Exhibit 10.4
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as
of the 1st day of January 2006, by and among Compression
Polymers Holding Corporation, a Delaware corporation (
“CPH” ), and its wholly owned
subsidiaries, Compression Polymers Corp., a Delaware corporation (
“CPC” ), and Vycom Corp., a Delaware
corporation ( “Vycom” ) (CPC and
Vycom, collectively, the “Employers” and
individually an “Employer” ), and James
Keisling ( “Executive” ).
RECITALS
WHEREAS, Employers and Executive
have previously entered into an Employment Agreement dated
May 10, 2005 (the “Original
Agreement” ), pursuant to which Executive agreed to
serve as the Chief Executive Officer of Employers; and
WHEREAS, Employers now desire to
provide for Executive’s transition to the position of
Chairman of the Employers and to amend and restate the Original
Agreement to provide for such transition; and
WHEREAS, as a condition precedent
and a material inducement for Employers to employ and pay
Executive, Executive has agreed to execute this Agreement and be
bound by the provisions herein; and
WHEREAS, the parties hereto intend
this Agreement to cancel and supersede in all respects the Original
Agreement.
NOW, THEREFORE, in consideration of
the mutual covenants contained herein, the parties hereto agree as
follows:
PROVISIONS
1.
Term and
Duties . Employers hereby agree to
employ Executive for the two-year period commencing on
January 1, 2006 and ending on December 31, 2007
(the “Initial
Term” ) or until terminated in
accordance with this Section 1 or Section 5. Unless
terminated by written notice delivered at least thirty (30) days
prior to the expiration of the Initial Term, Executive’s
employment shall continue for successive one (1) year terms
(each one (1) year term hereinafter referred to as a
“Subsequent
Term” and together with the Initial
Term, the “Term” ) until terminated by written
notice delivered at least thirty (30) days prior to the expiration
of the Subsequent Term. For the period commencing on
January 1, 2006 and continuing until December 31, 2006
(or such earlier date (the “Promotion Date”
) as John Loyack
is appointed successor Chief Executive Officer of the Employers),
Executive shall serve as the Chief Executive Officer of the
Employers.
Commencing with the
Promotion Date or January 1, 2007, whichever is earlier, and
continuing for the remainder of the Term, Executive shall serve as
the Chairman of the Boards of Directors (the “Board” ) of the Employers. The
Employers and Executive shall agree on the date (the
“Designation
Date” ) on which the Employers
shall announce John Loyack as CEO designate. Subject to the
provisions of this Agreement, during the Term, Executive shall
devote his best efforts and abilities to the performance of
Executive’s duties on behalf of Employers and to the
promotion of its interests consistent with Executive’s
offices and positions with the Employers and subject to the
direction and control of the Board. Until the Promotion Date,
Executive shall devote substantially all of his business time,
energies, attention and abilities to the operation of the business
of Employers and shall not be actively involved in any other trade
or business or as an employee of any other trade or business except
if such other trade or business does not entail, on the average,
over ten (10) hours per week and in the aggregate, no more
than forty (40) hours in any month and does not in any way
affect or impair the performance of Executive’s duties or
responsibilities hereunder. Executive’s services shall be
performed during administrative hours substantially in Scranton,
Pennsylvania, and Executive shall not be required to be absent from
the Scranton, Pennsylvania area more than five (5) business
days during any calendar month. During the period Executive serves
as Chairman of the Board, Executive shall devote the amount of time
necessary to perform duties customarily associated with the
position of Chairman of the Board, including being available to
other directors and senior management to discuss the business and
operations of Employers, provide guidance, consider strategic
alternatives and help establish the agenda for Board
meetings.
2.
Compensation
During Term .
(a)
Base
Compensation . In consideration of the
services to be rendered by Executive during the Term, Employers
shall pay to Executive, (i) for the portion of the Term
commencing on the date hereof and ending on December 31, 2006,
a base salary of $300,000 per year, payable bi-weekly and prorated
for any partial employment period, and (ii) for the remainder
of the Term, a base salary of $50,000 per year, payable bi-weekly
and prorated for any partial employment period ($300,000 or
$50,000, as the case may be, the “Base Compensation”
).
(b)
Bonus . Subject only to the
limitations set forth in the Agreement, Executive shall be entitled
to receive an annual incentive bonus ( the “Incentive Bonus”
)
based upon the
achievement of certain budget performance goals related to
Employers’ (i) EBITDA, (ii) working capital,
(iii) capital expenditures and/or (iv) such other
performance criteria as the Compensation Committee of the Board
(the “Compensation
Committee” ) shall determine. For the
2006 fiscal year, Executive shall be eligible to receive a target
Incentive Bonus of $300,000. The EBITDA target for such year shall
be $53.8 million (i.e., 102.5% of the $52.5 million budgeted EBITDA
for such year), inclusive of the Incentive Bonus as an expense. The
Compensation Committee in
2
consultation with Executive
shall establish other mutually agreeable performance targets and
Incentive Bonus payout ranges for 2006. For the 2007 fiscal year
and any fiscal year thereafter during the Term, Executive’s
target Incentive Bonus shall be $50,000 and Incentive Bonus payout
ranges shall be established by the Compensation Committee in
consultation with Executive. Each Incentive Bonus shall be paid no
later than 2½ months following the end of the fiscal year to
which it relates.
3.
Benefits
.
(a)
Subject to
Section 3(b) below, Executive shall be eligible to
participate in such benefit programs offered by each Employer
(other than bonus plans), such as health, dental, life insurance,
vision, vacations and 401(k), as are offered to similarly-situated
employees (except in the case of equity-based incentive plans where
awards are subject to Board (or committee thereof) approval) and in
each case no more favorable than the terms of benefits generally
available to the employees of Employers (based on seniority and
salary level), subject in each case to the generally applicable
terms and conditions of the plan, benefit or program in
question.
(b)
Notwithstanding
the foregoing, Executive shall be entitled, at a minimum, to the
following: (i) major medical insurance coverage comparable to
the insurance coverage currently provided by Employers for
Executive; (ii) ten (10) days of paid sick leave during
each annual period, which shall be cumulative and (iii) six
(6) weeks of paid vacation leave during each annual
period.
(c)
During the Term,
Executive shall be authorized to incur necessary and reasonable
travel, entertainment and other business expenses in connection
with his duties hereunder. Employers shall reimburse Executive for
such expenses upon presentation of an itemized account and
appropriate supporting documentation, all in accordance with the
generally applicable policies; provided the Board’s written
approval shall be required prior to Executive’s incurring
$10,000 of expenses in any one instance or $20,000 of expenses in
the aggregate. During the Initial Term, Employers shall provide to
Executive a monthly allowance for the use of an automobile
(the “Automobile
Expenses” ) substantially similar to
the average of Executive’s Automobile Expenses over the
preceding three (3) years. With respect to each Subsequent
Term, the Automobile Expenses shall be adjusted at the commencement
of each Subsequent Term to reflect changes from the prior year in
the Consumer Price Index For All Urban Consumers prepared by the
United
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