UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): April 13, 2018
 
BLUELINX HOLDINGS INC.
(Exact name of registrant specified in its charter)
 
Delaware
001-32383
77-0627356
(State or other
(Commission
(I.R.S. Employer
jurisdiction of
incorporation)
File Number)
Identification No.)
 
 
4300 Wildwood Parkway, Atlanta, Georgia
30339
(Address of principal executive offices)
(Zip Code)
 
Registrant’s telephone number, including area code: (770) 953-7000
 
Not applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o  
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o  
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o  
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o  
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐






Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Chief Operating Officer
On April 18, 2018, in connection with the previously disclosed acquisition (the “Cedar Creek Acquisition”) by BlueLinx Holdings Inc., a Delaware corporation (the “Company”), of Cedar Creek Holdings, Inc. (“Cedar Creek”), the Compensation Committee (the “Compensation Committee”) of the Board of Directors of the Company (the “Board”) appointed Alex Averitt to the position of Chief Operating Officer, effective April 16, 2018.
Mr. Averitt, age 41, was President and CEO of Cedar Creek from September 2017 until the Cedar Creek Acquisition. Prior to becoming President and CEO of Cedar Creek, beginning in 2015, Mr. Averitt served as Cedar Creek’s Chief Operating Officer. He joined Cedar Creek in 2005 as a sales manager and fulfilled various roles for the company, including Vice President of IT.  Prior to working for Cedar Creek, Alex gained experience as a general manager of both distribution and manufacturing operations for JELD-WEN Inc.
There are no arrangements or understandings between Mr. Averitt and any other persons pursuant to which he was selected as an officer of the Company, nor are there any family relationships between Mr. Averitt and any of the Company's directors or executive officers. Additionally, there are no transactions involving Mr. Averitt that are required to be disclosed pursuant to Item 404(a) of Regulation S-K.
In connection with his appointment as Chief Operating Officer, Mr. Averitt and the Company entered into an employment agreement, effective as of April 16, 2018 (the “Employment Agreement”). The Employment Agreement has an initial term of one year. The term will automatically renew for consecutive one-year periods, unless the Company provides Mr. Averitt with notice of non-renewal at least 90 days prior to the applicable expiration date.
The Employment Agreement provides that the Company will pay Mr. Averitt an annual base salary of $500,000, subject to increase at the discretion of the Company. Mr. Averitt shall also be eligible to receive an annual bonus pursuant to the terms of BlueLinx’s Short-Term Incentive Plan (“STIP”), with the annual bonus potential to be a target of 80% of his base salary, based upon satisfaction of performance goals and bonus criteria to be defined and approved by the Compensation Committee in advance for each fiscal year. The Employment Agreement provides that Mr. Averitt is eligible to participate in all benefit programs for which senior executives are generally eligible, including the Company’s long-term incentive plans, and that for the 12-month period beginning July 2018, the value of his awards under the long-term incentive plans, as determined by the Company, will be equal to at least 50% of Mr. Averitt’s annual base salary. Pursuant to the Employment Agreement, Mr. Averitt is also entitled to receive $40,000 for relocation expenses.
If Mr. Averitt’s employment is terminated without “cause” or he resigns for “good reason,” each as described in the Employment Agreement, Mr. Averitt will be entitled to, among other things: (i) payment of his annual base salary in effect immediately prior to the date of termination for a period of one year following termination (the “Severance Pay”), (ii) payment of a pro-rata portion of his annual target bonus for the performance year in which the termination occurs, (iii) in the event that termination occurs on or before April 1, 2020, $2.0 million minus all compensation Mr. Averitt has received from the Company since April 16, 2018 (including any and all annual base salary, bonuses, the gross value of long-term incentive awards and severance benefits), and (iv) continued participation in the Company’s medical and dental plans for a period of one year following termination, in each case, subject to Mr. Averitt timely executing a release of claims in favor of the Company.
Under the Employment Agreement, in the event Mr. Averitt’s employment is terminated in connection with a change in control of the Company, Mr. Averitt will also be entitled to receive what he would have received if his employment were terminated without “cause” or resigned for “good reason”, except that (i) his Severance Pay would be a payment equal to two times his annual base salary in effect immediately prior to the date of termination, (ii) he would be entitled to participate in the Company’s medical and dental plans for a period of eighteen months following termination and (iii) all unvested time-vested awards (whether to be settled in cash or stock) will automatically vest and become non-forfeitable, in each case, subject to Mr. Averitt timely executing a release of claims in favor of the Company.
The Employment Agreement also contains customary confidentiality and non-solicitation provisions, as well as a covenant not to compete during the employment term and continuing for a period of two years following the termination of Mr. Averitt’s employment for any reason.





The foregoing is a summary description of the Employment Agreement and does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Employment Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Integration Incentive Plan
On April 18, 2018, in connection with the Cedar Creek Acquisition, the Compensation Committee approved the BlueLinx Corporation Integration Incentive Plan (the “Plan”). Pursuant to the Plan, certain employees of the Company may be eligible to receive cash bonuses based on the achievement of certain integration synergy targets relating to the integration of the Cedar Creek operations, as will be specified in each such Plan participant’s participation agreement (each such agreement, a “Participation Agreement”), during the performance period. The performance period for the Plan commenced on April 16, 2018 and will end on October 16, 2019. There are two possible tranches of cash bonuses payable under the Plan: a base integration bonus and a supplemental integration bonus, each of which will be payable based on separate, specified integration synergy targets set forth in the applicable Participation Agreement.
Pursuant to the Plan, any base integration bonus will be paid in two installments with 50% paid within sixty (60) days after the fiscal month end in which the initial integration performance target is met, and the second 50% installment paid six (6) months following the fiscal month end in which the initial integration performance target is met, but in any event no later than April 30, 2020. In addition, any supplemental integration bonus will be determined within a reasonable time after the expiration of the performance period and paid on or before March 15, 2020. Unless specified otherwise in a Participation Agreement, a Plan participant must be employed by the Company at the time of the payment of any bonus pursuant to the Plan in order to receive such bonus. In addition, no bonus will be paid unless and until the Company achieves a threshold level of adjusted EBITDA as determined by the Committee, and if such threshold level of adjusted EBITDA is not achieved prior to October 16, 2019, no bonus will be payable under the Plan.
Mr. Shyam K. Reddy, the Company’s Chief Transformation Officer and a named executive officer, will be eligible to participate in the Plan.
The foregoing is a summary description of the Plan and Participation Agreement and does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Plan and a form of Participation Agreement, copies of which are attached hereto as Exhibits 10.2 and 10.3 and are incorporated herein by reference.
Item 9.01     Financial Statements and Exhibits

(d)        Exhibits








SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
BlueLinx Holdings Inc.
 
 
 
(Registrant)
 
 
 
 
 
Dated: April 19, 2018
By:
/s/ Shyam K. Reddy
 
 
 
Shyam K. Reddy
 
 
 
Chief Transformation Officer, General Counsel, and Corporate Secretary

 


 
 




EXECUTION VERSION
EMPLOYMENT AGREEMENT
This Employment Agreement (this “ Agreement ”) is entered into as of April 19, 2018, to be effective as of the Effective Date (as defined herein), between BLUELINX CORPORATION, a Georgia corporation (the “ Company ”), Alex Averitt (“ Executive ”) and, as applicable, to BLUELINX HOLDINGS INC. (“ BHI ”).
RECITALS:
WHEREAS, the Executive agrees to provide services to BHI and the Company as their Chief Operating Officer, and BHI and the Company in return agree to provide certain compensation and benefits to Executive; and
WHEREAS, the Company and Executive mutually desire to memorialize the terms of Executive’s employment as Chief Operating Officer of BHI and the Company.
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 ”). For the purposes of this Agreement, the “ Effective Date ” shall be April 16, 2018.
3. Position and Duties .
(a) During the Employment Period, Executive shall serve as Chief Operating Officer of BHI and the Company and shall have the normal duties, responsibilities and authority of an executive serving in such position, subject to the power of the Chief Executive Officer of BHI to provide oversight and direction with respect to such duties, responsibilities and authority, either generally or in specific instances.
(b) Intentionally Omitted.
(c) 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 periods of illness or other incapacity) to the business and affairs of BHI and the Company 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. However, Executive may continue to serve as a member of the board of directors of the non-profit corporations on which he serves on the Effective Date and may become a member of the board of directors of any other non-profit corporations so long as doing so does not create a conflict of interest or interfere with his ability to execute his responsibilities hereunder.
(d) Executive shall perform Executive’s duties and responsibilities from the Company’s headquarters office in the Atlanta, Georgia metropolitan area (the “ Principal Office ”).
(e) Executive as the Chief Operating Officer of BHI shall report to the Chief Executive Officer of BHI.



4. Compensation and Benefits .
(a) Salary . The Company agrees to pay Executive a salary during the Employment Period in installments (no less frequently than monthly) 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 $500,000 (less applicable withholding and other customary payroll deductions) per year (“ Base Salary ”). The Base Salary may be increased at the sole discretion of the Compensation Committee of BHI’s Board of Directors, but there will not be any decrease in Executive’s Base Salary.
(b) Moving Allowance . Executive will receive $40,000, less applicable payroll deductions, to defray his relocation expenses, immediately following Executive’s moving his residence to the Atlanta, Georgia Metropolitan Area, as long as such move is completed by August 15, 2018.
(c) Annual Bonus . Executive shall be eligible to receive an annual bonus, with the annual bonus target to be 80% of his then Base Salary (i.e., 80% upon achievement of annual “target” performance goals), with the “target” based upon satisfaction of performance goals and bonus criteria to be defined and approved by the Compensation Committee of BHI’s Board of Directors 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, but in no event later than March 15 of the calendar year following the calendar year in which such bonus is earned.
(d) Long-Term Incentives . During the Employment Period, the Executive will be eligible to participate in long term incentive programs of the Company and BHI now or hereafter made available to similarly situated executives, in accordance with the provisions of the applicable plan, which may be amended from time to time, and as deemed appropriate by the Compensation Committee of BHI’s Board of Directors to be applicable to his position as the Chief Operating Officer. For the twelve-month period beginning July 2018, the value of the award grant, as determined by the Company, shall be equal to at least 50% of the Executive’s Base Salary.
(e) Equity Awards . Annual awards of equity and rights to receive equity or equity equivalents under the long-term incentive plans of BHI shall be determined in the discretion of the Compensation Committee of the Board of Directors of BHI and shall be governed by the terms of the applicable plan.
(f) Expense Reimbursement . The Company shall reimburse Executive for all reasonable and necessary 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.
(g) Vacation . Executive shall receive annual paid vacation in accordance with the Company’s vacation policy applicable to senior executives in the amount of four (4) weeks per year, prorated for partial years.
(h) Executive Benefits Package .
(i) 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 broad-based 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.
(ii) The Company and BHI will maintain customary and appropriate Directors and Officers Liability Coverage for Executive during his Employment Period and for the 6 year period immediately following his Employment Period, and will afford Executive the Indemnification set forth in the Amended and Restated Bylaws of BHI, as may be amended from time to time.

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(iii) The Company will provide to Executive (a) a car allowance of $750 per month, less applicable payroll deductions; and (b) reimbursement of training and professional dues as deemed appropriate by the Chief Executive Officer.
(i) Additional Compensation/Benefits . The Compensation Committee of BHI’s Board of Directors, with input from the Chief Executive Officer, will determine any compensation and benefits to be provided to Executive during the Employment Period by BHI or the Company in addition to the compensation and benefits set forth in this Agreement.
(j) 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, but only to the extent such compensation would not have been earned in accordance with such restated financials; and (ii) any profits realized by Executive from the improper or unlawful sale of BHI’s securities during that 12-month period.
5. Employment Period .
(a) Subject to Section 5(b), the Employment Period will commence on the Effective Date and will continue until, and will end upon, the first anniversary of the Effective Date (the “ Initial Term ”). The Employment Period shall automatically be extended for successive one year terms (each, a “ Renewal Term ”), unless the Company shall have given Executive written notice of non-extension at least ninety (90) calendar days prior to the expiration of the Initial Term or any Renewal Term.
(b) Notwithstanding Section 5(a), the Employment Period and Executive’s employment 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 (A) without Cause or (B) upon expiration of the Employment Period solely as a result of the Company’s non-renewal as provided in Section 5(a) (each, a “ Termination without Cause ”); (v) Executive’s termination of Executive’s employment for Good Reason (a “ Termination for Good Reason ”); (vi) Executive’s termination of Executive’s employment at any time for any reason other than Good Reason (a “ Voluntary Termination ”); or (vii) a Change in Control Termination.
(c) Any termination of Executive’s employment under Section 5(b) (other than Section 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 forty-five (45) calendar days after the date Executive first becomes aware of such event or circumstance.
6. Post-Employment Period Payments .
(a) Except as otherwise provided in Section 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 properly 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 thirty (30) calendar days of the Date of Termination, in accordance with the Reimbursement Rules, where applicable, (ii) any plan benefits accrued before the termination plus the coverage described in Section 4(g)(ii) plus any benefits that by their terms extend beyond termination of Executive’s employment (but only to the extent provided

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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 Section 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 or Disability, in addition to the payments contemplated in Section 6(a), the Company will pay Executive the compensation set forth in Section 6(c)(ii) below and will provide no further benefit and make no further payments to Executive except as contemplated in Section 6(a). If Executive’s employment terminates on account of Executive’s Voluntary Termination or Termination for Cause the Company will provide no further benefit and make no further payments to Executive except as contemplated in Section 6(a).
(c) If Executive’s employment terminates on account of a Termination without Cause or a Termination for Good Reason, neither of which qualifies as a Change in Control Termination, subject to Section 6(e) below, Executive shall in addition to the benefits and payments described in Section 6(a) be entitled to the following:
(i) The Company will pay Executive salary continuance at Executive’s regular base salary level of $500,000 (or any higher base salary level in effect on the Date of Termination), less applicable payroll deductions, for one year following the Date of Termination, through direct deposit to Executive’s currently designated bank account or any other bank account Executive may designate. These payments in the total gross amount of $500,000 (or any higher base salary level in effect at the time of Executive’s Date of Termination) shall be referred to herein as “Separation Pay.” Separation Pay will be paid on the Company’s normal payroll dates beginning on the first payroll date on or after the Date of Termination, provided that no amount will be paid until the first pay day following the Effective Date of this Agreement, at which time any missed payments will also be paid;
(ii) a pro-rata portion of Executive’s annual bonus as set forth in Section 4(c) for the performance year in which Executive’s termination occurs (the “ Pro-Rata Bonus Amount ”). The Pro-Rata Bonus Amount shall be determined by multiplying the amount Executive would have received based upon performance had employment continued through the end of the performance year and the performance criteria had been achieved at target by a fraction, the numerator of which is the number of days Executive was employed by the Company during the performance year and the denominator of which is the total number of days in the performance year. Subject to delay if required under Section 11(a), the Pro-Rata Bonus Amount shall be paid in a lump sum, less applicable payroll deductions, no later than thirty (30) days after the Date of Termination;
(iii) In the event a termination of employment under this Section 6(c) takes place on or before April 1, 2020, an amount equal to two million dollars ($2,000,000), which shall be reduced by the following compensation and benefits provided to Executive between the Effective Date and the Date of Termination: (1) Base Salary; (2) Annual Bonus; (3) Company’s payment of any matching contribution to Executive’s account in the Company’s 401(k) plan; (4) the value of any grants under the Company’s long-term incentive plans; (5) the value of any other equity awards granted to Executive; and (6) any Separation Pay, the Pro-Rata Bonus Amount or any other payments payable after the Date of Termination to Executive under Section 6 of this Agreement. The sum of $2 million, less the aggregate of the above six amounts, shall be paid on a pro rata basis at the end of each calendar month, beginning with the first month following the Date of Termination, through April 1, 2020, less applicable payroll deductions.
(iv) Intentionally omitted;
(v) 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 (1) Executive’s eligibility for any such coverage under another employer’s medical or dental insurance plans or (2) the date that is one (1) year after the Date of Termination; except that in the event that participation in any such plan permitted only by Executive electing continued participation through COBRA, then assuming Executive timely makes such an election under COBRA, the Company

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shall reimburse Executive on a monthly basis in accordance with the Reimbursement Rules for any COBRA premiums paid by Executive (for Executive and his dependents). Executive agrees that the period of coverage under such plans (or the period of reimbursement if participation is through COBRA) shall count against the plans’ obligation to provide continuation coverage pursuant to COBRA; and
(vi) 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 ”).
(d) If Executive’s employment is terminated on account of a Change in Control Termination, subject to Section 6(e) below, Executive shall be entitled to the payments and benefits described in Section 6(c) except that:
(i)
the payment called for in Section 6(c)(i) shall be equal to two (2) times the Executive’s annual Base Salary in effect immediately prior to the Date of Termination, less applicable payroll deductions;
(ii)
the time period described in Section 6(c)(v) shall be eighteen (18) months instead of one (1) year; and
(iii)
notwithstanding anything to the contrary in any equity award agreement or plan, all unvested time-vested awards (whether to be settled in cash or stock) shall automatically vest and become non-forfeitable as of the date the Release Agreement becomes irrevocable.
(e) The Company shall have no obligation to make any of the payments, or deliver any of the benefits, in accordance with Section 6(c) (other than clause (vi) therein) or Section 6(d) if (i) Executive does not move his primary residence to the Atlanta, Georgia Metropolitan Area on or before August 15, 2018 or (ii) Executive declines to sign and return a Separation Agreement, or revokes the Separation Agreement or the Separation Agreement does not become effective, within the sixty (60) calendar days after the Date of Termination. Notwithstanding any other provision of this Agreement, any payments to be made, or benefits to be delivered, under this Agreement (other than the payments required to be made by the Company pursuant to Sections 6(a) and 6(c)(vi)) prior to Executive’s execution of the Separation Agreement and the expiration of the applicable revocation period, without Executive having elected to revoke same, within the 60-day period after the Date of Termination, shall be accumulated and paid in a lump sum or delivered after Executive’s execution of the Separation Agreement and the expiration of the applicable revocation period, without Executive having elected to revoke same, on the sixtieth (60 th ) day after the Date of Termination (except that, if such 60-day period spans more than one (1) calendar year, and the payments or benefits constitute deferred compensation subject to Section 409A, the payments shall be paid, and the benefits delivered, in the subsequent calendar year).

(f) Executive is not required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise, and employment of Executive after Termination shall not reduce any payment or benefit provided for in this Agreement, except as described in Section 6(c)(v).

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 Group all Confidential Information and Trade Secrets. During and following his employment, 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, use, communicate or divulge Confidential Information other than as necessary to perform his duties for the Company. If the Confidential Information is deemed a trade secret under Georgia law, then the period for nondisclosure shall continue for the applicable period under Georgia Trade Secret laws in effect at the time of Executive’s termination. In addition, except as necessary to perform his duties for the Company, during Executive’s employment and thereafter for the applicable period under the Georgia Trade Secret laws in effect at the time of Executive’s termination, Executive will

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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 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. Pursuant to the Defend Trade Secrets Act of 2016, Executive understands that: (i) An individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding; and (ii) f urther, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer’s trade secrets to the attorney and use the trade secret information in the court proceeding if the individual: (a) files any document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.
(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 in the course of his duties 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 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 the Company, BHI or any of their respective subsidiaries and affiliates with respect to any invention which is not patented or which is not listed.
(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 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, including such information located on Executive’s personal mobile phone, tablet, or laptop computer. 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.
(v) This Section 7(a) is not intended to restrict or limit any of the protected rights contained in Section 20 of this Agreement in any way.
(b) Non-Solicitation of Protected Customers . Executive understands and agrees that the relationship between the Company Group and each of its Protected Customers constitutes a valuable asset of the Company Group and may not be converted to Executive’s own use. Executive hereby agrees that, during his employment with the Company and for a period of two (2) years following the termination of the Executive’s employment for any reason, the Executive shall not, directly or indirectly, on Executive’s own behalf or as a Principal or Representative of any other Person, solicit, divert, take away, or attempt to solicit, divert, or take away a Protected Customer with which

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the Executive had contact while employed with the Company for the purpose of marketing, selling or providing to the Protected Customer any goods or services substantially similar to the goods or services provided by the Company Group.
(c) Non-Solicitation of Employees . Executive understands and agrees that the relationship between the Company Group and each of its Protected Employees constitutes a valuable asset of the Company Group and may not be converted to Executive’s own use. Executive hereby agrees that, during his employment and for a period of two (2) years following the termination of Executive’s employment for any reason, the Executive shall not, directly or indirectly, on Executive’s own behalf or as a Principal or Representative of any other Person, solicit or induce, or attempt to solicit or induce, any Protected Employee to terminate his employment with the Company Group or, for a period of no more than six (6) months after the Protected Employee is no longer employed by any member of the Company Group, to enter into employment with any other Person that is in competition with the Company Group.
(d) Non-Competition . During Executive’s employment and, if the Executive is terminated for any reason hereunder for a period of two (2) years following the termination of the Executive’s employment (the “Restricted Period”), Executive shall not render services substantially the same as the services rendered by Executive to the Company Group to any Person that engages in or owns, invests in any material respect, operates, manages or controls any venture or enterprise which substantially engages or proposes to substantially engage in Competitive Services in the Restricted Territory. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to prohibit the ownership by Executive of not more than five percent (5%) of any class of securities of any corporation having a class of securities registered pursuant to the Securities Exchange Act of 1934, as amended.
(e) Remedies: Specific Performance . The parties acknowledge and agree that the Executive’s breach of any of the restrictions set forth in this Section 7 will result in irreparable and continuing damage to the Company Group for which there may be no adequate remedy at law. The parties further agree and acknowledge that the Company, and each member of the Company Group, as applicable, shall be entitled to equitable relief, including specific performance and injunctive relief, as a remedy for any such breach and shall not be required to post bond in connection with obtaining such relief. Such equitable remedies shall be in addition to any and all remedies, including damages, available to the Company, or any member of the Company Group, as applicable, for such breaches by Executive. In addition, without limiting any of the foregoing remedies, and except as otherwise required by law, Executive shall not be entitled to any payments set forth in Section 6 hereof and shall be obligated to repay to the Company the after tax amount of any payments previously made pursuant to Section 6(b), (c) or (d) hereof if Executive commits a Material Breach of any of the covenants set forth in this Section 7 and fails to remedy or cure such Material Breach within fifteen (15) business days after his receipt of written notice thereof from the Company. Subject to and without waiver of Executive’s other rights and remedies, if BHI or the Company or any other member of the Company Group breaches its obligations to Executive under Section 4 or Section 6 or the covenant set forth in Section 7(h), the other covenants set forth in this Section 7 shall have no further force or effect.
(f) Communication of Section 7 Obligations . During Executive’s employment and for one (1) year thereafter, Executive will communicate his obligations under this Section 7 to any person, firm, association, partnership, corporation or other entity with which Executive accepts employment or is considering an offer of employment.
(g) No Limitation .     The Company’s rights under this Section 7 are in addition to, and not in lieu of, all other rights the Company may have at law or in equity to protect its confidential information, trade secrets and other proprietary interests.
8.     Definitions .
(a)    “ Cause ” means:
(i) Executive’s Material Breach of the duties and responsibilities of Executive or of any provision of this Agreement, provided, however , that Executive’s engagement in activities prohibited by Section 7 shall constitute Cause regardless of whether such engagement constitutes a Material Breach;

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(ii) Executive’s (x) conviction of a felony or (y) conviction of any misdemeanor involving willful misconduct (other than minor violations such as traffic violations) if such misdemeanor causes or is likely to cause material damage to the property, business, or reputation of BHI or the Company or their respective subsidiaries and affiliates;
(iii) acts of dishonesty by Executive resulting or intending to result in personal gain or enrichment at the expense of the Company, BHI or their respective subsidiaries and affiliates;
(iv) conduct by Executive in connection with his duties hereunder that is fraudulent, unlawful, or willful, and is also materially injurious to the Company, BHI, or their respective subsidiaries and affiliates;
(v) Executive’s failure to cooperate fully, or failure to direct the persons subject to Executive’s management or direction to cooperate fully, with all corporate investigations or independent investigations by the Company, BHI or the BHI Board of Directors, all governmental investigations of the Company or its subsidiaries and affiliates, and all orders involving Executive or the Company (or its subsidiaries and affiliates) entered by a court of competent jurisdiction; or
(vi) Executive’s material violation of BHI’s Code of Conduct (including as applicable to executive officers), or any successor codes.
Notwithstanding the foregoing, no termination of the Executive’s employment shall be for Cause until (A) there shall have been delivered to the Executive a copy of a written notice setting forth the basis for such termination in reasonable detail (the “Cause Notice”) no later than forty-five (45) days after the Company first becomes aware of the facts allegedly constituting Cause, and (B) the Executive shall have been provided an opportunity to be heard in person by BHI’s Board of Directors (with the assistance of the Executive’s counsel if the Executive so desires) following receipt of the Cause Notice. No act, or failure to act, on the Executive’s part shall be considered “willful” unless the Executive has acted or failed to act with a lack of good faith and with a lack of reasonable belief that the Executive’s action or failure to act was in the best interests of the Company, BHI, or their respective subsidiaries and affiliates. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by BHI’s Board of Directors or the Board of Directors of the Company or based upon the advice of counsel for BHI or the Company shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of BHI and the Company. Any termination of the Executive’s employment by BHI or the Company under this Agreement shall be deemed to be a termination other than for Cause unless it meets all requirements of this Section 8(a). The Company may not rely on any evidence allegedly supporting “Cause” unless such evidence is disclosed to Executive in the Cause Notice. In addition, if a court of competent jurisdiction later determines that the reason(s) set forth by the Company in the Cause Notice are improper or otherwise do not meet the definition of Cause set forth in this Section 8(a), the damages to which Executive will be entitled shall be equal to the amounts that would have been paid to Executive had Executive been terminated by the Company without Cause, plus reasonable attorneys’ fees, costs, expenses, and prejudgment interest; provided, however, if a court of competent jurisdiction determines that the reason(s) set forth by the Company in the Cause Notice are proper or otherwise meet the definition of Cause set forth in this Section 8(a), Executive shall reimburse the Company for reasonable attorneys’ fees, costs and expenses incurred by the Company in connection with such lawsuit. Finally, Executive shall have thirty (30) calendar days following receipt of the Cause Notice to address and “cure” any act or omission which might provide the basis for a termination for “Cause” and, if cured within such 30-day period, such acts or omissions shall not provide the basis for a termination for “Cause”. Notwithstanding anything in this Section 8(a) to the contrary, in the event the Company is precluded from providing the Cause Notice due to applicable law or regulation, or an ongoing internal investigation that would be compromised by providing the Cause Notice, the Company shall provide the Cause Notice within ten (10) business days after such impediment to providing the Cause Notice no longer exists.
(b)    “ Change in Control ” means any of the following events:
(i) The acquisition by any individual, entity, or group (a “Person”), including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of forty (40%) or more of either: (i) the then outstanding

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shares of common stock of BHI (the “Outstanding BHI Common Stock”), or (ii) the combined voting power of the then outstanding securities of BHI entitled to vote generally in the election of directors (the “Outstanding BHI Voting Securities”); excluding, however, the following: (A) any acquisition directly from BHI (excluding any acquisition resulting from the exercise of an exercise, conversion, or exchange privilege unless the security being so exercised, converted, or exchanged was acquired directly from BHI); (B) any acquisition by BHI; (C) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by BHI or any corporation controlled by BHI; or (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (x), (y), and (z) of Section 8(b)(iii);
(ii) Individuals who, as of the Effective Date, constitute the Board of Directors of BHI (the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided that any individual who becomes a director of BHI subsequent to the Effective Date whose election, or nomination for election by BHI’ s stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of the Incumbent Board; and provided further, that any individual who was initially elected as a director of BHI as a result of an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board of Directors of BHI shall not be deemed a member of the Incumbent Board;
(iii) Consummation of a reorganization, merger, or consolidation of BHI or sale or other disposition of all or substantially all of the assets of BHI (a “Corporate Transaction”); excluding, however, a Corporate Transaction pursuant to which: (x) all or substantially all of the individuals or entities who are the beneficial owners, respectively, of the Outstanding BHI Common Stock and the Outstanding BHI Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than sixty percent (60%) of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns BHI or all or substantially all of BHI’s assets either directly or indirectly) in substantially the same proportions relative to each other as their ownership, immediately prior to such Corporate Transaction, of the Outstanding BHI Common Stock and the Outstanding BHI Voting Securities, as the case may be; (y) no Person (other than BHI; any employee benefit plan (or related trust) sponsored or maintained by BHI or any corporation controlled by BHI; the corporation resulting from such Corporate Transaction; and any Person which beneficially owned, immediately prior to such Corporate Transaction, directly or indirectly, thirty percent (30%) or more of the Outstanding BHI Common Stock or the Outstanding BHI Voting Securities, as the case may be) will beneficially own, directly or indirectly, thirty percent (30%) or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors; and (z) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or
(iv) Approval by the stockholders of BHI of a plan of complete liquidation or dissolution of BHI.
(c)    “ Change in Control Termination ” means termination of Executive’s employment by the Company as a result of a Termination without Cause or by Executive as a result of a Termination for Good Reason either within (i) twenty-four (24) calendar months following a Change in Control or (ii) prior to a Change in Control if Executive’s termination was either a condition of the Change in Control or was at the request or insistence of a Person (other than BHI or the Company) related to the Change in Control.
(d)    “ Code ” means the Internal Revenue Code of 1986, as amended.
(e)    “ Company Group ” means the Company, BHI, and each of their respective wholly-owned subsidiaries and affiliates.

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(f)    “ Competitive Services ” means selling, marketing, manufacturing or distributing products and/or services that are substantially similar to any of those sold, marketed, distributed, furnished or supplied by the Company during the term of Executive’s employment with the Company.
(g)    “ Confidential Information ” means knowledge or data relating to the Company Group that is not generally known to persons not employed or otherwise engaged by the Company Group, is not generally disclosed by the Company Group, and is the subject of reasonable efforts to keep it confidential. Confidential Information includes, but is not limited to, information regarding product or service cost or pricing, information regarding personnel allocation or organizational structure, information regarding the business operations or financial performance of the Company Group, sales and marketing plans, and strategic initiatives (independent or collaborative), information regarding existing or proposed methods of operation, current and future development and expansion or contraction plans, sale/acquisition plans and non-public information concerning the legal or financial affairs of the Company Group. Confidential Information does not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of the Company Group. This definition is not intended to limit any definition of confidential information or any equivalent term under applicable federal, state or local law.
(h)    “ Date of Termination ” means (i) if Executive’s employment is terminated by the Company for Disability, thirty (30) calendar days after the Company gives Notice of Termination to Executive (provided that Executive has not returned to the performance of Executive’s duties on a full-time basis during this 30-day period), (ii) if Executive’s employment is terminated by Executive for Good Reason, the date specified in the Notice of Termination (but in no event prior to thirty (30) calendar days following the delivery of the Notice of Termination or more than sixty (60) calendar days following the delivery of the Notice of Termination), (iii) if Executive’s employment is terminated by Executive for any reason other than Good Reason, the date on which a Notice of Termination is given to the Company; and (iv) if Executive’s employment is terminated by the Company for any other reason, the date on which a Notice of Termination is given (except as a result of non-renewal by the Company as provided in Section 5(a), in which event the Date of Termination will be the date of the expiration of the Initial Term or the Renewal Term, as applicable). A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A of the Code (“Section 409A”) upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A.
(i)    “ Disability ” means the determination (1) by the Company, in accordance with applicable law, based on information provided by a physician selected by the Company or its insurers and reasonably acceptable to Executive or Executive’s legal representative that, as a result of a physical or mental injury or illness, Executive has been unable to perform the essential functions of his job with or without reasonable accommodation for a period of (i) ninety (90) consecutive calendar days or (ii) one hundred eighty (180) calendar days in any one-year period or (2) that Executive is currently eligible to receive long-term disability benefits under the long-term disability plan maintained by BHI or the Company in which Executive is a participant. Notwithstanding the foregoing, in the event that as a result of absence because of mental or physical incapacity the Executive incurs a “separation from service” within the meaning of the term under Section 409A, the Executive shall on such date automatically be terminated from employment because of Disability.
(j)    “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.
(k)    “ Good Reason ” means, without the consent of Executive, (A) any material diminution in Executive’s authority, duties or responsibilities that is caused by the Company; (B) a material reduction by the Company of Executive’s Base Salary or the target bonus percentage as set forth in Section 4(c)(i) herein; (C) the Company’s requiring Executive to be based at any office or location which is a material change in geographic location from the Principal Office as described in Section 3(d); or (D) any material violation or non-performance by BHI or the Company of the terms of this Agreement, which shall include the Company knowingly requiring Executive to perform any act or omit to perform any act, the performance or omission to perform would constitute a violation of law. Notwithstanding the foregoing, “Good Reason” shall not be deemed to exist for purposes of (A) through (D) if the event or circumstance

10


that constitutes “Good Reason” is rescinded or remedied by BHI or the Company to the reasonable satisfaction of Executive within thirty (30) days after receipt of a Notice of Termination.
(l)    “ Material Breach ” means an intentional act or omission by Executive which constitutes substantial non-performance of Executive’s obligations under this Agreement and causes material damage to the Company.
(m)    “ Notice of Termination ” means a written notice that indicates those specific termination provisions in this Agreement relied upon and that sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated. For purposes of this Agreement, no purported termination by either party is to be effective without a Notice of Termination.
(n)    “ Person ” means: any individual or any corporation, partnership, joint venture, limited liability company, association or other entity or enterprise.
(o)    “ Principal or Representative ” means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative or consultant.
(p)    “ Protected Customers ” means any then-existing customer to whom the Company Group sold its products or services at any time during Executive’s employment and with respect to whom Executive either (i) had business dealings on behalf of the Company Group; or (ii) supervised or coordinated the dealings between the Company Group and the customer.
(q)    “ Protected Employees ” means any employee of the Company Group who was employed during Executive’s employment and with whom Executive either (i) had a direct or indirect supervisory relationship; or (ii) worked or communicated on a regular basis regarding the Company Group’s business.
(r)    “ Reimbursement Rules ” means the requirement that any amount of expenses eligible for reimbursement under this Agreement be made (i) in accordance with the reimbursement payment date set forth in the applicable provision of the Agreement providing for the reimbursement or (ii) where the applicable provision does not provide for a reimbursement date, thirty (30) calendar days following the date on which Executive incurs the expense, but, in each case, no later than December 31 of the year following the year in which the Executive incurs the related expenses; provided, that in no event shall the reimbursements or in-kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor shall the Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.
(s)    “ Restricted Territory ” means continental United States of America.
(t)     “ Separation Agreement ” means a separation agreement in which the Company and Executive describe their obligations, as provided in this Agreement, to each other following Executive’s departure from the Company and which includes, without limitation, an agreement by Executive not to disparage, and a release by the Executive of claims against, the Company, its subsidiaries and affiliates, and their officers and directors, and such other terms to which Executive and Company agree.
(u)     “ Trade Secrets ” means all secret, proprietary or confidential information regarding the Company, BHI or any of their respective subsidiaries and affiliates or that meets the definition of “trade secrets” within the meaning set forth in O.C.G.A. § 10-1-761.
9. Executive Representations . Executive represents to the Company that (a) the execution, delivery and performance of this Agreement by Executive does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Executive is a party or by which Executive is bound and (b) upon the execution and delivery of this Agreement by the Company, this Agreement will be the valid and binding obligation of Executive, enforceable in accordance with its terms.

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10. Withholding of Taxes . The Company shall withhold from any amounts payable under this Agreement all federal, state, city or other taxes that the Company is required to withhold under any applicable law, regulation or ruling.
11. Section 409A .
(a) Notwithstanding any provisions of this Agreement to the contrary, if the Executive is a “specified employee” (within the meaning of Section 409A and determined pursuant to procedures adopted by the Company) at the time of his separation from service (within the meaning of Section 409A) and if any portion of the payments or benefits to be received by the Executive upon separation from service would be considered deferred compensation under Section 409A (that does not qualify for an exemption from Section 409A), any such deferred compensation amounts that would otherwise be payable pursuant to this Agreement during the six-month period immediately following the Executive’s separation from service (the “ Delayed Payments ”) and any such benefits that would be deferred compensation and that would otherwise be provided pursuant to this Agreement (the “ Delayed Benefits ”) during the six-month period immediately following the Executive’s separation from service (such period, the “ Delay Period ”) shall instead be paid or made available on the earlier of (i) the first business day following the six-month anniversary of the date of the Executive’s separation from service or (ii) Executive’s death (the applicable date, the “ Permissible Payment Date ”). The Company shall also reimburse the Executive for the after-tax cost incurred by the Executive in independently obtaining any Delayed Benefits in accordance with the Reimbursement Rules (the “ Additional Delayed Payments ”).
(b) With respect to any amount of expenses eligible for reimbursement under Section 6(a), such expenses shall be reimbursed by the Company within thirty (30) calendar days following the date on which the Company receives the applicable invoice from the Executive but in no event later than December 31 of the year following the year in which the Executive incurs the related expenses; provided, that with respect to reimbursement relating to the Additional Delayed Payments, such reimbursement shall be made on the Permissible Payment Date. In no event shall the reimbursements or in-kind benefits to be provided by the Company in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor shall the Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.
(c) Each payment under this Agreement shall be considered a “separate payment” and not of a series of payments for purposes of Section 409A.
(d) Any Delayed Payments shall bear interest at the United States 5-year Treasury Rate plus 2%, which accumulated interest shall be paid to the Executive on the Permissible Payment Date.
12. Excess Parachute Payments .
(a) In the event that it shall be determined, based upon the advice of the independent public accountants for BHI or the Company (the “ Accountants ”), that any payment, benefit or distribution by the Company, BHI or any of their respective subsidiaries or affiliates (a “ Payment ”) constitute “parachute payments” under Section 280G(b)(2) of the Code, as amended, then, if the aggregate present value of all such Payments (collectively, the “ Parachute Amount ”) exceeds 2.99 times the Executive’s “base amount”, as defined in Section 280G(h)(3) of the Code (the “Executive Base Amount”), the amounts constituting “parachute payments” which would otherwise be payable to or for the benefit of Executive shall be reduced to the extent necessary so that the Parachute Amount is equal to 2.99 times the Executive Base Amount (the “Reduced Amount”); provided that such amounts shall not be so reduced if the Executive determines, based upon the advice of the Accountants, that without such reduction Executive would be entitled to receive and retain, on a net after tax basis (including, without limitation, any excise taxes payable under Section 4999 of the Code), an amount which is greater than the amount, on a net after tax basis, that the Executive would be entitled to retain upon his receipt of the Reduced Amount.
(b) If the determination made pursuant to clause (a) of this Section 12 results in a reduction of the payments that would otherwise be paid to Executive except for the application of clause (a) of this Section 12, each particular entitlement of Executive shall be eliminated or reduced as follows: (i) first all cash payments, pro rata; and

12


then (ii) all remaining benefits, pro rata. Within any of these categories, a reduction shall occur first with respect to amounts that are not deemed to constitute a “deferral of compensation” within the meaning of and subject to Code Section 409A (“ Nonqualified Deferred Compensation ”) and then with respect to amounts that are treated as Nonqualified Deferred Compensation, with such reduction being applied in each case to the payments in the reverse order in which they would otherwise be made, that is, later payments shall be reduced before earlier payments.
(c) As a result of the uncertainty in the application of Section 280G of the Code at the time of a determination hereunder, it is possible that payments will be made by the Company which should not have been made under clause (a) of this Section 12 (“ Overpayment ”) or that additional payments which are not made by the Company pursuant to clause (a) of this Section 12 should have been made (“ Underpayment ”). In the event that there is a final determination by the Internal Revenue Service, or a final determination by a court of competent jurisdiction, that an Overpayment has been made and that repayment will eliminate any excise tax otherwise due under Section 4999 of the Code, any such Overpayment shall be repaid by Executive to the Company together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code. In the event that there is a final determination by the Internal Revenue Service, a final determination by a court of competent jurisdiction or a change in the provisions of the Code or regulations pursuant to which an Underpayment arises, any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive, together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code.
13. Successors and Assigns . This Agreement is to bind and inure to the benefit of and be enforceable by Executive, the Company and their respective heirs, executors, personal representatives, successors and assigns, except that neither party may assign any rights or delegate any obligations hereunder without the prior written consent of the other party. Executive hereby consents to the assignment by the Company of all of its rights and obligations under this Agreement to any successor to the Company by merger or consolidation or purchase of all or substantially all of the Company’s assets, provided that the transferee or successor assumes the Company’s liabilities under this Agreement by agreement in form and substance reasonably satisfactory to Executive.
14. Survival . Subject to any limits on applicability contained therein, Section 7 will survive and continue in full force in accordance with its terms notwithstanding any termination of the Employment Period.
15. Choice of Law . This Agreement is to be governed by the internal law, and not the laws of conflicts, of the State of Georgia.
16. Severability . Whenever possible, each provision of this Agreement is to be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, that invalidity, illegality or unenforceability is not to affect any other provision or any other jurisdiction, and this Agreement is to be reformed, construed and enforced in the jurisdiction as if the invalid, illegal or unenforceable provision had never been contained herein.
17. Notices . Any notice provided for in this Agreement is to be in writing and is to be either personally delivered, sent by reputable overnight carrier or mailed by first class mail, return receipt requested, to the recipient at the address indicated as follows:
Notices to Executive:
To the address listed in the personnel records of the Company.

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Notices to the Company:
BlueLinx Corporation
4300 Wildwood Parkway
Atlanta, Georgia 30339
Attention: Legal Department
Facsimile: (770) 953-7008
or any other address or to the attention of any other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement is to be deemed to have been given when so delivered, sent or mailed.
18. Amendment and Waiver . The provisions of this Agreement may be amended or waived only with the prior written consent of the Company and Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement is to affect the validity, binding effect or enforceability of this Agreement.
19. Complete Agreement . This Agreement embodies the complete agreement and understanding between the parties with respect to the subject matter hereof and effective as of its date supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, that may have related to the subject matter hereof in any way, including, but not limited to the Employment and Restrictive Covenant Agreement, dated as of August 23, 2016 among Cedar Creek LLC, a Delaware limited liability company, and Cedar Creek Corp, a Delaware corporation, and Alex Averitt, and any other prior agreements with respect to Executive’s employment or termination of employment with the Company or with a subsidiary of the Company.
20. Protected Rights . Executive understands that nothing contained in this Agreement limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“ Government Agencies ”). Executive further understands that this Agreement does not limit Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agencies, nor does this Agreement impact or limit Executive’s eligibility to receive an award for information provided to any Government Agencies.
21. Counterparts . This Agreement may be executed in separate counterparts, each of which is to be deemed to be an original and all of which taken together are to constitute one and the same agreement.


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The parties are signing this Agreement as of the date first set forth above, to be effective as of the Effective Date.
BLUELINX CORPORATION

By:                             
Name:    Mitchell B. Lewis
Title:
Chief Executive Officer and President

EXECUTIVE

                            
Alex Averitt
BLUELINX HOLDINGS INC.

By:                             
Name:    Mitchell B. Lewis
Title:
Chief Executive Officer and President


LIST OF UNPATENTED INVENTIONS
Executive represents that he has no such inventions by initialing below next to the word “NONE.”
NONE:         


15

BLUELINX CORPORATION
INTEGRATION INCENTIVE PLAN
APRIL 20, 2018

SECTION 1. BONUS PLAN
1.1      Purpose. The purpose of the BlueLinx Corporation Integration Incentive Plan, as may be amended from time to time (the “Plan”), is to align the interests of certain key employees of the Company (as defined below) with the Company’s integration objectives arising out of the Company’s acquisition of Cedar Creek Holdings, Inc.
Effective Date. The Plan is effective as of April 20, 2018.
SECTION 2. DEFINITIONS AND TERMS
2.1      Accounting Terms. Except as otherwise expressly provided or the context otherwise requires, financial and accounting terms are used as defined for purposes of, and shall be determined in accordance with, the Company’s GAAP accounting principles, as from time to time in effect, as applied and reflected in the consolidated financial statements of the Company, prepared in the ordinary course of business.
2.2      Specific Terms. The following words and phrases as used herein shall have the following meanings.
Adjusted EBITDA ” means the Parent Company’s consolidated adjusted EBITDA, excluding any extraordinary gain or loss and any unusual or non-recurring charges (i.e., severance, relocation costs, one-time compensation charges (other than payments in connection with this Plan or other integration bonus plans) costs related to closure of facilities and restructuring charges or reserves) as may be equitably adjusted and certified by the Committee in its sole and absolute discretion.
Base Integration Bonus ” means the bonus earned as a result of the attainment of the Initial Integration Performance Target set forth in a Participant’s Participation Agreement to the extent the attainment occurs during the Integration Performance Period.
Base Salary ” means a Participant’s base salary at the annual rate in effect as of June 1, 2018.
Bonus ” means the Base Integration Bonus, the Supplemental Integration Bonus or both.
Committee ” means the compensation committee of the Parent Company’s Board of Directors.
Company ” means BlueLinx Corporation, and its direct and indirect subsidiaries, and any successor, whether by merger, ownership of all or substantially all of its assets, or otherwise.
Cost To Achieve Synergies means the one-time [or limited time] costs associated with the Integration that are required to realize the Net Synergies.
Initial Integration Performance Target ” means the initial integration synergy target as set forth in a Participant’s Participation Agreement.
Integration shall mean the combination of the Company and Cedar Creek business operations.
Integration Performance Period ” means the period commencing on April 16, 2018 and ending on October 16, 2019.
Minimum LTM Adjusted EBITDA ” means the minimum Adjusted EBITDA for the twelve-month period ending the last day of the fiscal month immediately prior to the date a Bonus is to be paid.

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Net Synergies means the amount of net cost savings attributable to Integration that can be projected to occur over the twelve-month fiscal period following any fiscal month. Annual cost savings will be offset by any annual cost increases associated with the Integration.
Parent Company means BlueLinx Holdings Inc.
Participant ” means an employee of the Company or its subsidiaries, as applicable, who has been selected by the Committee to participate in the Plan and who has entered into a Participation Agreement.
Participation Agreement means the agreement between the Company and a Participant evidencing the terms of such Participant’s participation in the Plan
Plan has the meaning set forth in Section 1.1.
Section 409A ” shall have the meaning set forth in Section 7.
Supplemental Integration Bonus ” means the bonus earned as a result of the attainment of the Supplemental Integration Performance Target set forth in a Participant’s Participation Agreement to the extent the attainment occurs during the Integration Performance Period.
Supplemental Integration Performance Target ” means the supplemental integration synergies that are achieved by the end of the Integration Performance Period as set forth in a Participant’s Participation Agreement.
SECTION 3. ADMINISTRATION OF THE PLAN
3.1      Administration. The Plan shall be administered by the Committee. The Committee shall have the sole authority to select Participants, establish and administer targets for Net Synergies as they relate to payment of a Bonus, determine bonus target percentages for Participants, and, subject to Section 4.5, determine the time, or times, at which and the form and manner in which payments will be made under the Plan and shall otherwise be responsible for the administration of the Plan, in accordance with its terms. The Committee shall have the authority to construe and interpret the Plan (except as otherwise provided herein), may adopt rules and regulations governing the administration of the Plan and shall exercise all other duties and powers conferred on it by the Plan or which are incidental or ancillary thereto. The Committee may delegate all or portions of its authority to the Parent Company’s Chief Executive Officer so long as the Chief Executive Officer is not a participant in the Plan. All determinations by the Committee shall be final, binding and conclusive on all persons.
3.2      Requisite Action. A majority (but not fewer than two) of the members of the Committee shall constitute a quorum. The vote of a majority of those present at a meeting at which a quorum is present or the unanimous written consent of the Committee shall constitute action by the Committee.
SECTION 4. BONUS PROVISIONS
4.1      Participation Agreement. As a condition to participation in the Plan, each Participant shall enter into a Participation Agreement in substantially the form attached hereto as Exhibit A . The Participation Agreement shall set forth the terms of the Participant’s participation in the Plan.
4.2      Conditions to Payment of Bonuses. Except to the extent otherwise expressly set forth in the Participation Agreement, in order for a Participant to be entitled to a Bonus (i) the Participant must remain employed with the Company at the time of the payment of any such Bonus, and (ii) the Minimum LTM Adjusted EBITDA set forth in the Participation Agreement must have been met.
4.3      Changes Resulting from Accounting Changes. If a change occurs in the applicable accounting principles or practices, the determination of any Bonus to be paid under this Plan shall be appropriately adjusted by the Committee in its sole discretion so that the Bonus paid will approximate, as nearly as possible, those that would have been paid if such changes had not occurred.

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4.4      Certification. No Participant shall receive any Bonus under the Plan unless the Committee has certified that the amount thereof has been accurately determined in accordance with the terms, conditions and limits of the Plan. The Minimum Adjusted LTM EBITDA, Net Synergies, and Costs To Achieve Synergies shall be confirmed to the Committee to be accurate by the Parent Company’s CEO.
4.5      Time of Payment. Subject to Section 4.6, any Bonus earned by a Participant under the Plan shall be paid as follows: (i) the Base Integration Bonus shall be paid in two installments with 50% paid within sixty (60) days after the fiscal month end in which the Initial Integration Performance Target is met, and the second 50% installment paid six (6) months following the fiscal month end in which the Initial Integration Performance Target is met, but in any event no later than April 30, 2020 and (ii) the Supplemental Integration Bonus shall be determined within a reasonable time after the expiration of the Integration Performance Period and paid on or before March 15, 2020. If the Minimum Adjusted LTM EBITDA has not been attained when a Bonus would otherwise be paid, such Bonus will be paid in the first month following the month in which the Minimum Adjusted LTM EBITDA has been attained, and if the Minimum Adjusted LTM EBITDA is not attained on or before October 16, 2019, no Bonus shall be paid. Any Bonus shall be paid by check or direct deposit or in property of equal value on such payment date, as determined by the Committee.
4.6      Withholding. The Company shall be entitled to withhold from any payments due to Participant any federal, state or local taxes required to be withheld by the Company under the then applicable provisions of the Internal Revenue Code or state or local laws.
SECTION 5. GENERAL PROVISIONS
5.1      Absence of Liability. No member of the Board of Directors of the Company or the Parent Company or the Committee or any officer of the Company or the Parent Company shall be liable for any act or inaction hereunder, whether of commission or omission.
5.2      No Funding of Plan. The Company shall not be required to fund or otherwise segregate any cash or any other assets which may at any time be paid to Participants under the Plan. The Plan shall constitute an “unfunded” plan of the Company. The Company shall not, by any provisions of the Plan, be deemed to be a trustee of any property, and any obligations of the Company to any Participant under the Plan shall be those of a debtor and any rights of any Participant or former Participant shall be no greater than those of a general unsecured creditor.
5.3      Non-Transferability of Benefits and Interests. Except as expressly provided by the Committee, no benefit payable under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any such attempted action be void and no such benefit shall be in any manner liable for or subject to debts, contracts, liabilities, engagements or torts of any Participant or former Participant. This Section 5.3 shall not apply to an assignment of a contingency or payment due after the death of the Participant to the deceased Participant’s legal representative or beneficiary.
5.4      Rights of Participants. Nothing in this Plan or in any Participation Agreement shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment at any time (with or without cause) or confer upon any Participant any right to continue in the employ of the Company for any period of time or to continue his or her present (or any other) rate of compensation. No employee shall have a right to be selected as a Participant.
5.5      Governing Law. All questions pertaining to the construction, regulation, validity and effect of the provisions of the Plan shall be determined in accordance with the laws of the State of Georgia, without regard to its conflict of laws provisions.
5.6      Non-Exclusivity. The Plan does not limit the authority of the Company, the Board of Directors of the Parent Company, or the Committee to grant awards or authorize any other compensation under any other plan.

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SECTION 6. AMENDMENTS, SUSPENSION OR TERMINATION OF PLANS
The Committee may from time to time amend, suspend or terminate the Plan, in whole or in part. and if suspended or terminated, the Committee may reinstate, any or all of the provisions of the plan. Notwithstanding the foregoing, no amendment shall be made which would adversely impact awards that have been previously granted under the Plan (except to the extent expressly set forth in this Plan or in the affected Participant’s Participation Agreement). The Plan is not a contract of employment for any period. Employment and termination of employment are governed by Company policies and procedures and not by the Plan.
SECTION 7. COMPLIANCE WITH CODE SECTION 409A
This Plan is intended to satisfy the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder (“Section 409A”), to the extent applicable. All terms used in this Plan shall be interpreted to the maximum extent possible to satisfy Section 409A. Notwithstanding anything herein to the contrary, the Company may, in its sole discretion and without the consent of any Participant, amend the Plan to add, alter or remove any provision that the Committee deems necessary, appropriate or advisable to comply with Section 409A. For purposes of Section 409A, each payment of Bonus amounts under this Plan shall be considered a separate and distinct payment.

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INTEGRATION INCENTIVE PLAN
PARTICIPATION AGREEMENT

This Participation Agreement (this “Agreement”) is made as of this [___] day of [_________], 2018 between BlueLinx Corporation, a Delaware corporation (the “Company”) and [_________] (the “Participant”). Capitalized terms used and not defined herein shall have the meaning given to such terms in the Plan (as defined below).
WHEREAS, the Company has adopted and maintains the BlueLinx Integration Incentive Plan (the “Plan”) to assist the Company in retaining, motivating and rewarding eligible individuals who are participating in the Company’s efforts to integrate its business with the business of Cedar Creek Holdings, Inc.; and
WHEREAS, the Plan provides for the grant to Participants of contingent incentive payments pursuant to the Plan as provided therein.
NOW, THEREFORE, in consideration of the promises and the mutual covenants hereinafter set forth herein, the parties hereto hereby agree as follows:
1. Participation . The Participant is hereby eligible to receive a Base Integration Bonus and a Supplemental Integration Bonus in accordance with and subject to the terms and conditions of the Plan and this Agreement.
(a)    Upon the realization of at least $50 million in Net Synergies (the “Initial Integration Performance Target”), the Participant’s Base Integration Bonus shall be equal to the product of (A) the Participant’s Base Salary multiplied by (B) [____%]. The Participant’s Base Integration Bonus will be reduced to the extent the Cost To Achieve Synergies exceeds $[__] million in an amount equal to [___] for every [___] million in excess of [___] million of Cost To Achieve Synergies.
(b)    The Supplemental Integration Bonus shall be in an amount equal to [___%] of the Participant's Base Salary for every [__] million of Net Synergies above $50 million up to [__] million of Net Synergies. The Participant’s Supplemental Integration Bonus will be reduced to the extent the Cost To Achieve Synergies exceeds [__] million in an amount equal to [__] for every [_] million in excess of [___] million of Cost To Achieve Synergies.
(c)    No payment will be made on account of the Base Integration Bonus or the Supplemental Integration Bonus until the Minimum Adjusted LTM EBITDA is at least [___] million. In the event the Minimum Adjusted LTM EBITDA has not exceeded [___] million on or before October 16, 2019, then no Bonus shall be paid under the Plan.
(d)    No Bonus shall be paid to the Participant if the Participant is not employed on the applicable payment date for such Bonus.
2. Payment of Bonus.     Any Bonus earned under this Participation Agreement and the Plan shall be paid in accordance with Section 4.5 of the Plan.
3. Incorporation of Plan . All terms, conditions and restrictions of the Plan are incorporated herein and made part hereof as if stated herein. If there is any conflict between the terms and conditions of the Plan and this Agreement, the terms and conditions of the Plan, as interpreted by the Committee, shall govern. The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content. The Participant hereby acknowledges that all decisions, determinations and interpretations of the Committee in respect of the Plan and this Agreement shall be final, binding and conclusive on the Company and the Participant.





4. Delays or Omissions . No delay or failure to exercise any right, power or remedy accruing to any party hereto upon any breach or default of any party under the Plan or this Agreement, shall impair any such right, power or remedy of such party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, shall be in writing and shall be effective only to the extent specifically set forth in such writing.
5. Confidentiality of Agreement. The terms of this Agreement are strictly confidential and, other than with respect to information required to be disclosed by applicable law, the Participant agrees not to disclose the existence of this Agreement or the terms of this Agreement to any person at any time; provided the Participant may disclose this Agreement and/or any of its terms to the Participant’s immediate family, financial advisors and attorneys, so long as the Participant instructs every such person to whom the Participant makes such disclosure not to disclose the terms of this Agreement further. The Participant’s failure to comply with this Section 5 may, in the Committee’s sole and absolute discretion, immediately terminate this Agreement and all obligations of the Company contained herein.
6. Entire Agreement. This Agreement and the Plan contain the entire understanding of the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein and in the Plan. This Agreement, including without limitation, the Plan, supersedes all prior agreements and understandings between the parties hereto with respect to the subject matter hereof and the subject matter set forth in the Plan. Except as may be specifically provided for herein, this Agreement may not be amended in any respect except by a writing signed by both parties hereto.
7. Acknowledgement . The Participant acknowledges and agrees that (i) his or her rights under this Agreement are contractual in nature and nothing contained herein shall create any equity interest in the Company or any of its affiliates and (ii) neither the Company nor any of its officers, directors or affiliates shall owe any fiduciary duty of any kind to the Participant by virtue of the Plan.
8. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which shall constitute one and the same instrument.
9. Governing Law . This Agreement and the rights and obligations of all Persons claiming hereunder shall be construed and determined in accordance with the laws of the State of Georgia without giving effect to the choice of law principles thereof.


[SIGNATURES ON FOLLOWING PAGE]








IN W IT NESS WHEREO F , t he Co m pa n y h as ca u se d th is Ag r ee m e n t to be d u l y exec ut ed by its dul y a uth o ri zed office r a n d th e Par tic ip a nt has h e r eu n to s i g n ed t h i s Agree m e n t o n hi s o r h er ow n be ha l f , t hereby r e pr ese n t in g t h a t h e o r s h e h as carefu ll y rea d an d u n de r stands th i s Ag r ee m e n t a n d t h e Pl a n as o f the day an d yea r fir st w ri tten a b ov e.


BlueLinx Corporation


By:     _____________________________


Title:    _____________________________



Participant

By:        _____________________________


Name: (Print)    _____________________________