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AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Employment Agreement

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT | Document Parties: ASSOCIATED MATERIALS, LLC | AMH Holdings II, Inc You are currently viewing:
This Employment Agreement involves

ASSOCIATED MATERIALS, LLC | AMH Holdings II, Inc

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Title: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Governing Law: New York     Date: 4/4/2008
Industry: Fabricated Plastic and Rubber     Law Firm: White Case     Sector: Basic Materials

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT, Parties: associated materials  llc , amh holdings ii  inc
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Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
           EMPLOYMENT AGREEMENT (this “ Agreement ”), originally dated as of August 21, 2006, amended and restated in its entirety, as of April 1, 2008 (the “ Restatement Date ”), by and between ASSOCIATED MATERIALS LLC, a Delaware limited liability company (as successor to Associated Materials Incorporated, a Delaware corporation) (the “ Company ”), and a wholly owned indirect subsidiary of AMH Holdings II, Inc., a Delaware corporation (“ AMH II ”), and THOMAS CHIEFFE, an individual residing in the State of Ohio (the “ Executive ”).
WITNESSETH :
          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 such employment with the Company, upon the terms and conditions hereinafter set forth; and
          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:
     1.  Employment . On the terms and subject to the conditions set forth herein, the Company hereby employs the Executive as the President and Chief Executive Officer of the Company, 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 and Chief Executive Officer of the Company and shall report solely to the Board of Directors of AMH II (the “ Board ”), performing such duties as shall be reasonably required of a president and chief executive officer, and shall have such other powers and perform such other duties as may from time to time be assigned to him by the Board. Promptly following the commencement of the Employment Term, AMH II shall take all action necessary to appoint the Executive as a director of AMH II, and, thereafter, for so long as the Executive remains the President and Chief Executive Officer of the Company, AMH II shall use reasonable efforts to cause the Executive to be a director of AMH II, and the Executive agrees to serve as such a director. To the extent requested by the Board, the Executive shall also serve on any committees 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. The Company and the Executive understand and agree that the Executive is obliged under the terms of a consulting agreement between the Executive and another company to devote, and that the Executive may so devote, from time to time prior to October 5, 2007, a portion of his business time and attention to such other company and its affiliates pursuant to such consulting agreement, but only to the extent the Executive’s business time and attention to such other company and its affiliates does not interfere with the 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 April 1, 2008 (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 second 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 second 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 Five Hundred Fifty Thousand Dollars ($550,000), subject to annual review by the Board or its Compensation Committee, which may increase but not decrease the Executive’s base salary.
          (b) Annual Incentive Bonus; Stock Option Plan and Special Retention Incentive Bonus . (1) Commencing with calendar year 2006, 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.
          (2) The Executive shall also be entitled to participate in the stock option plan established by AMH II.

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          (3) The Executive shall also be entitled to receive a Special Retention Incentive Bonus payable in three equal installments of $500,000 each on (or within thirty (30) days after) October 1, 2008, October 1, 2009, and October 1, 2010, so long as the Executive is continuously actively employed by the Company through each such date, or such continuous active employment is terminated by the Company without Cause (as defined in Section 6) or by the Executive for Good Reason (as defined in Section 7(b)) or due to disability (as determined in the good faith discretion of the Board) or death; provided , however , that, if a Liquidity Event that does not constitute a Qualified Change in Control (as defined below) occurs during calendar year 2008, all unpaid installments will be payable no later than March 15, 2009, so long as the Executive is continuously actively employed by the Company through such date, or such continuous active employment is terminated by the Company without Cause or by the Executive for Good Reason or due to disability (as determined in the good faith discretion of the Board) or death; and provided further that, if a Liquidity Event that does not constitute a Qualified Change in Control occurs during calendar year 2009, the third installment will be payable no later than March 15, 2010, so long as the Executive is continuously actively employed by the Company through such date, or such continuous active employment is terminated by the Company without Cause or by the Executive for Good Reason or due to disability (as determined in the good faith discretion of the Board) or death. “ Qualified Change in Control ” means a “change in the ownership or effective control” of AMH II, or “change in the ownership of a substantial portion of the assets” of AMH II, as such terms are used in Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (the “ Code ”).
          (4) For purposes of this Agreement, “ Liquidity Event ” shall mean the occurrence of either of the following events: (A) a transaction or series of transactions (whether structured as a stock sale, merger, consolidation, reorganization, asset sale or otherwise) which results in the sale or transfer of more than a majority of the assets of AMH II and its subsidiaries (determined based on value) or of a majority of the capital stock of AMH II to a person other than the Investors or their affiliates; or (B) a widely distributed sale of the common stock of AMH II in an underwritten public offering pursuant to an effective registration statement filed with the Securities and Exchange Commission which yields at least $150,000,000 of net proceeds to AMH II. For purposes of the immediately preceding sentence, “ Investors ” shall mean all of the following persons collectively: Harvest Partners III, L.P., Harvest Partners III Beteiligungsgesellschaft Bürgerlichen Rechts (mit Haftungsbeschränkung), Harvest Partners IV, L.P., Harvest Partners IV GmbH & Co. KG, AM Holdings Limited, AM Equity Limited, AM Investments Limited, Associated Equity Limited and Associated Investments Limited.
          (5) The Executive shall not be entitled to participate in any bonus plan, program or arrangement of the Company or an Affiliate, other than as specifically provided in this Section 4(b).
          (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,

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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 . 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.
     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 two (2)-year period (the “ Restricted Period ”) 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 the Company or an Affiliate during the Employment Term.
          (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; (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 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.

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          (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, 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

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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 provision of this Agreement which breach is not cured, to the extent susceptible to cure, within fourteen (14) days after the Company has given written notice to the Executive describing such breach; (iv) failure or refusal by the Executive to perform any directive of the Board or the duties of his employment hereunder which continues for a period of fourteen (14) days following notice thereof by the Company to the Executive; (v) any act by the Executive constituting a felony or otherwise involving theft, fraud, dishonesty, misrepresentation or moral turpitude; (vi) conviction of, or plea of nolo contendere (or a similar plea) to, any criminal offense; (vii) 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; (viii) the Executive’s breach of his fiduciary obligations, or disloyalty, to the Company or an Affiliate; (ix) any act or omission to act of the Executive intended to harm or damage the business, property, operations, financial condition or reputation of the Company or any Affiliate; (x) any chemical dependence of the Executive which adversely affects the performance of his duties and responsibilities to the Company or an Affiliate; or (xi) 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, including but not limited to, the Company’s Code of Ethics for the Chief Executive Officer and the Senior Financial Officers. The existence or 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 resignation.
     7.  Severance . (a) Except as otherwise provided in Section 8, if the Executive’s employment hereunder is terminated during the Employment Term (1) b

 
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