EMPLOYMENT AGREEMENT
Exhibit 10.1
This Employment Agreement (this “Agreement”) is entered into as of October 31, 2011,
to be effective as of December 1, 2011 (the “Effective Date”) between BLUELINX CORPORATION,
a Georgia corporation (the “Company”), and Xxx X. Xxxxxx (“Executive”).
RECITALS:
WHEREAS, the Executive agreed to provide services to the Company as Senior Vice-President and
Chief Supply Chain Officer and the Company agreed to provide certain compensation and benefits to
Executive; and
WHEREAS, the Company and executive mutually desire to memorialize the terms of Executive’s
employment as Senior Vice-President and Chief Supply Chain Officer.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Certain Definitions. Certain words or phrases with initial capital letters not
otherwise defined herein are to have the meanings set forth in Section 8.
2. Employment. The Company shall employ Executive, and Executive accepts employment
with the Company upon the terms and conditions set forth in this Agreement for the period beginning
on the Effective Date and ending as provided in Section 5 (the “Employment Period”).
3. Position and Duties.
(a) During the Employment Period, Executive shall serve as Senior Vice-President and Chief
Supply Chain Officer of the Company and shall have the normal duties, responsibilities and
authority of an executive serving in such position, including those duties set forth on Exhibit
A hereto, subject to the power of Chief Executive Officer to provide oversight and direction
with respect to such duties, responsibilities and authority, either generally or in specific
instances.
(b) During the Employment Period, Executive shall devote Executive’s reasonable best efforts
and Executive’s full professional time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs of the Company and
its respective subsidiaries and affiliates, including specifically BlueLinx Holdings Inc. (“BHI”).
Executive shall perform Executive’s duties and responsibilities to the best of Executive’s
abilities in a diligent, trustworthy and business-like manner. During the Employment Period,
Executive shall not serve as a director or a principal of another company or any charitable or
civic organization without the prior consent of the Board of Directors of the Company (the
“Company Board”). Notwithstanding the foregoing, during the Employment Period,
Executive may render charitable and civic services so long as such services do not materially
interfere with Executive’s ability to discharge his duties hereunder.
(c) Executive shall perform Executive’s duties and responsibilities with his principal office
located in the Atlanta, Georgia metropolitan area.
4. Compensation and Benefits.
(a) Salary. The Company agrees to pay Executive a salary during the Employment Period
in installments based on the Company’s payroll practices as may be in effect from time to time.
The Executive’s salary is currently set at the rate of $400,000.00 per year (“Base
Salary”). The Base Salary may be increased at the sole discretion of the Company. The Company
will not decrease Executive’s base salary.
(b) Annual Bonus.
(i) Executive shall be eligible to receive an annual bonus, with the annual bonus target to
be 65% of Base Salary (i.e., 65% upon achievement of annual “target” performance goals) and a
maximum of 130% of Base Salary (i.e., 130% upon achievement of annual “maximum” performance goals),
with the “target” and “maximum” based upon satisfaction of performance goals and bonus criteria to
be defined and approved by the Compensation Committee of the BHI Board in advance for each fiscal
year. The Company shall pay any such annual bonus earned to Executive in accordance with the terms
of the applicable bonus plan, but in no event later than March 15 of the calendar year following
the calendar year in which such bonus is earned and vested.
(ii) During the Employment Period, the Executive will be eligible to participate in long term
incentive programs of the Company and BHI now or hereafter made available to similarly situated
executives, in accordance with the provisions thereof as in effect from time to time, and as deemed
appropriate by the Compensation Committee of the BHI Board (or the Chief Executive Officer if
applicable) to be applicable to this position.
(iii) Within 7 days of the Effective Date the Executive will receive a payment of $100,000
less applicable taxes, provided Executive actually commences employment on the Effective Date.
Upon one year anniversary of the Effective Date with the Company Executive will receive an
additional payment of $100,000 less applicable taxes, provided Executive is employed by the Company
on such one year anniversary.
(c) Restricted Stock. Upon commencement of Executive’s employment, the BHI Board
shall grant Executive 200,000 shares of restricted stock of BHI, which stock shall vest over a
three-year period commencing on the Effective Date in accordance with the terms of the applicable
Restricted Stock Award Agreement.
(d) Expense Reimbursement. The Company shall reimburse Executive for all reasonable
expenses incurred by Executive during the Employment Period in the course of performing Executive’s
duties under this Agreement in accordance with the Company’s policies in effect from time to time
with respect to travel,
entertainment and other business expenses, and subject to the Company’s requirements
applicable generally with respect to reporting and documentation of such expenses and subject to
the Reimbursement Rules. In order to be entitled to expense reimbursement, the Executive must be
employed as Senior Vice-President and Chief Supply Chain Officer on the date the Executive incurred
the expense.
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(e) Standard Executive Benefits Package. Executive is entitled during the Employment
Period to participate, on the same basis as the Company’s other senior executives, in the Company’s
Standard Executive Benefits Package. The Company’s “Standard Executive Benefits Package”
means those benefits (including insurance, vacation and other benefits, but excluding, except as
hereinafter provided in Section 6, any severance pay program or policy of the Company) for which
substantially all of the executives of the Company are from time to time generally eligible, as
determined from time to time by the Board. A summary of such benefits available to Executive as in
effect on the date of this Agreement is attached hereto as Exhibit B. BHI will maintain
appropriate Directors and Officers Liability Coverage, and will afford Executive with the
Indemnification set forth in Article V of the Amendment and Restated Bylaws of BHI.
(f) Additional Compensation/Benefits. The Compensation Committee of the BHI Board (or
the Chief Executive Officer if applicable), in its sole discretion, will determine any compensation
or benefits to be provided to Executive during the Employment Period other than as set forth in
this Agreement, including, without limitation, any future grant of stock options or other equity
awards.
(g) Disgorgement of Compensation. If BHI or the Company is required to prepare an
accounting restatement due to material noncompliance by BHI or the Company, as a result of
misconduct, with any financial reporting requirement under the federal securities laws, to the
extent required by law Executive will reimburse the Company for (i) any bonus or other
incentive-based or equity-based compensation received by Executive from the Company (including such
compensation payable in accordance with this Section 4 and Section 6) during the 12-month period
following the first public issuance or filing with the Securities and Exchange Commission
(whichever first occurs) of the financial document embodying that financial reporting requirement;
and (ii) any profits realized by Executive from the improper or unlawful sale of BHI’s securities
during that 12-month period.
5. Employment Period.
(a) Subject to subsection 5(b), the Employment Period will commence on the Effective Date and
will continue until, and will end upon, the second anniversary of the Effective Date (the
“Initial Term”). The Agreement shall automatically be extended for successive one year
terms (each, a “Renewal Term”), unless either party shall have given the other written
notice of non-extension at least 90 days prior the expiration of the Initial Term or any Renewal
Term.
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(b) Notwithstanding subsection 5(a), the Employment Period will end upon the first to occur of
any of the following events: (i) Executive’s death; (ii) the
Company’s termination of Executive’s employment on account of Disability; (iii) the Company’s
termination of Executive’s employment for Cause (a “Termination for Cause”); (iv) the
Company’s termination of Executive’s employment without Cause or expiration of this Employment
Period as a result of Company’s notification not to renew as provided in Section 5(a) above, (a
“Termination without Cause”); (v) Executive’s termination of Executive’s employment for
Good Reason (a “Termination for Good Reason”); or (vi) Executive’s termination of
Executive’s employment for any reason other than Good Reason (a “Voluntary Termination”).
(c) Any termination of Executive’s employment under subsection 5(b) (other than 5(b)(i)) must
be communicated by a Notice of Termination delivered by the Company or Executive, as the case may
be, to the other party.
(d) Executive will be deemed to have waived any right to a Termination for Good Reason based
on the occurrence or existence of a particular event or circumstance constituting Good Reason
unless Executive delivers a Notice of Termination within 45 days from the date the Chief Executive
Officer or the BHI Board first made Executive aware of the event or circumstance.
6. Post-Employment Period Payments.
(a) Except as otherwise provided in 6(c) below, at the Date of Termination, Executive will be
entitled to (i) any Base Salary that has accrued but is unpaid, any annual bonus that has been
earned for the fiscal year prior to the year in which the Date of Termination occurs, but is
unpaid, any reimbursable expenses that have been incurred but are unpaid, and any unexpired
vacation days that have accrued under the Company’s vacation policy but are unused, as of the end
of the Employment Period, which amount shall be paid in a lump sum in cash within 30 days of the
Date of Termination, in accordance with the Reimbursement Rules, where applicable, (ii) any plan
benefits that by their terms extend beyond termination of Executive’s employment (but only to the
extent provided in any such benefit plan in which Executive has participated as a Company employee
and excluding, except as hereinafter provided in Section 6, any Company severance pay program or
policy) and (iii) any benefits to which Executive is entitled in accordance with Part 6 of Subtitle
B of Title I of the Employee Retirement Income Security Act of 1974, as amended (“COBRA”).
Except as specifically described in this subsection 6(a) and in the succeeding subsections of this
Section 6 (under the circumstances described in those succeeding subsections), from and after the
Date of Termination Executive shall cease to have any rights to salary, bonus, expense
reimbursements or other benefits from the Company, BHI or any of their subsidiaries or affiliates.
(b) If Executive’s employment terminates on account of Executive’s death, Disability,
Voluntary Termination, or Termination for Cause in accordance with Section 5(a), the Company will
make no further payments to Executive except as contemplated in subsection 6(a).
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(c) If Executive’s employment terminates on account of a Termination without Cause or a
Termination for Good Reason, Executive shall be entitled to the following:
(i) payment equal to one (1) time the Executive’s annual Base Salary in effect immediately
prior to the Date of Termination, plus one (1) time the cash bonus amount equal to the
Target Bonus set forth in clause (i) of subparagraph 4(b) hereof for the fiscal year prior to
the year of termination of Executive’s employment, payable in twelve equal monthly installments
commencing on the earlier to occur of the first business day of the seventh month after the
Date of Termination or Executive’s death;
(ii) the Company shall request that the Compensation Committee of the Board of Directors
of BHI approve vesting of all unvested restricted stock grants effective as of the Date of
Termination. In the event the Compensation Committee does not approve such vesting, all
unvested restricted stock grants shall be cancelled in accordance with the applicable award
agreement, and the Company shall pay out the Fair Market Value (as defined in the plan pursuant
to which each award was granted) as of the Date of Termination of the unvested restricted stock
grants;
(iii) continued participation in the Company’s medical and dental plans, on the same basis
as active employees participate in such plans, until the earlier of (1) Executive’s eligibility
for any such coverage under another employer’s or any other medical or dental insurance plans
or (2) the first anniversary of the Date of Termination; except that in the event that
participation in any such plan is barred, the Company shall reimburse Executive on a monthly
basis in accordance with the Reimbursement Rules for any premiums paid by Executive to obtain
benefits (for Executive and his dependents) equivalent to the benefits he is entitled to
receive under the Company’s benefit plans. Executive agrees that the period of coverage under
such plans (or the period of reimbursement if participation is barred) shall count against the
plans’ obligation to provide continuation coverage pursuant to COBRA;
(iv) up to $25,000 in aggregate outplacement services to be used within one year of the
Date of Termination, the scope and provider of which shall be selected by Executive in his sole
discretion; and
(v) to the extent not theretofore paid or provided, any other amounts or benefits required
to be paid or provided or which the Executive is eligible to receive under any plan, program,
policy or practice or contract or agreement of the Company (such other amounts and benefits
shall be hereinafter referred to as the “Other Benefits”).
(d) The Company shall have no obligation to make any payments in accordance with subsection
6(c) if Executive declines to sign and return a Release
Agreement or revokes the Release Agreement within the time provided in the Release Agreement.
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(e) Executive is not required to mitigate the amount of any payment or benefit provided for in
this Agreement by seeking other employment or otherwise.
7. Competitive Activity; Confidentiality; Non-solicitation.
(a) Confidential Information and Trade Secrets.
(i) The Executive shall hold in a fiduciary capacity for the benefit of the Company Group
all Confidential Information and Trade Secrets. During his employment and for a period of two
(2) years following the termination of the Executive’s employment for any reason, the Executive
shall not, without the prior written consent of the Company or BHI or as may otherwise be
required by law or legal process, use, communicate or divulge Confidential Information other
than as necessary to perform his duties for the Company; provided, however, that if the
Confidential Information is deemed a trade secret under Georgia law, then the period for
nondisclosure shall continue for the applicable period under Georgia Trade Secret laws in
effect at the time of Executive’s termination. In addition, except as necessary to perform his
duties for the Company, during Executive’s employment and thereafter for the applicable period
under the Georgia Trade Secret laws in effect at the time of Executive’s termination, Executive
will not, directly or indirectly, transmit or disclose any Trade Secrets to any person or
entity, and will not, directly or indirectly, make use of any Trade Secrets, for himself or
herself or any other person or entity, without the express written consent of the Company.
This provision will apply for so long as a particular Trade Secret retains its status as a
trade secret under applicable law. The protection afforded to Trade Secrets and/or
Confidential Information by this Agreement is not intended by the parties hereto to limit, and
is intended to be in addition to, any protection provided to any such information under any
applicable federal, state or local law.
(ii) All files, records, documents, drawings, specifications, data, computer programs,
customer or vendor lists, specific customer or vendor information, marketing techniques,
business strategies, contract terms, pricing terms, discounts and management compensation of
the Company, BHI or any of their respective subsidiaries and affiliates, whether prepared by
the Executive or otherwise coming into the Executive’s possession, shall remain the exclusive
property of the Company, BHI or any of their respective subsidiaries and affiliates, and the
Executive shall not remove any such items from the premises of the Company, BHI or any of their
respective subsidiaries and affiliates, except in furtherance of the Executive’s duties.
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(iii) It is understood that while employed by the Company, the Executive will promptly
disclose to the Company in writing, and assign to the Company the Executive’s interest in any
invention, improvement, copyrightable material or discovery made or conceived by the Executive,
either alone or jointly with
others, which arises out of the Executive’s employment (“Executive Invention”).
At the Company’s request and expense, the Executive will reasonably assist the Company, BHI or
any of their respective subsidiaries and affiliates during the period of the Executive’s
employment by the Company and thereafter in connection with any controversy or legal proceeding
relating to an Executive Invention and in obtaining domestic and foreign patent or other
protection covering an Executive Invention. As a matter of record, Executive hereby states
that he or she has provided below a list of all unpatented inventions in which Executive owns
all or partial interest. Executive agrees not to assert any right against BHI with respect to
any invention which is not patented or which is not listed.
(iv) As requested by the Company and at the Company’s expense, from time to time and upon
the termination of the Executive’s employment with the Company for any reason, the Executive
will promptly deliver to the Company, BHI or any of their respective subsidiaries and
affiliates all copies and embodiments, in whatever form, of all Confidential Information in the
Executive’s possession or within his control (including, but not limited to, memoranda,
records, notes, plans, photographs, manuals, notebooks, documentation, program listings, flow
charts, magnetic media, disks, diskettes, tapes and all other materials containing any
Confidential Information) irrespective of the location or form of such material. If requested
by the Company, the Executive will provide the Company with written confirmation that all such
materials have been delivered to the Company as provided herein.
(b) Non-Solicitation of Protected Customers. Executive understands and agrees that
the relationship between the Company Group and each of its Protected Customers constitutes a
valuable asset of the Company Group and may not be converted to Executive’s own use. Executive
hereby agrees that, during his employment with the Company and for a period of twelve (12) months
following the termination of the Executive’s employment for any reason, the Executive shall not,
directly or indirectly, on Executive’s own behalf or as a Principal or Representative of any other
Person, solicit, divert, take away, or attempt to solicit, divert, or take away a Protected
Customer with which the Executive had contact while employed with the Company for the purpose of
marketing, selling or providing to the Protected Customer any goods or services similar to the
goods or services provided by the Company Group.
(c) Non-Solicitation of Employees. Executive understands and agrees that the
relationship between the Company Group and each of its Protected Employees constitutes a valuable
asset of the Company Group and may not be converted to Executive’s own use. Executive hereby
agrees that, during his employment and for the twelve (12) months following the termination of
Executive’s employment for any reason, the Executive shall not, directly or indirectly, on
Executive’s own behalf or as a Principal or Representative of any other Person, solicit or induce,
or attempt to solicit or induce, any Protected Employee to terminate his employment with the
Company Group or to enter into employment with any other Person that is in competition with the
Company Group.
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(d) Non-Competition. During Executive’s employment and, if the Executive is terminated
pursuant to Section 6(c) or in the event of Executive’s Voluntary Termination, for a period of
twelve (12) months following the termination of the Executive’s employment (the “Restricted
Period”), Executive shall not render services substantially the same as the services rendered
by Executive to the Company Group (including those described on Exhibit A) to any Person
that engages in or owns, invests in, operates, manages or controls any venture or enterprise which
engages or proposes to engage in the building products distribution business in the Restricted
Territory. Notwithstanding anything to the contrary herein, during the Restricted Period, in no
event shall Executive render services substantially the same as the services rendered by executive
to the Company Group (including those described on Exhibit A) to the Company’s competitors listed
on Exhibit B hereto or any of their subsidiaries or affiliates. Notwithstanding the
foregoing, nothing in this Agreement be deemed to prohibit the ownership by Executive of not more
than five percent (5%) of any class of securities of any corporation having a class of securities
registered pursuant to the Securities Exchange Act of 1934, as amended.
(e) Remedies; Specific Performance. The parties acknowledge and agree that the
Executive’s breach or threatened breach of any of the restrictions set forth in this Section 7 will
result in irreparable and continuing damage to the Company Group for which there may be no adequate
remedy at law. The parties further agree and acknowledge that the Company, and each member of the
Company Group, as applicable, shall be entitled to equitable relief, including specific performance
and injunctive relief, as a remedy for any such breach or threatened or attempted breach and shall
not be required to post bond in connection with obtaining such relief. Such equitable remedies
shall be in addition to any and all remedies, including damages, available to the Company, or any
member of the Company Group, as applicable, for such breaches or threatened or attempted breaches
by Executive. In addition, without limiting any of the foregoing remedies, and except as otherwise
required by law, Executive shall not be entitled to any payments set forth in Section 6 hereof if
the Executive breaches or attempts or threatens to breach any of the covenants set forth in this
Section 7.
(f) Communication of Contents of Agreement. During Executive’s employment and for two
years thereafter, Executive will communicate his obligations under this Section 7 to any person,
firm, association, partnership, corporation or other entity which Executive intends to be employed
by, associated with, or represent.
(g) The Company’s rights under this Agreement are in addition to, and not in lieu of, all
other rights the Company may have at law or in equity to protect its confidential information,
trade secrets and other proprietary interests.
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8. Definitions.
(a) “Cause” means, as determined by the BHI Board in good faith:
(i) a Material Breach of the duties and responsibilities of Executive;
(ii) Executive’s (x) commission of a felony or (y) commission of any misdemeanor involving
willful misconduct (other than minor violations such as traffic violations) if such misdemeanor
causes material damage to the property, business or reputation of BHI or the Company or their
respective subsidiaries and affiliates;
(iii) acts of dishonesty by Executive resulting or intending to result in personal gain or
enrichment at the expense of the Company, BHI or their respective subsidiaries and affiliates;
(iv) Executive’s Material Breach of any provision of this Agreement;
(v) Executive’s willful failure to follow the lawful written directions of the Company
Board or the BHI Board;
(vi) conduct by Executive in connection with his duties hereunder that is fraudulent,
unlawful or willful and materially injurious to the Company, BHI or their respective
subsidiaries and affiliates;
(vii) Executive’s engagement in habitual insobriety or the use of illegal drugs or
substances;
(viii) Executive’s failure to cooperate fully, or failure to direct the persons under
Executive’s management or direction, or employed by, or consultants or agents to, the Company
(or its subsidiaries and affiliates) to cooperate fully, with all corporate investigations or
independent investigations by the Company Board or the BHI Board, all governmental
investigations of the Company or its subsidiaries and affiliates, and all orders involving
Executive or the Company (or its subsidiaries and affiliates) entered by a court of competent
jurisdiction;
(ix) Executive’s material violation of BHI’s Code of Conduct (including as applicable to
executive officers), or any successor codes;
(x) Executive’s engagement in activities prohibited by Section 7; or
(xi) Notwithstanding the foregoing, no termination of the Executive’s employment shall be
for Cause until (i) there shall have been delivered to the Executive a copy of a written notice
setting forth the basis for such termination in reasonable detail, and (ii) the Executive shall
have been provided an opportunity to be heard in person by the Board (with the assistance of
the Executive’s counsel if the Executive so desires). No act, or failure to act, on the
Executive’s part shall be considered “willful” unless the Executive has acted or failed to act
with a lack of good faith and with a lack of reasonable belief that the Executive’s action or
failure to act was in the best interests of the Company. Any act, or failure to act, based
upon authority given pursuant to a resolution duly adopted by the BHI Board or the Company
Board or based upon the advice of counsel for BHI or the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive in good faith
and in the best interests of the Company. Any termination of the Executive’s employment by the
Company hereunder shall be deemed to be a termination other than for Cause unless it meets all
requirements of this Section 8(a)(xi).
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(b) “Company Group” means the Company, BHI, or any of their respective subsidiaries
and affiliates.
(c) “Competitive Services” means selling, marketing or distributing products and/or
services substantially similar to any of those sold, marketed, distributed, furnished or supplied
by the Company during the term of Executive’s employment with the Company or managing, supervising
or otherwise participating in a management or sales capacity on behalf of an entity which
distributes home building products similar to those distributed by the Company.
(d) “Confidential Information” means knowledge or data relating to the Company Group
that is not generally known to persons not employed or otherwise engaged by the Company Group, is
not generally disclosed by the Company Group, and is the subject of reasonable efforts to keep it
confidential. Confidential Information includes, but is not limited to, information regarding
product or service cost or pricing, information regarding personnel allocation or organizational
structure, information regarding the business operations or financial performance of the Company
Group, sales and marketing plans, and strategic initiatives (independent or collaborative),
information regarding existing or proposed methods of operation, current and future development and
expansion or contraction plans, sale/acquisition plans and non-public information concerning the
legal or financial affairs of the Company Group. Confidential Information does not include
information that has become generally available to the public by the act of one who has the right
to disclose such information without violating any right or privilege of the Company Group. This
definition is not intended to limit any definition of confidential information or any equivalent
term under applicable federal, state or local law.
(e) “Date of Termination” means (i) if Executive’s employment is terminated by the
Company for Disability, 30 days after the Company gives Notice of Termination to Executive
(provided that Executive has not returned to the performance of Executive’s duties on a full-time
basis during this 30-day period), (ii) if Executive’s employment is terminated by Executive for
Good Reason, the date specified in the Notice of Termination (but in no event prior to 30 days
following the delivery of the Notice of Termination), and (iii) if Executive’s employment is
terminated by the Company for any other reason, the date on which a Notice of Termination is given;
except that if within 30 days after any Notice of Termination is given to Executive by the Company,
Executive notifies the Company that a dispute exists concerning the termination, the Date of
Termination is to be the date the dispute is finally determined, whether by mutual written
agreement of the parties or upon final judgment, order or decree of a court of competent
jurisdiction (the time for appeal thereof having expired and no appeal having been perfected). A
termination of employment shall not be deemed to have occurred for purposes of any provision of
this Agreement providing for the payment of any amounts
or benefits subject to Section 409A of the Internal Revenue Code of 1986, as amended (“Section
409A”) upon or following a termination of employment unless such termination is also a “separation
from service” within the meaning of Section 409A.
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(f) “Disability” means the determination by the Company, in accordance with applicable
law, based on information provided by a physician selected by the Company or its insurers and
reasonably acceptable to Executive or Executive’s legal representative that, as a result of a
physical or mental injury or illness, Executive has been unable to perform the essential functions
of his job with or without reasonable accommodation for a period of (i) 90 consecutive days or (ii)
180 days in any one-year period. Notwithstanding the foregoing, in the event that as a result of
absence because of mental or physical incapacity the Executive incurs a “separation from service”
within the meaning of the term under Section 409A, the Executive shall on such date automatically
be terminated from employment because of Disability.
(g) “Good Reason” means, without the consent of Executive, (A) the assignment to
Executive of any duties inconsistent in any material adverse respect with Executive’s position
(including offices, titles and reporting requirements), authority, duties or responsibilities
immediately following the Effective Date, or any other action by the Company which results in a
material diminution in such position, authority, duties or responsibilities; (B) a material
reduction by the Company in Executive’s Base Salary of more then 15% or annual bonus opportunity,
other than pursuant to a reduction generally applicable to executives of the Company; (C) the
Company’s requiring Executive to be based at any office or location outside of the metropolitan
area of Atlanta, Georgia; or (D) any failure by the Company to comply with and satisfy the
requirements for any assignment of its rights and obligations under Section 13. Notwithstanding
the foregoing, “Good Reason” shall not be deemed to exist for purposes of (A) through (D) if the
event or circumstances are rescinded or remedied by the Company within thirty (30) days after
receipt of notice thereof given by Executive.
(h) “Material Breach” means an intentional act or omission by Executive which
constitutes substantial non-performance of Executive’s obligations under this Agreement and causes
material damage to the Company.
(i) “Notice of Termination” means a written notice that indicates those specific
termination provisions in this Agreement relied upon and that sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of Executive’s employment under
the provision so indicated. For purposes of this Agreement, no purported termination by either
party is to be effective without a Notice of Termination.
(j) “Person” means: any individual or any corporation, partnership, joint venture,
limited liability company, association or other entity or enterprise.
(k) “Principal or Representative” means a principal, owner, partner, shareholder,
joint venturer, investor, member, trustee, director, officer, manager, employee, agent,
representative or consultant.
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(l) “Protected Customers” means any then-existing customer to whom the Company Group
sold its products or services at any time during Executive’s employment and with respect to
whom Executive either (i) had business dealings on behalf of the Company Group; or (ii) supervised
or coordinated the dealings between the Company Group and the customer.
(m) “Protected Employees” means any employee of the Company Group who was employed
during Executive’s employment and with whom Executive either (i) had a supervisory
relationship; or (ii) worked or communicated on a regular basis regarding the Company Group’s
business.
(n) “Reimbursement Rules” means the requirement that any amount of expenses eligible
for reimbursement under this Agreement be made (i) in accordance with the reimbursement payment
date set forth in the applicable provision of the Agreement providing for the reimbursement or (ii)
where the applicable provision does not provide for a reimbursement date, thirty (30) calendar days
following the date on which Executive incurs the expense, but, in each case, no later than December
31 of the year following the year in which the Executive incurs the related expenses; provided,
that in no event shall the reimbursements or in-kind benefits to be provided by the Company in one
taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other
taxable year, nor shall the Executive’s right to reimbursement or in-kind benefits be subject to
liquidation or exchange for another benefit.
(o) “Release Agreement” means an agreement, substantially in a form approved by the
Company, pursuant to which Executive releases all current or future claims, known or unknown,
arising on or before the date of the release against the Company, its subsidiaries and its
officers.
(p) “Restricted Territory” means continental United States of America.
(q) “Trade Secrets” means all secret, proprietary or confidential information
regarding the Company, BHI or any of their respective subsidiaries and affiliates or that meets the
definition of “trade secrets” within the meaning set forth in O.C.G.A. § 10-1-761.
9. Executive Representations. Executive represents to the Company that (a) the
execution, delivery and performance of this Agreement by Executive does not and will not conflict
with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment
or decree to which Executive is a party or by which Executive is bound, (b) Executive is not a
party to or bound by any employment agreement, noncompete agreement or confidentiality agreement
with any other person or entity and (c) upon the execution and delivery of this Agreement by the
Company, this Agreement will be the valid and binding obligation of Executive, enforceable in
accordance with its terms.
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10. Withholding of Taxes. The Company shall withhold from any amounts payable under
this Agreement all federal, state, city or other taxes that the Company is required to withhold
under any applicable law, regulation or ruling.
11. Section 409A.
(a) Notwithstanding any provisions of this Agreement to the contrary, if the Executive is a
“specified employee” (within the meaning of Section 409A and determined pursuant to procedures
adopted by the Company) at the time of his separation from service (within the meaning of Section
409A) and if any portion of the payments or benefits to be received by the Executive upon
separation from service would be considered deferred compensation under Section 409A, amounts that
would otherwise be payable pursuant to this Agreement during the six-month period immediately
following the Executive’s separation from service (the “Delayed Payments”) and benefits
that would otherwise be provided pursuant to this Agreement (the “Delayed Benefits”) during
the six-month period immediately following the Executive’s separation from service (such period,
the “Delay Period”) shall instead be paid or made available on the earlier of (i) the first
business day of the seventh month following the date of the Executive’s separation from service or
(ii) Executive’s death (the applicable date, the “Permissible Payment Date”). The Company
shall also reimburse the Executive for the after-tax cost incurred by the Executive in
independently obtaining any Delayed Benefits (the “Additional Delayed Payments”).
(b) With respect to any amount of expenses eligible for reimbursement under Section 6(a), such
expenses shall be reimbursed by the Company within thirty (30) calendar days following the date on
which the Company receives the applicable invoice from the Executive but in no event later than
December 31 of the year following the year in which the Executive incurs the related expenses;
provided, that with respect to reimbursement relating to the Additional Delayed Payments, such
reimbursement shall be made on the Permissible Payment Date. In no event shall the reimbursements
or in-kind benefits to be provided by the Company in one taxable year affect the amount of
reimbursements or in-kind benefits to be provided in any other taxable year, nor shall the
Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for
another benefit.
(c) Each payment under this Agreement shall be considered a “separate payment” and not of a
series of payments for purposes of Section 409A.
(d) Any Delayed Payments shall bear interest at the United States 5-year Treasury Rate plus
2%, which accumulated interest shall be paid to the Executive on the Permissible Payment Date.
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12. Excess Parachute Payments.
(a) In the event that it shall be determined, based upon the advice of the independent public
accountants for BHI or the Company (the “Accountants”), that any payment, benefit or
distribution by the Company, BHI or any of their respective
subsidiaries or affiliates (a “Payment”) constitute “parachute payments” under Section
280G(b)(2) of the Code, as amended, then, if the aggregate present value of all such Payments
(collectively, the “Parachute Amount”) exceeds 2.99 times the Executive’s “base amount”, as
defined in Section 280G(b)(3) of the Code (the “Executive Base Amount”), the amounts constituting
“parachute payments” which would otherwise be payable to or for the benefit of Executive shall be
reduced to the extent necessary so that the Parachute Amount is equal to 2.99 times the Executive
Base Amount (the “Reduced Amount”); provided that such amounts shall not be so reduced if
the Executive determines, based upon the advice of the Accountants, that without such reduction
Executive would be entitled to receive and retain, on a net after tax basis (including, without
limitation, any excise taxes payable under Section 4999 of the Code), an amount which is greater
than the amount, on a net after tax basis, that the Executive would be entitled to retain upon his
receipt of the Reduced Amount.
(b) If the determination made pursuant to clause (a) of this Section 12 results in a reduction
of the payments that would otherwise be paid to Executive except for the application of clause (a)
of this Section 12, Executive may then elect, in his sole discretion, which and how much of any
particular entitlement shall be eliminated or reduced and shall advise the Company in writing of
his election within ten days of the determination of the reduction in payments. If no such
election is made by Executive within such ten-day period, the Company may elect which and how much
of any entitlement shall be eliminated or reduced and shall notify Executive promptly of such
election.
(c) As a result of the uncertainty in the application of Section 280G of the Code at the time
of a determination hereunder, it is possible that payments will be made by the Company which should
not have been made under clause (a) of this Section 12 (“Overpayment”) or that additional
payments which are not made by the Company pursuant to clause (a) of this Section 12 should have
been made (“Underpayment”). In the event that there is a final determination by the
Internal Revenue Service, or a final determination by a court of competent jurisdiction, that an
Overpayment has been made, any such Overpayment shall be repaid by Executive to the Company
together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the
Code. In the event that there is a final determination by the Internal Revenue Service, a final
determination by a court of competent jurisdiction or a change in the provisions of the Code or
regulations pursuant to which an Underpayment arises, any such Underpayment shall be promptly paid
by the Company to or for the benefit of Executive, together with interest at the applicable Federal
rate provided for in Section 7872(f)(2) of the Code.
13. Successors and Assigns. This Agreement is to bind and inure to the benefit of and
be enforceable by Executive, the Company and their respective heirs, executors, personal
representatives, successors and assigns, except that neither party may assign any rights or
delegate any obligations hereunder without the prior written consent of the other party. Executive
hereby consents to the assignment by the Company of all of its rights and obligations under this
Agreement to any successor to the Company by merger or consolidation or purchase of all or
substantially all of the Company’s assets,
provided that the transferee or successor assumes the Company’s liabilities under this
Agreement by agreement in form and substance reasonably satisfactory to Executive.
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14. Survival. Subject to any limits on applicability contained therein, Section 7
will survive and continue in full force in accordance with its terms notwithstanding any
termination of the Employment Period.
15. Choice of Law. This Agreement is to be governed by the internal law, and not the
laws of conflicts, of the State of Georgia.
16. Severability. Whenever possible, each provision of this Agreement is to be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, that invalidity, illegality or unenforceability is not
to affect any other provision or any other jurisdiction, and this Agreement is to be reformed,
construed and enforced in the jurisdiction as if the invalid, illegal or unenforceable provision
had never been contained herein.
17. Notices. Any notice provided for in this Agreement is to be in writing and is to
be either personally delivered, sent by reputable overnight carrier or mailed by first class mail,
return receipt requested, to the recipient at the address indicated as follows:
Notices to Executive:
To the address listed in the personnel records of the Company.
Notices to the Company:
BlueLinx Corporation
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Legal Department
Facsimile: (000) 000-0000
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Legal Department
Facsimile: (000) 000-0000
or any other address or to the attention of any other person as the recipient party shall have
specified by prior written notice to the sending party. Any notice under this Agreement is to be
deemed to have been given when so delivered, sent or mailed.
18. Amendment and Waiver. The provisions of this Agreement may be amended or waived
only with the prior written consent of the Company and Executive, and no course of conduct or
failure or delay in enforcing the provisions of this Agreement is to affect the validity, binding
effect or enforceability of this Agreement.
19. Complete Agreement. This Agreement embodies the complete agreement and
understanding between the parties with respect to the subject matter hereof and effective as of its
date supersedes and preempts any prior understandings, agreements or representations by or between
the parties, written or oral, that may have related to the
subject matter hereof in any way, including, but not limited to, any prior agreements with
respect to Executive’s employment or termination of employment with the Company.
- 15 -
20. Counterparts. This Agreement may be executed in separate counterparts, each of
which are to be deemed to be an original and both of which taken together are to constitute one and
the same agreement.
The parties are signing this Agreement as of the Effective Date.
| BLUELINX CORPORATION |
||||
| By: | /s/ Xxxxxx X. Xxxx | |||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | President & CEO | |||
| EXECUTIVE |
||||
| /s/ Xxx X. Xxxxxx | ||||
| XXX X. XXXXXX | ||||
LIST OF UNPATENTED INVENTIONS
Executive represents that he or she has no such inventions by initialing below next to the word
“NONE.”
NONE: NEB
- 16 -
EXHIBIT A
EXECUTIVE’S DUTIES
JOB SUMMARY
Position Purpose Summary:
Executive team member, fully responsible for driving the assessment, planning and execution of plans for the Supply Chain
organization. Develops and runs the required end-to-end product supply chain capabilities in alignment with cost, customer
expectation, quality, reliability and other key company deliverables. Oversees operations and coordination between facilities
to maintain best-in-class service levels, optimized inventory management and efficiently utilized manufacturing resources.
Improves existing business systems and processes by working effectively across all functions, facilities and suppliers.
Provides direction and leadership in the continuing roll-out of the company’s articulated goals, values, vision and culture
while encouraging aggressive and prudent risk-oriented business activities by leaders and employees across the company.
KEY TASKS / RESPONSIBILITIES
| • | Understands the company’s vision, mission, and strategy; understands business unit objectives and sets/accomplishes
individual performance goals accordingly. |
| • | Establishes personal credibility with the executive team and leaders throughout the organization, through a deep
understanding of the business and strategic levers. |
| • | Partners with senior leadership team to build support for Supply Chain strategy and ensures alignment with overall
business plans. |
| • | Develops and executes strategies and contracts to manage the Company’s spend in critical areas involving supply,
operations and maintenance. |
| • | Oversees and improves national and international procurement strategies and optimize cost savings, delivery and
services. |
| • | Ensures a system is in place that identifies and mitigates various supply chain risks. Ensures there is a robust
process in place to ensure the company’s supplier business practices policies are enforced. |
| • | Establishes, measures, and monitors key metrics to evaluate the effectiveness of the Supply Chain organization.
Monitors core supply chain performance, including delivery against product and service level agreements and cost objectives. |
| • | Leads team; selects/hires; develops objectives; coaches and evaluates performance. Ensures direct reports obtain
applicable training and development opportunities to enhance performance, development, and contributions to the company. Holds
direct reports accountable for individual and team performance. Addresses performance issues appropriately and timely. |
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EXHIBIT B
EXECUTIVE BENEFITS PACKAGE
The following benefits will be provided as for other salaried employees
Salaried 401(k) Plan
Medical and Dental Insurance
Medical and Dental Insurance
The following benefits will be provided to Xx. Xxxxxx:
| • | Life Insurance — $800,000.00 |
||
| • | Executive Annual Physical |
||
| • | Annual tax/accounting allowance — up to $3,500.00 |
Relocation
Household goods moved
Up to 3 months of temporary living expenses
Airfare of moving of family
Closing costs for purchase of home
Up to 3 months of temporary living expenses
Airfare of moving of family
Closing costs for purchase of home
- 18 -
EXHIBIT C
COMPANY’S COMPETITORS
Weyerhauser
Boise Cascade
Georgia-Pacific
Louisiana Pacific
Norbord
Beacon Roofing Supply
Huttig
Universal Forest Products
Builders Firstsource
Watsco
Interline Brands
Boise Cascade
Georgia-Pacific
Louisiana Pacific
Norbord
Beacon Roofing Supply
Huttig
Universal Forest Products
Builders Firstsource
Watsco
Interline Brands
- 19 -
