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Exhibit 10 (g)
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made effective as of the 1st
day of
January 2006 (the "Agreement Date"), by and between LESCO, INC., an
Ohio
corporation (the "Company"), and JEFFERY L. RUTHERFORD (the
"Executive").
WHEREAS, Executive currently is employed by the Company in an
at-will
capacity;
WHEREAS, the Company desires to change the duties and
responsibilities
of Executive (but not his at-will employment status) to provide for
the
employment of the Executive on the terms and conditions set forth
herein, in the
best interest of the Company and its constituencies; and
WHEREAS, the Executive desires to be employed by the Company,
as
provided herein;
NOW, THEREFORE, in consideration of the premises and the
respective
covenants and agreements of the parties herein contained, the
parties agree as
follows:
1.
Employment. The Company agrees to employ the Executive and the
Executive agrees to be employed on a full-time basis by the
Company for the period and upon the terms and conditions
hereinafter set forth.
2.
Term: Employment Period. The term of this Agreement shall
commence on the date hereof (the "Effective Date") and shall
continue hereunder, unless amended, until terminated under the
provisions of Section 6 of this Agreement. The period during
which the Executive is employed by the Company pursuant to
this Agreement is referred to herein as the "Employment
Period." The date on which the termination of the Executive's
employment hereunder shall become effective is referred to
herein as the "Termination Date." For purposes of this
Agreement, an "Employment Year" shall be the calendar year.
3.
Position and Duties. During the Employment Period, the
Executive shall serve as President and Chief Executive Officer
of the Company and shall have such responsibilities, duties
and authority as are customarily and ordinarily exercised by
executives in similar positions in similar businesses in the
United States and shall exercise such responsibilities, duties
and authority consistent with the foregoing as the Chairman of
the Company's Board of Directors (the "Board") shall determine
from time to time. During the Employment Period, the Executive
shall report to the Board as a whole. The Executive shall
devote substantially all his working time and efforts to the
business and affairs of the Company and shall use his best
efforts to carry out his responsibilities faithfully and
efficiently in a professional manner. Notwithstanding the
foregoing, it is understood that during the Employment Period,
subject to any conflict of interest policies of the Company
and Section 8, the Executive may (i) serve in any capacity
with any civic, charitable, or industry organizations,
provided that such service does not materially interfere with
his duties and responsibilities hereunder or the interests of
LESCO; (ii) make and manage personal investments of his
choice; provided
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that such activities do not materially interfere with his
duties and
responsibilities hereunder or conflict with the
interests of LESCO, and (iii) with approval of the Board,
which approval shall not be unreasonably withheld, serve on
the board of directors of up to two (2) noncompeting
for-profit business enterprises. During the Employment Period,
the Company shall take all actions required for the Executive
to be elected to the Board.
4.
Place of Performance. During the Employment Period, the
Executive's place of performance of his services shall be at
the Company's corporate headquarters, except for required
travel by the Executive on the Company's behalf.
5.
Compensation and Benefits.
(a) Salary.
During the Employment Period, the Company
shall pay to the Executive an initial annual base
salary of Three Hundred Seventy-Five Thousand Dollars
($375,000) (as the same may be increased from time to
time, the "Base Salary"), such salary to be paid in
periodic installments in accordance with the
Company's payroll practices as in effect from time to
time. The Base Salary shall be reviewed annually by
the Compensation, Governance and Nominating Committee
of the Board (the "Compensation Committee") and may
be increased from time to time in accordance with
normal business practices of the Company and, if so
increased, shall not, absent compelling economic
circumstances, thereafter be reduced.
(b) Annual
Bonus. During the Employment Period, the
Executive shall be eligible to earn an annual bonus
under the Company's bonus plan, or a successor plan
thereto, as shall be in effect from time to time (the
"Bonus Plan"), subject to achievement of performance
goals determined in accordance with the terms of the
Bonus Plan (such annual bonus, the "Annual Bonus").
The Annual Bonus shall be payable as determined by
the Compensation Committee at such time as bonuses
are ordinarily paid to senior executives of the
Company.
(c)
Performance Plan. The Executive shall be entitled to
immediate participation in the Company's Performance
Plan as and when such Performance Plan is approved by
the Compensation Committee for Management Committee
Members.
(d) Expenses.
During the Employment Period, the Company
shall promptly reimburse the Executive for all
reasonable out-of-pocket expenses incurred by the
Executive in connection with the business of the
Company and the performance of his duties under this
Agreement in accordance with the terms of the
Company's
expense reimbursement policies as in effect
from time to time.
(e) Benefit
Plans. During the Employment Period, the
Executive shall be entitled to participate in all of
the employee benefit plans, programs,
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agreements and arrangements provided to employees
generally and to senior executives of the Company, as
such are in effect from time to time, consistent with
the terms and conditions thereof and on a basis no
less favorable than that provided to such senior
executives; provided, however, that Executive shall
be given the opportunity, on a yearly basis, during
the open enrollment period generally applicable to
all employees of the Company, to change his benefit
plan elections, and shall be required to pay the
employee portion of the benefits elected.
(f)
Perquisites. During the Employment Period, the
Executive shall be entitled to (i) payment by the
Company or reimbursement for an executive annual
physical examination and (ii) an automobile allowance
of Five Hundred Dollars ($500) per month plus payment
by the Company or reimbursement for operating
expenses.
(g) Vacations.
During the Employment Period, the
Executive shall be entitled to vacation time, paid
holidays and personal days, determined in accordance
with the Company's policy with respect to its senior
executives as in effect from time to time, it being
understood that the Executive shall be entitled to
not less than four weeks' vacation in any Employment
Year.
6.
Termination of Employment
(a) Accrued
Benefits and Unvested Awards. In the event of
the termination of the Executive's employment
hereunder for any reason other than For Cause or a
Voluntary Resignation under Special Circumstances (as
defined herein) or death or disability, (i) the
Executive (or his estate or representative, as
applicable) shall be entitled to receive any Base
Salary (earned but unpaid), prior year's Annual Bonus
or other incentive award, if the Annual Bonus or
other incentive award would have been earned had the
Executive continued employment, vacation time and
expenses that have in each case accrued but are
unpaid as of the Termination Date, vested options,
vested benefits under the Company's benefit plans, as
well as any post-termination benefits to which he may
be entitled pursuant to the Company's retirement,
insurance and other benefit plans, programs and
arrangements as in effect immediately prior to the
Termination Date, but not the car allowance or car
insurance (the "Accrued Benefits") and (ii) all
long-term stock incentive awards held by the
Executive (whether in the form of options, phantom
units, performance shares, restricted shares or other
awards of whatever nature) which are otherwise
unvested on the Termination Date (the "Unvested
Awards") shall fully vest, and all restrictions and
conditions shall be removed, on the Date of
Termination; provided, however, that notwithstanding
anything contained in this Agreement or in any other
agreement to the contrary, in order to induce the
Company to vest such otherwise Unvested Awards, the
Executive
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hereby agrees to exercise all such otherwise Unvested
Awards within one year of the Termination Date.
(b) Death. The
Executive's employment hereunder shall
terminate as of the date of his death. Upon the
termination of the Executive's employment hereunder
because of his death, the Executive's estate or
representative, as the case may be, shall be entitled
to receive the Accrued Benefits, except that the
Annual Bonus payable, if any, will be on a pro rata
basis. Such pro rata Annual Bonus shall be determined
by multiplying the amount of the Annual Bonus by a
fraction, the numerator of which is the number of
days in the Employment Year elapsed prior to the date
of death and the denominator of which is three
hundred sixty-five (365).
(c)
Disability. The Executive's employment hereunder may
be terminated, at the discretion of the Board, during
the Employment Period, upon the Executive's
Disability. For this purpose, the term "Disability"
means: the Executive, by reason of any medically
determinable physical
or mental impairment that is
expected to result in death or last for a period of
at least twelve months, is unable to engage in any
substantial gainful activity. In such event, the
Executive (or his representatives, as applicable)
shall be entitled to receive the Accrued Benefits,
except that the Annual Bonus payable, if any, will be
on a pro rata basis. Such pro rata Annual Bonus shall
be determined by multiplying the target amount of the
Annual Bonus by a fraction, the numerator of which is
the number of days in the Employment Year elapsed
prior to the date of termination by reason of
disability and the denominator of which is three
hundred and sixty-five (365). The Company shall have
sole discretion as to whether the Executive has
experienced a Disability.
(d) Voluntary
Resignation. The Executive may voluntarily
terminate his employment hereunder during the
Employment Period by providing thirty (30) days'
written notice of termination to the Company (a
"Voluntary Resignation") unless circumstances exist
in which the Company could terminate For Cause. In
the event that the Executive's employment hereunder
is terminated pursuant to this Section 6(d), subject
to Section 6(j) below, the Executive shall be
entitled to the Accrued Benefits; provided, however,
that if any element of Accrued Benefits is subject to
the limitations of Internal Revenue Code ("Code")
Section 409A, such element(s) of Accrued Benefits
will be paid no earlier than six (6) months after
Executive's Separation From Service. For purposes of
this Agreement, Executive will have a "Separation
From Service" if: such Executive dies, retires,
experiences Disability, or terminates employment. For
this purpose, an Executive terminates employment if,
after the Termination Date, he no longer is providing
any services for the Company, in any capacity, or, if
he is providing services after such date, such
services are insignificant within the meaning of
Prop. Treas. Reg. Section 1.409A-1(h).
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(e) For Cause:
Voluntary Resignation Under Special
Circumstances. The Executive's employment hereunder
may be terminated during the Employment Period (i) by
the Company For Cause (as defined below) or (ii) by
the Executive's Voluntary Resignation under
circumstances in which the Company could terminate
For Cause (a "Voluntary Resignation Under Special
Circumstances). In the event that the Company
terminates the Executive's employment hereunder For
Cause or the Executive terminates employment by
Voluntary Resignation Under Special Circumstances,
the Termination Date shall be the date specifi
