EMPLOYMENT AGREEMENT
Exhibit
10.91
This
Employment
Agreement (this "Agreement"), dated April 1, 2004, is entered into between
Building Materials Holding Corporation (the "Company"), and the undersigned
employee, Xxxxxxx X. Xxxxxx ("Employee").
RECITALS
A. Employee
has been elected to the position of Senior Vice President and Chief Financial
Officer of the Company.
B. The
Company desires to obtain the benefit of the services of Employee.
C. Employee
desires to provide his service to the Company as provided for in this
Agreement.
In
consideration of
the compensation paid or to be paid to the Employee and for other good and
valuable consideration, the Company and the Employee agree as
follows:
1. Effective
Date. This
Agreement shall become effective on April 1, 2004 (the "Effective
Date").
2. Terms
of
Employment. Subject
to Section 7 hereof, the Company hereby employs the Employee under the terms
of
this Agreement, and the Employee hereby accepts continued employment with the
Company under the terms of this Agreement, for a period commencing on the
Effective Date and ending on April 1, 2006 (the "Term"), which may be extended
for a one year extension upon mutual agreement by Employee and Company. The
one
year extension, if exercised, must be mutually agreed upon by the parties prior
to April 1, 2006.
3. Duties. The
Employee shall serve as the Senior Vice President and Chief Financial Officer
of
the Company.
4. Compensation
and
Benefits.
(a) Base
Salary. During
the Term, in exchange for the services to be rendered by the Employee and the
covenants of the Employee in this Agreement, the Company shall compensate the
Employee with a minimum base salary at the rate of $275,000 per year, subject
to
review and evaluation in accordance with the Company's past practice and payable
in accordance with the Company's compensation practices in effect from time
to
time during the Term. The Employee will continue to be eligible to participate
in the Company's deferred compensation program and will have an annual
opportunity to elect to defer his salary in accordance with the terms of such
program. Such right to participate in the deferral of salary will end on the
expiration of the Term.
(b) Bonus. During
the Term, the Employee will participate in the Company's regular officers'
bonus
plan and the Equity Bonus set forth in Section 5. Payment of the regular
officers' bonus plan will be pro-rated at the end of the Term for
2006.
(c) Employee
Benefits. During
the Term and the extension as provided for herein, Employee shall be entitled
to
participate in the Company's benefit plans generally available to its officers,
employees and their dependents from time to time in accordance with the terms
thereof. Thereafter, Employee may participate in the Company's health care
plan
both individually and with dependant spouse with payment of the premium equal
to
one-half of the respective COBRA benefit cost (single, two party or family).
However, after retirement, when the dependent reaches age 65, the Company health
care plan will be secondary to Medicare. The Company will either
recognize prior service in the industry so that Employee is eligible to
participate in the Company's Retirement Health Care Plan if tax regulations
permit, or reimburse Employee's participation in another health care plan up
to
the amount that the Company would have otherwise contributed for Employee's
participation in the BMHC Retirement Health Care Plan. Employee shall be
eligible to participate in the Company's Long Term Incentive Plan to the same
extent as similar employees of the Company through 2006 and the extension of
the
Term, and the parties acknowledge that such plan currently provides payouts
based on the Company's operating performance on three year cycles. Partially
completed cycles will be paid out on a pro-rated basis at the end of the term
of
each cycle. Employee will also be entitled to the Company's PTO Plan (minimum
of
4 weeks per year), to be taken at a time acceptable to the Company with regard
to its operations.
(d) Expenses. The
Company shall promptly reimburse Employee for any reasonable business expense
incurred by Employee in connection with the business of the Company if (1)
it is
of a nature qualifying it as a proper deduction on the federal and state income
tax return of the Company for the relevant period; (2) Employee furnishes to
the
Company adequate records and other documentary evidence required by federal
and
state statutes and regulations issued by the appropriate taxing authorities
for
the substantiation of each such expenditure as an income tax deduction; and
(3)
such reimbursement is in accord with the internal policies and procedures of
the
Company.
5. Equity
Bonus. To
secure the benefits of Employee's services during the Term, Company agrees
to
provide to Employee an Equity Bonus which grants to Employee 30,000 units valued
at a minimum of $15 per unit. At the end of the Term on April 1, 2006, Employee
will be paid a cash bonus equal to the greater of (1) 30,000 multiplied times
the average price of the Company's stock on the 5 business days immediately
preceding the end of the Term, or (2) $450,000 which is equal to $15 per unit.
The Equity Bonus shall be paid within 30 days following then end of the Term.
Employee must be employed by the Company at the end of the Term in order to
receive payment of the Equity Bonus, and the Equity Bonus shall be forfeited
in
its entirety if Employee voluntarily or involuntarily terminates employment
prior to the completion of the Term. If employment is terminated as a result
of
death or disability of Employee, the Equity Bonus will be calculated as
described above as of the date of death or disability and a prorated amount
paid
(bonus amount multiplied by fraction of portion of Term completed divided by
2
years) within 30 days of such date.
To
encourage the Employee to continue with the Company through the one-year
extension, Company agrees to provide to Employee an Equity Bonus, which grants
to Employee 10,000 units at the beginning of the one-year extension thereafter
valued at $15 per unit. At the end of each one-year extension, Employee will
be
paid a cash bonus equal to the greater of (1) 10,000 multiplied times the
average price of the Company's stock on the 5 business days immediately
preceding the end of the one-year extension of the Term, or (2) $150,000, which
is equal to $15 per unit. If Employee leaves the Company voluntarily or is
terminated for cause (as described within Paragraph 8(a)) before the end of
the
one year extension of the Term, Employee forfeits the right to any equity bonus
under this paragraph. In the event that Employee is terminated without cause
(as
described within Paragraph 8(b)), the equity bonus shall be redeemed on the
date
of termination and calculated by the price of the Company's stock on the date
of
termination.
Notwithstanding
the
foregoing, if there is a Change of Control of the Company, the Equity Bonus
will
immediately vest in full upon such Change of Control; valued in accordance
with
Section 5 with the market value being the closing stock price on the 5 business
days immediately preceding the Change of Control, and paid within 30 days of
the
Change of Control. A "Change of Control" shall be deemed to have occurred if:
(i) there shall be consummated (x) any consolidation or merger of the Company
in
which the Company is not the continuing or surviving corporation or pursuant
to
which shares of the Company's Common Stock would be converted into cash,
securities or other property, other than a merger of the Company in which the
holders of the Company's Common Stock immediately prior to the merger have
the
same proportionate ownership of common stock of the surviving corporation
immediately after the transaction or (y) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all the assets of the Company; or (ii) the stockholders of the
Company approve a plan or proposal for the liquidation or dissolution of the
Company; or (iii) any 'person' (as defined in Section 13(d) or 14(d) of the
Exchange Act, shall become the 'beneficial owner' (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended directly or indirectly
of
50% or more of the Company's outstanding Common Stock.
6.
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Confidential
Information.
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6.1 Definition
of
Confidential Information. Company
is in the business of providing building material services and has built up
an
established and extensive trade and reputation in the industry. Company has
developed and continues to develop commercially valuable technical and
non-technical information ("Confidential Information") that is proprietary
and
confidential and/or constitutes Company's "trade secrets." Such Confidential
Information, which is vital to the success of Company's business, includes,
but
is not necessarily limited to; system documentation, data compilations, manuals,
methods, techniques, processes, customers, prospective customers, suppliers,
prospective suppliers, contracts with suppliers and customers, sales proposals,
methods of sales, marketing research and data, pricing policies, cost
information, financial information, business plans, specialized requests of
Company's customers, and other materials and documents developed by Company.
Confidential Information does not include, however, information which (i) is
or
becomes generally available to the public other than as a result of a disclosure
by Employee, (ii) was available to Employee on a non-confidential basis prior
to
its disclosure by Company, or (iii) becomes available to Employee on a
non-confidential basis from a person other than Company who is not otherwise
bound by a confidentiality agreement with Company, or is not otherwise
prohibited from transmitting the information to Employee.
6.2 Employee
Access
to Confidential Information. The
Company agrees to give Employee such access as is necessary to enable Employee
to perform Employee's job function.
6.3 Nondisclosure
of
Confidential Information. Employee
shall not, at any time, either during employment or during a period of five
years subsequent to employment (i) directly or indirectly, disclose or divulge
any Confidential Information to any person not then employed by Company, unless
authorized or directed by Company or (ii) appropriate any Confidential
Information for use other than performance of Employee's duties hereunder.
If
Company authorizes or directs Employee to disclose Confidential Information
to
any such third party, Employee must ensure that a signed confidentiality
agreement is or has been obtained from the third party to whom Confidential
Information is being disclosed and that all Confidential Information so
disclosed is clearly marked "Confidential"
6.4 Return
of
Confidential and Other Information. All
Confidential Information provided to Employee, and all documents and things
prepared by Employee in the course of Employee's employment, including but
not
necessarily limited to correspondence, manuals, letters, notes, lists,
notebooks, reports, flow-charts, proposals, day-timers, planners, calendars,
schedules, discs, financial plans and information, business plans, and other
documents and records, whether in hard copy or otherwise, and any and all copies
thereof, are the exclusive property of Company and shall be returned immediately
to Company upon termination of employment or upon Company's request at any
time.
7.0
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Enforcement.
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7.1 Reasonableness
of Restrictions. Employee
acknowledges that compliance with this Agreement, including but not limited
to
Section 6, is reasonable and necessary to protect Company's legitimate business
interests, including but not limited to the Company's goodwill and maintaining
the confidentiality of Company's Confidential Information.
7.2 Irreparable
Harm. Employee
acknowledges that a breach of Employee's obligations under this Agreement will
result in great, irreparable and continuing harm and damage to Company for
which
there is no adequate remedy at law.
7.3 Injunctive
Relief. The
parties agree that in the event either party breaches this Agreement, the
non-breaching party shall be entitled to seek, from any court of competent
jurisdiction, preliminary and permanent injunctive relief to enforce the terms
of this Agreement, in addition to any and all monetary damages allowed by law,
against the other party.
7.4 Extension
of
Covenants. In
the
event Employee violates anyone or more of the covenants contained in Section
6
of this Agreement, Employee agrees that the term of each such covenant so
violated shall be automatically extended for a period equal to the period during
which Employee is in violation of such covenants.
7.5 Judicial
Modification. Section
6 of this Agreement shall be deemed to consist of a series of separate
covenants, one for each line of business carried on by Company and each county
in California. The parties expressly agree that the character, duration and
geographical scope of such provisions in this Agreement are reasonable in light
of the circumstances as they exist on the date upon which this Agreement has
been executed. The parties have attempted to limit the Employee's right to
solicit employees and customers only to the extent necessary to protect
Company's goodwill, proprietary and/or Confidential Information, and other
business interests. The parties recognize, however, that reasonable people
may
differ in making such a determination. Consequently, the parties hereby agree
that a court having jurisdiction over the enforcement of this Agreement shall
exercise its power and authority to reform Employee's covenants under Section
6
above to the extent necessary to cause the limitations contained therein as
to
time, geographic area and scope of activity to be restrained to be reasonable
and to impose a restraint that is not greater than necessary to protect
Company's goodwill, Confidential Information, and other business
interests.
7.6 Attorney
Fees. In
the
event of any action in law or in equity for the purposes of enforcing any of
the
provisions of this Agreement, the prevailing party as determined by the trier
of
fact shall be entitled to recover its reasonable attorney fees, plus court
costs
and expenses, from the other party, to the extent permitted by applicable
law.
8.
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Termination.
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(a) Termination
for
Cause. If
the
Employee's employment is terminated by the Company for Cause, the Employee
will
be entitled to receive only base salary earned but unpaid through the date
of
termination, and the Company will not be required to make any payment under
the
Equity Bonus Plan or any other benefits or payment, by way of salary, bonus
or
other compensation or damages of any kind. Cause means (i) the Employee has
been
convicted of, or pleaded nolo contendere to, a felony; (ii) the Employee has
willfully failed to perform his obligations under this Agreement; (iii) the
Employee has committed an act of fraud upon, or willful misconduct toward,
the
Company; or (iv) the Employee has otherwise materially breached this
Agreement.
(b) Termination
Without Cause. If
the
Company terminates the Employee's employment without Cause, the Employee shall
be entitled to receive base salary the time remaining from the effective date
of
termination to the end of the Term, payable in accordance with the Company's
payroll practices in effect on the date of termination, continuation of benefits
in accordance with the applicable plans, payment of a pro-rata portion of the
Equity Bonus within 30 days following termination. The prorate amount of Equity
Bonus shall be calculated by calculating the amount owed on the termination
date
as if it were the end of the term and multiplying that amount by a fraction
of
which the nominator is the number of months of employment prior to termination
and the denominator is 24, and payment of the pro rated portion of any other
bonus that Employee may be entitled to under the Company's Long Term Incentive
Plan pursuant to the terms thereof. Upon termination by the Company of the
Employee without Cause, except as provided in this Section the Company will
not
be required to make any other payment, by way of salary, bonus or other
compensation or damages of any kind.
(c) Termination
Upon
Death or Disability. If
the
Employee's employment is terminated as a result of death or disability, the
Employee will be entitled to receive the base salary earned but unpaid through
the date of termination, a portion of the Equity Bonus pro rated over the Term
and the pro rated portion of any other bonus that Employee may be entitled
to
under the Company's bonus and Long Term Incentive Plans pursuant to the
respective terms thereof. The Company may terminate the Employee's employment
hereunder attributable to the disability of the Employee if the Employee becomes
physically or mentally incapacitated or disabled so that he is unable to perform
for the Company substantially the same services as he performed
prior to
incurring such incapacity or disability, and such incapacity or disability
exists for an aggregate of 180 days in any 360 day period. The Company, at
its
option and expense, is entitled to retain a physician reasonably acceptable
to
the Employee to determine or confirm the existence of such incapacity or
disability, and the determination of such physician shall be binding upon the
Company and the Employee.
(d) Resignation
By
The Employee. If,
for
any reason, Employee wishes to terminate the employment, Employee agrees to
provide the Company with ninety days written notice prior to terminating the
employment. If the Employee's employment is terminated by the Employee for
any
reason, the Employee will be entitled to receive only salary earned but unpaid
through the date of termination and any benefits that Employee may be entitled
to as a person retiring after the age of 55 pursuant to the terms and conditions
of the Company's normal benefit plans, and the Company will not be required
to
make any other payment, by way of salary, bonus, benefits or other compensation
or damages of any kind.
9.
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Miscellaneous.
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(a) Governing
Law. This
Agreement shall be governed by and construed and enforced in accordance with
the
internal, substantive laws of the State of California, without giving effect
to
the conflict of laws rules thereof.
(b) Amendment:
Waiver. No
amendment or modification of this Agreement shall be binding unless it is in
writing signed by the parties. The waiver by any party to this Agreement of
a
breach of any provision hereof by any other party shall not be construed as
a
waiver of any subsequent breach by any party.
(c) Entire
Agreement. This
Agreement represents the entire agreement between the parties regarding the
Employee's employment by the Company.
(d) Binding
Effect. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, the Parent and, to the extent expressly provided and permitted herein,
to their respective successors and assigns, and no other person shall acquire
or
have any right under or by virtue of this Agreement.
(e) Severability
of
Provisions. If
any
provision or any portion of any provision of this Agreement, or the application
of any such provision or any portion thereof to any person or circumstance,
shall be held invalid or unenforceable, the remaining portion of such provision
and the remaining provisions of this Agreement, and the application of such
provision or portion of such provision as is held invalid or unenforceable
to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be thereby affected.
(f) Arbitration
and
Attorneys Fees. Any
and
all disputes between the Employee and Company, or its Affiliates, agents,
employees or representatives, concerning this Agreement or the parties'
employment relationship, that cannot be resolved by negotiation between the
parties, shall be resolved by final and binding arbitration to be conducted
in
Boise, Idaho, according to Idaho law and the rules of the American Arbitration
Association then in effect. This agreement to arbitrate covers and includes,
without limitation, any claims concerning in any way the subject of the
Employee's employment, including but not limited to claims of discrimination
or
other claims under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, the
Employee Retirement Income Security Act, the Family and Medical Leave Act,
or
any other federal, state, or local law or regulation now in existence or
hereinafter enacted and as amended from time to time concerning in any way
the
subject of the Employee's employment. The arbitration provided for herein shall
be in lieu of any civil action, and any decision resulting from such arbitration
shall be final and binding, and enforceable by any competent court of law.
The
prevailing party in any such arbitration or court action to enforce arbitration
shall be entitled to recover his/her/its expenses, including attorneys'
fees.
(g) Affiliates. For
the
purposes of this Agreement, the term "affiliate" shall mean any entity
controlling, controlled by or under common control with the named
party.
(h) Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but of which taken together shall constitute one and the
same agreement.
__________________________________________
Xxxxxxx
X.
Xxxxxx
By:_________________________________________
Xxxxxx X. Xxxxxx, Chairman, President and
Chief
Executive
Officer