This Employment
Agreement (this “ Agreement ”) is entered into
as of January 12, 2007, to be effective as of January 22,
2007 (the “ Effective Date ”) between BLUELINX
CORPORATION, a Georgia corporation (the “Company”), and
Lynn Wentworth (“ Executive ”).
WHEREAS, the
Company desires to employ Executive as the Senior Vice President,
Chief Financial Officer and Treasurer of the Company, and Executive
desires to accept employment as the Senior Vice President, Chief
Financial Officer and Treasurer 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 paragraph 8.
2.
Employment . The Company shall employ Executive, and
Executive accepts employment with the Company, as of the Effective
Date, upon the terms and conditions set forth in this Agreement for
the period beginning on the Effective Date and ending as provided
in paragraph 5 (the “ Employment Period
”).
(a) During
the Employment Period, Executive shall serve as the Senior Vice
President, Chief Financial Officer and Treasurer 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,
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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 Board’s prior
consent. Notwithstanding the foregoing, during the Employment
Period, Executive may (i) serve as a member of the board of
directors of the Community Foundation of Greater Atlanta and the
Emory Board of Visitors, and (ii) render charitable and civic
services, so long as the Executive’s service on such boards
or directors and such charitable and civic services do not
materially interfere with Executive’s ability to discharge
his or her duties hereunder.
(c) Executive
shall perform Executive’s duties and responsibilities with
his or her principal office located in the Atlanta, Georgia
metropolitan area.
4.
Compensation and Benefits .
(a)
Signing Bonus and Stock Options . Contemporaneously with the
execution hereof, the Compensation Committee of the BHI Board has
granted Executive:
(i) 10,000
shares of restricted stock of BHI, which shall vest over a one year
period commencing on the Effective Date; and
(ii) stock
options with respect to 100,000 shares of the common stock of BHI,
which shall vest in annual increments of 20% over a five year
period, all in accordance with a stock option agreement in the form
attached hereto as Exhibit A .
(b)
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 shall be at the rate of $400,000 per year
prorated for the portion of a year during which Executive is
employed pursuant to this Agreement (as in effect from time to
time, “ Base Salary ”). The Base Salary shall be
reviewed at least annually. As a result of such review, the
Executive’s Base Salary may be increased, but not
decreased.
(c)
Annual Bonus and Long Term Incentive Compensation
.
(i) Executive
shall be eligible to receive an annual bonus, with the annual bonus
potential to be between 60% of Base Salary (i.e., 60% upon
achievement of annual “target” performance goals) and a
maximum of 120% of Base Salary (i.e., 120% 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 “ Target Bonus
”). The Company shall pay any such annual bonus earned to
Executive in accordance with the terms of the applicable bonus
plan.
(ii) For
fiscal year 2007, notwithstanding whether the performance goals for
fiscal 2007 are satisfied in accordance with subparagraph 4(c)(i)
above, Executive shall be entitled to receive a minimum bonus equal
to 60% of Base Salary, prorated based on the number of days
actually employed during fiscal year 2007 if Executive is not
employed for such full fiscal year (the “ Contractual
Bonus ”). To the extent that Executive is entitled to a
bonus payment under subparagraph 4(c)(i), the Contractual Bonus
shall constitute a portion of, and shall not be in addition to, the
amounts so payable to Executive. The Contractual Bonus shall
be
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payable to the
Executive no later than two and one-half months following the close
of fiscal year 2007.
(iii) For
fiscal year 2007, 2008 and 2009, Executive is entitled to receive a
targeted compensation amount equivalent to $400,000, as so
determined by the Compensation Committee of the BHI Board, payable
in the form of awards of stock options and/or shares of restricted
stock under the BHI’s long term equity incentive plan as then
in effect, all on such terms and conditions as the Compensation
Committee of the BHI Board shall determine in accordance with the
provisions of such plan. Such bonus award shall be subject to such
time and performance-based vesting conditions as are established by
the Compensation Committee of the BHI Board.
(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 applicable to senior executives 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 Senior Vice President, Chief
Financial Officer and Treasurer on the date the Executive incurred
the expense.
(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 paragraph 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 .
(f)
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.
(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 paragraph 4 and paragraph 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 sale of
BHI’s securities during that 12-month period.
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(a) Subject
to subparagraph 5(b), the Employment Period will commence on the
Effective Date and will continue until, and will end upon,
December 31, 2009 (the “ Renewal Date ”);
except that on the Renewal Date, unless either party shall have
given the other 30-days’ written notice otherwise, the
Employment Period will be extended automatically for one additional
year.
(b) Notwithstanding
subparagraph 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 (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 subparagraph 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 90 days from the date Executive
first became aware of the event or circumstance.
6.
Post-Employment Period Payments .
(a) At
the Date of Termination, regardless of the reason for termination
of employment, 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 paragraph 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 subparagraph 6(a) and in the
succeeding subparagraphs of this paragraph 6 (under the
circumstances described in those succeeding subparagraphs), 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.
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(b) If
Executive’s employment terminates on account of
Executive’s death, Disability, Voluntary Termination,
Termination for Cause or the end of the Employment Period in
accordance with subparagraph 5(a) due to the Executive giving the
Company written notice of nonrenewal, the Company will make no
further payments to Executive except as contemplated in
subparagraph 6(a).
(c) If
Executive’s employment terminates on account of a Termination
without Cause, a Termination for Good Reason, or the end of the
Employment Period in accordance with subparagraph 5(a) due to the
Company giving the Executive written notice of nonrenewal,
Executive shall be entitled to the following:
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(1)
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payment equal to two (2) times
the Executive’s annual Base Salary in effect immediately
prior to the Date of Termination, plus two (2) times
the cash bonus amount received by the Executive for the fiscal year
prior to the year of the termination of Executive’s
employment or if the termination occurs within the first year of
the Executive’s employment with the Company, a cash bonus
equal to the Target Bonus set forth in clause (iii) of
subparagraph 4(c) hereof, payable in twenty-four equal monthly
installments commencing six months after the Date of
Termination;
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(2)
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if
the termination occurs within the first year of the
Executive’s employment with the Company, the 10,000 shares of
restricted stock issued upon Executive’s hiring shall
immediately vest;
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(3)
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a
lump sum payment, payable six months after the Date of Termination,
in cash in an amount equal to the contributions the Company would
have made (excluding any salary reduction contributions pursuant to
an election of the Executive) for the benefit of the Executive to
the Company’s qualified salaried 401(k) plan (if the Company
is making matching contributions or other contributions to the
salaried 401(k) plan at the time of the Executive’s
termination), assuming (i) the Executive continued as an
employee of the Company for a period of one year beginning on the
Executive’s Date of Termination, and (ii) the Executive
during such period contributed six percent of his or her base
salary (as in effect immediately prior to the Date of Termination)
to the 401(k) plan;
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(4)
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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 or her 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;
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(5)
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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 or her or her sole
discretion; and
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(6)
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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 subparagraph 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. In no event shall the Release
Agreement release any claim for indemnification by the Company or
amounts and benefits set forth in subparagraph 6(a)
hereof.
(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 .
(i) The
Executive shall hold in a fiduciary capacity for the benefit of the
Company and BHI all secret or confidential information, knowledge
or data relating to the Company, BHI or any of their respective
subsidiaries and affiliates, and their respective businesses, which
shall have been (i) obtained by the Executive during the
Executive’s employment by the Company, BHI or any of their
respective subsidiaries and affiliates or (ii) acquired by the
Company, BHI or any of their respective subsidiaries and affiliates
from Georgia-Pacific Corporation, and which shall not be or become
public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement)
(“Confidential Information”). After termination of the
Executive’s employment with the Company, 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 any such information, knowledge or data to anyone other
than the Company and those designated by it.
(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, and assign to the Company
the Executive’s interest in any invention, improvement or
discovery made or conceived by the Executive, either alone or
jointly with others, which arises out of the Executive’s
employment. 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
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Company and
thereafter in connection with any controversy or legal proceeding
relating to such invention, improvement or discovery and in
obtaining domestic and foreign patent or other protection covering
the same.
(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 or her 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 . During his or her employment with the
Company and for a period of eighteen (18) months following the
termination of the Executive’s employment for any reason, the
Executive shall not solicit or attempt to solicit, (a) any
party who is a customer of the Company, BHI or any of their
respective subsidiaries and affiliates with whom the Executive had
material contact within the eighteen (18) month period prior
to the termination of the Executive’s employment, for the
purpose of marketing, selling or providing to any such party any
services or products offered by the Company, BHI or any of their
respective subsidiaries and affiliates to such customer other than
general solicitations to the public and not directed specifically
at a customer of the Company, (b) any party who is a vendor of
the Company, BHI or any of their respective subsidiaries and
affiliates with whom the Executive had material contact within the
eighteen (18) month period prior to the termination of the
Executive’s employment to sell similar products or (c) any
employee of the Company, BHI or any of their respective
subsidiaries and affiliates with whom the Executive had material
contact within the eighteen (18) month period prior to the
termination of the Executive’s employment, to terminate such
employee’s employment relationship with the Company, BHI and
any of their respective subsidiaries and affiliates in order, in
either case, to enter into a similar relationship with the
Executive, or any other person or any entity in competition with
the Company, BHI or any of their respective subsidiaries and
affiliates (other than with respect to general employment
solicitations to the public and not directed specifically at
employees of the Company, BHI and any of their respective
subsidiaries and affiliates).
(c)
Non-Competition. During Executive’s employment by the
Company and for a period of eighteen (18) months following the
termination of the Executive’s employment for any reason, the
Executive shall not, whether individually, as a director, manager,
member, stockholder, partner, owner, employee, consultant or agent
of any business, or in any other capacity, other than on behalf of
the Company, BHI or any of their respective subsidiaries and
affiliates, organize, establish, own, operate, manage, control,
engage in, participate in, invest in, permit his or her name to be
used by, act as a consultant or advisor to, render services for
(alone or in association with any perso
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