This Employment Agreement (this “
Agreement ”) is entered into as of June 4, 2009
(the “ Effective Date ”) between BLUELINX
CORPORATION, a Georgia corporation (the “ Company
”), and Dean A. Adelman (“ Executive
”).
WHEREAS, the Company desires to formalize the
terms of Executive’s employment as the Chief Administrative
Officer of the Company, and Executive desires to formalize the
terms of his employment as the Chief Administrative Officer of the
Company; and
WHEREAS, as of the Effective Date, the Company
shall employ Executive on the terms and conditions set forth in
this Agreement, and Executive shall be retained and employed by the
Company to perform such services under the terms and conditions of
this Agreement;
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
”).
(a) During the Employment Period, Executive
shall serve as the Chief Administrative Officer of the Company and
BlueLinx Holdings Inc. (“ BHI ”) and shall have
the normal duties, responsibilities and authority of an executive
serving in such position, subject to the power of the Board of
Directors of the Company (the “ Company Board ”)
and the Board of Directors of BHI (the “ BHI Board
”), to provide oversight and direction with respect to such
duties, responsibilities and authority, either generally or in
specific instances. The Executive also shall hold similar titles,
offices and authority with BHI’s direct and indirect
subsidiaries, as requested by the BHI Board from time to time,
subject to the oversight and direction of the respective boards of
directors of such entities.
(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, BHI
and their respective subsidiaries and affiliates. 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 Company Board’s
prior consent. 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 $315,000 per year (“ Base Salary ”).
The Base Salary shall be reviewed at least annually and may be
increased at the sole discretion of the BHI Board or Compensation
Committee.
(i) Executive shall be eligible to receive
an annual bonus, with the annual bonus target to be 50% of Base
Salary (i.e., 50% upon achievement of annual “target”
performance goals) and a maximum of 100% of Base Salary (i.e., 100%
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.
(ii) Beginning with fiscal year 2009 and
during the Employment Period hereunder, the Executive will be
eligible to participate in long term incentive programs of the
Company and BHI now or hereafter made available to senior
executives, in accordance with the provisions thereof as in effect
from time to time, and as deemed appropriate by the Compensation
Committee to be applicable to this position.
(c) 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. In order to be entitled to expense reimbursement,
the Executive must be employed as Chief Administrative Officer on
the date the Executive incurred the expense.
(d) 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 A .
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(e) Additional
Compensation/Benefits . The Compensation Committee of the BHI
Board, 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.
(f) 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.
(a) Subject to subsection 5(b), the
Employment Period will commence on the Effective Date and will
continue until, and will end upon, June 4, 2011 (the “
Renewal Date ”); except that on the Renewal Date,
unless either party shall have given the other 90-days’
written notice otherwise, the Employment Period will be extended
automatically for one additional year.
(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 BHI Board first made
Executive aware of the event or circumstance.
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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, (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).
(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 six months after the
Date of Termination;
(ii) 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
(i) Executive’s eligibility for any such coverage under
another employer’s or any other medical or dental insurance
plans or (ii) 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
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;
(iii) 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
(iv) 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
”).
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(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.
(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 and BHI all Confidential
Information and Trade Secrets. During his employment with the
Company and for a period of five 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,
communicate or divulge Confidential Information. In addition,
except as necessary to perform his duties for the Company, during
Executive’s employment and thereafter, 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.
(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
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