Exhibit 10.6
EMPLOYMENT
AGREEMENT
THIS AGREEMENT is made effective as
of the 10 th day of May 2005, by and among Compression
Polymers Holding Corporation, a Delaware Corporation (
“CPH” ), and its wholly owned subsidiary,
Vycom Corp., a Delaware corporation ( “ Vycom
” ) ( “Employer”
), and Ralph Bruno ( “Executive”
).
RECITALS
WHEREAS, Executive is currently
employed by Vycom; and
WHEREAS, Compression Polymers
Holdings II LP (the “Purchaser” ), a
Delaware limited partnership, has purchased all of the shares of
capital stock of Compression Polymers Corp. (
“CPC” ), a Delaware corporation, and
Vycom pursuant to a Stock Purchase Agreement, dated March 12, 2005,
among Compression Polymers Holdings LLC, a Delaware limited
liability company, the Purchaser, CPC, Vycom, CPCapitol Acquisition
Corp., a Delaware corporation, and North Keyser Partners, LLC, a
Delaware limited liability company; and
WHEREAS, Employer desires to
continue to employ the Executive and to utilize his management
services as indicated herein, and Executive has agreed to provide
such management services to Employer; and
WHEREAS, as a condition precedent
and a material inducement for Employer to continue to employ and
pay Executive, Executive has agreed to execute this Agreement and
be bound by the provisions herein; and
NOW, THEREFORE, in consideration of
the mutual covenants contained herein, the parties hereto agree as
follows:
PROVISIONS
1.
Term and
Duties . Employer hereby agrees to
employ Executive as the President - AZEK commencing on the date
hereof and continuing for a period of three (3) years (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. 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 Employer and to the promotion of its interests consistent
with and subject to the direction and control of
the Board of Directors of
Employer (the “Board” ). Executive shall devote
substantially all of his business time, energies, attention and
abilities to the operation of the business of Employer and shall
not be actively involved in any other trade or business or as an
employee of any other trade or business.
2.
Compensation
During Term .
(a)
Base
Compensation . In consideration of the
services to be rendered by Executive during the Term of this
Agreement, Employer shall pay to Executive, in the aggregate,
$200,000 per year ( “Base Compensation”
), payable
bi-weekly and prorated for any partial employment
period.
(b)
Bonus . Subject only to the
limitations set forth in this 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 Employer’s
and/or CPC’s (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. Such annual goals shall be determined by the
Compensation Committee in consultation with the Chief Executive
Officer of the Employer ( the “CEO” ). For the 2005 fiscal year,
(i) the maximum Incentive Bonus shall be $125,000, and (ii) at
least 75% of the Incentive Bonus shall be based on EBITDA
performance goals of Employer and CPC. Exhibit A
demonstrates the potential 2005 Incentive Bonus payment if the
Compensation Committee determines that the Incentive Bonus shall be
based entirely (100%) on EBITDA performance goals. 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 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 Employer (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 Employer for Executive;
(ii) ten (10) days of paid sick leave during each annual period,
which shall be cumulative and (iii) four (4) weeks of paid vacation
leave during each annual period.
2
(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. Employer 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 CEO’s 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.
4.
Equity
Participation . On the date hereof
Executive is purchasing class A units and class B units of
Compression Polymers Holding I LP ( “CPH I” ) pursuant to and in
accordance with the terms of the subscription agreements between
Executive and CPH I entered into on the date hereof.
5.
Termination
.
Executive’s employment shall terminate upon the first to
occur of the following (each a “Termination Date”
)
:
(a)
The expiration of
the Term;
(b)
Executive’s
death or disability (mentally, physically or emotionally), so that
Executive cannot substantially perform his duties hereunder for a
period of ninety (90) consecutive days or for one hundred eighty
(180) days during any 365 day period during the Term;
(c)
Executive’s
voluntary termination of his employment for any reason, upon not
less than 10 business days’ written notice to Employer;
provided, however, that any termination by Executive pursuant to
Section 5(e) shall not be treated as a voluntary termination under
this Section 5(c);
(d)
Employer’s
termination of Executive’s employment for Cause (as
hereinafter defined); or
(e)
Executive’s
termination of his employment for Good Reason (as hereinafter
defined) .
6.
Termination
Payments .
(a)
Except
as
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