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Exhibit 10.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), originally dated as of
August
21, 2002, amended and restated in its entirety, as of July 27, 2004
(the
"Restatement Date") and further amended and restated in its
entirety as of March
30, 2006, by and between ASSOCIATED MATERIALS INCORPORATED, a
Delaware
corporation (the "Company"), and ROBERT M. FRANCO, an individual
residing in the
State of Ohio (the "Executive").
WITNESSETH:
WHEREAS, the Executive previously served as President of Alside
Supply
Centers, a division of the Company;
WHEREAS, pursuant to that certain Agreement and Plan of Merger,
dated
as of March 16, 2002, among Associated Materials Holdings Inc.
(formerly known
as Harvest/AMI Holdings Inc.) ("Parent"), Simon Acquisition Corp.
and the
Company (the "Merger Agreement"), the Company became a wholly-owned
subsidiary
of Parent upon consummation of the transactions contemplated by the
Merger
Agreement (the "Merger");
WHEREAS, since the Merger, the Executive has served as President
of
Alside Supply Centers;
WHEREAS, on March 4, 2004, all of the stock of Parent was
exchanged
for stock of AMH Holdings, Inc. ("AMH") as part of a series of
corporate
reorganization transactions, and Parent became a wholly-owned
subsidiary of AMH;
WHEREAS,
on December 22, 2004, all of the stock of AMH was exchanged
for stock of AMH II Holdings, Inc. ("AMH II") as part of a series
of corporate
reorganization transactions, and Parent became an indirect
wholly-owned
subsidiary of AMH II;
WHEREAS, the Company desires to continue to retain the services
and
employment of the Executive on behalf of the Company, and the
Executive desires
to continue his employment with the Company, upon the terms and
conditions
hereinafter set forth;
WHEREAS, pursuant to
Section 12(g) of this Agreement, this Agreement
may be amended in writing by the parties hereto; and
WHEREAS, the Company and the Executive mutually desire to amend
and
restate this Agreement as set forth herein.
NOW, THEREFORE, in
consideration of the mutual covenants and promises
contained herein and for good and valuable consideration, the
receipt of which
is hereby acknowledged, the parties hereto, each intending to be
legally bound
hereby, agree as follows:
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1.
Employment. On the terms and subject to the conditions set forth
herein,
the Company hereby employs the Executive as the President of Alside
Supply
Centers, and the Executive accepts such employment, for the
Employment Term (as
defined in Section 3). During the Employment Term, the Executive
shall serve as
the President of Alside Supply Centers and shall report to the
President and
Chief Executive Officer of the Company, performing such duties as
shall be
reasonably required of a president, and shall have such other
powers and perform
such other duties as may from time to time be assigned to him by
the President
and Chief Executive Officer of the Company and the Board of
Directors of the
Company (the "Board"). To the extent requested by the Company's
President and
Chief Executive Officer or the Board, the Executive shall also
serve on the
Board or any committee of the Board and/or as a director, officer
or employee of
AMH II or any other person or entity which, from time to time, is a
direct or
indirect subsidiary of AMH II (AMH II and each such subsidiary,
person or
entity, other than the Company, are hereinafter referred to
collectively as the
"Affiliates," and individually as an "Affiliate"). The Executive's
service as a
director of the Company or as a director, officer or employee of
any Affiliate
shall be without additional compensation.
2.
Performance. The Executive will serve the Company faithfully and to
the
best of his ability and will devote his full business time, energy,
experience
and talents to the business of the Company and the Affiliates;
provided,
however, that it shall not be a violation of this Agreement for the
Executive to
manage his personal investments and business affairs, or to engage
in or serve
such civic, community, charitable, educational, or religious
organizations as he
may reasonably select so long as such service does not interfere
with the
Executive's performance of his duties hereunder.
3.
Employment Term. Subject to earlier termination pursuant to Section
6,
the Executive's term of employment hereunder shall begin on the
Offer Completion
Date (hereinafter referred to as the "Commencement Date") and
continue through
the date which is two (2) years following the Commencement Date;
provided,
however, that beginning on the first anniversary of the
Commencement Date, and
on each subsequent anniversary of the Commencement Date, such term
shall be
automatically extended by an additional one (1) year beyond the end
of the
then-current term, unless, at least thirty (30) days before such
first
anniversary of the Commencement Date, or thirty (30) days before
any such
subsequent anniversary of the Commencement Date, the Company gives
written
notice to the Executive that the Company does not desire to extend
the term of
this Agreement, in which case, the term of employment hereunder
shall terminate
as of the second anniversary of the Commencement Date or the end of
the
then-current term, as applicable (the term of employment hereunder,
including
any extensions, in accordance with this Section 3, shall be
referred to herein
as the "Employment Term").
4.
Compensation and Benefits.
(a) Salary. As compensation for his services hereunder and in
consideration of the Executive's other agreements hereunder, during
the
Employment Term, the Company shall pay the Executive a base salary,
payable in
equal installments in accordance with the Company's
payroll procedures, at an annual rate of Three Hundred Thousand
Dollars
($300,000), subject to annual review by the Board, which may
increase, but not
decrease, the Executive's base salary.
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(b) Annual Incentive Bonus; Stock Options. The Executive shall
be
entitled to participate in an annual incentive bonus arrangement
established by
the Company on terms and conditions substantially as set forth in
Exhibit A
hereto. The Executive shall not be entitled to participate in any
other annual
cash bonus plan, program or arrangement with respect to any period
to which the
annual incentive bonus arrangement described in the immediately
preceding
sentence applies. The Executive shall also be entitled to
participate in the
stock option plan established by Parent or AMH II.
(c) Retirement, Medical, Dental and Other Benefits. During the
Employment Term, the Executive shall, in accordance with the terms
and
conditions of the applicable plan documents and all applicable
laws, be eligible
to participate in the various retirement, medical, dental and other
employee
benefit plans made available by the Company, from time to time, for
its
executives.
(d) Vacation; Sick Leave. During the Employment Term, the
Executive
shall be entitled to not less than four (4) weeks of vacation
during each
calendar year and sick leave in accordance with the Company's
policies and
practices with respect to its executives.
(e) Business Expenses. (1) The Company shall reimburse or
advance
payment to the Executive for all reasonable expenses actually
incurred by him in
connection with the performance of his duties hereunder in
accordance with
policies established by the Company from time to time and subject
to receipt by
the Company of appropriate documentation.
(2) During the Employment Term, the Executive shall be paid an
automobile allowance in the amount of $900 per month. Such
allowance shall
be
paid by the Company to the Executive on the last business day of
each
month or otherwise in accordance with Company policy.
5.
Covenants of the Executive. The Executive acknowledges that in
the
course of his employment with the Company he has and will become
familiar with
the Company's and the Affiliates' trade secrets and with other
confidential
information concerning the Company and the Affiliates, and that his
services are
of special, unique and extraordinary value to the Company and the
Affiliates.
Therefore, the Company and the Executive mutually agree that it is
in the
interest of both parties for the Executive to enter into the
restrictive
covenants set forth in this Section 5 and that such restrictions
and covenants
are reasonable given the nature of the Executive's duties and the
nature of the
Company's business.
(a) Noncompetition. During the Employment Term and for the
Restricted
Period (as hereinafter defined) following termination of the
Employment Term,
the Executive shall not, within any jurisdiction or marketing area
in which the
Company or any Affiliate is doing or is qualified to do business,
directly or
indirectly, own, manage, operate, control, be employed by or
participate in the
ownership, management, operation or control of, or be connected in
any manner
with, any Business (as hereinafter defined), provided that the
Executive's
ownership of securities of two percent (2%) or less of any class of
securities
of a public company shall not, by itself, be considered to be
competition with
the Company or any Affiliate. For purposes of this Agreement,
"Business" shall
mean the manufacturing, production, distribution or sale of
exterior residential
building products, including, without limitation, vinyl siding,
windows,
fencing, decking, railings and garage doors, or any other business
of a type and
character engaged in by
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the Company or an Affiliate during the Employment Term. For
purposes of this
Agreement, the "Restricted Period" shall be two (2) years.
(b) Nonsolicitation. During the Employment Term and for the
Restricted
Period following termination of the Employment Term, the Executive
shall not,
directly or indirectly, (i) employ, solicit for employment or
otherwise contract
for the services of any individual who is or was an employee of the
Company or
any Affiliate during the Employment Term; (ii) otherwise induce or
attempt to
induce any employee of the Company or an Affiliate to leave the
employ of the
Company or such Affiliate, or in any way knowingly interfere with
the
relationship between the Company or any Affiliate and any employee
respectively
thereof; or (iii) induce or attempt to induce any customer,
supplier, licensee
or other business relation of the Company or any Affiliate to cease
doing
business with the Company or such Affiliate, or interfere in any
way with the
relationship between any such customer, supplier, licensee or
business relation
and the Company or any Affiliate.
(c)
Nondisclosure; Inventions. For the Employment Term and
thereafter,
(i) the Executive shall not divulge, transmit or otherwise disclose
(except as
legally compelled by court order, and then only to the extent
required, after
prompt notice to the Board of any such order), directly or
indirectly, other
than in the regular and proper course of business of the Company
and the
Affiliates, any customer lists, trade secrets or other confidential
knowledge or
information with respect to the operations or finances of the
Company or any
Affiliates or with respect to confidential or secret processes,
services,
techniques, customers or plans with respect to the Company or the
Affiliates
(all of the foregoing collectively hereinafter referred to as,
"Confidential
Information"), and (ii) the Executive will not use, directly or
indirectly, any
Confidential Information for the benefit of anyone other than the
Company and
the Affiliates; provided, however, that the Executive has no
obligation, express
or implied, to refrain from using or disclosing to others any such
knowledge or
information which is or hereafter shall become available to the
general public
other than through disclosure by the Executive. All Confidential
Information,
new processes, techniques, know-how, methods, inventions, plans,
products,
patents and devices developed, made or invented by the Executive,
alone or with
others, while an employee of the Company which are related to the
business of
the Company and the Affiliates shall be and become the sole
property of the
Company, unless released in writing by the Board, and the Executive
hereby
assigns any and all rights therein or thereto to the Company.
(d) Nondisparagement. During the Employment Term and thereafter,
the
Executive shall not take any action to disparage or criticize the
Company or any
Affiliate or their respective employees, directors, owners or
customers or to
engage in any other action that injures or hinders the business
relationships of
the Company or any Affiliate. Nothing contained in this Section
5(d) shall
preclude the Executive from enforcing his rights under this
Agreement.
(e) Return of Company Property. All Confidential Information,
files,
records, correspondence, memoranda, notes or other documents
(including, without
limitation, those in computer-readable form) or property relating
or belonging
to the Company or an Affiliate, whether prepared by the Executive
or otherwise
coming into his possession in the course of the performance of his
services
under this Agreement, shall be the exclusive property of the
Company and shall
be delivered to the Company, and not retained by the Executive
(including,
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without limitations, any copies thereof), promptly upon request by
the Company
and, in any event, promptly upon termination of the Employment
Term.
(f) Enforcement. The Executive acknowledges that a breach of
his
covenants contained in this Section 5 may cause irreparable damage
to the
Company and the Affiliates, the exact amount of which would be
difficult to
ascertain, and that the remedies at law for any such breach or
threatened breach
would be inadequate. Accordingly, the Executive agrees that if he
breaches or
threatens to breach any of the covenants contained in this Section
5, in
addition to any other remedy which may be available at law or in
equity, the
Company and the Affiliates shall be entitled to specific
performance and
injunctive relief to prevent the breach or any threatened breach
thereof without
bond or other security or a showing that monetary damages will not
provide an
adequate remedy.
(g) Scope of Covenants. The Company and the Executive further
acknowledge that the time, scope, geographic area and other
provisions of this
Section 5 have been specifically negotiated by sophisticated
commercial parties
and agree that all such provisions are reasonable under the
circumstances of the
activities contemplated by this Agreement. In the event that the
agreements in
this Section 5 shall be determined by any court of competent
jurisdiction to be
unenforceable by reason of their extending for too great a period
of time or
over too great a geographical area or by reason of their being too
extensive in
any other respect, they shall be interpreted to extend only over
the maximum
period of time for which they may be enforceable and/or over the
maximum
geographical area as to which they may be enforceable and/or to the
maximum
extent in all other respects as to which they may be enforceable,
all as
determined by such court in such action.
6.
Termination. The employment of the Executive hereunder shall
automatically terminate at the end of the Employment Term. The
employment of the
Executive hereunder and the Employment Term may also be terminated
at any time
by the Company with or without Cause. For purposes of this
Agreement, except as
otherwise provided in Section 8, "Cause" shall mean: (i)
embezzlement, theft or
misappropriation by the Executive of any property of the Company or
an
Affiliate; (ii) any breach by the Executive of the Executive's
covenants under
Section 5; (iii) any breach by the Executive of any other material
provision of
this Agreement which breach is not cured, to the extent susceptible
to cure,
within thirty (30) days after the Company has given notice to the
Executive
describing such breach; (iv) willful failure by the Executive to
perform the
duties of his employment hereunder which continues for a period of
fourteen (14)
days following written notice thereof by the Company to the
Executive; (v) the
conviction of, or a plea of nolo contendere (or a similar plea) to,
any criminal
offense that is a felony or involves fraud, or any other criminal
offense
punishable by imprisonment of at least one year or materially
injurious to the
business or reputation of the Company involving theft,
dishonesty,
misrepresentation or moral turpitude; (vi) gross negligence or
willful
misconduct on the part of the Executive in the performance of his
duties as an
employee, officer or director of the Company or an Affiliate; (vii)
the
Executive's breach of his fiduciary obligations to the Company or
an Affiliate;
(viii) the Executive's commission of intentional, wrongful damage
to property of
the Company or an Affiliate; (ix) any chemical dependence of the
Executive which
adversely affects the performance of his duties and
responsibilities to the
Company or an Affiliate; or (x) the Executive's violation of the
Company's or an
Affiliate's code of ethics, code of business conduct or similar
policies
applicable to the Executive. The existence or
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non-existence of Cause shall be determined in good faith by the
Board. The
employment of the Executive may also be terminated at any time by
the Executive
by notice of resignation delivered to the Company not less than
ninety (90) days
prior to the effective date of such
