<PAGE>
EXHIBIT 10.1
EXECUTION COPY
EMPLOYMENT AGREEMENT
This
Employment Agreement (this "Agreement") is entered into as of
October
20, 2005 (the "Effective Date") between
BLUELINX CORPORATION, a Georgia
corporation (the "Company"), and STEPHEN E.
MACADAM ("Executive").
RECITALS:
WHEREAS,
the Company desires to employ Executive as the Chief Executive
Officer of the Company, and Executive
desires to accept employment as the Chief
Executive Officer of the Company; and
WHEREAS,
as of the Effective Date, the Company shall employ Executive on
the terms and conditions set forth in this
Agreement, and Executive shall be
retained and employed by the Company to
perform such services under the terms
and conditions of this Agreement;
NOW,
THEREFORE, in consideration of the mutual covenants contained
herein
and other good and valuable consideration,
the receipt and sufficiency of which
are hereby acknowledged, the parties hereto
agree as follows:
1. Certain
Definitions. Certain words or phrases with initial capital
letters not otherwise defined herein are to
have the meanings set forth in
paragraph 8.
2.
Employment. The Company shall employ Executive, and Executive
accepts
employment with the Company, as of the
Effective Date, upon the terms and
conditions set forth in this Agreement for
the period beginning on the Effective
Date and ending as provided in paragraph 5
(the "Employment Period").
3.
Position and Duties.
(a) During the Employment Period, Executive shall serve as the
Chief
Executive Officer of the Company and
BlueLinx Holdings Inc. ("BHI") and shall
have the normal duties, responsibilities
and authority of an executive serving
in such position, subject to the power of
the Board of Directors of the Company
(the "Company Board") and the Board of
Directors of BHI (the "BHI Board"), to
provide oversight and direction with
respect to such duties, responsibilities
and authority, either generally or in
specific instances. The Executive also
shall hold similar titles, offices and
authority with BHI's direct and indirect
subsidiaries, as requested by the BHI Board
from time to time, subject to the
oversight and direction of the respective
boards of directors of such entities.
(b) During the Employment Period, the Executive shall be included
in
the management's slate for election as a
member of the BHI Board. Subject, as
required, to reelection by BHI's
stockholders, Executive shall serve as a member
of the BHI Board, with no additional
remuneration payable to Executive for that
service. Upon the Date of Termination,
Executive shall, at the BHI Board's
request, resign from the Board, the BHI
Board and any other board or committee
of the Company, BHI or any of their
respective subsidiaries or affiliates.
<PAGE>
(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
reasonable periods of illness or
other incapacity) to the Business and
affairs of the Company, BHI and their
respective subsidiaries and affiliates.
Executive shall perform Executive's
duties and responsibilities to the best of
Executive's abilities in a diligent,
trustworthy and business-like manner.
During the Employment Period, Executive
shall not serve as a director or a
principal of another company or any
charitable or civic organization without
the Board's prior consent.
Notwithstanding the foregoing, during the
Employment Period, Executive may
continue to serve on the board of directors
of Consolidated Container Company
and may also render charitable and civic
services so long as such services do
not materially interfere with Executive's
ability to discharge his duties
hereunder.
(d) Executive shall perform Executive's duties and
responsibilities
with his principal office located in the
Atlanta, Georgia metropolitan area.
4.
Compensation and Benefits.
(a) Signing Bonus and Stock Options. Contemporaneously with
Executive's commencement of employment with
the Company, the Company shall pay
Executive a signing bonus of $600,000.
Contemporaneously with the execution
hereof, the Compensation Committee of the
BHI Board has granted Executive stock
options with respect to 750,000 shares of
the common stock of BHI, which shall
vest in annual increments of 20% over a
five year period, all in accordance with
a stock option agreement in the form
attached hereto as Exhibit A.
(b) Salary. The Company agrees to pay Executive a salary during
the
Employment Period in installments based on
the Company's payroll practices as
may be in effect from time to time. The
Executive's salary shall be at the rate
of $700,000 per year for 2005 and 2006,
$750,000 per year for 2007, and $800,000
per year for 2008, in each case prorated
for the portion of a year during which
Executive is employed pursuant to this
Agreement (as in effect from time to
time, "Base Salary").
(c) Annual Bonus.
(i) For each of fiscal years 2006 (subject to subparagraph
4(c)(ii) below), 2007 and 2008, Executive
shall be eligible to receive an annual
bonus, with the annual bonus potential to
be between 75% of Base Salary (i.e.,
75% upon achievement of annual "target"
performance goals) and a maximum of 150%
of Base Salary (i.e., 150% upon achievement
of annual "maximum" performance
goals), with the "target" and "maximum"
based upon satisfaction of performance
goals and bonus criteria to be defined and
approved by the Compensation
Committee of the BHI Board in advance for
each fiscal year. The Company shall
pay any such annual bonus earned to
Executive in accordance with the terms of
the applicable bonus plan.
(ii) For fiscal year 2006, notwithstanding whether the
performance goals for fiscal 2006 are
satisfied in accordance with subparagraph
4(c)(i) above, Executive shall be entitled
to receive a minimum bonus equal to
50% of Base Salary, prorated based on the
number of days actually employed
during fiscal year 2006 if Executive is not
employed for such
2
<PAGE>
full fiscal year (the "Contractual Bonus").
To the extent that Executive is
entitled to a bonus payment under
subparagraph 4(c)(i), the Contractual Bonus
shall constitute a portion of, and shall
not be in addition to, the amounts so
payable to Executive.
(iii) For each of fiscal years 2006, 2007 and 2008, Executive
is entitled to receive an annual targeted
bonus equivalent to $750,000 in value,
as so determined by the Compensation
Committee of the BHI Board, payable in the
form of awards of stock options and/or
shares of restricted stock under the
BHI's long term equity incentive plan as
then in effect, all on such terms and
conditions as the Compensation Committee of
the BHI Board shall determine in
accordance with the provisions of such
plan. Such bonus award shall be subject
to such time and performance-based vesting
conditions as are established by the
Compensation Committee of the BHI
Board.
(d) Expense Reimbursement. The Company shall reimburse Executive
for
all reasonable expenses incurred by
Executive during the Employment Period in
the course of performing Executive's duties
under this Agreement in accordance
with the Company's policies in effect from
time to time with respect to travel,
entertainment and other business expenses,
and subject to the Company's
requirements applicable generally with
respect to reporting and documentation of
such expenses. In order to be entitled to
expense reimbursement, the Executive
must be employed as Chief Executive Officer
on the date the Executive incurred
the expense.
(e) Standard Executive Benefits Package. Executive is entitled
during the Employment Period to
participate, on the same basis as the Company's
other senior executives, in the Company's
Standard Executive Benefits Package.
The Company's "Standard Executive Benefits
Package" means those benefits
(including insurance, vacation and other
benefits, but excluding, except as
hereinafter provided in paragraph 6, any
severance pay program or policy of the
Company) for which substantially all of the
executives of the Company are from
time to time generally eligible, as
determined from time to time by the Board. A
summary of such benefits available to
Executive as in effect on the date of this
Agreement is attached hereto as Exhibit
B.
(f) Indemnification. The Indemnification Agreement, dated
December
13, 2004, between BHI and the Executive
remains and shall remain in effect until
amended or terminated in accordance with
its terms.
(g) Professional Fees. Promptly following receipt of invoices
therefor, the Company will reimburse
Executive for Executive's reasonable
professional fees and costs (and related
disbursements) incurred in connection
with Executive's negotiation and execution
of this Agreement, in an amount not
to exceed $10,000.
(h) Additional Compensation/Benefits. The Compensation Committee
of
the BHI Board, in its sole discretion, will
determine any compensation or
benefits to be provided to Executive during
the Employment Period other than as
set forth in this Agreement, including,
without limitation, any future grant of
stock options or other equity awards.
(i) 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
3
<PAGE>
result of misconduct, with any financial
reporting requirement under the federal
securities laws, to the extent required by
law Executive will reimburse the
Company for (i) any bonus or other
incentive-based or equity-based compensation
received by Executive from the Company
(including such compensation payable in
accordance with this paragraph 4 and
paragraph 6) during the 12-month period
following the first public issuance or
filing with the Securities and Exchange
Commission (whichever first occurs) of the
financial document embodying that
financial reporting requirement; and (ii)
any profits realized by Executive from
the sale of BHI's securities during that
12-month period.
5.
Employment Period.
(a) Subject to subparagraph 5(b), the Employment Period will
commence on the Effective Date and will
continue until, and will end upon,
December 31, 2008 (the "Renewal Date");
except that on the Renewal Date, unless
either party shall have given the other
30-days' written notice otherwise, the
Employment Period will be extended
automatically for one additional year.
(b) Notwithstanding subparagraph 5(a), the Employment Period
will
end upon the first to occur of any of the
following events: (i) Executive's
death; (ii) the Company's termination of
Executive's employment on account of
Disability; (iii) the Company's termination
of Executive's employment for Cause
(a "Termination for Cause"); (iv) the
Company's termination of Executive's
employment without Cause (a "Termination
without Cause"); (v) Executive's
termination of Executive's employment for
Good Reason (a "Termination for Good
Reason"); or (vi) Executive's termination
of Executive's employment for any
reason other than Good Reason (a "Voluntary
Termination").
(c) Any termination of Executive's employment under
subparagraph
5(b) (other than 5(b)(i)) must be
communicated by a Notice of Termination
delivered by the Company or Executive, as
the case may be, to the other party.
(d) Executive will be deemed to have waived any right to a
Termination for Good Reason based on the
occurrence or existence of a particular
event or circumstance constituting Good
Reason unless Executive delivers a
Notice of Termination within 45 days from
the date Executive first became aware
of the event or circumstance.
6.
Post-Employment Period Payments.
(a) At the Date of Termination, regardless of the reason for
termination of employment, Executive will
be entitled to (i) any Base Salary
that has accrued but is unpaid, any annual
bonus that has been earned for the
fiscal year prior to the year in which the
Date of Termination occurs, but is
unpaid, any reimbursable expenses that have
been incurred but are unpaid, and
any unexpired vacation days that have
accrued under the Company's vacation
policy but are unused, as of the end of the
Employment Period, which amount
shall be paid in a lump sum in cash within
30 days of the Date of Termination,
(ii) any plan benefits that by their terms
extend beyond termination of
Executive's employment (but only to the
extent provided in any such benefit plan
in which Executive has participated as a
Company employee and excluding, except
as hereinafter provided in paragraph 6, any
Company severance pay program or
policy)
4
<PAGE>
and (iii) any benefits to which Executive
is entitled in accordance with Part 6
of Subtitle B of Title I of the Employee
Retirement Income Security Act of 1974,
as amended ("COBRA"). Except as
specifically described in this subparagraph 6(a)
and in the succeeding subparagraphs of this
paragraph 6 (under the circumstances
described in those succeeding
subparagraphs), from and after the Date of
Termination Executive shall cease to have
any rights to salary, bonus, expense
reimbursements or other benefits from the
Company, BHI or any of their
subsidiaries or affiliates.
(b) If Executive's employment terminates on account of
Executive's
death, Disability, Voluntary Termination,
Termination for Cause or the end of
the Employment Period in accordance with
Section 5(a), the Company will make no
further payments to Executive except as
contemplated in subparagraph 6(a).
(c) If Executive's employment terminates on account of a
Termination
without Cause or a Termination for Good
Reason, Executive shall be entitled to
the following:
(1) payment equal to two times
Executive's annual base salary in effect
immediately prior to the Date of Termination, plus two times the
cash
bonus
amount received by the Executive for the fiscal year prior to
the
year of
the termination of Executive's employment, payable in
twenty-four
equal
monthly installments commencing six months after the Date of
Termination;
(2) a lump sum payment, payable
six months after the Date of Termination, in
cash in an
amount equal to the contributions the Company would have made
(excluding
any salary reduction contributions pursuant to an election of
the
Executive) for the benefit of the Executive to the Company's
qualified
salaried
401(k) plan (if the Company is making matching contributions or
other
contributions to the salaried 401(k) plan at the time of the
Executive's termination), assuming (i) the Executive continued as
an
employee
of the Company for a period of 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) continued participation in
the Company's medical and dental plans, on the
same basis
as active employees participate in such plans, until the
earlier of
(i) Executive's eligibility for any such coverage under another
employer's
or any other medical or dental insurance plans or (ii) the
second
anniversary of the Date of Termination; except that in the
event
that
participation in any such plan is barred, the Company shall
reimburse
Executive
on a monthly basis for any premiums paid by Executive to obtain
benefits
(for Executive and his dependents) equivalent to the benefits
he
is
entitled to receive under the Company's benefit plans. Executive
agrees
that the
period of coverage under such plans (or the period of
reimbursement if participation is barred) shall count against the
plans'
obligation
to provide continuation coverage pursuant to COBRA;
(4) up to $25,000 in aggregate
outplacement services to be used within one
year of
the Date of Termination, the scope and provider of which shall
be
selected
by Executive in his sole discretion; and
5
<PAGE>
(5) 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) The Company shall have no obligation to make any payments
in
accordance with subparagraph 6(c) if
Executive declines to sign and return a
Release Agreement or revokes the Release
Agreement within the time provided in
the Release Agreement.
(e) Executive is not required to mitigate the amount of any
payment
or benefit provided for in this Agreement
by seeking other employment or
otherwise.
7.
Competitive Activity; Confidentiality; Non-solicitation.
(a) Confidential Information.
(i) The Executive shall hold in a fiduciary capacity for the
benefit of the Company and BHI all secret
or confidential information, knowledge
or data relating to the Company, BHI or any
of their respective subsidiaries and
affiliates, and their respective
businesses, which shall have been (i) obtained
by the Executive during the Executive's
employment by the Company, BHI or any of
their respective subsidiaries and
affiliates or (ii) acquired by the Company,
BHI or any of their respective subsidiaries
and affiliates from Georgia-Pacific
Corporation, and which shall not be or
become public knowledge (other than by
acts by the Executive or representatives of
the Executive in violation of this
Agreement) ("Confidential Information").
After termination of the Executive's
employment with the Company, the Executive
shall not, without the prior written
consent of the Company or BHI or as may
otherwise be required by law or legal
process, communicate or divulge any such
information, knowledge or data to
anyone other than the Company and those
designated by it.
(ii) All files, records, documents, drawings, specifications,
data, computer programs, customer or vendor
lists, specific customer or vendor
information, marketing techniques, business
strategies, contract terms, pricing
terms, discounts and management
compensation of the Company, BHI or any of their
respective subsidiaries and affiliates,
whether prepared by the Executive or
otherwise coming into the Executive's
possession, shall remain the exclusive
property of the Company, BHI or any of
their respective subsidiaries and
affiliates, and the Executive shall not
remove any such items from the premises
of the Company, BHI or any of their
respective subsidiaries and affiliates,
except in furtherance of the Executive's
duties.
(iii) It is understood that while employed by the Company, the
Executive will promptly disclose to the
Company, and assign to the Company the
Executive's interest in any invention,
improvement or discovery made or
conceived by the Executive, either alone or
jointly with others, which arises
out of the Executive's employment. At the
Company's request and expense, the
Executive will reasonably assist the
Company, BHI or any of their respective
subsidiaries and affiliates during the
period of the Executive's employment by
the Company and thereafter in connection
with any controversy or legal
proceeding relating to such
6
<PAGE>
invention, improvement or discovery and in
obtaining domestic and foreign patent
or other protection covering the same.
(iv) As requested by the Company and at the Company's expense,
from time to time and upon the termination
of the Executive's employment with
the Company for any reason, the Executive
will promptly deliver to the Company,
BHI or any of their respective subsidiaries
and affiliates all copies and
embodiments, in whatever form, of all
Confidential Information in the
Executive's possession or within his
control (including, but not limited to,
memoranda, records, notes, plans,
photographs, manuals, notebooks,
documentation, program listings, flow
charts, magnetic media, disks, diskettes,
tapes and all other materials containing
any Confidential Information)
irrespective of the location or form of
such material. If requested by the
Company, the Executive will provide the
Company with written confirmation that
all such materials have been delivered to
the Company as provided herein.
(b) Non-Solicitation. During his employment with the Company and
for
a period of two years following the
termination of the Executive's employment
for any reason, the Executive shall not
solicit or attempt to solicit, (a) any
party who is a customer of the Company, BHI
or any of their respective
subsidiaries and affiliates, for the
purpose of marketing, selling or providing
to any such party any services or products
offered by the Company, BHI or any of
their respective subsidiaries and
affiliates to such customer other than general
solicitations to the public and not
directed specifically at a customer of the
Company, (b) any party who is a vendor of
the Company, BHI or any of their
respective subsidiaries and affiliates to
sell similar products or (c) any
employee of the Company, BHI or any of
their respective subsidiaries and
affiliates to terminate such employee's
employment relations
