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Exhibit 10.3
EMPLOYMENT AGREEMENT
AGREEMENT
made as of January 15, 2004, by and between Builders
FirstSource, Inc., a Delaware corporation
(the "Company"), and Donald F.
McAleenan (the "Executive").
WHEREAS,
the Company desires that Executive serve as the Senior Vice
President and General Counsel of the
Company, and Executive desires to hold such
positions under the terms and conditions of
this Agreement; and
WHEREAS,
the Board of Directors of the Company (the "Company Board") has
approved and authorized the Company to
enter into this Agreement with Executive.
NOW,
THEREFORE, in consideration of the mutual covenants and
agreements
set forth herein, and intending to be
legally bound hereby, the parties agree as
follows:
1.
Employment. The Company hereby employs Executive, and Executive
hereby
accepts employment with the Company, upon
the terms and subject to the
conditions set forth herein.
2.
Term.
(a) Subject to Section 2(b) hereof, the term of employment by
the
Company of Executive pursuant to this
Agreement (as the same may be extended,
the "Term") shall commence on January 15,
2004 (the "Effective Date"), and
terminate on the first anniversary
thereof.
(b) Commencing on the first anniversary of the Effective Date and
on
each subsequent anniversary thereof, the
Term shall automatically be extended
for one (1) additional year unless, not
later than ninety days (90) prior to any
such anniversary date, either party hereto
shall have notified the other party
hereto in writing that such extension shall
not take effect.
3.
Position. During the Term, Executive shall serve as the Senior
Vice
President and General Counsel of the
Company, supervising the legal matters and
affairs of the Company and performing such
other duties as the Company Board
shall determine.
4. Duties.
During the Term, Executive shall devote his full time and
attention during normal business hours to
the business and affairs of the
Company, except vacations in accordance
with the Company's policies and for
illness or incapacity, in accordance with
Section 6 hereof.
5. Salary
and Bonus.
(a) During the Term, the Company shall pay to Executive a base
salary at the rate of $320,000 per year
(the "Base Salary"), subject to
adjustments pursuant to the terms of
Section 5(b) hereof.
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(b) On or prior to each anniversary hereof during the Term
(assuming
the Term of the Agreement is extended
pursuant to Section 2(b) hereof), the
Company Board or the Compensation Committee
of the Company Board (the
"Compensation Committee") shall review the
Base Salary and may, in its sole
discretion, increase the Base Salary based
upon performance and merit.
Executive's Base Salary shall not be
decreased below the amount set forth in
Section 5(a) hereof. The Base Salary shall
be payable to Executive in
substantially equal installments in
accordance with the Company's normal payroll
practices, but in no event less often than
semi-monthly.
(c) For the Company's fiscal year ending December 31, 2004, and
for
each fiscal year during the Term
thereafter, Executive shall be eligible to
receive an annual cash bonus equal to the
amount provided for in the Company's
Annual Cash Incentive Plan ("Annual
Incentive Plan") (which currently provides
for a target bonus percentage of 100% of
Executive's Base Salary), which Annual
Incentive Plan is approved by the Company
Board or the Compensation Committee
thereof. Executive's target bonus
percentage under the Annual Incentive Plan
shall not be reduced below 100% of his Base
Salary.
6.
Vacation, Holidays and Sick Leave. During the Term, Executive shall
be
entitled to paid vacation, paid holidays
and sick leave in accordance with the
Company's standard policies for its senior
executive officers.
7.
Business Expenses. Executive shall be reimbursed for all reasonable
and
necessary business expenses incurred by him
in connection with his employment,
including, without limitation, expenses for
travel and entertainment incurred in
conducting or promoting business for the
Company upon timely submission by
Executive of receipts and other
documentation as required by the Internal
Revenue Code of 1986, as amended (the
"Code"), and in accordance with the
Company's normal expense reimbursement
policies.
8. Health,
Welfare and Related Benefits. During the Term, Executive and
eligible members of his family shall be
eligible to participate fully in all (a)
health and dental benefits and insurance
programs; (b) life and short- and
long-term disability benefits and insurance
programs; and (c) defined
contribution and equity compensation
programs, all as available to senior
executive officers of the Company
generally.
9.
Confidentiality, Non-Competition.
(a) Executive acknowledges that: (I) the Executive has, and his
employment hereunder will require that
Executive continue to have, access to and
knowledge of Confidential Information (as
hereinafter defined); (ii) the direct
and indirect disclosure of any such
Confidential Information to existing or
potential competitors of the Company or its
subsidiaries would place the Company
at a competitive disadvantage and would do
damage, monetary or otherwise, to the
Company's businesses; and (iii) the
engaging by Executive in any of the
activities prohibited by this Section 9 may
constitute improper appropriation
and/or use of such Confidential
Information. Executive expressly acknowledges
that the Confidential Information
constitutes a protectable business interest of
the Company. As used herein, the term
"Confidential Information" shall mean
information of any kind, nature or
description which is disclosed to or
otherwise known to the Executive as a
direct or indirect consequence of his
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association with the Company, which
information is not generally known to the
public or in the businesses in which such
entities are engaged or which
information relates to specific investment
opportunities within the scope of
their business which were considered by the
Company during the Term; provided,
however, that "Confidential Information"
shall not be deemed to include
information which (i) is or becomes
generally available to the public other than
as a result of a disclosure by the
Executive, (ii) becomes available to the
Executive on a non-confidential basis from
a source other than the Company,
provided that such source is not bound by
any contractual, legal or fiduciary
obligation with respect to such information
or (iii) was in the Executive's
possession prior to being furnished by the
Company.
(b) During the Term of this Agreement and for a period of one
year
after the termination of Executive's
employment hereunder (upon expiration of
the Term or otherwise), Executive shall
not, directly or indirectly, whether
individually, as a director, stockholder,
owner, manager, member, partner,
employee, consultant, principal or agent of
any business, or in any other
capacity, use for his own account, utilize
or make known, disclose, furnish or
make available to any person, firm or
corporation any of the Confidential
Information, other than to authorized
officers, directors and employees of the
Company in the proper performance of the
duties contemplated herein, or as
required by a court of competent
jurisdiction or other administrative or
legislative body; provided that, prior to
disclosing any of the Confidential
Information to a court or other
administrative or legislative body, Executive
shall promptly notify the Company so that
the Company may seek a protective
order or other appropriate remedy.
Executive agrees to return all Confidential
Information, including all photocopies,
extracts and summaries thereof, and any
such information stored electronically on
tapes, computer disks or in any other
manner to the Company at any time upon
request by the Company and upon the
termination of his employment for any
reason.
(c) During the Term of this Agreement and for a period of one
year
after termination of Executive's employment
hereunder (upon expiration of the
Term or otherwise), Executive shall not,
directly or indirectly, own any
interest in, operate, join, control or
participate as a partner, member,
director, manager, principal, officer, or
agent of, enter into the employment
of, act as a consultant or advisor to, or
perform any services for, any entity
(in those geographic areas in which the
Company or any of its subsidiaries, as
of the date of termination of the
Executive's employment hereunder, have
material operations) which entity is
engaged in competition with the Company or
any of its subsidiaries. An entity shall be
deemed to be engaged in competition
with the Company or its subsidiaries if it
engages in a business which is the
same as or substantially similar to any
business engaged in by the Company or
such subsidiary during the Term.
(d) During the Term of this Agreement and for a period of two
years
after termination of Executive's employment
hereunder (upon expiration of the
Term or otherwise), Executive shall not,
directly or indirectly, hire, solicit
or recruit for hire any employee of the
Company or any of its subsidiaries or
encourage any employee of the Company or
any of its subsidiaries to terminate
his or her employment in order to obtain
employment by any other person, firm or
corporation.
(e) Executive acknowledges that(A) in connection with rendering
the
services to be rendered by Executive
hereunder, Executive will have access to
and knowledge of
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Confidential Information, the disclosure of
which would place the Company or its
subsidiaries at a competitive disadvantage,
causing irreparable injury, and (B)
the services to be rendered by Executive
hereunder are of a special and unique
character, which gives this Agreement a
peculiar value to the Company, the loss
of which may not be reasonably or
adequately compensated for by damages in an
action at law, and that a material breach
or threatened breach by Executive of
any of the provisions contained in this
Section 9 will cause the Company
irreparable injury. Executive, therefore,
agrees that the Company shall be
entitled, in addition to any other right or
remedy, to a temporary, preliminary
and permanent injunction, without the
necessity of proving the inadequacy of
monetary damages or the posting of any bond
or security, enjoining or
restraining Executive from any such
violation or threatened violations.
(f) Executive further acknowledges and agrees that due to the
uniqueness of his services and confidential
nature of the information he will
possess, the covenants set forth herein are
reasonable and necessary for the
protection of the business and goodwill of
the Company; and it is the intent of
the parties hereto that if, in the opinion
of any court of competent
jurisdiction, any provision set forth in
this Sec
