RETIREMENT AND CONSULTING AGREEMENT
This
Retirement and Consulting Agreement (this “Agreement”)
is
entered into effective as of October 13, 2006 (the “Effective
Date”)
by and
between the “Company,” “Ply Gem Holdings,” “PIHI”, “Prime Holdings,” Xxx Xxxxx
(the “Executive”)
and,
for purposes of Section IID only, the Xxxxx Family Investment, L.P (the
“Xxxxx
Family Trust”).
For
purposes of this Agreement, (i) “PIHI”
shall
mean Ply Gem Investment Holdings, Inc., a Delaware corporation, (ii)
“Ply
Gem Holdings”
shall
mean Ply Gem Holdings, Inc., a Delaware corporation and wholly-owned subsidiary
of PIHI, (iii) “Prime
Holdings”
shall
mean Ply Gem Prime Holdings, Inc., a Delaware corporation and parent of PIHI,
and (iv) the “Company”
shall
mean Ply Gem Industries, Inc., a Delaware corporation and wholly-owned
subsidiary of Ply Gem Holdings.
WHEREAS,
the Executive is currently employed by the Company and holds the positions
of
Chief Executive Officer and President of each of PIHI, Ply Gem Holdings, Prime
Holdings and the Company (collectively, the “Companies”);
and
WHEREAS,
the Companies and the Executive have agreed that the Executive’s employment with
the Company shall terminate, and the Executive shall resign from his positions
as Chief Executive Officer and President of the Companies, in each case,
effective as of the Effective Date; and
WHEREAS,
the Companies desire to provide the Executive with certain benefits upon the
Executive’s retirement from employment with the Companies, in exchange for the
Executive’s agreement to provide certain consulting services to the Companies
after such termination, comply with certain restrictive covenants in favor
of
the Companies and release certain claims against the Companies and their
subsidiaries, parents, shareholders and their respective executives, officers,
directors, partners, members and agents, on the terms and subject to the
conditions more fully set forth in this Agreement.
NOW
THEREFORE, in consideration of the promises, mutual covenants and other good
and
valuable consideration set forth in this Agreement, the receipt and sufficiency
of which is hereby acknowledged, the Executive and the Companies agree as
follows:
I. Termination
of Employment; Resignation from Positions
The
Executive’s employment by the Company and any and all titles, positions and
appointments the Executive holds with the Companies or any of their subsidiaries
(collectively with the Companies, the “Company
Group”),
whether as an officer, director, employee, consultant (except
pursuant to Section III of this Agreement),
agent
or otherwise (including, without limitation,
as Chief
Executive Officer and President and as a member of the Board of Directors of
each of the Companies) shall cease as of the Effective Date. Effective
as of the Effective Date, the Executive shall have no authority to act on behalf
of any member of the Company Group and shall not hold himself out as having
such
authority, enter into any agreement or incur any obligations on behalf of any
member of the Company Group, commit any member of the Company Group in any
manner or otherwise act in an executive or other decision-making capacity with
respect to any member of the Company Group. The Executive agrees to make himself
available to provide consulting services pursuant to the terms of Section III
of
this Agreement.
IRS
Circular 230 disclosure:
To ensure compliance with requirements imposed by the IRS, we inform you
that
any U.S. federal tax advice contained in this document is not intended
or
written to be used, and cannot be used, for the purpose of (i) avoiding
penalties under the Internal Revenue Code or (ii) promoting, marketing
or
recommending to another party any transaction or matter that is contained
in
this document.
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#:NY7:103390.11
II. Payments
and Benefits
In
consideration for the Executive’s entering into this Agreement, specifically
including the restrictive covenants contained in Section VI of this Agreement
and the Executive’s execution on the Effective Date of a release of claims
substantially in the form attached to this Agreement as Exhibit A (the “Release”),
the Executive shall be entitled to receive the payments and benefits described
in Sections IIA, IIB and IIC of this Agreement, subject to the
Executive’s (i) executing the Release on the Effective Date and not revoking the
Release before expiration of the seven-day revocation period described therein,
and (ii) continued compliance with the covenants set forth in Section VI
of this
Agreement on the terms described in Section VIH of this
Agreement.
A. Continued
payment during the period commencing on the Effective Date and ending on the
second anniversary of the Effective Date (the “Consulting
Period”)
of the
Executive’s annual base salary in effect immediately prior to the Effective Date
(which, for the avoidance of doubt, shall not include any amounts in respect
of
any car allowance or payments for any other perquisites or benefits for the
Executive), in 24 equal monthly installments during the Consulting
Period;
B. Medical
and dental benefit coverage during the Consulting Period; provided that, with
respect to the period commencing on the Effective Date and ending on the date
on
which the Executive’s coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”)
terminates as provided by law, such coverage shall be provided in the form
of
payment by the Company of the Executive’s and his dependents’ COBRA premiums,
and, with respect to any portion of the Consulting Period that continues after
COBRA coverage terminates, the Company shall provide such additional coverage
by
either allowing the Executive to continue to participate in the Company’s
medical and dental plans at the Company’s sole cost, or, if such continued
participation is not permitted by the plan or by an insurance policy paying
for
benefits under the plan or if such continued participation would have an adverse
impact on the tax-free nature of the medical and dental benefits provided to
any
other participant in the plan, then, the Company agrees to provide such coverage
by purchasing for the Executive a medical and dental insurance policy that
provides coverage that is as comparable as is commercially available to the
coverage under the medical and dental plans in effect
as
of the Effective Date.
If the
Executive is required to pay tax with respect to the premium paid by the Company
for such insurance policy, the Company shall pay the Executive 25% of the total
amount of such taxable
premium;
C. Payment
by Prime Holdings of the “Stock Repurchase Amount”, subject to and in accordance
with the terms and
conditions of this Section IIC.
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1. Stock
Repurchase Amount Definition.
The
“Stock
Repurchase Amount”
shall
be an amount that constitutes the repurchase by Prime Holdings of the 112,800
shares (the “Sweet
Equity Shares”)
of
common stock, par value $0.01 per share, of Prime Holdings (“Prime
Holdings Common Stock”)
held
by the Xxxxx Family Trust as of the Effective Date, and that were: (i) initially
acquired by the Executive as 112,800 shares of common stock, par value $0.01
per
share, of PIHI (“PIHI
Common Stock”)
pursuant to an agreement between PIHI and the Executive dated July 28, 2005
pursuant to which 112,800 phantom incentive stock units awarded to the Executive
by PIHI on February 12, 2004 pursuant to the Ply Gem Investment Holdings, Inc.
Phantom Plan (which was assumed by Prime Holdings in connection with the
transactions contemplated by the Agreement and Plan of Merger and Contribution,
dated February 24, 2006, by and between the Companies, Ply Gem Merger Sub,
Inc.,
a Delaware corporation and then a wholly-owned subsidiary of Prime Holdings,
and
certain executives of AWC Holding Company (the “Merger
and Contribution Agreement”),
and
amended and restated as the Ply Gem Prime Holdings, Inc. Amended and Restated
Phantom Stock Plan (the “Phantom
Plan”))
cancelled in exchange for the grant to the Executive of 112,800 shares of PIHI
Common Stock, (ii) transferred by the Executive to the Xxxxx Family Trust on
September
28,
2005,
and (iii) converted into the Sweet Equity Shares pursuant to the transactions
contemplated by the Merger and Contribution Agreement.
(a) Stock
Repurchase Amount Calculation.
The
Stock
Repurchase Amount shall be $1,128,000, which represents the product of 112,800
(the number of Sweet Equity Shares) and $10.00.
2. Timing
of Payment.
The
Stock Repurchase Amount shall be paid to the Executive as soon as reasonably
practicable following the expiration of the revocation period set forth in
the
Release, subject to the Executive’s not having revoked the Release as of such
date.
3. Stock
Repurchase Amount Upon Release Revocation, Other Executive
Breach.
If the
Executive revokes the Release or otherwise breaches any of his obligations
under
this Agreement prior to the payment of the Stock Repurchase Amount, then this
Section IIC shall be null and void, and the terms of the Ply
Gem
Prime Holdings, Inc. Stockholders Agreement, dated as of February 24, 2006,
by
and between Prime Holdings, PIHI, Xxxxxx-Xxxxxx (Ply Gem), L.P. and certain
other investors in and management stockholders of Prime Holdings, as amended
from time to time (the “Stockholders
Agreement”)
shall
govern any rights of the Executive in respect of the Prime Holdings Common
Stock.
4. PIHI
Call.
The
Stock Repurchase Amount shall only be paid pursuant to this Section IIC
following PIHI’s purchase of 112,800 shares of PIHI Common Stock from Prime
Holdings, at a purchase price per share equal to the
amount described in Section IIC2 above,
pursuant
to PIHI’s exercise of its “Call Right” set forth in
the
Stockholders’ Agreement, which purchase shall occur immediately prior to the
repurchase contemplated by paragraph 1 of this Section IIC.
D. Other
Equity Holdings.
The
Executive acknowledges and agrees that, as of the Effective Date, in addition
to
the Sweet Equity Shares, the Executive holds (i) 8,780 shares of Prime Holdings
Common Stock and 4,724 shares of senior preferred stock, par value $0.01 of
Prime Holdings (“Prime
Holdings Senior Preferred Stock”),
which
the Executive initially purchased as shares of PIHI Common Stock and shares
of
senior preferred stock, par value $0.01 per share, of PIHI (“PIHI
Senior Preferred Stock”),
pursuant to the Ply Gem Investment Holdings, Inc. Subscription Agreement -
Strip, dated as of August 27, 2004, by and between PIHI and the Executive (the
“Subscription
Agreement”),
and
which were converted into 8,780 shares of Prime Holdings Common Stock and 4,724
shares of Prime Holdings Senior Preferred Stock, respectively, in connection
with the transactions contemplated by the Merger and Contribution Agreement,
and
(ii) 31,766
shares of Prime Holdings Common Stock, which the Executive purchased on
September 25
3
E. ,
2006 in
connection with the termination of his award of phantom additional units under
the Phantom Plan.
The
Companies and the Executive agree that the Stockholders’ Agreement shall remain
in full force and effect with respect to the holdings described in the preceding
sentence. The Executive acknowledges and agrees that, except as set forth in
this Section II, as of the Effective Date, the Executive does not hold any
outstanding shares of Prime Holdings Common Stock, Prime Holdings Senior
Preferred Stock, PIHI Common Stock, PIHI Senior Preferred Stock, phantom
incentive stock units, phantom additional units, stock options or other
equity-based compensation awards or hold or have any rights relating to any
other securities of Prime Holdings or PIHI or any member of the Company
Group.
F. The
Executive’s annual cash bonus for the 2006 fiscal year, calculated based on
actual performance during 2006, pro-rated based on the Executive’s employment
with the Company during 2006 until the Effective Date (the “Pro-Rated
Bonus”),
and
payable at such time as annual cash bonuses in respect of fiscal year 2006
are
paid to other senior executives of the Company; provided, that, the bonus shall
be paid in no event later than the date that is 2 ½ months after the end of the
2006 fiscal year.
G. As
soon
as reasonably practicable following the Effective Date or such earlier date
as
may be required by applicable state statute or regulation, (i) any annual base
salary earned but unpaid through the Effective Date, (ii) payment in respect
of
any vacation time that is accrued but unused through the Effective Date, and
(iii) reimbursement for all un-reimbursed business expenses properly incurred
by
the Executive in accordance with policies of the Companies prior to the
Effective Date and not yet reimbursed by any of the Companies; provided, that,
the Executive must submit to the applicable Company, within 30 days after the
Effective Date, any outstanding expense reports within his possession, and
the
Executive shall not receive reimbursement in respect of any expense reports
submitted after such date. For the avoidance of doubt, the payments described
in
this Section IIF are not intended to result in any duplication of any
payments or benefits described in this Agreement or any compensation or benefits
plans, policies, programs, agreements or arrangements of any of the
Companies.
H. All
benefits accrued up to the Effective Date, to the extent vested, under all
employee benefit plans of the Companies and any members of the Company Group
in
accordance with the terms of such plans, except for under the Ply
Gem
Industries, Inc. Change in Control Severance Benefit Plan for Key Employees,
dated October 30, 2003, as amended for the Executive, dated February 12, 2004
(the “Change
in Control Plan”),
the
Stockholders Agreement, the Ply Gem Investment Holdings, Inc. 2004 Stock Option
Plan or under any plan, policy, program, practice, agreement or arrangement
that
provides for severance or separation pay or benefits or for any equity-based
compensation award.
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I. Full
Satisfaction
The
Executive acknowledges and agrees that the Executive is not entitled to any
other compensation or benefits from any of the Companies or any member of the
Company Group (including without limitation any severance or retirement
compensation or benefits), and as of and after the Effective Date, the Executive
shall no longer participate in, accrue service credit or have contributions
made
on his behalf under any employee benefit plan sponsored by any member of the
Company Group in respect of periods commencing on and following the Effective
Date, including without limitation any plan which is intended to qualify under
Section 401(a) of the Internal Revenue Code of 1986, as amended (a “Qualified
Plan”);
provided, that, except as expressly provided herein, nothing in this Agreement
shall constitute a waiver by the Executive of his rights to vested benefits,
if
any, under any Qualified Plan or under any group health plan of any of the
Companies or to any other fringe benefits to which he may be entitled under
applicable law in respect of his services to the Company prior to the Effective
Date.
J. Release
The
payments and benefits described in Sections IIA, IIB and IIC above shall
be
contingent on the Executive’s entering into the Release and not revoking such
Release during the applicable seven-day revocation period set forth therein.
If
the Executive revokes such Release during the period described in the
immediately preceding sentence, this Agreement shall be void as of and following
the Effective Date, and applicable provisions of the Change in Control Plan,
the
Stockholders Agreement and other employee benefit plans of the Companies
or
members of the Company Group shall apply.
K. Continued
Compliance with Certain Covenants
Upon
a determination by the Boards of Directors of the Companies that the Executive
has violated (i) the Employee’s Non-Disclosure Agreement, previously signed by
the Executive (the “Non-Disclosure
Agreement”),
the Ply Gem Industries, Inc. Employee Information Agreement, (the “Employee
Information Agreement”) or any of Sections VIB, VIC, VIE, VIF or VIG
of this Agreement, the Companies shall be entitled to immediately cease paying
any amounts remaining due or providing any payments or benefits to the Executive
pursuant to Sections IIA, IIB or IIC of this Agreement,
and (ii) Section VIB of this Agreement, subject to applicable state law,
the
Companies shall be entitled to reclaim any amounts already paid to the Executive
under Section IIA of this Agreement.
III. Consulting
Services
A. With
respect to the Consulting Period, the Companies hereby retain the Executive,
and
the Executive hereby agrees to serve, as a consultant to the Companies, on
the
terms and subject to the conditions of this Section III. During the Consulting
Period, the Executive shall, from time to time at the request of any of the
Companies, upon reasonable advance notice, engage in those consulting services
and activities as may be requested by such Company (the “Consulting
Services”),
at
such times and places as mutually agreed upon by the Executive and the Company;
provided that the aggregate time or times that the Executive provides Consulting
Services to any of the Companies shall not exceed three days per any calendar
quarter occurring during the Consulting Period, or such greater amount of time
agreed to by the Executive.
5
B. The
Companies shall reimburse the Executive for all reasonable travel and related
out-of-pocket expenses incurred by the Executive in performing the Consulting
Services; provided that such expenses are incurred with the prior approval
of
the Companies, and the Executive provides the Companies with an itemized invoice
of the expenses incurred.
C. The
Executive acknowledges that, during the Consulting Period, as a consultant,
the
Executive shall be an independent contractor and, by virtue of his being an
independent contractor, shall not be eligible to actively participate in or
accrue benefits under any employee benefit plan or program offered by any member
of the Company Group to its employees; provided, however, that, subject to
the
terms of this Agreement, the Executive shall continue to receive the benefits
set forth in Section IIA of this Agreement. The Parties agree that, during
the
Consulting Period, Executive shall be an independent contractor for purposes
of
all federal, state and local laws governing worker’s compensation
insurance.
D. In
performing the Consulting Services, the Executive shall have no authority to
act
as an agent of any of the Companies, except on authority specifically so
delegated in writing, and he shall not represent contrary to any person, and
shall only consult, render advice and perform such tasks as the Executive deems
are necessary to achieve the results specified by the Companies.
E. The
Executive acknowledges and agrees that he shall not be entitled to receive
any
compensation, fees or benefits in addition to those described in this Agreement
in exchange for his agreement to provide the Consulting Services pursuant to
this Section III.
IV. Additional
Consideration
The
Executive acknowledges that, except with respect to the payments described
in
Section IIF of this Agreement, pursuant to this Agreement he is receiving
consideration in addition to any amounts to which he would have otherwise been
entitled but for this Agreement.
V. Return
of Company Property
No
later than the Effective Date, the Executive shall return to the Companies
all
originals and copies of papers, notes and documents (in any medium, including
computer disks), whether property of any member of the Company Group or not,
prepared, received or obtained by the Executive during the course of, and
in
connection with, his employment with or services for the Companies or any
member
of the Company Group, and all equipment and property of any member of the
Company Group which may be in the Executive’s possession or under his control,
whether at the Company’s offices, the Executive’s home or elsewhere, including
all such papers, work papers, notes, documents and equipment in the possession
of the Executive. The Executive agrees that he and his family shall not retain
copies of any such papers, work papers, notes and documents. Notwithstanding
the
foregoing, the Executive may retain copies of the Change in Control Plan,
the
Phantom Plan, the Stockholders Agreement and any employment, compensation
or
benefits agreements between the Executive and any of the Companies, this
Agreement and any employee benefit plan materials distributed generally to
participants in any such plan by the Companies. On the Effective Date, all
telephone and other accounts being paid by the Companies on the Executive’s
behalf shall be terminated and all company credit cards shall be returned
to the
Companies and canceled. To the extent any charges are made by the Executive
using company accounts or credit cards after the Effective Date, such charges
will be solely the Executive’s responsibility.
6
VI. Restrictive
Covenants
A. Survival
of Non-Disclosure Agreement; Employee Information Agreement; Ply Gem Code of
Ethics
Notwithstanding
anything to the contrary in this Agreement, the covenants and other provisions
set forth in the Non-Disclosure Agreement, the Employee Information Agreement,
the Ply Gem Industries, Inc. Code of Ethics as constituted on the Effective
Date (the “Ply
Gem Code of Ethics”) and Section 6.3 of the Stockholders Agreement
that expressly survive termination of the Executive’s employment shall survive
the Effective Date and be effective for the periods described
therein.
B. Non-Competition/Non-Solicitation
The
Executive acknowledges and recognizes the highly competitive nature of the
businesses of the Company and its subsidiaries and controlled affiliates and
accordingly agrees as follows:
1. During
the period commencing on the Effective Date and ending on the second anniversary
of the Effective Date (the “Restricted
Period”),
or
such longer period as described in the last sentence of Section VIH of this
Agreement, the Executive will not, directly or indirectly, (a)
engage in any “Competitive Business” (defined below) for the Executive’s own
account, (b) enter the employ of, or render any services to, any person engaged
in any Competitive Business, (c) acquire a financial interest in, or otherwise
become actively involved with, any person engaged in any Competitive Business,
directly or indirectly, as an individual, partner, shareholder, officer,
director, principal, agent, trustee or consultant, or (d) interfere with
business relationships between the Company and customers or suppliers of, or
consultants to, the Company.
2. For
purposes of this Section VIB, a “Competitive Business” means, as of any date,
including during the Restricted Period, any person or entity (including any
joint venture, partnership, firm, corporation or limited liability company)
that
engages in or proposes to engage in the following activities in any geographical
area in which the business unit for which the Executive works does business:
the
manufacture and sale of vinyl, aluminum or wood windows and doors; vinyl, metal
or composite siding and accessories; and vinyl or composite fencing and
decking.
3. For
purposes of Section VIB of this Agreement, the Company shall be construed to
include the Company and its subsidiaries and controlled affiliates.
4. Notwithstanding
anything to the contrary in this Agreement, the Executive may, directly or
indirectly, own, solely as an investment, securities of any person engaged in
the business of the Company which are publicly traded on a national or regional
stock exchange or on the over-the-counter market if the Executive (A) is not
a
controlling person of, or a member of a group which controls, such person and
(B) does not, directly or indirectly, own one percent (1%) or more of any class
of securities of such person.
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5. During
the Restricted Period, the Executive will not, directly or indirectly, without
the Company’s written consent, solicit or encourage to cease to work with the
Company any employee or any consultant of the Company or any person who was
an
employee of or consultant then under contract with the Company within the
six-month period preceding such activity. In addition, during the Restricted
Period, the Executive will not, without the Company’s written consent, directly
or indirectly hire any person who is or who was, within the six-month period
preceding such activity, an employee of the Company.
6. The
Executive understands that the provisions of this Section VIB may limit the
Executive’s ability to earn a livelihood in a business similar to the business
of the Company, but the Executive nevertheless agrees and hereby acknowledges
that (a) such provisions do not impose a greater restraint than is necessary
to
protect the goodwill or other business interests of the Company, (b) such
provisions contain reasonable limitations as to time and scope of activity
to be
restrained, (c) such provisions are not harmful to the general public and (d)
such provisions are not unduly burdensome to the Executive. In consideration
of
the foregoing and in light of the Executive’s education, skills and abilities,
the Executive agrees that he shall not assert that, and it should not be
considered that, any provisions of Section VIB of this Agreement otherwise
are
void, voidable or unenforceable or should be voided or held
unenforceable.
7. It
is
expressly understood and agreed that, although the Executive and the Company
consider the restrictions contained in this Section VIB to be reasonable, if
a
judicial determination is made by a court of competent jurisdiction that the
time or territory or any other restriction contained in this Section VIB or
elsewhere in this Agreement is an unenforceable restriction against the
Executive, the provisions of the Agreement shall not be rendered void but shall
be deemed amended to apply as to such maximum time and territory and to such
maximum extent as such court may judicially determine or indicate to be
enforceable. Alternatively, if any court of competent jurisdiction finds that
any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained
herein.
C. Nondisparagement
1. The
Executive agrees (whether before or after the Effective Date) not to issue,
circulate, publish or utter any false or disparaging statements, remarks or
rumors about any of the Companies or any member of the Company Group or any
of
their respective shareholders, officers, directors or managers, other than
to
the extent reasonably necessary in order to (i) assert a bona fide claim against
any of the Companies or any member of the Company Group arising out of the
Executive’s employment with the Companies, or (ii) respond in a truthful and
appropriate manner to any legal process or give truthful and appropriate
testimony in a legal or regulatory proceeding.
8
2. The
Companies agree to instruct their respective shareholders, officers, directors
and managers, (whether before or after the Effective Date) not to issue,
circulate, publish or utter any false or disparaging statements, remarks or
rumors about the Executive other than to the extent reasonably necessary in
order to (i) assert a bona fide claim against the Executive arising out of
the
Executive’s employment with the Companies, or (ii) respond in a truthful and
appropriate manner to any legal process or give truthful and appropriate
testimony in a legal or regulatory proceeding.
D. Company
Policies
The
Executive agrees to abide by the terms of any policies or codes of conduct
of
the Companies that (i) expressly apply
to
the Executive after
termination of employment,
or
(ii) during the Consulting Period apply to consultants to the
Companies.
E. Confidentiality
The
Executive shall not, without the prior written consent of the Companies,
use,
divulge, disclose or make accessible to any other person, firm, partnership,
corporation or other entity, any “Confidential Information” (as defined below)
except while employed by the Companies, in furtherance of the business of
and
for the benefit of the Companies, or any “Personal Information” (as defined
below); provided that the Executive may disclose such information in any
proceeding in which he is making a bona fide claim against the Companies
or
defending any claim of the Companies, when required to do
so by a court of competent jurisdiction, by any governmental agency having
supervisory authority over the business of the Companies and/or any member
of
the Company Group, as the case may be, or by any administrative body or
legislative body (including a committee thereof) with jurisdiction to order
the
Executive to divulge, disclose or make accessible such information; provided,
further, that in the event that the Executive is ordered by a court or other
government agency to disclose any Confidential Information or Personal
Information, the Executive shall (i) promptly notify the Companies of such
order, (ii) at the written request of the Companies, diligently contest such
order at the sole expense of the Companies as expenses occur, and (iii) at
the
written request of the Companies, seek to obtain, at the sole expense of
the
Companies, such confidential treatment as may be available under applicable
laws
for any information disclosed under such order. For purposes of this Section
VIE, (i) “Confidential
Information” shall mean non-public information concerning the
financial data, strategic business plans, product development (or other
proprietary product data), customer lists, marketing plans and other non-public,
proprietary and confidential information relating to the business of the
Companies or any member of the Company Group or any of their customers, that,
in
any case, is not otherwise available to the public (other than by the
Executive’s breach of the terms hereof) and (ii) “Personal
Information” shall mean any information concerning the personal,
social or business activities of the shareholders, officers or directors
of the
Companies.
9
F. Developments
All
discoveries, inventions, ideas, technology, formulas, designs, software,
programs, algorithms, products, systems, applications, processes, procedures,
methods and improvements and enhancements conceived, developed or otherwise
made
or created or produced by the Executive, alone or with others, and in any way
relating to the business or any proposed business of the Companies of which
the
Executive has been made aware, or the products or services of the Companies
of
which the Executive has been made aware, whether or not subject to patent,
copyright or other protection and whether or not reduced to tangible form,
at
any time during the Executive’s employment with the Companies or any member of
the Company Group (“Developments”),
shall
be the sole and exclusive property of the Companies. The Executive agrees to,
and hereby does, assign to the Companies, without any further consideration,
all
of the Executive’s right, title and interest throughout the world in and to all
Developments. The Executive agrees that all such Developments that are
copyrightable may constitute works made for hire under the copyright laws of
the
United States and, as such, acknowledges that the applicable Company is the
author of such Developments and owns all of the rights comprised in the
copyright of such Developments, and the Executive hereby assigns to the
Companies, without any further consideration, all of the rights comprised in
the
copyright and other proprietary rights the Executive may have in any such
Development to the extent that it might not be considered a work made for hire.
The Executive shall make and maintain adequate and current written records
of
all Developments and shall disclose all Developments promptly, fully and in
writing to the Companies promptly after development of the same, and at any
time
upon request.
G. Cooperation
At
any time after the date of the Executive’s
termination of employment, the Executive agrees to reasonably cooperate (i)
with
the Companies in the defense of any legal matter involving any matter that
arose
during the Executive’s employment with the Companies and (ii) with all
government authorities on matters pertaining to any investigation, litigation
or
administrative proceeding pertaining to the Companies. The Companies will
reimburse the Executive for any earnings lost, and any reasonable travel
and out
of pocket expenses incurred, by the Executive in providing such
cooperation.
H. Enforcement
The
Executive acknowledges and agrees that the Companies’ remedies at law for a
breach or threatened breach of any of the provisions of Sections VIB, VIC,
VIE
and VIF of this Agreement would be inadequate, and, in recognition of this
fact,
the Executive agrees that, in the event of such a breach or threatened breach,
in addition to any remedies at law, the Company, without posting any bond,
shall
be entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available. In addition, upon a determination
by the Boards of Directors of the Companies that the Executive has violated
(i)
the Non-Disclosure Agreement, the Employee Information Agreement or any
provision of Section VIB, VIC, VIE, VIF or VIG of this Agreement, the Companies
shall be entitled to immediately cease paying any amounts remaining due or
providing any benefits to the Executive pursuant to Sections
IIB or IIC of the Agreement, and (ii) with respect to
the Executive’s violation of Section VIB of this Agreement, subject to
applicable state law, the Company shall be entitled to reclaim any amounts
already paid under Section IIB of this Agreement, subject,
in the case of clauses (i) and (ii), above, to payment of all such amounts
upon
a final determination that the Executive had not violated such Section. If
the
Executive breaches any of the covenants contained in Section VIB, VIC, VIE
or
VIF of this Agreement, and the Company Group obtains injunctive relief with
respect thereto, the period during which the Executive is required to comply
with that particular covenant shall be extended by the same period that the
Executive was in breach of such covenant prior to the effective date of such
injunctive relief.
10
VII. Miscellaneous
A. Entire
Agreement.
This
Agreement is the entire agreement between the Executive and the Companies with
respect to the subject matter hereof and contains all agreements, whether
written, oral, express or implied, between the Executive and the Companies
relating thereto and, effective as of the Effective Date, supersedes and
extinguishes any other agreement relating thereto, whether written, oral,
express or implied, between the Executive and any of the Companies, including,
without limitation, the Change in Control Plan; provided, that (i) the
Non-Disclosure Agreement, the Employee Information Agreement and the Ply Gem
Code of Ethics shall not be superseded by this Agreement and shall remain in
full force and effect, (ii) the continuing effect of the Stockholders Agreement
and the Subscription Agreement, as applied to the Executive, shall
be as
set forth in Section II
of this
Agreement, and (iii) the Executive’s awards under the Phantom Plan, including
any amendments to such awards as of the Effective Date or amendments to such
awards after the Effective Date shall not be superseded or amended in any way
by
this Agreement and all agreements and documents relating to the Executive’s
awards under the Phantom Plan (and any aforementioned amendments) shall continue
to be in full force and effect, and provided, further, that, no rights or
obligations established under any superseded agreement and specifically
preserved by this Agreement are extinguished. Other than this Agreement and
as
otherwise explicitly stated in this Agreement, including, without
limitation, in Section IIC
of this
Agreement and in clause (iii) of the preceding sentence, there are no agreements
of any nature whatsoever between the Executive and any member of the
Company
Group that survive this Agreement.
B. Modification.
This
Agreement may not be modified or amended, nor may any rights under it be waived,
except in a writing signed and agreed to by the Companies and the Executive.
C. Notices.
Any
notice given pursuant to the Agreement to any party hereto shall be deemed
to
have been duly given when mailed by registered or certified mail, return receipt
requested, or by overnight courier, or when hand delivered as
follows:
If
to the
Companies:
Ply
Gem
Prime Holdings, Inc.
X.X.
Xxx
0000
Xxxxxxx,
XX 00000
Attention:
Xxxxx Xxx, Chief Financial Officer
Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000-0000
Attention:
Xxxx Xxxxxxx, Esq.
11
If
to the
Executive:
000
Xxxxxx Xxxxx
Xxxxxxx,
XX 00000
or
at
such other address as either party shall from time to time designate by written
notice, in the manner provided herein, to the other party hereto.
D. Successors;
Death Benefit.
The
Agreement shall be binding upon and inure to the benefit of the Companies,
the
Executive and their respective heirs, successors and assigns. In the event
the
Executive dies at any time after the Effective Date and before any amounts
payable to him under this Agreement are paid in full, the amounts remaining
to
be paid under Sections IIA,
IIB,
IIC,
IIE
and IIF
of this Agreement at the time of his death shall be paid (at such times as
such
amounts would have been paid to the Executive and,
with
respect to Sections IIA and IIB, for the full Consulting Period)
to his
surviving spouse, if any, and otherwise to his estate.
E. Taxes.
Notwithstanding any other provision of this Agreement to the contrary, the
Companies or any member of the Company Group, as applicable, may withhold from
all amounts payable under this Agreement all federal, state, local and foreign
taxes that are required to be withheld pursuant to any applicable laws and
regulations. Notwithstanding anything to the contrary in Section III of this
Agreement, the Companies and the Executive acknowledge that the
payments
described in Section IIA
of this
Agreement shall be treated as wages for all income and employment tax purposes.
The Executive shall be responsible for the payment of his portion of any and
all
required federal, state, local and foreign taxes incurred, or to be incurred,
in
connection with any amounts payable to the Executive under this Agreement.
F. Severability.
In the
event that any provision of the Agreement is determined to be invalid or
unenforceable, the remaining terms and conditions of the Agreement shall be
unaffected and shall remain in full force and effect. In addition, if any
provision is determined to be invalid or unenforceable due to its duration
and/or scope, the duration and/or scope of such provision, as the case may
be,
shall be reduced, such reduction shall be to the smallest extent necessary
to
comply with applicable law, and such provision shall be enforceable, in its
reduced form, to the fullest extent permitted by applicable law.
G. Non-Admission.
Nothing
contained in the Agreement shall be deemed or construed as an admission of
wrongdoing or liability on the part of the Executive or on the part of any
member of the Company Group.
H. No
Mitigation.
The
Executive shall not be required to mitigate the amount of any payment provided
for pursuant to this Agreement by seeking other employment and, to the extent
that the Executive obtains or undertakes other employment, the payment will
not
be reduced by the earnings of the Executive from the other
employment.
12
I. Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE WHOLLY PERFORMED
WITHIN THAT STATE, WITHOUT REGARD TO ITS CONFLICT OF LAWS PROVISIONS OR THE
CONFLICT OF LAWS PROVISIONS OF ANY OTHER JURISDICTION WHICH WOULD CAUSE THE
APPLICATION OF ANY LAW OTHER THAN THAT OF THE STATE OF DELAWARE.
Each
party to this Agreement irrevocably agrees for the exclusive benefit of the
other that any and all suits, actions or proceedings relating to Section
VIB of
this Agreement (collectively, “Actions”
and, individually, an “Action”) may
be maintained in either the courts of the State of Delaware or the federal
District Courts sitting in Wilmington, Delaware (collectively, the “Chosen
Courts”) and that the Chosen Courts shall have jurisdiction to
hear and determine or settle any such Action and that any such Actions may
be
brought in the Chosen Courts. Each party irrevocably waives any objection
that
it may have now or hereafter to the laying of the venue of any Actions in
the
Chosen Courts and any claim that any Actions have been brought in an
inconvenient forum and further irrevocably agrees that a judgment in any
Action
brought in the Chosen Courts shall be conclusive and binding upon it and
may be
enforced in the courts of any other jurisdiction.
Each
party to this Agreement agrees that this Agreement involves at least $100,000
and that this Agreement has been entered into in express reliance on Section
2708 of Title 6 of the Delaware Code. Each of the parties to this Agreement
irrevocably and unconditionally agrees (i) that, to the extent such party is
not
otherwise subject to service of process in the State of Delaware, it will
appoint (and maintain an agreement with respect to) an agent in the State of
Delaware as such party’s agent for acceptance of legal process and notify the
other parties hereto of the name and address of said agent, (ii) that service
of
process may also be made on such party by pre-paid certified mail with a
validated proof of mailing receipt constituting evidence of valid service sent
to such party at the address set forth in this Agreement, as such address may
be
changed from time to time pursuant hereto, and (iii) that service made pursuant
to clause (i) or (ii) above shall, to the fullest extent permitted by applicable
law, have the same legal force and effect as if served upon such party
personally within the State of Delaware.
J. Waiver
of Jury Trial.
The
Companies and the Executive each hereby waive any right to a trial by jury
in
any action, suit or other legal proceeding arising under or relating to any
provision of this Agreement.
K. Counterparts.
The
Agreement may be executed by one or more of the parties hereto on any number
of
separate counterparts and all such counterparts shall be deemed to be one and
the same instrument. Each party hereto confirms that any facsimile copy of
such
party’s executed counterpart of the Agreement (or its signature page thereof)
shall be deemed to be an executed original thereof.
[Remainder
of Page Intentionally Left Blank; Signature Page to
Follow]
13
IN
WITNESS WHEREOF, the undersigned have executed the Agreement on the date first
written above.
_________________________________
Xxx
Xxxxx
PLY
GEM
INDUSTRIES, INC.
_________________________________
Xxxxx
Xxx
Chief
Financial Officer
PLY
GEM
HOLDINGS, INC.
By:_________________________________
Title:
Chief Financial Officer
PLY
GEM
INVESTMENT HOLDINGS, INC.
By:_________________________________
Title:
Chief Financial Officer
PLY
GEM
PRIME HOLDINGS, INC.
By:_________________________________
Title:
Chief Financial Officer
For
purposes of Section IIC only,
THE
XXXXX
FAMILY INVESTMENT, L.P.
By:_________________________________
Title:
14
RELEASE
OF CLAIMS
Ply
Gem
Prime Holdings, Inc., a Delaware corporation (“Prime
Holdings”),
Ply
Gem Investment Holdings, Inc., a Delaware corporation and wholly-owned
subsidiary of Prime Holdings (“PIHI”),
Ply
Gem Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of PIHI
(“Ply
Gem Holdings”),
Ply
Gem Industries, Inc., a Delaware corporation and wholly-owned subsidiary of
Ply
Gem Holdings (the “Company”),
Xxx
Xxxxx (the “Executive”)
and,
for certain purposes only, the Xxxxx Family Investment, L.P (the “Xxxxx
Family Trust”)
are
parties to a Retirement and Consulting Agreement, effective as of October 13,
2006 (the “Agreement”),
under
which the parties mutually agreed to terminate the Executive’s employment with
each of Prime Holdings, PIHI, Ply Gem Holdings and the Company (collectively,
the “Companies”),
effective upon the Effective Date, as defined in the Agreement. In consideration
of the promises set forth in this Release and the Agreement, the Executive
agrees as follows:
1. Acknowledgment
and Release
In
consideration of the Companies’ execution of the Agreement, and except with
respect to the Companies’ obligations arising under or preserved in the
Agreement, the Executive, for and on behalf of himself and his heirs and
assigns, hereby waives and releases all common law, statutory or other
complaints, claims, charges or causes of action arising out of or relating
to
the Executive’s employment or termination of employment with, or his serving in
any capacity in respect of, any member of the “Company
Group”
(as
defined in the Agreement), both known and unknown, in law or in equity, which
the Executive may now have or ever had against any member of the Company Group
or any shareholder, employee, director or officer of any member of the Company
Group (collectively, the “Releasees”),
including, without limitation, any complaint, charge or cause of action arising
out of the Executive’s employment with the Company Group under the Age
Discrimination in Employment Act of 1967 (the “ADEA,”
a
law
which prohibits discrimination on the basis of age), the National Labor
Relations Act, the Civil Rights Act of 1991, the Americans With Disabilities
Act
of 1990, Title VII of the Civil Rights Act of 1964, the Employee Retirement
Income Security Act of 1974, all as amended; and all other federal, state and
local laws. By signing this Release the Executive acknowledges that he intends
to waive and release all rights known or unknown he may have against the
Releasees under these and any other laws; provided, that the Executive does
not
waive or release claims with respect to the right to enforce this Release or
the
Agreement.
The
Executive acknowledges that he has not filed any complaint, charge, claim or
proceeding against any of the Releasees before any local, state or federal
agency, court or other body relating to his employment or the resignation
thereof (each individually a “Proceeding”).
The
Executive represents that he is not aware of any basis on which such a
Proceeding could reasonably be instituted.
The
Executive (i) acknowledges that he will not initiate or cause to be initiated
on
his behalf any Proceeding and will not participate in any Proceeding, in each
case, except as required by law; and (ii) waives any right he may have to
benefit in any manner from any relief (whether monetary or otherwise) arising
out of any Proceeding, including any Proceeding conducted by the Equal
Employment Opportunity Commission (“EEOC”).
Further, the Executive understands that by entering into this Release, he will
be limiting the availability of certain remedies that he may have against the
Companies and also limiting his ability to pursue certain claims against the
Releasees. Notwithstanding the above, nothing in this Release shall prevent
the
Executive from (i) initiating or causing to be initiated on his behalf any
complaint, charge, claim or proceeding against the Companies before any local,
state or federal agency, court or other body challenging the validity of the
waiver of his claims under ADEA contained in this Release (but no other portion
of such waiver); or (ii) initiating or participating in an investigation or
proceeding conducted by the EEOC with respect to ADEA.
The
Executive acknowledges that he has been given 21 days from the date of receipt
of this Release to consider all the provisions of this Release and he does
hereby knowingly and voluntarily waive said given 21 day period. THE
EXECUTIVE FURTHER ACKNOWLEDGES THAT HE HAS READ THIS RELEASE CAREFULLY, HAS
BEEN
ADVISED BY THE COMPANIES TO CONSULT AN
ATTORNEY, AND FULLY UNDERSTANDS THAT, BY SIGNING BELOW, HE IS GIVING UP CERTAIN
RIGHTS WHICH HE MAY HAVE TO XXX OR ASSERT A CLAIM AGAINST ANY OF THE RELEASEES,
AS DESCRIBED IN THIS RELEASE AND THE OTHER PROVISIONS HEREOF. THE EXECUTIVE
ACKNOWLEDGES THAT HE HAS NOT BEEN FORCED OR PRESSURED IN ANY MANNER WHATSOEVER
TO SIGN THIS RELEASE, AND THE EXECUTIVE AGREES TO ALL OF ITS TERMS
VOLUNTARILY.
The
Executive shall have seven days from the date of his execution of this Release
to revoke this Release. If the Executive revokes this Release, the Executive
will be deemed not to have accepted the terms of the Agreement, including any
action required of the Companies after the Effective Date by any Section of
the
Agreement.
The
Executive acknowledges that nothing in this Release shall constitute any
admission of wrongdoing by the Companies or any Releasee.
_________________________________
Xxx
Xxxxx
Dated: __________,
200_
