On April 1, 2024, the Board of Directors of the Company (the “Board”) approved the Beacon Roofing Supply, Inc., 2024 Stock Plan (the “2024 Plan”), subject to stockholder approval, which was subsequently obtained on May 15, 2024 in conjunction with the 2024 Annual Meeting of Stockholders. Upon approval, the 2024 Stock Plan succeeded the Beacon Roofing Supply, Inc. Second Amended and Restated 2014 Stock Plan (the “Prior Plan”) and is the only plan of the Company pursuant to which stock-based awards are currently granted. The 2024 Plan provides for discretionary grants of stock options, stock awards, stock unit awards, and stock appreciation rights (“SARs”) for up to 6,200,000 shares of common stock to key employees and non-employee directors. Stock options and SARs granted under the 2024 Plan, or granted under the Prior Plan after March 6, 2024, will reduce the number of available shares by one share for every share subject to the stock option or SAR, and stock awards and stock unit awards granted under the 2024 Plan, or granted under the Prior Plan after March 6, 2024, will reduce the number of available shares by 2.25 shares for every one share delivered. If (i) there is a lapse, forfeiture, expiration, termination or cancellation of any award for any reason under the 2024 Plan, or under the Prior Plan after March 6, 2024, or (ii) shares subject to a stock award or a stock unit award under the 2024 Plan, or under the Prior Plan after March 6, 2024, are delivered or withheld as payment of any withholding taxes, then in each case such shares will again be available for issuance under the 2024 Plan, to be added back in the same multiple as described in the preceding sentence. Any shares delivered or withheld as payment for the exercise price of a stock option or of any withholding taxes with respect to such stock options or SARs will not be available for issuance pursuant to subsequent awards. As of September 30, 2024, there were 6,309,540 shares of common stock available for issuance pursuant to the 2024 Plan.

All unvested employee equity awards contain a “double trigger” change in control mechanism to the extent such employee equity award is continued or assumed after a change in control. If an award is not continued or assumed by a public company in an equitable manner, such award shall become vested immediately prior to a change in control (in the case of a restricted stock unit award with performance conditions at the then-calculable payout percentage for any completed annual performance periods and at 100% for any annual performance periods not yet calculable, and in the case of a restricted stock unit award with market conditions at 100% of the award then earned but not then vested). If an award is so continued or assumed, vesting will continue in accordance with the terms of the award, unless there is a qualifying termination (without cause or for good reason) within one-year following the change in control, in which event the award shall immediately become vested (in the case of a restricted stock unit award with performance conditions at the then-calculable payout percentage for any completed annual performance periods and at 100% for any annual performance periods not yet calculable, and in the case of a restricted stock unit award with market conditions at 100% of the award then earned but not then vested).


	Options Outstanding	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value1
Balance as of December 31, 2023	1.1	$	41.38	5.8	$	51.3
Granted	0.1	85.18
Exercised	(0.2)	34.46
Canceled/Forfeited	(0.0)	61.58

Balance as of September 30, 2024	1.0	$	46.92	5.6	$	40.3
Vested and expected to vest after September 30, 2024	1.0	$	46.54	5.6	$	40.2
Exercisable as of September 30, 2024	0.8	$	39.30	4.8	$	37.1

During the three months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense related to stock options of $0.9 million and $1.1 million, respectively. During the nine months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense related to stock options of $2.9 million and $3.1 million, respectively. During the three months ended September 30, 2024 and 2023, the Company recognized a tax benefit related to stock-based compensation expense related to stock options of $0.2 million and $0.3 million, respectively. During the nine months ended September 30, 2024 and 2023, the Company recognized a tax benefit related to stock-based compensation expense related to stock options of $2.1 million and $1.0 million, respectively.

Time-based RSU awards granted to employees are subject to continued employment and generally vest on the third anniversary of the grant date. The Company also grants certain RSU awards to management that additionally may contain market or performance conditions. Market conditions are incorporated into the grant date fair value of the management awards with market conditions using a Monte Carlo valuation model. Compensation expense for management awards with market conditions is recognized over the service period and is not reversed if the market condition is not met. For awards with performance conditions, the actual number of awards that will vest can range from 0% to 200% of the original grant amount, depending upon actual Company performance below or above the established performance metric targets. At each reporting date, the Company estimates performance in relation to the defined targets when determining the projected number of management awards with performance conditions that are expected to vest and calculating the related stock-based compensation expense. Management awards with performance conditions are amortized over the service period if, and to the extent that, it is determined that achievement of the performance condition is probable. If awards with market, performance and/or service conditions are forfeited due to failure to achieve performance conditions or failure to satisfy service conditions, any previously recognized expense for such awards is reversed.

RSUs granted to non-employee directors are subject to continued service and vest on the first anniversary of the grant date (except under certain conditions). Generally, the common shares underlying the RSUs are not eligible for distribution until the non-employee director’s service on the Board has terminated, and for non-employee director RSU grants made prior to fiscal year 2014, the share distribution date is six months after the director’s termination of service on the Board. Any non-employee directors who have Beacon equity holdings (defined as common stock and outstanding vested equity awards) with a total fair value that is greater than or equal to five times the annual Board cash retainer may elect to have any future RSU grants settle simultaneously with vesting.

During the three months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense related to RSUs of $6.0 million and $6.2 million, respectively. During the nine months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense related to RSUs of $18.6 million and $18.5 million, respectively. During the three months ended September 30, 2024 the Company recognized a de minimis tax benefit related to stock-based compensation expense related to RSUs. During the three months ended September 30, 2023, the Company recognized a tax benefit related to stock-based compensation expense related to RSUs of $0.8 million. During the nine months ended September 30, 2024 and 2023, the Company recognized a tax benefit related to stock-based compensation expense related to RSUs of $2.7 million and $1.1 million, respectively.

On March 20, 2023, the Board adopted the Company’s 2023 Employee Stock Purchase Plan (the “ESPP”), subject to stockholder approval, which was subsequently obtained on May 17, 2023 in conjunction with the 2023 Annual Meeting of Stockholders. The ESPP allows eligible employees to acquire shares of the Company’s common stock through payroll deductions over six-month offering periods. The purchase price per share is equal to 85% of the lesser of (1) the fair market value of a share of the Company’s common stock on the offering date, defined as the first trading day of the offering period, or (2) the fair market value of a share of the Company’s common stock on the purchase date, defined as the last trading day of the offering period; provided that the purchase price is not less than the $0.01 par value per share of the common stock. Participant purchases are limited to a maximum of $12,500 worth of stock per offering period (or $25,000 per calendar year). The Company is authorized to grant up to 1,000,000 shares of its common stock under the ESPP.

During the nine months ended September 30, 2024, employees purchased 115,281 shares at a weighted average per share price of $72.18. As of September 30, 2024, there were 884,719 shares of common stock available for issuance pursuant to the Company’s ESPP. During the three and nine months ended September 30, 2024, the Company recorded stock-based compensation expense related to the ESPP of $0.7 million and $1.8 million, respectively. During the three and nine months ended September 30, 2023, the Company recorded stock-based compensation expense related to the ESPP of $0.6 million.