Exhibit 10.12
NORCRAFT COMPANIES, L.P.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
October 21, 2003
Xxxxx Xxx Xxxxx
0000 Xxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Dear Xxxxx:
I am pleased to confirm our offer and your acceptance for you to continue
your employment with Norcraft Companies, L.P., formerly known as Norcraft
Companies, L.L.C. (the "Company"). This letter will set forth the terms of the
employment agreement between you and the Company.
1. Effective Date; Term. The "Effective Date" of this Agreement is the date
hereof. Unless earlier terminated pursuant to Section 5, the term of your
employment shall continue until December 31, 2004. Thereafter, the employment
term shall be automatically extended for consecutive one-year periods unless
either you or the Company declines to extend the employment term no later than
forty five (45) days prior to the expiration of such term.
2. Duties, etc. You will continue your employment as the President of Mid
Continent. In this capacity, you will be one of the highest ranking management
personnel of the Company. In addition, you will serve without additional
compensation as an officer of any of the Company's affiliates, as designated by
the General Partner of the Company, unless such designation materially increases
your responsibilities. You will be accountable to, and will also have such
powers, duties and responsibilities as may from time to time be prescribed by
the Chief Executive Officer of the Company or such other officer designated by
him or the General Partner of the Company, provided that such duties and
responsibilities are consistent with your position. You will perform and
discharge your duties and responsibilities faithfully, diligently and to the
best of your ability. You will devote substantially all of your working time and
efforts to the business and affairs of the Company.
3. Cash Compensation. During the term of your employment, the Company will
pay you base salary at the base salary of $200,000.00. You will continue to be
eligible for an annual bonus for 2003 pursuant to the bonus plans in place on
the date hereof, and the Board of Managers of the General Partner of the Company
will determine bonus plans for future years
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after completing an assessment of business objectives and existing plans. All
payments under this section or any other section of this letter agreement will
be made in accordance with the regular payroll practices of the Company, reduced
by applicable withholding.
4. Benefits. You will continue to be eligible to participate in all
benefits and welfare plans in which you currently participate on the date
hereof. The Board of Managers of the General Partner of the Company will
undertake a review of all benefit and welfare plans and may modify the existing
package of plans or adopt new plans after completing its assessment, with the
intent of retaining a level of overall benefits substantially similar to those
currently in place.
5. Termination of Employment. Your employment under this Agreement shall be
for the term set forth in Section 1 hereof, except as provided below. You or the
Company may terminate your employment prior to the end of this term, as set
forth in this Section, subject to applicable statutory and common law
restrictions. The parties' rights and duties in the event of a termination of
employment will be as set forth below.
If (x) the Company terminates your employment other than for Cause (as
defined below) or (y) you terminate your employment for Good Reason (defined
below), the Company will, in lieu of any other payments or benefits hereunder or
otherwise (except for payment of base salary through the Date of Termination, at
the rate then in effect, plus benefits accrued pursuant to Section 4 above),
continue to pay your base salary at the rate in effect on the Date of
Termination (as defined below) and continue to provide or cause to be provided
health, life and disability insurance benefits to the extent permitted under
such plans through December 31, 2004 (subject to a minimum total payment equal
to three months' base salary) and the pro-rated portion of any bonus accrued
with respect to your period of employment (payable when such bonus ordinarily
would have been paid); provided that you make such affirmative COBRA or other
elections as are required for such benefits to continue. Any payments under this
Section 5 shall be made in accordance with the Company's standard practices and
shall be dependent upon your performance of the obligations under this letter.
If your employment terminates for any other reason, the Company will, in
lieu of any other payments hereunder or otherwise, continue to pay your base
salary through the Date of Termination, at the rate then in effect, plus
benefits accrued pursuant to Section 4 above.
For purposes of this letter: "Date of Termination" shall mean the date your
employment with the Company terminates regardless of the reason. "Cause" shall
mean (A) any material failure by you to perform your duties under this letter or
to obey policy directives from any superior executive officer of the Company or
the General Partner of the Company, it being understood that how well you
perform such duties or carry out such directives shall not give rise to "Cause"
under this clause (A), (B) your reporting to work under the influence of alcohol
or illegal drugs, the use of illegal drugs (whether or not at the workplace) or
other repeated conduct causing the Company or any of its affiliates public
disgrace or disrepute or material economic
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harm, (C) your material violation of any of the policies and guidelines for the
Company, including, without limitation, those relating to conflicts of interest,
ethical practices, trade regulation, payment and procurement policies, legal
compliance, employment discrimination, and/or sexual harassment, (D) your
commission of a felony or an act of fraud, misappropriation, embezzlement or any
other act involving moral turpitude, (E) your commission of any act of
dishonesty which materially injures the Company or any of its affiliates, or (F)
material breach by you of this letter or the limited partnership agreement of
Norcraft Holdings, L.P. (the "LP Agreement"), provided, that in the
circumstances described in clauses (A), (C), or (F) you shall have thirty (30)
days to cure the default after notice by the Company. "Good Reason" shall mean
(w) any material diminution of your duties, (x) a material breach by the Company
of this letter or the LP Agreement, (y) relocation by the Company outside of the
United States, or (z) change of your title, provided, that in the circumstances
described in clauses (w), (x), and (z) the Company shall have thirty (30) days
to cure the default after notice by you.
6. Confidentiality; Proprietary Rights. Without the written consent of the
General Partner of the Company, you will not during or after the term of your
employment with the Company disclose to any person or entity (other than a
person or entity to which disclosure is in your reasonable judgment necessary or
appropriate in connection with the performance of your duties for the Company),
any confidential or trade secret information obtained by you while in the employ
of the Company the disclosure of which may be adverse to the interests of the
Company or any of its affiliates, or use any such information to the detriment
of the Company or any of its affiliates; provided, however, that such
restriction shall not apply to information that is generally known to the public
other than as a result of unauthorized disclosure by you.
All inventions, developments, methods, processes and ideas conceived,
developed or reduced to practice by you during your employment, and for three
months thereafter, which are directly or indirectly useful in, or relate to, the
business of or services provided by or sold by the Company or any of its
affiliates shall be promptly and fully disclosed by you to an appropriate
executive officer of the Company (accompanied by all papers, drawings, data and
other materials relating thereto) and shall be the Company's exclusive property
as against you. You will, upon the Company's request and at its expense (but
without any additional compensation to you), execute all documents reasonably
necessary to assign your right, title and interest in any such invention,
development, method or idea (and to direct issuance to the Company of all
patents or copyrights with respect thereto).
7. Restricted Activities. You agree that, during the term of your
employment with the Company and until December 31, 2004 or your last severance
payment, whichever is later, you will not compete with the Company in the North
American branded cabinet business. To this end, you agree that you will not
directly or indirectly, be connected as an officer, director, employee,
consultant, owner or otherwise with any business in North America which competes
with the Company in the North American branded cabinet business. In addition,
during the term of your employment with the Company and the period ending on the
one-year anniversary of the Date of Termination, you agree to not directly (or
indirectly through another person or entity) (i)
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induce or attempt to induce any employee of the Company or any of its affiliates
to leave the employ of the Company or any of its affiliates, as the case may be,
or in any way interfere with the relationship between the Company or any of its
affiliates and any employee thereof, or (ii) hire any person who was an employee
of the Company or any of its affiliates at any time during the term of your
employment with the Company or the period ending on the one-year anniversary of
the Date of Termination. You agree that the restrictions contained in this
Section 7 are reasonably necessary for the protection of the Company and that a
violation of such provisions will cause damage that may be irreparable or
impossible to ascertain and, accordingly, that the Company will be entitled to
injunctive or other similar relief in equity from a court of competent
jurisdiction to enforce or restrain a violation of these restrictions.
8. Miscellaneous. The headings in this letter are for convenience only and
shall not affect the meaning hereof. This letter, together with the LP Agreement
and your letter agreement with Norcraft Holdings, L.P., dated as of October 16,
2003 (the "Success Bonus Letter"), with respect to deferred compensation
matters, constitutes the entire agreement between the Company and you, and
supersedes any prior communications, agreements and understandings, written or
oral, with respect to your employment and compensation and all matters
pertaining thereto. If any provision in this letter should, for any reason, be
held invalid or unenforceable in any respect, it shall be construed by limiting
it so as to be enforceable to the maximum extent compatible with applicable law.
This letter agreement shall be governed by and construed in accordance with the
internal substantive laws of the State of Minnesota without giving effect to any
choice or conflict of laws provision or rule that would cause the application of
the domestic substantive laws of any other jurisdiction. Should any action or
proceeding be brought to construe or enforce the terms and conditions of this
Agreement or the rights of the parties hereunder, the losing party shall pay to
the prevailing party all court costs and reasonable attorneys' fees and costs
incurred in such action or proceeding.
9. Acceptance. In accepting this offer, you represent that you have not
relied on any agreement or representation, oral or written, express or implied,
that is not set forth expressly in this letter, the LP Agreement or the Success
Bonus Letter.
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Very truly yours,
NORCRAFT COMPANIES, L.P.
By NORCRAFT GP, L.L.C.,
its general partner
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Authorized Person
Accepted and Agreed To:
/s/ Xxxxx Xxx Xxxxx
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Xxxxx Xxx Xxxxx
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