Document:

Exhibit
10.8

 

	
   

  	
  May
  7, 2004

  

 

Steven
C. Hardin

512
Castle Pines Drive S

Castle
Rock, Colorado 80104

 

Dear
Steven:

 

BlueLinx Corporation (the “Company”) desires to set forth the payments
to which you (the “Executive”) would be entitled following the termination of
the Executive’s employment with the Company as well as the Executive’s
continuing obligations to the Company during and after the Executive’s
employment with the Company. This Agreement shall only become effective on the
Closing Date as defined in the Asset Purchase Agreement by and among
Georgia-Pacific Corporation, Georgia-Pacific Building Materials Sales, Ltd. and
the Company (f/k/a ABP Distribution Inc.), dated as of March 12, 2004 (the
“Asset Purchase Agreement”). For the purposes of this Agreement, the Company’s
subsidiaries and APB Distribution Holdings Inc., so long as APB Holdings
Distribution Inc. owns at least a majority of the outstanding common stock of
the Company, shall be referred to as “Affiliated Companies.” By signing this
letter agreement (“Agreement”), the Executive agrees to the terms and
conditions set forth herein.

 

1.                                       Reasons for Termination of Employment. The Executive’s employment shall terminate
under the following circumstances:

 

(a)                                  the Executive’s death;

 

(b)                                 a determination by the Company in good faith
that the Executive has incurred a “Disability” (as defined below) as follows:
The Company may give to the Executive written notice of its intention to
terminate the Executive’s employment because of his Disability (as defined
below). In such event, the Executive’s employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the “Disability Effective Date”), provided that, within the
30 days after such receipt, the Executive shall not have returned to full-time
performance of the Executive’s duties.

 

For purposes of this Agreement, “Disability” means the determination 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 the Executive or the Executive’s legal representative that, as a
result of a physical or mental injury or illness, the Executive has been unable
to perform the essential functions of his job with or without reasonable
accommodation for a period of (i) 90 consecutive days or (ii) 180 days in any
one year period.

 

(c)                                  by the Company with or without Cause; or

 

 

For purposes of this Agreement, “Cause” shall mean (i) commission of a
felony by the Executive, (ii) acts of dishonesty by the Executive resulting or
intending to result in personal gain or enrichment at the expense of the
Company or its Affiliated Companies, (iii) the Executive’s material breach of
any provision of this Agreement, (iv) the Executive’s failure to follow the
lawful written directions of the Chief Executive Officer of the Company, or (v)
conduct by the Executive in connection with his duties hereunder that is
fraudulent, unlawful or willful and materially injurious to the Company or its
Affiliated Companies; provided, that, the Executive shall have ten (10)
business days following the Company’s written notice of its intention to
terminate the Executive’s employment to cure such Cause, if curable, as
determined by the Company, in its sole discretion.

 

For the purposes of this Section l(c), no act or failure to act on
the part of the Executive shall be considered “willful” unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable belief
that the Executive’s action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board of Directors of the Company or upon the
instructions of the Chief Executive Officer or a senior officer of the Company
(in the case of the Chief Executive Officer, the Board of Directors of the
Company) or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company.

 

(d)                                 by the Executive with or without Good Reason.

 

(i)                                     For purposes of this Agreement, “Good Reason”
shall mean, without the consent of the Executive, (A) the assignment to the
Executive of any duties inconsistent in any material adverse respect with the
Executive’s position (including offices, titles and reporting requirements),
authority, duties or responsibilities immediately following the Closing Date,
or any other action by the Company which results in a material diminution in
such position, authority, duties or responsibilities; (B) a reduction by the
Company in the Executive’s base salary or in the percentage of base salary on
which the Executive’s bonus is based; (C) the Company’s requiring the Executive
to be based at any office or location outside of twenty-five (25) miles from
Denver, Colorado; (D) any purported termination by the Company of the
Executive’s employment otherwise than as expressly permitted by this Agreement
or (E) any failure by the Company to comply with and satisfy Section 15 of
this Agreement.

 

(ii)                                  “Good Reason” shall not include for purposes
of Sections 1(d)(i)(A) through (D) above, an isolated, insubstantial and
inadvertent action not taken in bad faith which is remedied by the Company
within ten (10) business days after receipt of notice thereof given by the
Executive.

 

2.                                       Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 17
of this Agreement. For purposes of this Agreement, a “Notice of Termination”
means a written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the

 

2

 

Executive’s
employment under the provision so indicated and (iii) indicates the Date of
Termination (as defined below). The failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder, or preclude the
Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive’s or the Company’s rights hereunder.

 

3.                                       Date of Termination. “Date of Termination” means (i) if the
Executive’s employment is terminated by the Company for Cause or by the
Executive for Good Reason, ten (10) business days following the Company’s or
Executive’s receipt of the Notice of Termination, unless, in the case of Cause,
the Company determines that the reason (or reasons) for the Cause termination
is (or are) not curable in which case the Date of Termination shall be the date
set forth by the Company in the Notice of Termination, (ii) if the Executive’s
employment is terminated by the Company without Cause, the Date of Termination
shall be the date on which the Company notifies the Executive of such
termination, (iii) if the Executive’s employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of the death of
the Executive or the Disability Effective Date, as the case may be, and (iv) if
the Executive resigns for reasons that do not constitute Good Reason, the Date
of Termination shall be the last day of the month in which such resignation occurs.

 

4.                                       Termination of Employment by the Company
without Cause or by the Executive for Good Reason. If the Company terminates the Executive’s
employment without Cause or the Executive terminates his employment for Good
Reason, the Executive shall be entitled to the following; provided that the
Executive delivers to the Company a valid release substantially in the form
attached hereto as Exhibit A.

 

(a)                                  the Executive’s accrued but unpaid base
salary and any accrued, but unpaid portion of bonus through the Date of
Termination, if any (the “Accrued Obligations”);

 

(b)                                 payment equal to two times the Executive’s
annual base salary in effect immediately prior to the Date of Termination plus
two times the bonus amount received by the Executive for the year prior to the
calendar year of the Executive’s termination; provided, that, if termination
occurs during 2004, such bonus amount shall be the bonus amount received by the
Executive from Georgia-Pacific Corporation in respect of fiscal year 2003
performance, payable in equal monthly installments over a twenty-four (24)
month period from the Date of Termination;

 

(c)                                  a lump sum in cash within 30 days after the
Date of Termination in an amount equal to the contributions the Company would
have made for the benefit of the Executive to the Company’s qualified salaried
401(k) plan, (if the Company is making matching contributions or other
contributions to the salaried 401(k) plan at the time of the Executive’s
termination), assuming (i) the Executive continued as an employee of the
Company for a period of two years beginning on the Executive’s Date of
Termination, and (ii) the Executive during such period contributed six percent
of his base salary (as in effect immediately prior to the Date of Termination)
to the 401(k) plan;

 

3

 

(d)                                 continued health and welfare benefits to the
Executive and his family for a period of two (2) years as if the Executive’s
employment had not been terminated or, if more favorable to the Executive, as
in effect generally at any time thereafter with respect to other similarly
situated executives of the Company and their families, at no additional cost to
the Executive other than the cost of such benefits to the Executive as in
effect immediately prior to the Date of Termination. If, at the end of this two
year period of continued health and welfare benefit coverage, the Executive is
at least age 55 and has 10 years of service (determined as if the Executive had
remained employed by the Company during the two year period of continued
benefit coverage and, pursuant to the terms of the Human Resources Agreement
(as defined under the Asset Purchase Agreement), including the Executive’s
period of service with Georgia-Pacific Corporation), the Company shall provide
the Executive (and the Executive’s eligible dependents) with retiree medical
and dental benefit coverage no less favorable than the coverage provided to
retirees of the Company (and their dependents) immediately prior to the Date of
Termination; provided, that, in all cases, the Executive shall pay the full
cost of any applicable premium without any subsidy provided by the Company in a
manner which results in no cost to the Company on a FAS 106 basis. In the event
the Executive becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another employer-provided plan
or becomes eligible for Medicare, the medical and other welfare benefits
described herein shall be secondary to those provided under such other plan or
Medicare, as applicable, during such applicable period of eligibility.

 

(e)                                  $25,000 of outplacement services, the scope
and provider of which shall be selected by the Executive in his sole
discretion; and

 

(f)                                    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”).

 

5.                                       Termination Due to Executive’s Death. If the Executive’s employment is terminated
by reason of the Executive’s death, the Company shall have no further
obligations to the Executive’s legal representatives under this Agreement,
other than for the payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to the
Executive’s estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. The term “Other Benefits” as used in this
Section 5 shall include, without limitation, and the Executive’s estate
and/or beneficiaries shall be entitled to receive, benefits under such plans,
programs, practices and policies relating to death benefits, if any, as are
applicable to the Executive on the Date of Termination.

 

6.                                       Termination Due to Executive’s Disability. If the Executive’s employment is terminated
by reason of the Executive’s Disability, the Company shall have no further
obligations to the Executive, other than for payment of Accrued Obligations and
the timely payment or provision of Other Benefits. Accrued Obligations shall be
paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination. The term “Other Benefits” as used in this Section 6 shall
include, without limitation, and Executive shall be entitled to receive,
disability and other benefits under such plans, programs, practices and
policies relating to disability, if any, as are applicable to Executive and his
family on the Date of Termination.

 

4

 

7.                                       Termination of Executive’s Employment by the
Company for Cause or By the Executive without Good Reason. If the Executive’s employment is terminated
by the Company for Cause or by the Executive without Good Reason, the Company
shall have no further obligations to the Executive, other than for payment to
the Executive of his accrued but unpaid base salary and benefits through the
Date of Termination, if any, and Other Benefits, in each case to the extent
theretofore unpaid.

 

8.                                       Exclusivity of Severance. Payments under this Agreement shall be in
lieu of any payments to which Executive may be entitled under any Company
severance plan for salaried employees.

 

9.                                       No Mitigation. In no event shall the Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the provisions
of this Agreement and, except as provided in Section 4(d), such amounts
shall not be reduced whether or not the Executive obtains other employment.

 

10.                                 Parachute Payments. At the Executive’s request, the Company
will use its reasonable best efforts to obtain approvals as may be required,
including shareholder approvals, to cause payments made under this Agreement to
be exempt from the definition of “parachute payments” under Section 280G
of the Internal Revenue Code of 1986, as amended (the “Code”), if such payments
hereunder are made in connection with the events described under
Section 280G of the Code. Notwithstanding any provision contained herein
to the contrary, the Company shall not be responsible for the payment of any
excise taxes incurred by the Executive under Section 4999 of the Code or
for any tax gross-up payments at any time, including, but not limited to, in
the event that the appropriate approvals are not obtained or in the event that
exemptions to “parachute payments” no longer apply.

 

11.                                 Confidential Information.

 

(a)                                  The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its Affiliated Companies,
and their respective businesses, which shall have been (i) obtained by the
Executive during the Executive’s employment by the Company or any of its
Affiliated Companies or (ii) acquired by the Company or any of its Affiliated
Companies from Georgia-Pacific Corporation, and which shall not be or become
public knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement) (“Confidential Information”). After
termination of the Executive’s employment with the Company, the Executive shall
not, without the prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.

 

(b)                                 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 and its Affiliated Companies, whether prepared by the Executive or
otherwise coming into the Executive’s possession, shall remain the exclusive
property of the Company and its Affiliated Companies, and the Executive shall
not remove any

 

5

 

such
items from the premises of the Company and its Affiliated Companies, except in
furtherance of the Executive’s duties.

 

(c)                                  It is understood that while employed by the
Company or its Affiliated Companies, the Executive will promptly disclose to
the Company, and assign to the Company the Executive’s interest in any
invention, improvement or discovery made or conceived by the Executive, either
alone or jointly with others, which arises out of the Executive’s employment.
At the Company’s request and expense, the Executive will reasonably assist the
Company and its Affiliated Companies during the period of the Executive’s
employment by the Company or its Affiliated Companies and thereafter in
connection with any controversy or legal proceeding relating to such invention,
improvement or discovery and in obtaining domestic and foreign patent or other
protection covering the same.

 

(d)                                 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 and its Affiliated Companies 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. 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.

 

12.                                 Non-Solicitation or Hire. During his employment with the Company and
for a period of eighteen months (18) months following the termination of the
Executive’s employment for any reason, the Executive shall not solicit or
attempt to solicit, (a) any party who is a customer of the Company or its Affiliated
Companies, for the purpose of marketing, selling or providing to any such party
any services or products offered by the Company or its Affiliated Companies to
such customer other than general solicitations to the public and not directed
specifically at a customer of the Company, (b) any party who is a vendor of the
Company or its Affiliated Companies to sell similar products or (c) any
employee of the Company or any of its Affiliated Companies to terminate such
employee’s employment relationship with the Company and its Affiliated
Companies in order, in either case, to enter into a similar relationship with
the Executive, or any other person or any entity in competition with the
Company or any of its Affiliated Companies (other than with respect to general
employment solicitations to the public and not directed specifically at
employees of the Company and its Affiliated Companies).

 

13.                                 Non-Competition During Executive’s employment by the Company
and for a period of eighteen (18) months following the termination of the
Executive’s employment for any reason, the Executive shall not, whether
individually, as a director, manager, member, stockholder, partner, owner,
employee, consultant or agent of any business, or in any other capacity, other
than on behalf of the Company or it Affiliated Companies, organize, establish,
own, operate, manage, control, engage in, participate in, invest in, permit his
name to be used by, act as a consultant or advisor to, render services for
(alone or in association with any person, firm, corporation or business
organization), or otherwise assist any person or entity that engages in or
owns, invests in, operates, manages or controls any venture or enterprise which
engages or

 

6

 

proposes
to engage in the building products distribution business in the United States
or Canada (the “Business”). Notwithstanding the foregoing, nothing in this
Agreement shall prevent the Executive from owning for passive investment
purposes not intended to circumvent this Agreement, less than five percent (5%)
of the publicly traded voting securities of any company engaged in the Business
(so long as the Executive has no power to manage, operate, advise, consult with
or control the competing enterprise and no power, alone or in conjunction with
other affiliated parties, to select a director, manager, general partner, or
similar governing official of the competing enterprise other than in connection
with the normal and customary voting powers afforded the Executive in
connection with any permissible equity ownership).

 

14.                                 Remedies; Specific Performance. The parties acknowledge and agree that the
Executive’s breach or threatened breach of any of the restrictions set forth in
Sections 11 through 13 will result in irreparable and continuing damage to the
Company and its Affiliated Companies for which there may be no adequate remedy
at law and that the Company and its Affiliated Companies shall be entitled to
equitable relief, including specific performance and injunctive relief as
remedies for any such breach or threatened or attempted breach. The Executive
hereby consents to the grant of an injunction (temporary or otherwise) against
the Executive or the entry of any other court order against the Executive prohibiting
and enjoining him from violating, or directing him to comply with any provision
of Sections. The Executive also agrees that such remedies shall be in addition
to any and all remedies, including damages, available to the Company and its
Affiliated Companies against him for such breaches or threatened or attempted
breaches. In addition, without limiting the remedies of the Company and its
Affiliated Companies for any breach of any restriction on the Executive set
forth in Sections 11 through 13, except as required by law, the Executive shall
not be entitled to any payments set forth in Section 4 hereof if the
Executive breaches the covenant applicable to the Executive contained in
Sections 11 through 13 and the Company and its Affiliated Companies will have
no obligation to pay any of the amounts that remain payable by the Company
under Section 4.

 

15.                                 Successors. This Agreement is personal to the Executive and without prior written
consent of the Company, shall not be assignable by the Executive. To the extent
provisions contained herein relate to the Executive’s legal representatives,
this Agreement shall inure to the benefit of and be enforceable by such legal
representatives. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if not such succession had taken place. As used in this Agreement, “Company”
shall mean the Company as hereinbefore defined and any successor to its
business and/or assets as set forth herein and any successor to its business
and/or assets as set forth herein which assumes and agrees to perform this
Agreement.

 

16.                                 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.

 

7

 

17.                                 Notices. All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:

 

	
  If
  to the Executive:

  
	
   

  
	
  Steven
  C. Hardin

  
	
  512
  Castle Pines Drive S

  
	
  Castle
  Rock, Colorado 80104

  
	
   

  
	
  If
  to the Company:

  
	
   

  
	
  BlueLinx
  Corporation

  
	
  4100
  Wildwood Parkway

  
	
  Atlanta,
  Georgia 30339

  
	
  Attention:
  Chief Executive Officer

  
	
   

  
	
  With
  a copy to:

  
	
   

  
	
  Cerberus
  Capital Management, L.P.

  
	
  299
  Park Avenue

  
	
  New
  York, New York 10171

  
	
  Attention:
  Lenard Tessler

  
	
   

  
	
  And
  a copy to:

  
	
  Schulte
  Roth & Zabel LLP

  
	
  919
  Third Avenue

  
	
  New
  York, New York 10022

  
	
  Attention:
  Stuart D. Freedman, Esq.

  

 

or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.

 

18.                                 Tax Withholding. The Company may withhold from any amounts
payable under this Agreement such federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law or regulation.

 

19.                                 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto. The
parties hereto understand and acknowledge that the agreement dated
April 1, 2002 between the Executive and Georgia-Pacific Corporation has
been terminated.

 

8

 

20.                                 Waiver and Amendments. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any right, power or
privilege hereunder, nor any single or partial exercise of any right, power or
privilege hereunder, preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.

 

21.                                 Arbitration. The Company and Executive agree to arbitrate any controversy or claim
arising out of this Agreement or otherwise relating to Executive’s employment
by the Company or the termination of such employment to the extent required
(including, but not limited to, any claims of breach of contract, wrongful
termination or age, sex, race or other discrimination); provided that the
Company shall have the right to, and be permitted to, seek and obtain
injunctive relief from a court of competent jurisdiction pursuant to
Section 14 above in the state or federal courts located in the State of
New York. Any such arbitration shall be fully and finally resolved in binding
arbitration in a proceeding in the State of New York, in accordance with the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association before a single arbitrator. The arbitrator shall not
have the authority to modify or change any of the terms of this Agreement,
except as provided in Section 25 hereof. The arbitrator’s award shall be
final and binding upon the parties, and judgment upon the award may be entered
in any court of competent jurisdiction in any state of the United States or
country or application may be made to such court for a judicial acceptance of
the award and an enforcement as the law of such jurisdiction may require or
allow. Each party thereto shall bear its own costs incurred in any such
arbitration, including legal fees and expenses.

 

22.                                 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.

 

23.                                 Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning of terms contained herein.

 

24.                                 Severability. If any term, provision, covenant or
restriction of this Agreement, or any part thereof, is held by a court of
competent jurisdiction of any foreign, federal, state, county or local
government or any other governmental, regulatory or administrative agency or
authority to be invalid, void, unenforceable or against public policy for any
reason, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected or impaired or invalidated. The Executive acknowledges that the
restrictive covenants contained in Sections 11 through 13 are a condition of
this Agreement and are reasonable and valid in temporal scope and in all other
respects.

 

25.                                 Judicial Modification. If any court or arbitrator determines that
any of the covenants in Sections 11 through 13, or any part of any of them, is
invalid or unenforceable, the remainder of such covenants and parts thereof
shall not thereby be affected and shall be given full effect, without regard to
the invalid portion. If any court or arbitrator determines that any of such
covenants, or any part thereof, is invalid or unenforceable because of the
geographic or

 

9

 

temporal
scope of such provision, such court or arbitrator shall reduce such scope to
the minimum extent necessary to make such covenants valid and enforceable.

 

10

 

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have executed this Agreement as of the day and year first above
mentioned.

 

	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Steven C. Hardin

  	
   

  
	
   

  	
  Name:  Steven C. Hardin

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BLUELINX
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Charles H. McElrea

  	
   

  
	
   

  	
   

  	
  Name:  Charles H. McElrea

  
	
   

  	
   

  	
  Title:    CEO

  
					

 

11Exhibit 10.9

 

May 7, 2004

 

Barbara
V. Tinsley

1960
Greystone Road

Atlanta,
GA 30318

 

Dear
Barbara:

 

BlueLinx Corporation (the “Company”) desires to set forth the payments
to which you (the “Executive”) would be entitled following the termination of
the Executive’s employment with the Company as well as the Executive’s
continuing obligations to the Company during and after the Executive’s
employment with the Company. This Agreement shall only become effective on the
Closing Date as defined in the Asset Purchase Agreement by and among
Georgia-Pacific Corporation, Georgia-Pacific Building Materials Sales, Ltd. and
the Company (f/k/a ABP Distribution Inc.), dated as of March 12, 2004 (the
“Asset Purchase Agreement”). For the purposes of this Agreement, the Company’s
subsidiaries and APB Distribution Holdings Inc., so long as APB Holdings
Distribution Inc. owns at least a majority of the outstanding common stock of
the Company, shall be referred to as “Affiliated Companies.” By signing this
letter agreement (“Agreement”), the Executive agrees to the terms and
conditions set forth herein.

 

1.                                       Reasons for Termination of Employment. The Executive’s employment shall terminate
under the following circumstances:

 

(a)                                  the Executive’s death;

 

(b)                                 a determination by the Company in good faith
that the Executive has incurred a “Disability” (as defined below) as follows:
The Company may give to the Executive written notice of its intention to
terminate the Executive’s employment because of her Disability (as defined
below). In such event, the Executive’s employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the “Disability Effective Date”), provided that, within the
30 days after such receipt, the Executive shall not have returned to full-time
performance of the Executive’s duties.

 

For purposes of this Agreement, “Disability” means the determination 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 the Executive or the Executive’s legal representative that, as a
result of a physical or mental injury or illness, the Executive has been unable
to perform the essential functions of her job with or without reasonable
accommodation for a period of (i) 90 consecutive days or (ii) 180 days in any
one year period.

 

(c)                                  by the Company with or without Cause; or

 

For purposes of this Agreement, “Cause” shall mean (i) commission of a
felony by the Executive, (ii) acts of dishonesty by the Executive resulting or
intending to result in

 

 

personal
gain or enrichment at the expense of the Company or its Affiliated Companies,
(iii) the Executive’s material breach of any provision of this Agreement, (iv)
the Executive’s failure to follow the lawful written directions of the Chief
Executive Officer of the Company, or (v) conduct by the Executive in connection
with her duties hereunder that is fraudulent, unlawful or willful and
materially injurious to the Company or its Affiliated Companies; provided,
that, the Executive shall have ten (10) business days following the Company’s
written notice of its intention to terminate the Executive’s employment to cure
such Cause, if curable, as determined by the Company, in its sole discretion.

 

For the purposes of this Section l(c), no act
or failure to act on the part of the Executive shall be considered “willful”
unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or omission was in the
best interests of the Company. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board of Directors of the
Company or upon the instructions of the Chief Executive Officer or a senior
officer of the Company (in the case of the Chief Executive Officer, the Board
of Directors of the Company) or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company.

 

(d)                                 by the Executive with or without Good Reason.

 

(i)                                     For purposes of this Agreement, “Good Reason”
shall mean, without the consent of the Executive, (A) the assignment to the
Executive of any duties inconsistent in any material adverse respect with the
Executive’s position (including offices, titles and reporting requirements),
authority, duties or responsibilities immediately following the Closing Date,
or any other action by the Company which results in a material diminution in
such position, authority, duties or responsibilities; (B) a reduction by the
Company in the Executive’s base salary or in the percentage of base salary on
which the Executive’s bonus is based; (C) the Company’s requiring the Executive
to be based at any office or location outside of twenty-five (25) miles from
Marietta, Georgia; (D) any purported termination by the Company of the
Executive’s employment otherwise than as expressly permitted by this Agreement
or (E) any failure by the Company to comply with and satisfy Section 15 of
this Agreement.

 

(ii)                                  “Good Reason” shall not include for purposes
of Sections 1(d)(i)(A) through (D) above, an isolated, insubstantial and
inadvertent action not taken in bad faith which is remedied by the Company
within ten (10) business days after receipt of notice thereof given by the
Executive.

 

2.                                       Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 17
of this Agreement. For purposes of this Agreement, a “Notice of Termination”
means a written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated and
(iii) indicates the Date of Termination (as defined below). The failure by the
Executive or the Company to set forth in the

 

2

 

Notice
of Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder, or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights hereunder.

 

3.                                       Date of Termination. “Date of Termination” means (i) if the
Executive’s employment is terminated by the Company for Cause or by the
Executive for Good Reason, ten (10) business days following the Company’s or
Executive’s receipt of the Notice of Termination, unless, in the case of Cause,
the Company determines that the reason (or reasons) for the Cause termination
is (or are) not curable in which case the Date of Termination shall be the date
set forth by the Company in the Notice of Termination, (ii) if the Executive’s
employment is terminated by the Company without Cause, the Date of Termination
shall be the date on which the Company notifies the Executive of such
termination, (iii) if the Executive’s employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of the death of
the Executive or the Disability Effective Date, as the case may be, and (iv) if
the Executive resigns for reasons that do not constitute Good Reason, the Date
of Termination shall be the last day of the month in which such resignation
occurs.

 

4.                                       Termination of Employment by the Company
without Cause or by the Executive for Good Reason. If the Company terminates the Executive’s
employment without Cause or the Executive terminates her employment for Good
Reason, the Executive shall be entitled to the following; provided that the
Executive delivers to the Company a valid release substantially in the form
attached hereto as Exhibit A.

 

(a)                                  the Executive’s accrued but unpaid base
salary and any accrued, but unpaid portion of bonus through the Date of Termination,
if any (the “Accrued Obligations”);

 

(b)                                 payment equal to the Executive’s annual base
salary in effect immediately prior to the Date of Termination plus the bonus
amount received by the Executive for the year prior to the calendar year of the
Executive’s termination; provided, that, if termination occurs during 2004,
such bonus amount shall be $180,000.00, payable in equal monthly installments
over a twelve (12) month period from the Date of Termination;

 

(c)                                  a lump sum in cash within 30 days after the
Date of Termination in an amount equal to the contributions the Company would
have made for the benefit of the Executive to the Company’s qualified salaried
401(k) plan, (if the Company is making matching contributions or other
contributions to the salaried 401(k) plan at the time of the Executive’s
termination), assuming (i) the Executive continued as an employee of the
Company for a period of one year beginning on the Executive’s Date of
Termination, and (ii) the Executive during such period contributed six percent
of her base salary (as in effect immediately prior to the Date of Termination)
to the 401(k) plan;

 

(d)                                 continued health and welfare benefits to the
Executive and her family for a period of one (1) year as if the Executive’s
employment had not been terminated or, if more favorable to the Executive, as
in effect generally at any time thereafter with respect to other similarly
situated executives of the Company and their families, at no additional cost to
the Executive other than the cost of such benefits to the Executive as in
effect immediately prior to

 

3

 

the
Date of Termination. If, at the end of this one year period of continued health
and welfare benefit coverage, the Executive is at least age 55 and has 10 years
of service (determined as if the Executive had remained employed by the Company
during the one year period of continued benefit coverage, the Company shall
provide the Executive (and the Executive’s eligible dependents) with retiree
medical and dental benefit coverage no less favorable than the coverage
provided to retirees of the Company (and their dependents) immediately prior to
the Date of Termination; provided, that, in all cases, the Executive shall pay
the full cost of any applicable premium without any subsidy provided by the
Company in a manner which results in no cost to the Company on a FAS 106 basis.
In the event the Executive becomes reemployed with another employer and is
eligible to receive medical or other welfare benefits under another
employer-provided plan or becomes eligible for Medicare, the medical and other
welfare benefits described herein shall be secondary to those provided under
such other plan or Medicare, as applicable, during such applicable period of eligibility.

 

(e)                                  $25,000 of outplacement services, the scope
and provider of which shall be selected by the Executive in her sole
discretion; and

 

(f)                                    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”).

 

5.                                       Termination Due to Executive’s Death. If the Executive’s employment is terminated
by reason of the Executive’s death, the Company shall have no further
obligations to the Executive’s legal representatives under this Agreement,
other than for the payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to the
Executive’s estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. The term “Other Benefits” as used in this
Section 5 shall include, without limitation, and the Executive’s estate
and/or beneficiaries shall be entitled to receive, benefits under such plans,
programs, practices and policies relating to death benefits, if any, as are
applicable to the Executive on the Date of Termination.

 

6.                                       Termination Due to Executive’s Disability. If the Executive’s employment is terminated
by reason of the Executive’s Disability, the Company shall have no further
obligations to the Executive, other than for payment of Accrued Obligations and
the timely payment or provision of Other Benefits. Accrued Obligations shall be
paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination. The term “Other Benefits” as used in this Section 6 shall
include, without limitation, and Executive shall be entitled to receive,
disability and other benefits under such plans, programs, practices and
policies relating to disability, if any, as are applicable to Executive and her
family on the Date of Termination.

 

7.                                       Termination of Executive’s Employment by the
Company for Cause or By the Executive without Good Reason. If the Executive’s employment is terminated
by the Company for Cause or by the Executive without Good Reason, the Company
shall have no further obligations to the Executive, other than for payment to
the Executive of her accrued but unpaid base salary and benefits through the
Date of Termination, if any, and Other Benefits, in each case to the extent
theretofore unpaid.

 

4

 

8.                                       Exclusivity of Severance. Payments under this Agreement shall be in
lieu of any payments to which Executive may be entitled under any Company
severance plan for salaried employees.

 

9.                                       No Mitigation. In no event shall the Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the provisions
of this Agreement and, except as provided in Section 4(d), such amounts
shall not be reduced whether or not the Executive obtains other employment.

 

10.                                 Parachute Payments. At the Executive’s request, the Company
will use its reasonable best efforts to obtain approvals as may be required,
including shareholder approvals, to cause payments made under this Agreement to
be exempt from the definition of “parachute payments” under Section 280G
of the Internal Revenue Code of 1986, as amended (the “Code”), if such payments
hereunder are made in connection with the events described under
Section 280G of the Code. Notwithstanding any provision contained herein
to the contrary, the Company shall not be responsible for the payment of any
excise taxes incurred by the Executive under Section 4999 of the Code or
for any tax gross-up payments at any time, including, but not limited to, in the
event that the appropriate approvals are not obtained or in the event that
exemptions to “parachute payments” no longer apply.

 

11.                                 Confidential Information.

 

(a)                                  The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its Affiliated Companies,
and their respective businesses, which shall have been (i) obtained by the
Executive during the Executive’s employment by the Company or any of its Affiliated
Companies or (ii) acquired by the Company or any of its Affiliated Companies
from Georgia-Pacific Corporation, and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement) (“Confidential Information”). After
termination of the Executive’s employment with the Company, the Executive shall
not, without the prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.

 

(b)                                 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 and its Affiliated Companies, whether prepared by the Executive or
otherwise coming into the Executive’s possession, shall remain the exclusive
property of the Company and its Affiliated Companies, and the Executive shall
not remove any such items from the premises of the Company and its Affiliated
Companies, except in furtherance of the Executive’s duties.

 

(c)                                  It is understood that while employed by the
Company or its Affiliated Companies, the Executive will promptly disclose to
the Company, and assign to the Company the Executive’s interest in any
invention, improvement or discovery made or conceived by the Executive, either
alone or jointly with others, which arises out of the Executive’s

 

5

 

employment.
At the Company’s request and expense, the Executive will reasonably assist the
Company and its Affiliated Companies during the period of the Executive’s
employment by the Company or its Affiliated Companies and thereafter in
connection with any controversy or legal proceeding relating to such invention,
improvement or discovery and in obtaining domestic and foreign patent or other
protection covering the same.

 

(d)                                 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 and its Affiliated Companies all copies and
embodiments, in whatever form, of all Confidential Information in the
Executive’s possession or within her control (including, but not limited to,
memoranda, records, notes, plans, photographs, manuals, notebooks,
documentation, program listings, flow charts, magnetic media, disks, diskettes,
tapes and all other materials containing any Confidential Information)
irrespective of the location or form of such material. If requested by the
Company, the Executive will provide the Company with written confirmation that
all such materials have been delivered to the Company as provided herein.

 

12.                                 Non-Solicitation or Hire. During her employment with the Company and
for a period of twelve months (12) months following the termination of the
Executive’s employment for any reason, the Executive shall not solicit or
attempt to solicit, (a) any party who is a customer of the Company or its
Affiliated Companies, for the purpose of marketing, selling or providing to any
such party any services or products offered by the Company or its Affiliated
Companies to such customer other than general solicitations to the public and
not directed specifically at a customer of the Company, (b) any party who is a
vendor of the Company or its Affiliated Companies to sell similar products or
(c) any employee of the Company or any of its Affiliated Companies to terminate
such employee’s employment relationship with the Company and its Affiliated
Companies in order, in either case, to enter into a similar relationship with
the Executive, or any other person or any entity in competition with the
Company or any of its Affiliated Companies (other than with respect to general
employment solicitations to the public and not directed specifically at employees
of the Company and its Affiliated Companies).

 

13.                                 Non-Competition During Executive’s employment by the Company
and for a period of twelve (12) months following the termination of the
Executive’s employment for any reason, the Executive shall not, whether
individually, as a director, manager, member, stockholder, partner, owner,
employee, consultant or agent of any business, or in any other capacity, other
than on behalf of the Company or it Affiliated Companies, organize, establish,
own, operate, manage, control, engage in, participate in, invest in, permit her
name to be used by, act as a consultant or advisor to, render services for
(alone or in association with any person, firm, corporation or business
organization), or otherwise assist any person or entity that engages in or
owns, invests in, operates, manages or controls any venture or enterprise which
engages or proposes to engage in the building products distribution business in
the United States or Canada (the “Business”). Notwithstanding the foregoing,
nothing in this Agreement shall prevent the Executive from owning for passive
investment purposes not intended to circumvent this Agreement, less than five
percent (5%) of the publicly traded voting securities of any company engaged in
the Business (so long as the Executive has no power to manage, operate, advise,
consult with or control the competing enterprise and no power, alone or in
conjunction with other affiliated parties, to select a director, manager,
general partner, or similar governing official of

 

6

 

the
competing enterprise other than in connection with the normal and customary
voting powers afforded the Executive in connection with any permissible equity
ownership).

 

14.                                 Remedies; Specific Performance. The parties acknowledge and agree that the
Executive’s breach or threatened breach of any of the restrictions set forth in
Sections 11 through 13 will result in irreparable and continuing damage to the
Company and its Affiliated Companies for which there may be no adequate remedy
at law and that the Company and its Affiliated Companies shall be entitled to
equitable relief, including specific performance and injunctive relief as
remedies for any such breach or threatened or attempted breach. The Executive
hereby consents to the grant of an injunction (temporary or otherwise) against
the Executive or the entry of any other court order against the Executive
prohibiting and enjoining her from violating, or directing her to comply with
any provision of Sections.  The Executive
also agrees that such remedies shall be in addition to any and all remedies,
including damages, available to the Company and its Affiliated Companies
against her for such breaches or threatened or attempted breaches. In addition,
without limiting the remedies of the Company and its Affiliated Companies for
any breach of any restriction on the Executive set forth in Sections 11 through
13, except as required by law, the Executive shall not be entitled to any
payments set forth in Section 4 hereof if the Executive breaches the
covenant applicable to the Executive contained in Sections 11 through 13 and
the Company and its Affiliated Companies will have no obligation to pay any of
the amounts that remain payable by the Company under Section 4.

 

15.                                 Successors. This Agreement is personal to the Executive and without prior written
consent of the Company, shall not be assignable by the Executive. To the extent
provisions contained herein relate to the Executive’s legal representatives,
this Agreement shall inure to the benefit of and be enforceable by such legal
representatives. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if not such succession had taken place. As used in this Agreement, “Company”
shall mean the Company as hereinbefore defined and any successor to its
business and/or assets as set forth herein and any successor to its business
and/or assets as set forth herein which assumes and agrees to perform this
Agreement.

 

16.                                 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.

 

17.                                 Notices. All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:

 

 

7

 

If to the Executive:

 

Barbara V. Tinsley

1960 Greystone Road

Atlanta, GA 30318

 

If to the Company:

 

BlueLinx Corporation

4100 Wildwood Parkway

Atlanta, Georgia 30339

Attention: Chief Executive Officer

 

With a copy to:

 

Cerberus Capital Management, L.P.

299 Park Avenue

New York, New York 10171

Attention: Lenard Tessler

 

And a copy to:

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention: Stuart D.
Freedman, Esq.

 

or
to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

 

18.                                 Tax Withholding. The Company may withhold from any amounts payable
under this Agreement such federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

 

19.                                 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto,
including, but not limited to, the Consulting Agreement between the Executive
and ABP Distribution Inc., dated as of March 25, 2004.

 

20.                                 Waiver and Amendments. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any right, power or
privilege hereunder, nor any single or partial exercise of any right, power or
privilege hereunder, preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.

 

8

 

21.                                 Arbitration. The Company and Executive agree to arbitrate any controversy or claim
arising out of this Agreement or otherwise relating to Executive’s employment
by the Company or the termination of such employment to the extent required
(including, but not limited to, any claims of breach of contract, wrongful termination
or age, sex, race or other discrimination); provided that the Company shall
have the right to, and be permitted to, seek and obtain injunctive relief from
a court of competent jurisdiction pursuant to Section 14 above in the
state or federal courts located in the State of New York. Any such arbitration
shall be fully and finally resolved in binding arbitration in a proceeding in
the State of New York, in accordance with the National Rules for the Resolution
of Employment Disputes of the American Arbitration Association before a single
arbitrator. The arbitrator shall not have the authority to modify or change any
of the terms of this Agreement, except as provided in Section 25 hereof.
The arbitrator’s award shall be final and binding upon the parties, and
judgment upon the award may be entered in any court of competent jurisdiction
in any state of the United States or country or application may be made to such
court for a judicial acceptance of the award and an enforcement as the law of
such jurisdiction may require or allow. Each party thereto shall bear its own
costs incurred in any such arbitration, including legal fees and expenses.

 

22.                                 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.

 

23.                                 Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning of terms contained herein.

 

24.                                 Severability. If any term, provision, covenant or
restriction of this Agreement, or any part thereof, is held by a court of
competent jurisdiction of any foreign, federal, state, county or local
government or any other governmental, regulatory or administrative agency or
authority to be invalid, void, unenforceable or against public policy for any
reason, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected or impaired or invalidated. The Executive acknowledges that the
restrictive covenants contained in Sections 11 through 13 are a condition of
this Agreement and are reasonable and valid in temporal scope and in all other
respects.

 

25.                                 Judicial Modification. If any court or arbitrator determines that
any of the covenants in Sections 11 through 13, or any part of any of them, is
invalid or unenforceable, the remainder of such covenants and parts thereof
shall not thereby be affected and shall be given full effect, without regard to
the invalid portion. If any court or arbitrator determines that any of such
covenants, or any part thereof, is invalid or unenforceable because of the
geographic or temporal scope of such provision, such court or arbitrator shall
reduce such scope to the minimum extent necessary to make such covenants valid
and enforceable.

 

9

 

IN WITNESS WHEREOF, the parties hereto, intending to
be legally bound hereby, have executed this Agreement as of the day and year
first above mentioned.

 

	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Barbara V. Tinsley

  	
   

  
	
   

  	
  Barbara
  V. Tinsley

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BLUELINX
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles H. McElrea

  	
   

  
	
   

  	
   

  	
  Name: Charles H.
  McElrea

  
	
   

  	
   

  	
  Title:   CEO

  
					

 

10

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