Exhibit 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this “ Agreement ”), dated
as of June 22, 2009, 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 STEPHEN GRAHAM, an individual residing in the
State of Ohio (the “ Executive ”).
W I T N E S
S E T H :
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.
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 Vice President, Chief Financial
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 Vice President,
Chief Financial Officer of the Company and shall report to the
President and Chief Executive Officer of the Company, performing
such duties as shall be reasonably required of a vice 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 AMH
II (the “ Board ”). To the extent requested by
the Company’s President and Chief Executive Officer or the
Board, the Executive shall also serve on 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.
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3. Employment Term . Unless earlier
terminated pursuant to Section 6, the Executive’s term
of employment hereunder shall begin on June 22, 2009
(hereinafter referred to as the “ Commencement Date
”), and continue through the date which is one (1) year
following the Commencement Date (the “ Initial Term
”); provided that such term shall be automatically
extended for additional one (1) year periods commencing on the
first day immediately following the expiration date of the Initial
Term and successively thereafter on the first day immediately
following the expiration of each such one-year period (each such
period an “ Additional Term ”) unless the
Company shall have given notice to the Executive that the Company
does not desire to extend the term of this Agreement, such notice
to be given at least thirty (30) days prior to the end of the
Initial Term or the applicable Additional Term (the Initial Term
and any Additional Terms, if applicable, collectively, 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 or its
Compensation Committee, which may increase, but not decrease, the
Executive’s base salary.
(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 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 . 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.
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(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 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
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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 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
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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 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 . Except as otherwise
provided in Section 8, if the Executive’s employment
hereunder is terminated during the Employment Term, following the
Executive’s initial twelve (12) months of employment, by
the Company or is terminated due to expiration of the Employment
Term following notice by the Company not to extend the Employment
Term in accordance with Section 3, in each case other
than for Cause or due to disability (as determined in the good
faith discretion of the Board) or death, the Executive shall be
entitled to receive as severance (subject to Section 9):
(i) an amount equal to the Executive’s base salary as in
effect immediately prior to the date of the Executive’s
termination of employment for twelve (12) months, payable,
commencing no later than sixty (60) days following such
termination, in equal installments in accordance with the
Company’s payroll procedures during the twelve
(12) months following the date of the Executive’s
termination (such twelve-month period, the “ Severance
Period ”); (ii) continued medical and dental
benefits described in Section 4(c) for the Severance Period, at the
same rate of employee and Company shared costs of such coverage as
in effect from time to time for active employees of the Company;
and (iii) a pro rata portion (based on the number of
days the Executive was employed by the Company during the calendar
year of termination) of any incentive bonus otherwise payable in
accordance with Section 4(b) for the year of termination of the
Executive’s employment, payable no earlier than the date on
which such bonus, if any, would have been paid under the applicable
plan or policy of the Company absent such termination of
employment, but no later than March 15 of the calendar year
immediately following the calendar year of such termination. With
respect to any such continued medical and dental benefits described
in clause (ii) of the first sentence of this Section 7
for which the Executive is eligible, (I) if the Company cannot
continue such benefits, the Company shall pay the Executive for
the
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