plans. The Company reserves the right to modify any of its employee benefit plans from time to time and to terminate such plans at any time, subject to any limitations imposed by law on such actions.
b.Paid Time Off. The Executive shall be eligible to participate in the paid time off policy generally applicable to the Company’s employees, as in effect from time to time.
c.Reimbursement of Expenses. The Company shall reimburse the Executive for any expenses reasonably incurred by the Executive during the Term, in furtherance of the Executive’s duties hereunder, including business travel, meals and accommodations, upon submission by the Executive of such evidence as may be required under the terms of the Company’s business expense reimbursement policy as in effect from time to time.
d.Executive Car Program. The Executive will be eligible to participate in the Company’s executive car program.
6. Termination of Employment
a.Termination without Cause. The Company may terminate the Executive’s employment without Cause at any time; subject to providing to the Executive 60 days’ advance written notice of such termination. Notwithstanding the foregoing, the Company may terminate the Executive’s employment without Cause without such advance written notice; provided, however, that the Company shall pay to the Executive the Executive’s Base Salary, as then in effect, for the period such advance written notice requirement exceeds the period of actual written notice of the Executive’s termination.
b.Death or Disability. The Executive’s employment shall terminate immediately upon the Executive’s death. The Executive’s employment may also be terminated by the Company in the event of the Executive’s Disability. For these purposes, “Disability” means the Executive is eligible for disability benefits under the Company’s long-term disability plan; provided, however, that if there is no such plan in effect, Disability means that the Executive is unable to perform the Executive’s duties under the terms of this Agreement, with or without a reasonable accommodation for a period of not less than three months
3
(subject to any longer period that may be required under applicable law) by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a period of not less than 12 months. Nothing in this Agreement shall be construed to waive or limit the Executive’s rights under existing law, including, without limitation, the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., and the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq.
c.Termination for Cause. The Company may terminate the Executive’s employment for Cause without any advance notice except as expressly provided for in this Section 6(c). For these purposes, “Cause” means any of the following:
i.The Executive’s indictment for, commission of, conviction of or plea of nolo contendere to a felony or a crime involving moral turpitude;
ii.The Executive’s commission of fraud, theft, embezzlement, self-dealing, dishonesty, misappropriation or other malfeasance against the Company;
iii.The Executive’s material and persistent failure to perform Executive’s lawful duties or responsibilities under the terms of this Agreement or other agreement between the Parties (other than by reason of disability);
iv.The Executive’s failure to comply with any lawful policy of the Company;
v.The Executive’s commission of acts or omissions constituting gross negligence or material misconduct in the performance of any aspect of the Executive’s lawful duties or responsibilities which have or may be expected to have an adverse effect on the Company;
vi.The Executive’s breach of any fiduciary duty owed to the Company;
vii.The Executive’s material violation or material breach of any restrictive covenant or any material term of this Agreement or material term of another agreement between the Parties;
viii.The Executive’s failure or refusal to cooperate in good faith with a governmental or internal investigation; or
ix.The Executive’s commission of any act or omission that materially damages or is reasonably likely to materially damage the financial condition or business of the Company or materially damages or is reasonably likely to materially damage the reputation, public image, goodwill, assets or prospects of the Company.
Notwithstanding the foregoing, Cause for the Executive’s termination of employment shall not exist with respect to any of the above matters to the extent the situation is reasonably susceptible to cure (as determined at the discretion of the Board) unless the Company has provided the Executive with written notice detailing the event constituting Cause and the Executive fails to cure such condition within 15 days of the Executive’s receipt of such notice.
d.Resignation by the Executive. The Executive may resign at any time without Good Reason (as defined below); subject to provision to the Company of 60 days’ advance notice of such termination.
e.Resignation by the Executive for Good Reason. The Executive may resign for “Good Reason” in the following circumstances:
4
i.The Company materially reduces the Executive’s Base Salary (except for any across-the-board reduction impacting substantially all executives of the Company where such reduction does not represent a greater than 10% reduction);
ii.The Company materially reduces the percentage of Base Salary that constitutes the Executive’s Target Bonus;
iii.The Company materially reduces the Executive’s duties, authorities and responsibilities;
iv.The Company makes any material adverse change to the Executive’s title or reporting line;
v.The Company requires that the Executive report to a different principal work location that increases the Executive’s commute by more than 40 miles; or
vi.The Company engages in a material violation or material breach of any restrictive covenant or any material term of this Agreement or material term of another agreement between the Parties.
Notwithstanding the foregoing, in no event shall the Executive’s resignation be deemed to be for Good Reason unless the Executive provides the Company with written notice of the condition claimed to constitute Good Reason for the Executive’s resignation within 30 days of the initial existence of such condition, the Company must have failed to correct such condition within 30 days of the Company’s receipt of the aforementioned written notice and the Executive must then resign and separate from employment no later than 90 days following the initial existence of the condition that is claimed to constitute Good Reason for the Executive’s resignation.
f.Obligations of the Executive on Termination of Employment. In addition to the post-termination covenants described in Section 8 of this Agreement, the Executive shall, following any termination of employment with the Company:
i.Return to the Company all property of the Company in the Executive’s possession and shall take appropriate measures to return or destroy any files or confidential information in the Executive’s possession that may be in electronic form; and
ii.Resign each position (if any) that the Executive then holds as an officer or director of the Company and any affiliate of the Company other than as a member of the Board. The Executive’s execution of this Agreement shall be deemed the grant by the Executive to the officers of the Company of a limited power of attorney to sign in the Executive’s name and on the Executive’s behalf any such documentation as may be required to be executed solely for the limited purposes of effectuating such resignations.
7. Compensation Payable Following Termination of Employment.
a.Accrued Obligations. In the event of any termination of employment, the Executive shall be entitled to: (i) all amounts of unpaid Base Salary through the date of termination; (ii) benefits or payments from any Company sponsored employee benefit plan, in accordance with the terms and conditions of the governing plan documents; and (iii) reimbursement
5
of any unpaid business related expenses incurred prior to the Executive’s termination of employment, provided the Executive has complied with the requirements for such reimbursements under the terms of the Company’s business expense reimbursement policy (collectively, the “Accrued Obligations”). For purposes of clarity and avoidance of doubt, only the Accrued Obligations will be paid to the Executive in the event of the Executive’s termination of employment under any circumstances other than a termination by the Company without Cause or a resignation for Good Reason, including where the termination of employment is due to the Executive’s death or Disability or upon expiration of the Term. Nothing in this Section 7(a), however, shall be interpreted to deny payment to the Executive of any death or disability benefits that are provided for under the Company’s employee benefit plans.
b.Termination by the Company without Cause or Resignation by the Executive for Good Reason. If the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason, in addition to the Accrued Obligations, the Company shall provide to the Executive, as severance pay: (i) the remaining portion of the Executive’s Base Salary for the remainder of the Term, to be paid in substantially equal payments in accordance with the Company’s regular payroll schedule, commencing as soon as practicable following the date the Release (as defined below) becomes irrevocable (with the first such payment including any amounts that would have been paid had the Executive’s Base Salary continued following the Executive’s termination of employment without interruption pending the Release being executed and becoming irrevocable); (ii) an amount equal to the bonus payable under the Bonus Plan, if any, if the Executive had remained employed through the end of the Term, to be paid in accordance with the Company’s regular payroll schedule for the payment of executive bonuses; and (iii) notwithstanding anything contained in any award agreement or otherwise, the vesting conditions of all outstanding awards issued to Employee under the Equity Incentive Plan that are unvested as of such date of termination (such unvested portion, the “Unvested Awards”) shall be deemed accelerated as of the termination date solely with respect to the portion of such Unvested Awards that would have become vested if the Executive had remained employed through the end of the Term (collectively, the “Severance Pay”), subject to the Executive executing a release of claims in a form determined by the Company to be acceptable (the “Release”) and the Release, thereafter, becoming irrevocable pursuant to its terms; provided, however, that if the period for the Executive to consider, sign and not revoke the Release spans two taxable years, the Severance Pay shall commence in the second such taxable year. In addition, subject to the Executive enrolling in COBRA continuation coverage, the Company shall, for the remainder of the Term following the date of termination, pay the Executive an amount equal to the monthly cost of the Executive purchasing COBRA coverage for the Executive and the Executive’s covered dependents (the “Benefit Continuation”), except that the Benefit Continuation shall cease in the event that the Executive becomes eligible for coverage from a subsequent employer.
8. Covenants. The Executive’s employment is conditioned upon his execution of the Confidentiality, Non-Solicitation and Non-Compete Agreement in substantially the form attached hereto as Exhibit A (as it may be amended, restated or modified from time to time and together with any similar agreement entered into by the Executive and the Company or any affiliate thereof, the “PCA”). For the avoidance of doubt and notwithstanding anything
6
contained in the PCA, the Executive shall be permitted to hire [Redacted] following termination of the Executive’s employment with the Company. In the event the Executive violates any of his obligations set forth in the PCA, any unpaid Severance Pay or other separation benefits shall terminate.
9. Assignment. This Agreement, and any rights and obligations hereunder, may not be assigned by the Executive and may be assigned by the Company to (i) a successor by merger, (ii) purchasers of substantially all of the assets of the Company or its affiliates, or (iii) in connection with any other acquisition, reorganization or restructuring of the Company.
10. Code Section 409A. In general, it is intended that all compensation provided for under the terms of this Agreement be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), by reason of the “short-term deferral” and “separation pay” exemptions found in Treasury Regulation Sections 1.409A-1(b)(4) and (9) (or any successor to such exemptions). Notwithstanding the foregoing, however, if any payments are deemed to be a form of nonqualified deferred compensation for purposes of Code Section 409A, the Parties intend that such compensation arrangements be structured so as to comply with the requirements of Code Section 409A and shall make reasonable efforts to cause such arrangements to comply with Code Section 409A. In this regard, all payments that are deemed to be subject to Code Section 409A will be considered to be separate payments and not a form of installment payments, any such payments that are triggered by a termination of employment will be paid when there has been a “separation from service” (as that phrase is used for purposes of Code Section 409A), and no such payments will be subject to offset by any other amount unless otherwise permitted by Section 409A. Whenever a payment that is subject to Code Section 409A has a specified payment date, payment will be made at such time as is deemed to be a timely payment for purposes of Code Section 409A and any discretion as the time of payment will be exercised solely by the Company. If the Executive is a “specified employee” within the meaning of Code Section 409A at the time of his “separation from service”, then any payments that are triggered by such separation from service that would otherwise be payable within the six-month period following the separation from service will be paid in a lump sum on the date that is the first day of the calendar month following the six-month anniversary of the Executive’s separation from service.
If and to the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (A) all such expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred, (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (C) the amount of expenses eligible for reimbursement, or the in-kind benefits provided, during any taxable year will not affect the expenses eligible for reimbursement, or the in-kind benefits to be provided, in any other taxable year, and (D) any reimbursement shall be for expenses incurred during the period of time specified in this Agreement and if no time period is specified, shall be for expenses incurred during the Executive’s lifetime. It is the intent of this Agreement to comply with, or be exempt from, the requirements of Code Section 409A so that none of the payments and benefits to be provided hereunder shall be subject to the additional tax imposed under Code Section 409A, and any ambiguities herein shall be interpreted to so comply.
11. Code Section 280G.
7
a.Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary (including the Equity Incentive Plan), if there is a change of ownership or effective control or change in the ownership of a substantial portion of the assets of a corporation (within the meaning of Code Section 280G) and any payment or benefit (including payments and benefits pursuant to this Agreement) that the Executive would receive from the Company or otherwise (“Transaction Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Code Section 4999 (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Transaction Payment are paid to the Executive, which of the following two alternative forms of payment would result in the Executive’s receipt, on an after-tax basis, of the greater amount of the Transaction Payment notwithstanding that all or some portion of the Transaction Payment may be subject to the Excise Tax: (1) payment in full of the entire amount of the Transaction Payment (a “Full Payment”), or (2) payment of only a part of the Transaction Payment so that the Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”). For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, the reduction in payments and/or benefits will occur in the following order: (1) first, reduction of cash payments, in reverse order of scheduled payment date (or if necessary, to zero), (2) then, reduction of non-cash and non-equity benefits provided to the Executive, on a pro rata basis (or if necessary, to zero), and (3) then, cancellation of the acceleration of vesting of equity award compensation in the reverse order of the date of grant of the Executive’s equity awards.
b.Unless the Executive and the Company otherwise agree in writing, any determination required under this section shall be made in good faith in writing by an independent accounting firm selected by the Company which is reasonably acceptable to the Executive (the “Accountants”), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes absent manifest error. For purposes of making the calculations required by this section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Code Sections 280G and 4999. The Accountants shall provide detailed supporting calculations to the Company and the Executive as requested by the Company or the Executive. The Executive and the Company shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this section. The Company shall bear all costs of the Accountants in connection with any calculations contemplated by this Section 11(b).
c.Notwithstanding the foregoing, in the event that no stock of the Company or its Affiliates is readily tradable on an established securities market or otherwise (within the meaning of Code Section 280G) at the time of the change in control, the Company shall, upon request of the Executive, submit to a vote of shareholders for approval the portion of the
8
Transaction Payments that exceeds three times the Executive’s “base amount” (within the meaning of Code Section 280G) (the “Excess Parachute Payments”) in accordance with Treas. Reg. §1.280G-1, and the Parties shall cooperate with such vote of shareholders, including the execution of any required documentation subjecting the Executive’s entitlement to all Excess Parachute Payments to such shareholder vote.
12. General Provisions.
a.Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of one business day following email delivery, or the third business day after mailing by FedEx or UPS to the addresses set forth below or to such other address or to the attention of such other person as the recipient Party will have specified by prior written notice to the sending Party:
To the Company
Core & Main LP
Attn: Lead Independent Director
1830 Craig Park Court
St. Louis, MO 63146
Email: [Redacted]
With a copy to:
Core & Main LP
Attn: General Counsel
1830 Craig Park Court
St. Louis, MO 63146
Email: [Redacted]
To the Executive:
At the address shown in the Company’s personnel records.
(b)Severability. Any provision of this Agreement which is deemed by a court of competent jurisdiction to be invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to this paragraph be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable by a court of competent jurisdiction because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. If any benefit or treatment is stated in form or substance as to be in actual or possible conflict with applicable law, the applicable law shall prevail in the stead of any statements contained in this Agreement.
9
(c)Entire Agreement. This document, together with any attachments hereto, the indemnification agreement previously entered into by and between the Executive, the Company and certain other affiliates, and all restrictive covenants in any and all agreements between the Executive and the Company or any of the Company’s affiliates constitute the final, complete, and exclusive embodiment of the entire agreement and understanding between the Parties related to the subject matter hereof and to the compensatory arrangements between the Company and the Executive and supersedes and preempts any prior or contemporaneous understandings, agreements, term sheets, or prior drafts or representations by or between the Parties, written or oral. For the avoidance of doubt, from and after the Effective Date, this Agreement supersedes and replaces the Prior Employment Agreement in its entirety and such Prior Employment Agreement shall have no further force or effect from and after the Effective Date.
(d)Counterparts. This Agreement may be executed on separate counterparts, any one of which need not contain signatures of more than one Party, but all of which taken together will constitute one and the same agreement.
(e)Amendments. No amendments or other modifications to this Agreement may be made except by a writing signed by all Parties. No amendment or waiver of this Agreement requires the consent of any individual, partnership, corporation or other entity not a party to this Agreement, with the possible exception of the Board. Nothing in this Agreement, express or implied, is intended to confer upon any third person any rights or remedies under or by reason of this Agreement.
(f)Dispute Resolution. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE ANY RIGHTS THAT THEY MAY HAVE TO A JURY TRIAL FOR ANY SUCH DISPUTES, CONTROVERSIES OR CLAIMS. In the event of any dispute arising under or including any provisions of this Agreement, the Executive and the Company agree to submit the dispute to binding arbitration before a mutually agreed upon arbitrator in accordance with the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1, et seq. Disputes between the Parties that may not be subject to pre-dispute arbitration agreement as provided by an Act of Congress are excluded from the coverage of this Agreement. The arbitration shall be conducted in St. Louis, Missouri by JAMS, Inc. (“JAMS”) or its successors, under JAMS’ then applicable rules. A neutral arbitrator (the “Arbitrator”) shall be selected by both Parties, and shall: (a) have the authority to compel adequate discovery for the resolution of the dispute; (b) have the authority to award monetary damages and any and all other remedies that would be available in court, governed by the substantive laws of the State of Missouri; and (c) issue a written arbitration decision including the arbitrator’s essential findings of fact and conclusions of law and a statement of the award. The Parties shall be entitled to all rights and remedies that either would be entitled to pursue in a court of law; provided, however, that either Party may seek to obtain injunctive relief in court to prevent irreparable harm pending the conclusion of arbitration. Each Party will pay the fees for their own counsel, subject to any remedies to which that Party may later be entitled under this Agreement or applicable law. However, in all cases where required by law, the Company will pay the Arbitrator’s and arbitration fees. If under applicable law the Company is not required to pay all of the Arbitrator’s and/or arbitration fees, such fee(s) will be apportioned between the Parties in
10
accordance with said applicable law, and any disputes in that regard will be resolved by the Arbitrator. The decision of the Arbitrator shall be final and binding on the Parties.
(g)Choice of Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the laws of the State of Missouri without giving effect to principles of conflicts of law of such state.
(h)Survivorship. The provisions of this Agreement necessary to carry out the intention of the Parties as expressed herein shall survive the termination or expiration of this Agreement.
(i)Waiver. The waiver by either Party of the other Party’s prompt and complete performance, or breach or violation, of any provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation, and the failure by any Party hereto to exercise any right or remedy which it may possess hereunder shall not operate nor be construed as a bar to the exercise of such right or remedy by such Party upon the occurrence of any subsequent breach or violation. No waiver shall be deemed to have occurred unless set forth in a writing executed by or on behalf of the waiving Party. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.
(j)Captions. The captions of this Agreement are for convenience and reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision hereof.
(k)Construction. The Parties acknowledge that this Agreement is the result of arm’s-length negotiations between sophisticated parties, each afforded representation by legal counsel. Each and every provision of this Agreement shall be construed as though both Parties participated equally in the drafting of the same, and any rule of construction that a document shall be construed against the drafting Party shall not be applicable to this Agreement.
(l)This Agreement Controls. If there is any conflict or dispute between this Agreement and any other agreement between the Executive and the Company, the terms of this Agreement shall control.
(m)Compensation Clawback. Any incentive based or other compensation paid to the Executive under this Agreement or any other agreement between the Parties shall be subject to recovery by the Company under the Company’s Dodd-Frank Clawback Policy or any other clawback or other such recovery policy adopted by the Company from time to time.
[Remainder of page is intentionally left blank.]
11
IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREBY, the Parties hereto have executed and delivered this Agreement as of the year and date first written.
COMPANY:
Core & Main LP
By:/s/ James Castellano
Name: James Castellano
Title: Authorized Person - Lead Independent Director
EXECUTIVE:
/s/ Stephen O. LeClair
Name: Stephen O. LeClair
12
Exhibit A
Form of PCA
See attached.
13
CONFIDENTIALITY, NON-SOLICITATION, AND NONCOMPETE AGREEMENT
THIS CONFIDENTIALITY, NON-SOLICITATION, AND NON-COMPETE AGREEMENT (“Agreement”) is made as of the date this Agreement is executed by and between the undersigned employee (“Employee”) and Core & Main LP (“Employer”).
WHEREAS, Employee acknowledges that the business in which Employer is engaged is highly competitive, that Employer devotes a substantial amount of time and effort to the development and maintenance of Confidential Information (defined below) and that Confidential Information constitutes a valuable asset of Employer; and
WHEREAS, due to, among other things, the nature of Employee’s position with Employer, Employee has been and will continue to be provided with Confidential Information and may be responsible for developing and maintaining customer relationships and goodwill and Employer has placed Employee in a position of trust and confidence with Employer; and
WHEREAS, Employee receives training, experience, and expertise from Employer that make Employee’s services of special, unique and extraordinary value to Employer; and
WHEREAS, it would be detrimental to Employer for Employee to disclose Confidential Information or unfairly compete with Employer in a manner prohibited by this Agreement.
NOW, THEREFORE, in consideration of Employee’s continued employment and service as an executive officer, additional consideration in the form of participation in the Core & Main Inc. 2021 Omnibus Equity Incentive Plan and the receipt of equity (in any form) under the plan, compensation, and the equipment, materials, facilities, resources, and Confidential Information (as defined below) that have been supplied to Employee, and the mutual promises contained herein, and intending to be legally bound, Employee and Employer agree as follows:
1.Whereas Clauses.
The Whereas Clauses contained in the paragraphs above hereby are incorporated and made a part of this Agreement.
2.Definitions
a.The term “Competitor” as used herein shall mean any business, person, entity or group of business entities, regardless of whether organized as a corporation, partnership (general or limited), joint venture, association or other organization, that provides a product or service that competes with the products or services of Employer that Employee was involved in or was provided Confidential Information (defined below) about during the Look Back Period.
14
b.The term “Covered Customer” as used herein shall mean any customer of Employer (i) with whom Employee had business-related contact or (ii) about which Employee received or learned Confidential Information during the Look Back Period.
c.The term “Covered Employee” as used herein shall mean any employee of Employer that Employee worked with, supervised, or received Confidential Information about during the Look Back Period.
d.The term “Employer” as used herein shall mean Employer, its predecessors, designees and successors and its past, present and future operating companies, divisions, subsidiaries, affiliates and other business units, including businesses acquired by purchase of assets, stock, merger or otherwise.
e.The term “Look Back Period” as used herein shall mean (i) the last two (2) years of Employee’s employment with Employer as of the Termination Date (defined below), or such shorter period of time as Employee has been employed by Employer; or, if the foregoing period is not enforceable then, (ii) such lesser period as would be enforceable under applicable law.
f.The term “Termination Date” as used herein shall mean the last day Employee actively performs services for Employer, regardless of the reason for Employee’s separation from employment with Employer, including any and all voluntary and involuntary reasons for termination.
g.The term “Territory” as used herein will depend upon Employee’s position as follows: (i) if Employee is in a position where Employee’s responsibilities are not geographically limited to an assigned location or territory or where Employee is provided Confidential Information that is not geographically limited to an assigned location or territory (such as, by way of example but not limitation, management positions, marketers, and operations employees), then Territory means the United States (including state and state-equivalents and county and county-equivalents within the United States); (ii) if Employee is in a position with responsibilities and Confidential Information that are limited to an assigned territory or territories during the Look Back Period, then Territory shall be the specific geographic territory or territories assigned to Employee during the Look Back Period; and (iii) in the event that neither (i) or (ii) apply, then the Territory is the county or counties that Employee performed services in or on behalf of Employer during the Look Back Period.
3. Confidential Information.
a.Employee acknowledges that in the course of Employee’s employment with Employer, Employee has been and will continue to become familiar with Confidential Information concerning Employer, its businesses, customers and employees, which may be disclosed
15
to Employee or which Employee may learn, observe, discover or otherwise acquire during, or as a result of, Employee’s employment by Employer and which may include, but is not limited to, information in any form (tangible or intangible) related to the business of Employer which Employer has not made public or authorized public disclosure of, and that is not generally known to the public through proper means, including, without limitation, any information, whether patentable, patented or not, relating to any (1) trade secrets; (2) any information Employee has reason to know that Employer treats as confidential for any purpose; (3) financial records; (4) sales information or events; (5) confidential products or promotional lines; (6) customer account information; (7) vendor pricing agreements; (8) marketing and forecasting information; and (9) pricing, proposals, and plans (collectively, “Confidential Information”). Private disclosure of otherwise Confidential Information to parties the Company is doing business with for business purposes shall not cause the information to lose its protected status under this Agreement.
b.Employee further acknowledges and agrees that Employee will not, directly or indirectly, at any time during or after Employee’s employment with Employer (for so long thereafter as the information is maintained as Confidential Information), except in the course of performing Employee’s duties for Employer, disclose, disseminate, make available or use Employer’s Confidential Information. Employee further agrees not to make copies of such Confidential Information except as authorized by Employer.
c.Confidential Information does not include information lawfully acquired by a nonmanagement employee about wages, hours or other terms and conditions of employment when used for purposes protected by §7 of the National Labor Relations Act such as joining or forming a union, engaging in collective bargaining, or engaging in other concerted activity for mutual aid or protection of laborers. For purpose of clarity, it shall still be a violation of this Agreement for a non-management employee to compete wrongfully by sharing Confidential Information with a competitor about other employees’ compensation and benefits that Employee obtained through the course of employment with Employer for purposes of assisting such competitor in soliciting Employer’s employees.
d.Nothing in this Agreement prohibits Employee from reporting an event that Employee reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the Securities and Exchange Commission, Equal Employment Opportunity Commission, or Department of Labor), or from cooperating in an investigation conducted by such a government agency. This may include disclosure of trade secret or Confidential Information within the limitations permitted by the 2016 Defend Trade Secrets Act (DTSA). Employee is hereby provided notice that under the DTSA, (1) no individual will be held criminally or civilly liable under Federal or State trade secret law for the disclosure of a trade secret (as defined in the Economic Espionage Act) that: (A) is made in confidence to a Federal, State, or local government official,
16
either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and, (2) an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.
4. Noncompetition.
In order to protect, among other things, Employer’s interests and investment in Confidential Information, its relationships with its customers, vendors and other employees, and its goodwill, and as a material inducement to Employer to compensate Employee as well as provide Employee with additional benefits and other good and valuable consideration, and subject to the State Specific Modifications provided for in Exhibit A, if applicable to Employee, Employee covenants and agrees that:
During Employee’s employment and for a period of two (2) years following the Termination Date, Employee will not, (i) for the benefit of a Competitor’s operations or sales within the Territory, directly or through others, alone or with others, individually or as an owner, operator, shareholder, principal, director, officer, consultant, partner, employee, contractor, or agent, (other than on behalf of Employer) provide services that are the same or similar in function or purpose to the services Employee provided to Employer during the Look Back Period; or (ii) provide such services that are otherwise likely or probable to result in the use or disclosure of Confidential Information to a business whose products and services include products and services offered by Employer regarding which Employee had material involvement or about which Employee received Confidential Information during the Look Back Period.
Nothing in this Paragraph 4 shall prohibit Employee from passively investing in a publicly held business that competes with Employer provided Employee’s investment is less than 2% of the outstanding stock or market value of the business and Employee does not otherwise violate this Agreement.
5. Non-Solicitation.
a.Subject to the State Specific Modifications provided for in Exhibit A, if applicable to Employee, Employee will not during the term of Employee’s employment, other than in the performance of Employee’s work for Employer, and for the two (2) year period following the Termination Date, (i) participate, directly or through others, in soliciting or communicating with a Covered Customer of Employer for the purpose of soliciting business from a Covered Customer; or, (ii) for the benefit of a Competitor, request,
17
induce, or advise any Covered Customer to withdraw, curtail, modify, or cancel their business with Employer.
b.Subject to the State Specific Modifications provided for in Exhibit A, if applicable to Employee, Employee will not during the term of Employee’s employment with Employer and for the two (2) year period following the Termination Date (i) participate in soliciting or communicating with any Covered Employee to leave the employment of Employer; or, (ii) hire, attempt to hire, or assist in hiring any Covered Employee on behalf of a Competitor. This Paragraph 5(b) shall exclude any employee who performs only secretarial or clerical services.
c.Paragraphs 5(a) and 5(b) are reasonably limited by geography to those locations where the Covered Customers and Covered Employees referred to are located, and if this is not sufficient for enforcement, then Paragraphs 5(a) and 5(b) are limited to the Territory.
6. Return of Property.
All reports, manuals, memoranda, electronic information and data and other materials made available to Employee by Employer during the performance of Employee’s duties are the property of Employer, and Employee will use all such property exclusively for Employer’s benefit and will return it, including all copies, to Employer upon Employer’s request, and in any event, without the requirement of a request, on the Termination Date. Employee agrees to take reasonable security precautions and measures to maintain and protect the confidentiality of Confidential Information, and shall follow all policies and procedures of Employer regarding the handling, use, access, distribution, maintenance, and disclosure of Confidential Information.
7. Tolling.
In the event Employee breaches any or all subparagraphs of Paragraphs 4 or 5 of this Agreement and Employer seeks injunctive relief to enforce those provisions, the time period for Employee’s obligations will be extended by one day for each day Employee’s violation thereof, up to a maximum of one (1) year, or to the extent permitted by law; however, this extension of time shall be capped so that the extension of time itself does not exceed the original one (1) year restriction, and if this extension would make the restriction unenforceable under applicable law it will not be enforced.
8. Reasonableness of Restrictions /Severability.
a.Employee agrees that the terms of this Agreement are reasonable and do not impose a greater restraint than necessary to protect Employer’s legitimate protectable business interests, including, but not limited to, the protection of its Confidential Information and trade secrets. Employee agrees and acknowledges that the restrictions contained in this Agreement do not preclude Employee from earning a livelihood, nor do they
18
unreasonably impose limitations on Employee’s ability to earn a living. Employee further agrees and acknowledges that the potential harm to Employer of the non-enforcement of this Agreement outweighs any potential harm to Employee from its enforcement by injunction or otherwise. It is the desire and intent of the parties hereto that the provisions of this Agreement shall be enforced to the fullest extent legally permissible.
b.If a court finds any provision, paragraph or subparagraph of this Agreement to be void or unenforceable in whole or in part, such a determination shall not affect the validity of the remainder of the Agreement, including any other provision, paragraph or subparagraph. Each provision, paragraph, and subparagraph of this Agreement is separable from every other provision, paragraph and subparagraph and constitutes a separate and distinct covenant. The parties agree, however, that should a court construing this Agreement determine that any provision of the Agreement is overbroad or unenforceable, the court shall reform any overbroad or unenforceable provision in a manner that provides Employer with the greatest level of protection permissible by applicable law.
9. Remedies.
Employee acknowledges that a remedy at law for any breach or threatened breach of the provisions of this Agreement would be inadequate and therefore agrees that Employer shall be entitled to injunctive relief in case of any such breach or threatened breach of this Agreement. Employee acknowledges and agrees that Employer may apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief (without posting a bond or other security) in order to enforce or prevent any violation of the provisions of this Agreement, and that money damages would not be an adequate remedy for any breach of the provisions of this Agreement. Employee acknowledges and agrees that a violation of this Agreement would cause irreparable harm to Employer, and Employee covenants that Employee will not assert in any proceeding that a violation or further violation of this Agreement: (i) will not result in irreparable harm to Employer; or (ii) could be remedied adequately at law. Nothing contained herein shall be construed as prohibiting Employer from pursuing any other remedies available for any such breach or threatened breach against Employee’s or any of Employee’s subsequent employers, which may also include, but not be limited to, contract damages, lost profits, and punitive damages.
10. Entire Agreement.
This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes any previous communications, representations, arrangements or agreements, whether written or oral. However, Employee acknowledges that the provisions of this Agreement are in addition to, and in no way intended to limit, restrict or narrow any prior or existing employment or other agreement with Employer. This Agreement does not replace or supersede any prior or existing employment or other agreement Employee has with Employer, but rather, shall be read in conjunction with such prior or existing agreements and shall be
19
interpreted in a manner to provide Employer the maximum protection provided by all agreements Employee has with Employer.
11. Assignment.
This Agreement shall be binding and inure to the benefit of Employer, its successors and assigns, and to the benefit of Employee. Employer may assign this Agreement to any party, without the consent of Employee.
12. Amendment; Waiver.
This Agreement only may be amended by a written agreement signed by Employee and the Chief Human Resources Officer for Employer. No waiver of this Agreement will be effective unless it is in writing and signed by Employer’s Chief Human Resources Officer.
13. Effectiveness of Agreement.
This Agreement becomes effective when Employee signs it. The obligations under it continue throughout the entire period of time Employee is employed by Employer, without regard to the business within Employer with which Employee is associated and these obligations will continue after and survive the end of Employee’s employment with Employer as described herein.
14. Notice to Future Employers.
For the period of two (2) years immediately following the Termination Date, Employee agrees to inform each new prospective employer, prior to accepting employment, of the existence of this Agreement and provide that prospective employer with a copy of it. Employee also agrees that Employer has the right to inform any of Employee’s future employers of the existence of this Agreement and to provide any of Employee’s future employers with a copy of it. Employee hereby consents to the notification of Employee’s future employers of Employee’s rights and obligations under this Agreement and will not assert that Employer’s doing so constitutes actionable interference or wrongdoing.
15. Governing Law and Venue.
This Agreement shall be governed by and construed in accordance with the laws of the state of Missouri without regard to its principles of conflicts of law. The parties agree that all actions or proceedings that arise out of, are associated with, require the interpretation of, or that are in any way directly or indirectly related to the subject matter covered in this Agreement or to any matter related to Employee’s employment with Employer, shall be tried and litigated exclusively in the courts of Missouri, specifically the courts located in St. Louis County. This choice of venue is intended by the parties to be mandatory and not permissive in nature.
20
Therefore, the parties hereby waive any right to assert lack of personal jurisdiction or the doctrine of forum non conveniens or a similar doctrine or to object to venue or jurisdiction with respect to any action or proceeding brought in accordance with this Paragraph. THE PARTIES IRREVOCABLY CONSENT AND AGREE THAT MISSOURI COURTS (SPECIFICALLY THOSE IN ST. LOUIS COUNTY) HAVE PERSONAL JURISDICTION OVER EMPLOYEE AND EMPLOYER FOR PURPOSES OF LITIGATING ANY DISPUTE, CONTROVERSY, OR PROCEEDING CONCERNING THE MATTERS DESCRIBED IN THIS AGREEMENT.
16. Attorneys’ Fees.
In the event a court determines that Employee has breached or threatened to breach this Agreement, Employee agrees to reimburse Employer for all attorneys’ fees and costs incurred by Employer to establish that breach or threatened breach, to obtain injunctive relief, and/or to otherwise enforce the terms of this Agreement. However, if Employee resides in and is subject to the law of a state that would convert this recovery of attorney’s fees provision into a reciprocal obligation or an obligation where the prevailing party would recover fees and costs, then this recovery of attorneys’ fees and costs provision shall not apply and each party will bear its or their own attorneys’ fees and costs.
17. At-Will Statement.
Nothing in this Agreement shall be construed to create a term or tenure of employment or to alter or create limitations on either party’s right to terminate the employment relationship between Employer and Employee at either party’s discretion.
18. Reporting of Fraud or Waste.
Under Section 743 of the Consolidated and Further Continuing Appropriations Act, the U.S. Government is prohibited from using certain appropriated funds for a contract with any entity that requires employees or subcontractors to sign internal confidentiality agreements or statements that would prohibit or otherwise restrict such employees or subcontractors from lawfully reporting waste, fraud or abuse to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive such information.
Accordingly, nothing in this Agreement—or in any other internal Employer confidentiality agreements, statements, or policies—prohibits or otherwise restricts Employee from lawfully reporting any waste, fraud or abuse to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive such information. The provisions contained in this Agreement that prohibit or restrict disclosing internal Confidential Information do not apply to communications by Employee lawfully seeking to report waste, fraud or abuse to a designated investigative or law enforcement representative of a Federal department or agency authorized to receive such information.
21
19. Headings.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of this Agreement.
Employee acknowledges that Employee has read and understands this Agreement, believes it to be reasonable, and is signing it voluntarily. Employee acknowledges that Employee’s obligations under this Agreement will not impose an unreasonable economic hardship on Employee and are reasonable and necessary to protect Employer’s legitimate business interests. Employee understands and agrees that Employee will continue to be bound by the provisions of this Agreement after Employee’s employment with Employer has ended. Employee is directed to Exhibit A, which is incorporated herein by reference, for important state limitations on the scope of this Agreement.
IN WITNESS WHEREOF, Employee has executed this Agreement as of the date above written.
Stephen O. LeClair March 20, 2025
Employee Name Date
Employee Signature
22
EXHIBIT A - State Specific Modifications
The following shall apply to modify provisions of the Agreement, where applicable, if the governing law provision in Paragraph 15 does not apply to Employee because either (a) a modification based on Employee’s primary state of employment controls pursuant to the terms below, or (b) a different state’s law is deemed by a binding adjudicator to control.
Confidential Information Supplement. If, and only if, the controlling state law applicable to Employee requires a time limit to be placed on restrictions concerning the post-employment use of Confidential Information in order for the restriction to be enforceable, then this Agreement’s restriction on Employee’s use of Confidential Information that is not a trade secret will expire two (2) years after the Termination Date. This time limit will not apply to (a) Confidential Information that qualifies as a trade secret, or (b) confidential information of third parties. Employer’s trade secrets will remain protected for as long as they qualify as trade secrets under applicable law. Items of confidential information of third parties will remain protected for as long as allowed under the laws and/or separate agreements that make them confidential. Nothing in the foregoing shall be construed to permit Employee to recreate records of Confidential Information from memory or retain copies of Confidential Information in any form after Employee’s employment with Employer ends. Employee understands that Employee should have no records of this kind in Employee’s possession or control with which to refresh Employee’s memory after Employee’s employment with Employer ends.
Alabama
If Alabama law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: Paragraph 5(b) is limited in scope to solicitation and hiring of Covered Employees holding Sensitive Positions. An employee in a “Sensitive Position” refers to an employee who is uniquely essential to the management, organization, or service of the business.
The definition of “Covered Customer” shall be limited to those persons and entities with active (not former) business-relationships with Employer.
California
If California law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: The restrictions in Paragraph 4 shall not apply.
Paragraph 5: Paragraph 5(a) shall be limited to situations where Employee is aided in their conduct by the use or disclosure of Employer’s trade secrets (as defined by applicable law). The restrictions in Paragraph 5(b) shall not apply.
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Colorado
23
If Colorado law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: If Employee is not an officer, executive or management employee, or an employee who constitutes professional staff to executive and management personnel, within the meaning of § 8-2-113(2)(d) of Colorado Revised Statutes § 8-2-113, et. seq. (the “Colorado Noncompete Act”), then: (a) Paragraph 5(a) shall be modified to read as follows: “For one (1) year after the Termination Date (“Restricted Period”), Employee will not (directly or through the direction or control of others) solicit business from a Covered Customer that would compete with Employer’s business opportunities with the Covered Customer or cause Employer to lose the patronage of a Covered Customer, in order to protect Employer from misuse of trade secrets related to Employer’s Covered Customers that Employee received access to during the Look Back Period; provided, further, that the definition of Covered Customer shall be limited to only those persons or entities that Employee had access to trade secrets about in the Look Back Period.”; and (b) Employee stipulates that the restrictions in Paragraphs 4 and 5 are reasonable and necessary for the protection of trade secrets within the meaning § 8-2-113(2)(b) of Colorado Revised Statutes.
District of Columbia
If Employee is an employee in the District of Columbia, as long as Employee perform works in the District of Columbia within the meaning of the “Ban on Non-Compete Agreements Amendment Act of 2020,” then no restriction in this Agreement (including, but not limited to, the noncompetition, client nonsolicitation, business vendor nonsolicitation, and employee nonsolicitation restrictions) will be applied to Employee in a way that would prohibit Employee from being simultaneously or subsequently employed by another person, performing work or providing services for pay for another person, or operating Employee’s own business. However, Employee understands that nothing in this exception to this Agreement’s restrictions shall be construed to permit Employee to take any action that involves or may result in the use or disclosure of Confidential Information, proprietary, or sensitive information, client lists, or a trade secret, as that term is defined in section 2(4) of the Uniform Trade Secrets Act of 1988 (D.C. Law 7-216; D.C. Official Code §36-401(4)). Such actions shall remain prohibited and nothing in this Agreement shall be construed to limit or eliminate any rights or remedies Employer would have against Employee under trade secret law, unfair competition law, agency law or other laws applicable in the District of Columbia absent this Agreement.
NOTICE: “No employer operating in the District of Columbia may request or require any employee working in the District of Columbia to agree to a non-compete policy or agreement, in accordance with the Ban on Non-Compete Agreements Amendment Act of 2020.”
Georgia
If Georgia law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
24
Paragraph 2(g): The definition of “Territory” shall be modified to mean “the territory where Employee was working at the time Employee’s employment with Employer ended” and allows Employee to reasonably determine the maximum reasonable scope of the restraint as of the Termination Date.
The definition of “Confidential Information” shall not include data or information (a) which has been voluntarily disclosed to the public by the employer, except where such public disclosure has been made by the employee without authorization from the employer; (b) which has been independently developed and disclosed by others; or (c) which has otherwise entered the public domain through lawful means, and shall be applied consistent with the definition of “Confidential Information” under Ga. Code Ann. § 13-8-53(e).
Paragraph 7: Paragraph 7 regarding extension of post-employment restrictions shall not apply.
Employee agrees, represents, and warrants that Employee’s duties with Employer, and/or skill as a professional, satisfy the requirements of Georgia law for covenants that restrict competition under Official Code of Georgia Annotated Section 13-8-53(a).
Idaho
If Idaho law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Employee stipulates and agrees that employee is a “key” employee within the meaning of Idaho Code §44-2701, et seq.
Illinois
If Employee resides in Illinois at the time Employee enters into this Agreement, as additionally mutually agreed upon consideration for the noncompetition and nonsolicitation restrictions in Paragraphs 4 and 5, Employer shall allow Employee to participate in the Core & Main, Inc. 2021 Omnibus Equity Incentive Plan. Employee stipulates that this is adequate consideration to make the provisions of this Agreement immediately binding upon Employee. Additionally, Employee acknowledges that Employee received a copy of this Agreement at least 14 days before the effective date and was advised to consult with an attorney about this Agreement and has been given an opportunity to do so.
If Illinois law is deemed to apply, then the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: The restrictions in Paragraph 4 shall not apply if Employee is paid $75,000.00/year (or as otherwise adjusted by law) or less.
Paragraph 5: The restrictions in Paragraph 5 shall not apply if Employee is paid $45,000.00 (or as otherwise adjusted by law) or less.
Indiana
25
If Indiana law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: Paragraph 5(b) shall be modified to further limit the restriction on solicitation of employees to those who have access to or possess any Confidential Information that would give a Competitor an unfair advantage.
Louisiana
If Louisiana law is deemed to apply, then the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 2(g): The “Territory” shall specifically include the following Louisiana parishes: Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Bienville, Bossier, Caddo, Calcasieu, Caldwell, Cameron, Catahoula, Claiborne, Concordia, De Soto, East Baton Rouge, East Carroll, East Feliciana, Evangeline, Franklin, Grant, Iberia, Iberville, Jackson, Jefferson, Jefferson Davis, Lafayette, Lafourche, La Salle, General, Livingston, Madison, Morehouse, Natchitoches, Orleans, Ouachita, Plaquemines, Pointe Coupee, Rapides, Red River, Richland, Sabine, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Landry, St. Martin, St. Mary, St. Tammany, Tangipahoa, Tensas, Terrebonne, Union, Vermilion, Vernon, Washington, Webster, West Baton Rouge, West Carroll, West Feliciana, and Winn.
The “Territory” shall also specifically include the following Texas counties: Cass, Marion, Harrison, Panola, Shelby, Sabine, Newton, Orange, and Jefferson.
The “Territory” shall also specifically include the following Arkansas counties: Miller, Lafayette, Columbia, Union, Ashley and Chicot.
The “Territory” shall also specifically include the following Mississippi Counties: Issaquena, Warren, Clairborne, Jefferson, Adams, Wilkinson, Amite, Pike, Walthall, Marion, Pearl River and Hancock.
Employee agrees that the foregoing provides Employee with adequate notice of the geographic scope of the restrictions contained in the Agreement by name of specific parish or parishes (and equivalents), municipality or municipalities, and/or parts thereof.
Paragraphs 4 and 5: The restrictions in Paragraphs 4 and 5 are limited to the parishes and counties identified in the preceding paragraphs.
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Maine
If Maine law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
26
Paragraph 4: Paragraph 4 will not apply if Employee’s earned wages are at or below 400% of the federal poverty level. Paragraph 4 also will not take effect until one year of employment or a period of six months from the date the Agreement is signed, whichever is later.
Employee acknowledges that, if Employer is hiring Employee, Employee received a copy of this Agreement prior to receiving a formal offer of employment from Employer and was given at least three (3) business days to consider the Agreement before signing.
Maryland
If Maryland law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not apply if Employee earns less than $15.00 an hour or $31,200 a year.
Massachusetts
If Employee resides in Massachusetts at the time this Agreement is entered into, then Employee stipulates that an award of equity pursuant to the Core & Main, Inc. 2021 Omnibus Equity Incentive Plan is adequate consideration to make the noncompetition restrictions of this Agreement immediately binding upon them.
If Massachusetts law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 shall be limited to a period of one (1) year following the Termination Date (as well as while Employee is employed by Employer); however, if Employee breaches Paragraph 4 of this Agreement, and also breaches Employee’s fiduciary duty to Employer and/or has unlawfully taken, physically or electronically, any Employer records, then the restricted period in Paragraphs 4 and 7 shall be extended to a period of two (2) years from the Termination Date. Additionally, Paragraph 4 will not apply post-employment if Employee is classified as a nonexempt employee under the Federal Labor Standards Act (FLSA).
Paragraph 4 will not apply if Employee’s employment is terminated without Cause or if Employee is terminated as part of a reduction in force. As used in this Paragraph herein, “Cause” is: (i) a material breach by Employee of any of their material obligations under any applicable employment, confidentiality, non-solicitation or noncompetition agreement with Employer; (ii) Employee’s conviction of or entering a plea of guilty or nolo contendere to, or admission to facts sufficient for a finding of guilt for, any crime constituting a felony or any misdemeanor involving fraud, dishonesty and/or moral turpitude under federal, state, local or foreign law; (iii) Employee’s neglect, refusal, or failure to meet the performance expectations for their position, discharge their duties (other than due to physical or mental illness) commensurate with his/her title and function, or their failure to comply with a lawful direction of Employer; (iv) the commission of any act or omission involving dishonesty, disloyalty or fraud with respect to Employer; (v) Employee’s breach of a statutory or common law duty of loyalty or fiduciary duty to Employer; (vi) Employee’s violation of Employee Policies and Procedures; (vii) any other
27
willful misconduct by Employee which is or intends to be materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, Employer; or (viii) any other reason recognized under the common law.
Paragraph 7: The tolling language in Paragraph 7 shall only apply to any breach of Paragraph 5 (i.e., the tolling language shall not apply to Paragraph 4, except as indicated above).
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Employee acknowledges that they were provided a copy of this Agreement and Exhibit at least ten (10) business days before the effective date of this Agreement.
Employee also acknowledges that Employee has been advised to consult with an attorney about this Agreement and has been given an opportunity to do so.
Minnesota
If Minnesota law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Employee acknowledges that they were provided a copy of this Agreement and Exhibit when they were offered employment and Employee was aware that execution of an agreement with noncompetition and nonsolicitation restrictions was a requirement of employment when Employee accepted Employer’s offer.
Montana
If Montana law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: The prohibited acts set forth in Paragraph 5(a) shall be limited to situations where Employee’s conduct is aided by the use or disclosure of Confidential Information or trade secrets.
Paragraph 17: Paragraph 17 shall not apply to the extent it conflicts with Montana law. Nebraska
If Nebraska law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 2(b): The definition of “Covered Customer” is modified so that it is limited only to Employer customer’s (person or entity) that Employee had material business-related contact or dealings with during the Look Back Period.
Paragraph 4: Paragraph 4 shall not apply.
Nevada
28
If Nevada law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not take effect until Employer has employed Employee for sixty (60) days or Employee has received $5,000 in wages from Employer.
The noncompetition restrictions in Paragraph 4 shall not apply to Employee if Employee is paid solely on an hourly wage basis, exclusive of any tips or gratuities.
Additionally, if Employer terminates Employee’s employment as a result of a reduction in force, reorganization or similar restructuring, the noncompete restrictions in Paragraph 4 only will be enforceable during the period in which Employer is paying Employee’s salary, benefits, or equivalent compensation, including without limitation, severance pay, if it elects to make such payments.
Paragraph 5: Paragraph 5(a) does not preclude Employee from providing services to any former client or customer of Employer if: (a) Employee did not solicit the former customer or client; (b) the customer or client voluntarily chose to leave and seek services from Employee; and (c) Employee is otherwise complying with the limitations in this Agreement as to time, geographical area, and scope of activity to be restrained.
New Hampshire
If New Hampshire law is deemed to apply the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
By signature hereto, Employee acknowledges that they been given a minimum of two (2) weeks advance notice of the need to execute this Agreement and they received this Agreement prior to accepting their offer of employment.
Paragraph 4: Paragraph 4 will not apply if Employee earns less than or equal to 200% of the federal minimum wage.
New York
If New York law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 2(b): The definition of “Covered Customer” is modified so that “Covered Customer” excludes those customers who became a client of Employer as a result of Employee’s independent contact and business development efforts with the client prior to and independent from their employment with Employer.
North Carolina
If North Carolina law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition, Agreement is modified as follows:
Paragraph 2(e): The “Look Back Period” shall be calculated looking back two (2) years from the date of enforcement and not from the Termination Date.
29
North Dakota
If North Dakota law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraphs 4: The restrictions in Paragraph 4 shall not apply.
Paragraph 5: The restrictions in Paragraph 5(a), including all subparts, are modified so that they only restrict Employee from engaging in the activities described therein after the Termination Date if they also involve the unauthorized use or disclosure of Confidential Information or trade secrets.
Oklahoma
If Oklahoma law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not apply.
Paragraph 5: Paragraph 5(a) is modified to state that Employee is prohibited only from directly soliciting established customers of Employer for the purpose of doing any business with a Competitor.
Oregon
If Oregon law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
By signature hereto, Employee acknowledges that they have been given a minimum of two (2) weeks advance notice of the need to execute this Agreement. Employee further acknowledges that this Agreement is a condition of employment, if entered into at the time employment commences.
Paragraph 4: The noncompete restrictions in Paragraph 4 will not apply to Employee if as of the Termination Date: (a) the total amount of Employee’s gross salary and commissions, calculated on an annual basis does not exceed $100,533.00 (or as otherwise adjusted), or (b) Employee does not otherwise qualify under O.R.S. § 653.295; unless, Employer chooses to compensate Employee as provided for under O.R.S. § 653.295 (6).
Rhode Island
If Rhode Island law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not apply if Employee earns less than 250% of the federal poverty level based on Employee’s regular (non-overtime, non-weekend, non-holiday) hour or if Employee is classified as a nonexempt employee under the Federal Labor Standards Act (FLSA).
South Dakota
30
If South Dakota law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: The restrictions in Paragraph 5(a) regarding prospective customers of Employer shall not apply.
Texas
If Texas law is deemed to apply, Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Virginia
If Virginia law is deemed to apply, Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4(ii) regarding noncompetition restrictions on the use of Confidential Information shall not apply.
Paragraphs 4 and 5(a): Paragraphs 4 and 5(a) will not apply to Employees earning less than approximately $52,000 annually (or as otherwise provided by Code of Virginia §40.1-28.7:7 (the “Virginia Act”)), or those Employees who otherwise qualifies as a low-wage employee under the Virginia Act, unless Employee’s earnings are derived, in whole or in predominant part, from sales commissions, incentives, or bonuses.
Paragraph 5(a): The restrictions in Paragraph 5(a) of the Agreement shall not restrict Employee from providing a service to a Covered Customer of Employer if Employee does not initiate contact with or solicit the Covered Customer. However, Employee acknowledges that they understand they still are prohibited from using or disclosing Employer’s Confidential Information.
The parties agree that the restrictive covenants in Paragraphs 4 and 5 are reasonably limited in nature and do not prohibit employment with a competing business in a non-competitive position.
Washington
If Washington law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 4: Paragraph 4 will not apply unless and until Employee earns less than $101,390 annually (or the otherwise adjusted equivalent in accordance with the requirements of Washington Noncompete Act (Chapter of Title 49 RCW enacting ESHB 1450 of the 66th Legislature, 2019 Regular Session) (the “Washington Act”)). Employee further agrees that if, at the time Employee signs this Agreement, Employee does not earn from Employer at least $101,390 in Box 1 W-2 annual compensation (or as otherwise adjusted), then the noncompetition
31
restrictions in Paragraph 4 will automatically become enforceable against Employee if and when Employee begins earning at least $101,390 annually (or as otherwise adjusted).
Employee also understands that Paragraph 4 will not be enforced against Employee if Employee is laid off, unless Employer pays Employee during the noncompetition period an amount equal to Employee’s base salary as of the Termination Date, less any compensation earned by Employee during the Restricted Period. For purposes of this section, “layoff” means termination of Employee’s employment by Employer for reasons of Employer’s insolvency or other purely economic factors, and specifically excludes termination of Employee’s employment for any other reason, either with or without cause. Paragraph 5: The restrictions in Paragraph 5(a)(i) shall not apply. The restrictions in Paragraph 5(b)(ii) shall not apply.
Paragraph 15: The Missouri choice of law provision in Paragraph 15 and the venue provision in Paragraph 15 shall not apply.
Employee acknowledges that they received notice of this Agreement before accepting any offer of employment or before this Agreement becomes effective (whichever applies). If Employee is an existing employee, Employee acknowledges that Employee was given ten (10) business days to consider this Agreement before accepting it.
Wisconsin
If Wisconsin law is deemed to apply, the Confidentiality, Non-Solicitation, and Non-Competition Agreement is modified as follows:
Paragraph 5: Paragraph 5(b) will be limited to the solicitation of an employee who is in a “Sensitive Employee Position.” “Sensitive Employee Position” refers to an employee of Employer who is in a management, supervisory, sales, research and development, or similar role where the employee is provided Confidential Information or is involved in business dealings with Employer’s customers.
Paragraph 7: Paragraph 7 regarding extension of post-employment restrictions shall not apply.
32
Exhibit 10.4
Form of
Participant Performance Share Agreement
This Participant Performance Share Agreement (the “Agreement”), by and between Core & Main, Inc., a Delaware corporation (the “Company”), and the Participant whose name is set forth on Exhibit A hereto, is being entered into pursuant to the Core & Main, Inc. 2021 Omnibus Equity Incentive Plan (the “Plan”) and is dated as of the date it is accepted and agreed to by the Participant in accordance with Section 6(r). Capitalized terms that are used but not defined herein shall have the respective meanings given to them in the Plan.
WHEREAS, the Company has adopted the Plan to provide equity-based incentive awards to eligible employees and service providers to encourage them to maintain shareholder value, act consistent with the interest of the Company’s shareholders, deliver outcomes and/or continue in the service of the Company and the Subsidiaries; and
WHEREAS, the Participant’s participation in the terms of the Plan and this Agreement through acceptance of Performance Shares is entirely voluntary, and is not a term and/or condition of employment, and is not compensation for services rendered, but is instead an award granted on a discretionary basis to align the Participant’s interests with those of the Company’s shareholders and is an award that the Participant is free to decline at the Participant’s discretion.
Section 1.Grant of Performance Shares.
(a)The Company hereby evidences and confirms its grant to the Participant, effective as of the date set forth on Exhibit A hereto (the “Grant Date”), a target number of Performance Shares in the amount set forth on Exhibit A hereto (the “Target Award”). The number of Performance Shares a Participant actually earns (up to a maximum number set forth on Exhibit A) will be determined by the level of achievement of Performance Goals during the Performance Cycle (each as set forth on Exhibit A), in accordance with this Agreement. Each earned and vested Performance Share represents the right to receive one share of Company Common Stock, subject to the terms and conditions set forth in this Agreement and the Plan. This Agreement is entered into pursuant to, and the Performance Shares granted hereunder are subject to, the terms and conditions of the Plan, which are incorporated by reference herein. If there is any inconsistency between any express provision of this Agreement and any express term of the Plan, the express term of the Plan shall govern.
1
(b)The Participant acknowledges and recognizes that an important purpose of this Agreement is to align the interests of the Participant with those of the shareholders and to ensure that the Participant does not engage in activity detrimental to the interests of the Company’s shareholders if the Participant is going to be allowed the opportunity to participate in the financial rewards that result from this Agreement and their relationship to the value of equity participation in the Company. In addition, the Participant acknowledges that an ancillary purpose consistent with protecting the interests of the shareholders arises with respect to the Participant because the Participant will be allowed access to confidential and proprietary information (including, but not limited to, trade secrets) about the Company and one or more of the Subsidiaries’ businesses, as well as access to the prospective and actual customers, suppliers, investors, clients and partners involved in those businesses, and the goodwill associated with the Company and one or more of the Subsidiaries. Accordingly, in consideration of the receipt of the Performance Shares, the Participant agrees to be bound by the covenants set forth in Exhibit B to this Agreement (the “Commitment to Avoid Competitive Activities Agreement”). The Participant further affirms and understands that he or she shall be required to comply with such restrictive covenants for the periods provided in the Commitment to Avoid Competitive Activities Agreement, to the extent permitted by applicable law, even if the Participant has not vested in or has forfeited all of the Performance Shares. These covenants shall be in addition to, and shall not supersede, the covenants set forth in any other agreement to which the Participant and the Company or any of its Subsidiaries are or hereafter become parties. The Participant acknowledges and agrees that the Company would not have entered into this Agreement and issued Performance Shares under this Agreement if the Participant did not agree to these covenants. The Participant acknowledges and agrees not to contest or dispute the Company’s position that the prohibition of competitive activities provided for in Exhibit B is inextricably connected to and part of the Company’s governance of its internal affairs and relates directly to the interests of the Company’s shareholders.
Section 2.Performance Cycle; Vesting.
(a)Performance Cycle and Goals.
(i)The Performance Cycle applicable to the Performance Shares is set forth on Exhibit A. The number of Performance Shares earned by the Participant for the Performance Cycle will be determined at the end of the Performance Cycle based on the level of achievement of the Performance Goals in accordance with Exhibit A. All
2
determinations of whether Performance Goals have been achieved, the number of Performance Shares earned by the Participant, and all other matters related to this Section 2 shall be made by the Administrator in its sole discretion.
(ii)Promptly following completion of the Performance Cycle (and no later than two and one-half months following the end of the Performance Cycle), the Administrator will review and certify in writing (A) whether, and to what extent, the Performance Goals for the Performance Cycle have been achieved, and (B) the number of Performance Shares that the Participant shall earn, if any, subject to compliance with the vesting requirements of Section 2(b). Such certification shall be final, conclusive and binding on the Participant, and on all other persons, to the maximum extent permitted by law.
(b)Vesting. Performance Shares are subject to forfeiture until they vest. Except as otherwise provided in this Section 2, the Performance Shares shall become vested, if at all, in the percentage(s), and on the vesting date(s) set forth on Exhibit A hereto (each, a “Vesting Date” and the period beginning on the Grant Date and ending on the Vesting Date is referred to herein as the “Vesting Period”), subject to the Administrator’s certification of the achievement of Performance Goals and subject to the continued employment of the Participant by the Company or any Subsidiary thereof through the Vesting Date. Vested Performance Shares shall be settled as provided in Section 3 of this Agreement.
(c)Effect of Termination of Employment.
(i)Termination Without Cause or Upon a Special Termination. Upon (A) termination of the Participant’s employment by the Company or any Subsidiary thereof without Cause or (B) a Special Termination (as defined in the Plan), in each case during the Vesting Period, a pro rata portion of the Performance Shares will vest, subject to the achievement of the Performance Goals. Such pro rata portion shall be equal to (A) the total number of Performance Shares that would have been earned by the Participant for the Performance Cycle as of the end of the Performance Cycle based on the level of achievement of the Performance Goals in accordance with Exhibit A, multiplied by (B) a fraction, the numerator of which equals the number of days that the Participant was employed during the Vesting Period and the denominator of which equals the total number of days in the Vesting Period. For purposes of this Agreement, “Cause” shall
3
have the meaning ascribed to such term in the applicable employment agreement by and between the Participant and the Company or any Subsidiary thereof as of the date of such termination; provided, that if no such employment agreement exists, then “Cause” shall mean: (1) the Participant’s indictment for, commission, conviction of or plea of nolo contendere to a felony or a crime involving moral turpitude; (2) the Participant’s commission of fraud, theft, embezzlement, self-dealing, dishonesty, misappropriation or other malfeasance against the Company or any Subsidiary thereof; (3) the Participant’s material and persistent failure to perform the Participant’s lawful duties or responsibilities under the terms of any agreement between the Company or any Subsidiary thereof and the Participant (other than by reason of Disability (as defined in the Plan)); (4) the Participant’s failure to comply with any lawful policy of the Company; (5) the Participant’s commission of acts or omissions constituting gross negligence or material misconduct in the performance of any aspect of the Participant’s lawful duties or responsibilities which have or may be expected to have an adverse effect on the Company or any Subsidiary thereof; (6) the Participant ’s breach of any fiduciary duty owed to the Company or any Subsidiary thereof; (7) the Participant’s material violation or breach of any restrictive covenant or any material term of any agreement between the Participant and the Company or any Subsidiary thereof; (8) the Participant’s failure or refusal to cooperate in good faith with a governmental or internal investigation; or (9) the Participant’s commission of any act or omission that materially damages or is reasonably likely to materially damage the financial condition or business of the Company or any Subsidiary thereof or materially damages or is reasonably likely to materially damage the reputation, public image, goodwill, assets or prospects of the Company or any Subsidiary thereof.
(ii)Any Other Reason. Upon termination of the Participant’s employment for any reason (whether initiated by the Company or by the Participant) other than a termination by the Company or any Subsidiary thereof without Cause or a Special Termination, any unvested Performance Shares (including any right to accumulated dividend equivalents described in Section 6(b)) shall be forfeited and canceled effective as of the date of such termination.
4
(d)Effect of a Change in Control. In the event of a Change in Control, the treatment of any unvested Performance Shares shall be governed by Article XIV of the Plan.
(e)No Other Accelerated Vesting. The vesting and settlement provisions set forth in this Section 2, or in Section 3, or expressly set forth in the Plan, shall be the exclusive vesting and exercisability provisions applicable to the Performance Shares and shall supersede any other provisions relating to vesting and exercisability, unless such other such provision expressly refers to the Plan by name and this Agreement by name and date.
Section 3.Settlement of Performance Shares.
(a)Timing of Settlement. Subject to Section 6(a), any Performance Shares that are earned and became vested in accordance with the terms of this Agreement shall be settled by issuance of an equal number of shares of Company Common Stock, on a date selected by the Company that is within two and one-half months following the date of vesting, contingent on the Administrator’s determination of the achievement of the Performance Goals (each such date, a “Settlement Date”).
(b)Notwithstanding any other provisions of the Plan to the contrary, to the extent necessary to comply with the requirements of Section 409A with respect to any individual who is a “specified employee” within the meaning of Section 409A, delivery of shares of Company Common Stock on account of termination of the Participant’s employment with the Company or any Subsidiary may not be made before the date that is six (6) months after the date of such termination of employment (or, if earlier, the date of the Participant’s death).
(c)Mechanics of Settlement. On each Settlement Date, the Company shall electronically issue to the Participant one whole share of Company Common Stock for each Performance Share that then became vested (except as provided in Section 6(a)), and, upon such issuance, the Participant’s rights in respect of such Performance Share shall be extinguished. In the event that there are any fractional Performance Shares that became vested on such date, such fractional Performance Shares shall be settled through a cash payment equal to the portion of the Performance Share multiplied by the Fair Market Value of the Company Common Stock on such Settlement Date. No fractional shares of Company Common Stock shall be issued. Notwithstanding the foregoing, the Administrator may in its sole discretion settle any Performance Shares in the form of a cash payment.
5
Section 4.Securities Law and Company Policy Compliance. Notwithstanding any other provision of this Agreement, the Employee may not sell the shares of Company Common Stock acquired upon settlement of the Performance Shares unless such shares are registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act. The sale of such shares must also comply with Company policy and with other applicable laws and regulations governing the Company Common Stock, and the Participant may not sell the shares of Company Common Stock if the Company determines that such sale would not be in material compliance with its policies or such laws and regulations.
Section 5.Restriction on Transfer; Non-Transferability of Performance Shares. The Performance Shares are not assignable or transferable, in whole or in part, and they may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including, but not limited to, by gift, operation of law or otherwise) other than, upon the Participant’s death, by designation of a beneficiary pursuant to Section 6(o), will or by the laws of descent and distribution to the estate of the Participant. Any purported transfer in violation of this Section 5 shall be void ab initio.
Section 6.Miscellaneous.
(a)Tax Withholding. The Company or one of the Subsidiaries shall require the Participant to satisfy any applicable U.S. federal, state and local and non-U.S. tax withholding obligations that may arise in connection with the Performance Shares and the related issuance of shares of Company Common Stock. Accordingly, unless the Company determines otherwise, (i) except as set forth in clause (ii) of this Section 6(a), with respect to all withholding obligations in connection with the Performance Shares, the Company shall retain a number of shares of Company Common Stock issuable in respect of the Performance Shares, then vesting or issued that have an aggregate Fair Market Value as of the applicable date equal to the amount of such taxes required to be withheld, not to exceed the amount necessary to avoid liability award accounting (plus any additional withholding amount resulting from imputed income to the Participant resulting from such withholding, if applicable), and the number of shares of Company Common Stock to be issued in respect of the Performance Shares shall thereupon be reduced by the number of shares of Company Common Stock so retained (ii) with respect to any Federal Insurance Contributions Act (FICA) withholding amounts the Company determines to be due as a result of the Participant having met the qualifications for a Qualifying Retirement, at such time or times as determined by the Company in its discretion, the Company or its Subsidiary shall, to the
6
extent permitted by applicable law and the Code, withhold an amount in cash (through payroll deduction or otherwise) from Participant’s salary (or any other amount owed by the Company or its Subsidiaries to the Participant) equal to the Company’s estimate of such FICA withholding obligation, not to exceed the amount necessary to avoid liability award accounting. The Company, in its discretion, may, as an alternative to the withholding methods described in the preceding portion of this Section 6(a), permit or require the Participant to satisfy all such withholding obligations by another means, including by remitting cash to the Company in an amount sufficient to satisfy all or any portion of the relevant taxes required to be withheld. No method of withholding that would violate any financing instrument of the Company or any of the Subsidiaries shall be permitted.
(b)Dividend Equivalents. Unless otherwise determined by the Administrator, in the event that the Company pays any ordinary dividend in cash on a share of Company Common Stock following the Grant Date and prior to an applicable Settlement Date, there shall be credited to the account of the Participant in respect of each outstanding Performance Share an amount equal to the amount of such dividend. The amount so credited, if any, shall be (i) deferred (without interest, unless the Administrator determines otherwise) until the settlement of such related Performance Share and then paid in cash at the same time as Performance Shares are settled, and (ii) forfeited to the extent the underlying Performance Share is forfeited.
(c)Authorization to Share Personal Data. The Participant authorizes the Company or any Affiliate of the Company that has or lawfully obtains personal data relating to the Participant to divulge or transfer such personal data to the Company or to a third party, in each case in any jurisdiction, if and to the extent reasonably appropriate in connection with this Agreement or the administration of the Plan.
(d)No Rights as Stockholder; No Voting Rights. Except as provided in Section 6(b), the Participant shall have no rights as a stockholder of the Company with respect to any shares of Company Common Stock covered by the Performance Shares prior to the issuance of such shares of Company Common Stock.
(e)No Right to Awards. The Participant acknowledges and agrees that the grant of any Performance Shares (i) is being made on an exceptional basis and is not intended to be renewed or repeated, (ii) is entirely voluntary on the part of the Administrator and (iii) should not be construed as creating any obligation on the part of the Administrator to offer any Performance Shares or other Awards in the future.
7
(f)No Right to Continued Employment. Nothing in this Agreement shall be deemed to confer on the Participant any right to continue in the employ of the Company or any Subsidiary, or to interfere with or limit in any way the right of the Company or any Subsidiary to terminate such employment at any time.
(g)Interpretation. The Administrator shall have full power and discretion to construe and interpret the Plan (and any rules and regulations issued thereunder) and this Award. Any determination or interpretation by the Administrator under or pursuant to the Plan or this Award shall be final and binding and conclusive on all persons affected hereby.
(h)Forfeiture of Awards; Clawback Policy. The Performance Shares granted hereunder (and gains earned or accrued in connection therewith) shall be subject to such generally applicable policies as to forfeiture and recoupment (including, without limitation, upon the occurrence of material financial or accounting errors, financial or other misconduct or Competitive Activity) as may be adopted by the Administrator or the Board from time to time and communicated to the Participant or as required by applicable law, and are otherwise subject to forfeiture or disgorgement of profits as provided by the Plan. Without limiting the generality of the foregoing, in accordance with Section 13.3 of the Plan, by accepting the Performance Shares, the Participant acknowledges that the Participant is fully bound by, and subject to all of the terms and conditions of, the any clawback policy adopted by Administrator, Board, the Company or any Subsidiary of the Company and the Participant agrees to abide by the terms of such policies. To the extent that the Board determines that all or any portion of the Performance Shares or the shares of Company Common Stock issued on settlement thereof (or the value of those shares) must be cancelled, forfeited, repaid, or otherwise recovered by the Company, the Participant shall promptly take whatever action is necessary to effectuate such cancellation, forfeiture, repayment, or recovery.
(i)Consent to Electronic Delivery. By entering into this Agreement and accepting the Performance Shares evidenced hereby, the Participant hereby consents to the delivery of information (including, without limitation, information required to be delivered to the Participant pursuant to applicable securities laws) regarding the Company and the Subsidiaries, the Plan, this Agreement and the Performance Shares via Company website or other electronic delivery.
(j)Binding Effect; Benefits. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective
8
successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.
(k)Waiver; Amendment; Notice.
(i)Waiver. Any party hereto or beneficiary hereof may by written notice to the other parties (A) extend the time for the performance of any of the obligations or other actions of the other parties under this Agreement, (B) waive compliance with any of the conditions or covenants of the other parties contained in this Agreement and (C) waive or modify performance of any of the obligations of the other parties under this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of any party or beneficiary, shall be deemed to constitute a waiver by the party or beneficiary taking such action of compliance with any representations, warranties, covenants or agreements contained herein. The waiver by any party hereto or beneficiary hereof of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by a party or beneficiary to exercise any right or privilege hereunder shall be deemed a waiver of such party’s or beneficiary’s rights or privileges hereunder or shall be deemed a waiver of such party’s or beneficiary’s rights to exercise the same at any subsequent time or times hereunder.
(ii)Amendment. This Agreement may not be amended, modified or supplemented orally, but only by a written instrument executed by the Participant and the Company.
(iii)Notice. Any notice required hereunder shall be made in writing, as applicable, to the Company in care of the Company’s General Counsel at his principal office location, with a copy to the Company’s Chief Human Resources Officer at her principal office location, or to the Participant at the Participant’s principal office location or home address most recently on file with the Company, such notice to be deemed effective on the earlier of receipt or two (2) days after it is issued.
(l)Assignability. Except as expressly provided herein, neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by
9
reason hereof shall be assignable by the Company or the Participant without the prior written consent of the other party.
(m)Applicable Law; Venue. This Agreement shall be governed in all respects, including, but not limited to, as to validity, interpretation and effect, by the internal laws of the State of Delaware, without reference to principles of conflict of law that would require application of the law of another jurisdiction. Any suit, action or proceeding with respect to this Agreement (or any provision incorporated by reference) that can be pursued or enforced in a court of law, shall be brought in the U.S. District Court for the District of Delaware or in any other court of competent subject matter jurisdiction located in the State of Delaware. The Company and the Participant, each hereby submits to the exclusive jurisdiction of the courts of proper subject matter jurisdiction located in Delaware (the “Chosen Venue”), consents to the exercise of personal jurisdiction over them by such courts, and irrevocably waives (a) any objections which they may now or hereafter have to the laying of the venue of any suit, action, or proceeding arising out of or relating to this Agreement that can be pursued in a court of law in the Chosen Venue; and (b) any claim that any such suit, action, or proceeding brought in the Chosen Venue has been brought in any inconvenient forum.
(n)Waiver of Jury Trial. Each party hereby waives, to the fullest extent permitted by applicable law, any right he, she or it may have to a trial by jury in respect of any suit, action or proceeding arising out of this Agreement or any transaction contemplated hereby. Each party (i) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that he, she or it and the other party hereto have been induced to enter into the Agreement by, among other things, the mutual waivers and certifications in this Section 6(n).
(o)Beneficiary. The Participant may file with the Administrator a written designation of a beneficiary on such form as may be prescribed by the Administrator and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Participant, the executor or administrator of the Participant’s estate shall be deemed to be the Participant’s beneficiary.
(p)Limitations of Actions. No lawsuit relating to this Agreement may be filed before a written claim is filed with the Administrator and is denied or deemed denied as provided in the Plan and any lawsuit must be filed within one year of such denial or deemed denial or be forever barred.
10
(q)Section and Other Headings, etc. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.
(r)Acceptance of Performance Shares and Agreement. The Participant has timely indicated his or her consent and acknowledgement of the terms of this Agreement pursuant to the instructions provided to the Participant by or on behalf of the Company on Exhibit A hereto (or as otherwise instructed by the Company in writing or via the Participant’s stock plan portal). The Participant acknowledges receipt of the Plan, represents to the Company that he or she has read and understood this Agreement and the Plan, and, as an express condition to the grant of the Performance Shares under this Agreement, agrees to be bound by the terms of both this Agreement and the Plan. The Participant and the Company each agrees and acknowledges that the use of electronic media (including, without limitation, a clickthrough button or checkbox on a website of the Company or a third-party administrator) to indicate the Participant’s confirmation, consent, signature, agreement and delivery of this Agreement and the Performance Shares is legally valid and has the same legal force and effect as if the Participant and the Company signed and executed this Agreement in paper form. The same use of electronic media may be used for any amendment or waiver of this Agreement.
(s)Section 409A. This Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Grantee on account of non-compliance with Section 409A of the Code.
11
Exhibit A to
Participant Performance Shares Agreement
| Participant: | ||||||||||||||
| Grant Date:* | ||||||||||||||
Target Award:* | ||||||||||||||
Performance Cycle:
Performance Goals:
Vesting:
* Important Notice to Participant: Pursuant to Section 6(r) of this Agreement, this grant of Performance Shares is conditioned upon the Participant’s timely acceptance of the terms of this Agreement. Accordingly, unless the Participant affirmatively accepts this Award within 90 days of the Grant Date (as specified in the Participant’s personal Fidelity portal) or another time period directed by the Company to the Participant in writing (or in the Participant’s personal Fidelity portal), this Agreement shall be void ab initio and the Participant shall not be entitled to receive the Performance Shares and shall have no rights under this Agreement whatsoever.
12
Exhibit B to
Participant Performance Shares Agreement
Commitment to Avoid Competitive Activities
Capitalized terms that are used but not defined herein shall have the respective meanings given to them in the Participant Performance Shares Agreement to which this Commitment to Avoid Competitive Activities Agreement is attached.
The Participant acknowledges that as an individual being presented with the opportunity to share in the growth and value of the Company through Performance Shares, it is important to avoid certain activities that would be detrimental to the Company’s business and its potential value to shareholders while engaged to provide services to Core & Main LP (“CMLP”) or any other Subsidiary and for a reasonable period of time thereafter. The Participant agrees that it is reasonable for the Company to require a commitment from the Participant of this nature to allow the Participant to participate in the Plan and retain the benefits of the Performance Shares. Accordingly, the Participant agrees that any activity or conduct by the Participant that violates one of the restrictions or obligations provided for in Sections 1 and 3 of this Exhibit B (the “Restrictive Covenants”) will be considered a Competitive Activity violation.
Section 1 Confidential Information.
1.1 The Participant will honor all agreements with CMLP, the Company and/or any of the Company’s other Subsidiaries (collectively, the “Company Group”) regarding maintaining the confidentiality of information that qualifies as contractually protected “Confidential Information”, protect and preserve the value of the Company Group’s trade secrets and proprietary information to the Company Group (irrespective of whether same is also covered by the contractual definition of Confidential Information), and comply with the Company Group’s policies and directives regarding the handling of the Company Group’s records, files, computer system access, materials and property at all times. To the extent the Participant is not otherwise subject to another contractual agreement with the Company Group covering Confidential Information, the Participant agrees that until such time as the Confidential Information is readily available publicly (other than as a result of disclosure by the Participant), the Participant shall not disclose Confidential Information to any person or use, copy, download, upload or transfer any Confidential Information, whether or not created in whole or in part by the efforts of the Participant, and regardless of whether the Participant is still employed by the Company Group. The Participant will only disclose or use, copy, download, upload or transfer such Confidential Information as is required by law or as necessary in the performance of the Participant’s duties on behalf of the Company Group. If Participant is subject to another contractual agreement that defines what constitutes the Company’s “Confidential Information”, that definition shall control. Absent such a controlling definition, it is understood “Confidential Information” means an item of information or compilation of information in any form (tangible or intangible) related to the Company Group’s
13
businesses that Participant acquires or gains access to during their employment that the Company Group has not authorized public disclosure of, and that is not readily available to the public or persons outside the Company Group through proper means. By way of example and not limitation, Confidential Information is understood to include: (1) trade secrets; (2) any information Participant has reason to know that the Company Group treats as confidential for any purpose; (3) unpublished financial records; (4) all business plans and marketing strategies; (5) information concerning existing and prospective markets, suppliers and customers; (6) information concerning the development of new products, services or promotional lines; (7) technical and nontechnical data related to software programs, design, specifications, compilations, inventions, improvements, patent applications, studies, research, methods, devices, prototypes, processes, procedures and techniques; (8) sales information or events; (9) customer account information; (10) vendor pricing agreements; (11) marketing and forecasting information and strategies; and (12) unpublished pricing, proposals, plans, including fees, costs and pricing structures, underlying pricing-related variables such as costs, volume discounting options, and profit margins; and (13) and information concerning existing and prospective clients, distributors, agents, suppliers and customers and other information related thereto.
1.2 The Participant’s obligations under this Section 1 are indefinite in term until such time as such Confidential Information has become public knowledge other than as a result of Participant’s breach of this Section 1 or breach by those acting in concert with Participant or on Participant’s behalf; provided, however, if applicable law requires a time limit to be place on the restrictions in Section 1 for the restriction to enforceable, then this restriction on Participant’s use of Confidential Information that is not a trade secret will expire two (2) years after Participant’s employment or other association with the Company Group ends. This time limit will not apply to Confidential Information that qualifies as a trade secret as trade secrets will remain protected for as long as they qualify as trade secrets under applicable law.
Section 2 Return of Company Property.
2.1 The Participant acknowledges that all tangible items containing any confidential or proprietary information or trade secrets, including without limitation: memoranda, photographs, records, reports, manuals, drawings, blueprints, prototypes, notes, documents, drawings, specifications, software, media and other materials, including any copies thereof (including electronically recorded copies), are the exclusive property of the Company, and its Subsidiaries, and the Participant shall deliver to the Company all such material in the Participant’s possession or control upon the Company request and in any event upon the termination of the Participant’s employment with the Company Group. The Participant shall also return any keys, equipment, identification or credit cards, or other property belonging to the Company or its Subsidiaries upon termination of the Participant’s employment or the Company request.
Section 3 Noncompetition and Nonsolicitation.
14
3.1 Avoidance of Competition and Other Competitive Acts During Engagement.
While employed or otherwise engaged as an individual to provide services to the Company Group (as an employee, consultant, or otherwise), the Participant will comply with each of the restrictions and obligations below.
a. The Participant will comply at all times with the Participant’s duty of loyalty to the Company Group as an employee or agent of the Company Group placed in a position of special trust and confidence which shall be understood to include, but not be limited to,
(i) an obligation not to engage or participate in the business of, or become employed with a Competitor as an employee, owner, member, partner, consultant, director or otherwise, without the express written consent of the Company Group,
(ii) an obligation not to interfere with or otherwise knowingly cause harm to the Company Group’s ongoing or prospective business relationship with a Company Group employee, consultant or individual providing services as an independent contractor, or a supplier, distributor, vendor, customer, or other person or entity that does business with the Company Group or that the Company Group has a reasonable expectation of doing business with, and
(iii) and to inform the Company Group of business opportunities that fall within the Company Group’s lines of business and not pursue them for personal gain separate from the Company Group without the Company Group’s express written consent in advance, or otherwise participate in any conduct or relationship that creates a conflict of interest in violation of Company Group policies.
b. The Participant will not knowingly participate in or pursue activities that harm the value of the Company Group’s intellectual property and will honor all agreements with the Company Group concerning the ownership and protection of proprietary works and intellectual property. The Participant will be responsible for understanding, complying with, and implementing the Company Group’s confidential and proprietary information policies and guidelines published by the Company Group as they apply to the Participant’s position and area of accountability at the Company Group.
c. The “Business” of the Company Group is the distribution of water, sewer, storm drainage, fire protection, and geosynthetics products and related services (each individually a “line of Business”). The Company Group competes directly with persons and entities engaged in the Business on a local and national scope. The term “Competitor” means any person or entity engaged in the developing, marketing or selling of any product(s) or service(s) the Company Group is developing, marketing or selling or has plans to develop, market or sell at the time of the Participant’s termination of
15
employment, in which the Participant had involvement or about which the Participant was provided Confidential Information during the last two years of their employment with CMLP or any other Subsidiary (or such shorter period of time as Participant is employed)(the “Look Back Period”). For avoidance of doubt, if the Participant is a senior officer of CMLP or any other Subsidiary, it is presumed the Participant was provided Confidential Information about all of the Company Group’s lines of business.
3.2. Avoidance of Competition and Other Detrimental Acts After Vesting.
The Participant will comply with the following restrictions for a period of one (1) year after Participant’s employment or other services engagement with CMLP or any of the Subsidiaries end, or a period of four years after all Performance Shares covered by this Agreement have fully vested, whichever period ends earlier (“Restricted Period”):
a. Noncompete. The Participant will not, anywhere within the Territory, directly or through the direction or control of others, acting individually or as an owner, shareholder, partner, employee, contractor, agent or otherwise, on behalf of a Competitor: (i) provide, supervise or manage services that are the same as or similar in function or purpose to the services the Participant provided to the Company Group during the Look Back Period; (ii) assist in the development or improvement of a competing product or service; or (iii) provide services that are otherwise likely or probable to result in the use or disclosure of Confidential Information to a Competitor. The term “Territory” as used in this Exhibit B will depend upon Participant’s position as follows: (x) if Participant is in a position where Participant’s responsibilities are not geographically limited to an assigned location or territory or where Participant is provided Confidential Information that is not geographically limited to an assigned location or territory (such as, by way of example but not limitation, senior management positions, administrative leadership positions, and operations employees), then Territory means the United States (including state and state-equivalents and county and county-equivalents within the United States); (y) if Participant is in a position with responsibilities and Confidential Information that are limited to an assigned territory or territories during the Look Back Period, then Territory shall be the specific geographic territory or territories assigned to Participant during the Look Back Period; and (z) in the event that neither (x) or (y) apply, then the Territory is the county or counties that Participant performed services in or on behalf of the Company Group during the Look Back Period.
b. Worker Nonsolicit. The Participant will not, directly or indirectly through providing assistance to others, knowingly: (i) participate in soliciting or communicating (verbally, electronically, or in other written form) with a Covered Worker for the purpose of persuading the Covered Worker to go to work for a Competitor or to end or modify the Covered Worker’s relationship with the Company Group, or (ii) assist a Competitor in efforts to hire a Covered Worker away from the Company Group. A “Covered Worker” means an employee or individual worker engaged as an independent contractor of Company Group that the Participant works with, gains knowledge of or is
16
provided Confidential Information about in the Look Back Period. A worker who resigns will continue to be considered a Covered Worker for a period of six months after the worker’s employment or other engagement with the Company Group ends except where doing so would make this restriction unenforceable.
c. Customer Nonsolicit. The Participant will not, working alone or in conjunction with one or more other persons or entities, whether for compensation or not, on behalf of (or for the benefit of) a Competitor: (i) solicit, assist in soliciting, or facilitate the solicitation of, competing business from a customer of the Company Group that the Participant had material contact or involvement with or was provided Confidential Information about during the Look Back Period (“Covered Customer”); or (ii) interfere with the Company Group’s business relationship with any such Covered Customer. Material interaction is presumed present if Participant participated in or supervised communications with the customer (other than through mass mailings or cold calls) or received commissions, bonuses, or other beneficial credit or attribution for business done with the customer. Unless it would make the restriction unenforceable, a customer will be presumed to include any prospect (person or entity) who is in active negotiations or communication with the Company Group about doing business with it at the time Participant’s employment ends. The restrictions contained in Sections 3.2(b) and (c) are understood to be reasonably limited by geography to those locations, and counties, where the Covered Customer and Covered Worker are present and available for solicitation. However, to the extent additional geographic limitations are required to make the restrictions enforceable, they shall be deemed limited to the Territory.
d. Business Relationship Interference. The Participant will not, directly or indirectly through providing assistance to others, knowingly interfere with the Company Group’s ongoing (or where allowed by law, prospective) business relationship with a supplier, distributor, or vendor that the Company Group has a reasonable expectation of doing business with, and that the Participant had material contact or involvement with or gained knowledge of through the Participant’s role with the Company Group in the Look Back Period, by soliciting, inducing or otherwise encouraging the supplier, distributor, or vendor to cease or reduce doing business with the Company Group or to give a valuable business opportunity to a Competitor.
Section 4 Remedies.
4.1 The Company and the Participant agree that the provisions of this Exhibit B do not impose an undue hardship on the Participant and are not injurious to the public; that these provisions are necessary to protect the business of the Company and its Subsidiaries; that the nature of the Participant’s responsibilities with the Company Group provide and/or will provide the Participant with access to confidential or proprietary information or trade secrets that are valuable and confidential to the Company and its Subsidiaries; that the Company Group would not issue Performance Shares to the Participant if the Participant did not agree to the provisions of this Exhibit B; that the
17
provisions of this Exhibit B are reasonable in terms of length of time and scope; and that adequate consideration supports the provisions of this Exhibit B. Except where otherwise expressly indicated, Participant’s obligations under this Exhibit B are severable and/or subject to reformation or partial enforcement. Except where otherwise expressly indicated, Participant’s obligations under this Agreement are severable and/or subject to reformation or partial enforcement. In the event that a court determines that any provision of this Exhibit B is unreasonably broad or extensive (such as to time, scope or geography), the Participant agrees that such court should narrow such provision to the extent necessary to make it reasonable and enforce the provisions as narrowed for the protection of the Company Group’s interests and prevention of irreparable harm which is the express intent of the parties. If, despite the forgoing, any provision of this Agreement is by a court or arbitrator of competent jurisdiction determined to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms. The period of time during which the provisions of Section 3.2 shall be in effect shall be extended by the length of time during which the Participant is in breach of the terms hereof as determined by any court of competent jurisdiction on the Company Group’s application for injunctive relief.
4.2 In the event the Plan Administrator has reason to believe Participant has engaged in any Competitive Activities, or is pursuing a course of conduct that threatens to violate the Restrictive Covenants, the Company Group shall have the right to suspend the vesting schedule with respect to any unvested Performance Shares until it determines that a violation has occurred and/or that any threatened violation has been resolved so as to longer be a threat. The type of harm to the Company Group caused by a violation of the Restrictive Covenants cannot be fully measured and remedied through monetary damages and would be irreparable in nature. Accordingly, in addition to the forgoing, the Company Group shall retain all rights and remedies available in law or equity to enforce the restrictions and obligations that Participant has committed to in Exhibit B.
4.3 Participant’s Commitment to Avoid Competitive Activities and the terms of this Agreement awarding Performance Shares’ to Participant are mutually dependent, material terms. Accordingly, in the event the enforceability of the Restrictive Covenants are challenged by Participant and found by court or arbitrator of competent jurisdiction to be void or unenforceable in any part deemed material by the Company Group, then the Company Group shall have the right to demand and receive from Participant within 10 business days of the Company Group’s request to the Participant, the aggregate after-tax proceeds (taking into account all amounts of tax that would be recoverable upon a claim of loss for payment of such proceeds in the year of repayment) the Participant received upon the sale or other disposition of, or distributions in respect of, the Performance Shares or shares of Company Common Stock issued in settlement of the Performance Shares.
18
Section 5. Limitations.
a. Notwithstanding anything in this Exhibit B to the contrary, nothing herein prohibits the Participant from owning a non-controlling interest consisting of two percent (2%) or less of any class of securities in any publicly traded company or passive investments through an independently controlled fund such as a mutual fund, provided that Participant is not a controlling person of, or a member of a group that controls, such business that is a Competitor, and further provided that the Participant does not otherwise participate in any conduct prohibited under this Agreement. In addition, nothing herein shall be construed to prohibit Participant’s employment in a separately operated subsidiary or other business unit of a company that would not be a Competitor but for common ownership with a Competitor so long as Participant provides written assurances regarding the non-competitive nature of Participant’s position that are satisfactory to the Company Group and Participant remains employed solely in such non-competitive entity or unit during the pendency of the restrictions in Section 3.2(a). Nothing herein is intended to be or is to be construed as a prohibition against general generic advertising of a company’s products, services or job openings to the public such as “help wanted” ads that are not targeted at the Company Group. Where (and only where) a different form of geographic limitation is required by applicable law for enforcement, the covenants in Section 3.2 (b) through (d) will be considered limited to the Territory.
b. It is the intent of the Company Group to apply Exhibit B in a manner that does not violate any law that is deemed to be the controlling law for the parties with respect to the obligations in the Agreement. CALIFORNIA: If Participant is a resident of California, and when Participant last worked for CMLP or any other Subsidiary, Participant primarily resided and worked in California, Section 3.2 in this Exhibit B and Sections 6(m) (Applicable Law; Venue) and (n) (Waiver of Jury Trial) in the Agreement shall not apply to them. However, any conduct relating to the solicitation of Company Group’s customers or employees that involves the misappropriation of the Company’s trade secret information, such as its protected customer information, will remain prohibited conduct at all times. DISTRICT OF COLUMBIA: If the Company Group is deemed to operate in the District of Columbia and when Participant last worked for the Company or any of its Subsidiaries, Participant worked for it in the District of Columbia, then nothing in Exhibit B will be applied to prohibit Participant from being simultaneously or subsequently employed by another person, performing work or providing services for pay for another person, or operating Participant’s own business. However, conduct involving disclosure of confidential, proprietary, or sensitive information, client lists, customer lists, or a trade secret (as defined in the Uniform Trade Secrets Act) will remain prohibited.
c. Nothing in this Agreement prohibits the Participant from opposing or reporting to the relevant law-enforcement agency (such as the Securities and Exchange Commission, Equal Employment Commission, or Department of Labor) an event that the Participant reasonably and in good faith believes is a violation of law, requires notice to or approval from the Company Group before doing so, or prohibits the Participant from cooperating
19
in an investigation conducted by such a government agency. The Participant acknowledges notice that the Defend Trade Secrets Act provides that no individual will be held criminally or civilly liable under Federal or State trade secret law for the disclosure of a trade secret that: (a) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public. It also provides that an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may in pursuing such lawsuit disclose trade secrets to his/her attorney and use trade secrets in court submissions so long as documents containing the trade secret are filed under seal and do not disclose trade secrets except as permitted by court order.
20
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Mark R. Witkowski, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Core & Main, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: June 10, 2025 | /s/ Mark R. Witkowski | ||||
| Mark R. Witkowski | |||||
| Chief Executive Officer and Director | |||||
| (Principal Executive Officer) | |||||
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robyn L. Bradbury, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Core & Main, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: June 10, 2025 | /s/ Robyn L. Bradbury | ||||
| Robyn L. Bradbury | |||||
| Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Core & Main, Inc. (the “Company”) on Form 10-Q for the quarter ended May 4, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark R. Witkowski, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: June 10, 2025 | /s/ Mark R. Witkowski | ||||
Mark R. Witkowski | |||||
Chief Executive Officer and Director | |||||
(Principal Executive Officer) | |||||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Core & Main, Inc. (the “Company”) on Form 10-Q for the quarter ended May 4, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robyn L. Bradbury, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: June 10, 2025 | /s/ Robyn L. Bradbury | ||||
Robyn L. Bradbury | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) | |||||