Ply Gem Industries, Inc.
EXHIBIT 10.2
Ply
Gem Industries, Inc.
0000
Xxxxxx Xxxxxxx, Xxxxx 000
Xxxx,
X.X. 00000
November
7, 2008
Xxxxx X.
Xxx
0000
Xxxxxxxx Xxxxx
Xxxxxxx,
XX 00000
Re: Amended
and Restated Retention Agreement
Dear
Xxxxx:
Ply Gem
Industries, Inc. (“Ply Gem”) considers the continuity of management essential to
the best interests of Ply Gem and its stockholders and desires to reinforce and
encourage your continued attention and dedication to your duties to Ply Gem
and its subsidiaries and affiliates (each, an
“Employer”). Ply Gem recognizes that the performance of your
duties over the past several months has demanded an increased commitment of your
time and energy in light of the relocation of Ply Gem’s headquarters and the
attendant relocation required of you, and that this increased commitment will
continue. To assure your continued focus on your duties to your
Employer under these circumstances the Board of Directors of Ply Gem (the
“Board”) and the Compensation Committee of the Board have authorized Ply Gem to
enter into this letter agreement with you, which is an amended and restated
version of the Retention Agreement between you and Ply Gem, dated
December 1, 2005 (as amended from time to time prior to the date hereof,
the “Original Retention Agreement”). This letter agreement sets forth
a relocation retention incentive payment and certain additional compensation
that Ply Gem agrees to pay you if your employment is terminated under the
circumstances described herein.
This
letter agreement sets forth the terms and conditions of Ply Gem’s agreement to
pay you the compensation under the circumstances described herein, and the
parties to this letter agreement acknowledge the receipt and sufficiency of good
and valuable consideration in support of this letter agreement, including the
covenants and agreements set forth herein.
1. Term
This
letter agreement is effective as of the date hereof and shall expire on February
12, 2009; provided, that, Ply Gem shall have the right to renew this letter
agreement for successive one year periods (each, a “Renewal Term”), which right
it must exercise prior to February 12, 2009, or the last day of any Renewal
Term, as applicable; provided, further, that Section 3 of this Agreement shall
remain effective following the date of this Agreement until necessary to give
effect thereof and shall not expire on February 12, 2009 or the last day of any
Renewal Term as described above.
2. Compensation
If your
employment is terminated during the term of this letter agreement (A) by your
Employer without “Cause” or (B) by you following a “Material Adverse Change” (as
such terms are defined below), and subject to (X) your execution of a Release
and Restrictive Covenant Agreement substantially in the form attached to this
letter agreement as Exhibit A (the “Release and Restrictive Covenant Agreement”)
within 30 days following the date of your termination of employment and (Y) your
continued compliance with such Release and Restrictive Covenant Agreement for
the periods described therein, you will be entitled to receive:
(a) An amount
equal to your annual base salary in effect on the date of your termination
(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 that you may
be entitled to). This salary continuation shall be payable in equal
installments over the 12-month period following the date of your termination of
employment (the “Payment Period”), in accordance with your Employer’s normal
payroll practices;
(b) An amount
equal to the lesser of (I) your target annual cash bonus with respect to the
fiscal year during which your termination of employment occurs (the “Year of
Termination”) and (II) the actual annual cash bonus you would have received with
respect to the Year of Termination based on actual performance during that year,
if you had been employed for the full year, measured as of the time such
performance is measured for purposes of paying annual cash bonuses to other
executives of your Employer with respect to such year (the “Actual
Bonus”). You shall be paid a lump sum cash payment equal to the
portion of the Actual Bonus that you would have been paid prior to such date had
such amount been determined as of the date of your termination of employment as
soon as reasonably practicable following the date that the amount of the Actual
Bonus is determined, which shall be not later than March 15 next following the
close of the fiscal year to which the bonus relates; provided that it shall not
be a breach of this letter agreement if payment is made later in such year to
the extent financial results are not available by March 15 so long as payment is
made by payroll as soon as practicable following certification of such
results;
(c) A lump
sum payment equal to a pro rata portion of any annual cash bonus that you would
have been entitled to receive with respect to the Year of Termination based upon
the percentage of such year that shall have elapsed through the date of your
termination of employment, and determined as of the date such bonuses are
determined for other executives of your Employer (the “Pro Rata
Bonus”). The Pro Rata Bonus shall be payable when annual cash bonuses
with respect to the Year of Termination are paid to other executives of your
Employer, which shall be not later than March 15 next following the close of the
fiscal year to which the bonus relates; provided that it shall not be a breach
of this letter agreement if payment is made later in such year to the extent
financial results are not available by March 15 so long as payment is made by
payroll as soon as practicable following certification of such
results;
(d) Continuation
of medical and dental benefits for you and your spouse and dependents, if any,
during the Payment Period, in the same plans and on the same basis (including,
without limitation, contribution rates) as such benefits are provided from time
to time to actively employed executives of your Employer, subject to the terms
of such plans as the same may exist from time to time; provided, that, the
Employer’s obligation to provide such medical and dental benefits shall cease at
the time you become eligible for such benefits from another
employer;
(e) (i) Your
base salary through the date of termination; (ii) any declared but unpaid annual
cash bonus for any fiscal year preceding the year in which the termination
occurs; (iii) reimbursement for any unreimbursed business expenses properly
incurred by you in accordance with Employer policy through your date of
termination; and (iv) any other amounts, including without limitation, accrued
but unused vacation, required to be paid to you under any applicable state
statute or regulation; and
(f) If, at
the end of the Payment Period, you have not been able to obtain employment
providing you with an annual salary of at least $300,000, the salary and bonus
payments and other benefits referred to in paragraphs (a), (b) and (d) above
shall be continued for a period equal to the shorter of (i) 12
additional months and (ii) the period between the expiration of the Payment
Period and the date on which you become employed in a position that provides you
with an annual salary of at least $300,000 (the “Extended Payment
Period”). Any bonus that you would be entitled to receive during the
Extended Payment Period shall be prorated if the Extended Payment Period is less
than 12 months. If, at any time during the Extended Payment Period,
you receive employment providing you with an annual salary of less than
$300,000, then all payment of salary and bonus during the Extended Payment
Period shall be reduced by the salary and bonus you receive from such other
employment during that period and the benefits provided to you under this letter
agreement shall be equitably adjusted and reduced to reflect the benefits
received by you from such other employment.
The
Employer shall have the authority to delay the provision of any amounts or
benefits under this letter agreement to the extent it reasonably deems necessary
to comply with Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as
amended (the “Code”) (relating to payments made to “specified employees”); in
such event any such amount or benefit to which you would otherwise be entitled
during the six-month period following your separation from service will be
provided or paid on the first business day following the expiration of such
six-month period, or, if earlier, the date of death. For purposes of
Section 409A of the Code, the right to a series of installment payments under
this letter agreement shall be treated as a right to a series of separate
payments except where otherwise specifically provided.
Your
employment shall not be deemed to be terminated by your Employer without Cause
or by you following a Material Adverse Change, and you shall not be entitled to
any payments or benefits under this Section 2 solely on account of, the sale or
disposition by Ply Gem or any Employer, or any parent of Ply Gem or any
Employer, as applicable, of the subsidiary or division for which you are
employed if you are offered employment by the purchaser or acquirer of such
subsidiary or division and such acquirer or purchaser agrees to assume the terms
of this letter agreement.
Notwithstanding
anything to the contrary in this letter agreement, no further payments or
benefits are due under this Section 2, and all other benefits, if any, due you
following a termination of employment shall be determined in accordance with the
plans, policies and practices of your Employer. In addition, subject
to applicable state law, Ply Gem and any Employer, as applicable, shall have the
right to reclaim any amounts already paid to you under this Section 2 if, at any
time after your employment is terminated, (i) you breach any of the provisions
of Section VI of the Release and Restrictive Covenant Agreement, or (ii) the
Board determines, in good faith, that grounds existed, on or prior to the date
of termination of your employment with Employer, including prior to the date of
this letter agreement, for your Employer to terminate your employment for Cause;
provided, that, in all events you will be entitled to receive amounts in
sub-clauses (i), (iii), and (iv) of Section 2(e) above.
3. Relocation
Retention Incentive
Subject
to the terms of this Section 3, you shall be entitled to receive a one-time,
lump-sum cash relocation retention incentive bonus (“Relocation Incentive”) of
$650,000. This Relocation Incentive will vest and be paid on
September 1, 2011 (the “Incentive Payment Date”). You must be
employed by your Employer on the Incentive Payment Date to receive the
Relocation Incentive. Notwithstanding the foregoing, in the event
that you die or become Disabled (as defined below) prior to the Incentive
Payment Date, Ply Gem shall pay you a pro-rated portion of the Relocation
Incentive (the “Pro-Rated Relocation Incentive”), in an amount equal to (x) the
Relocation Incentive multiplied by (y) a fraction, the denominator of which is
1,095 and the numerator of which is the number of days that you were employed by
your Employer during the period beginning on September 1, 2008 and ending on the
date of termination of your employment due to your death or becoming
Disabled.
It shall
not be a breach of this letter agreement if Ply Gem defers the Relocation
Incentive or Pro-Rated Relocation Incentive, as applicable, if there exists and
is continuing a default or an event of default (or, if Ply Gem does not have
sufficient cash to consummate the Relocation Incentive or Pro-Rated Relocation
Incentive, as applicable, causing its subsidiaries to distribute or advance the
required funds) on the part of Ply Gem or any of its subsidiaries under any
guarantee or other agreement under which Ply Gem or any of its subsidiaries has
borrowed money or if such payment would constitute a breach of, or result in a
default or an event of default (with or without the giving of notice or passage
of time or both) on the part of Ply Gem or any of its subsidiaries under, any
such guarantee or agreement, or if the payment of the Relocation Incentive or
Pro-Rated Relocation Incentive, as applicable (or, if Ply Gem does not have
sufficient cash to consummate the payment, causing its subsidiaries to
distribute or advance the required funds) would not be permitted under any
applicable laws. If Ply Gem defers the Relocation Incentive or
Pro-Rated Relocation Incentive, as applicable, in accordance with the preceding
sentence, Ply Gem shall pay the Relocation Incentive or Pro-Rated Relocation
Incentive, as applicable, as soon as possible, with interest at the prime rate
offered by Ply Gem’s principal lending institution, as in effect from time to
time.
4. Definitions
For
purposes of this letter agreement, “Cause” shall mean: (i) your
willful and continued failure to perform substantially your material duties
(other than any such failures resulting from, or contributed to by, incapacity
due to physical or mental illness), after a written demand for substantial
performance is delivered to you by the Board, which notice specifically
identifies the manner in which you have not substantially performed your
material duties, and you neglect to cure such failure within 30 days; (ii) a
willful failure to follow the lawful direction of the Board or of the senior
executive officer of Ply Gem to whom you directly report (if applicable);
(iii) your material act of dishonesty or breach of trust in connection with
the performance of your duties to Ply Gem or your Employer; (iv) your
conviction of, or plea of guilty or no contest to, (x) any felony or
(y) any misdemeanor having as its predicate element fraud, dishonesty or
misappropriation; or (v) a civil judgment in which Employer is awarded damages
from you in respect of a claim of loss of funds through fraud or
misappropriation by you, which has become final and is not subject to further
appeal.
For
purposes of this letter agreement, a “Material Adverse Change” shall mean any of
the following, without your express written consent:
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(1)
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Assignment
to you of any duties that are inconsistent with your position, duties and
responsibilities and status with your Employer as of February 12,
2006;
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(2)
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Your
Employer’s reduction of your base
salary;
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(3)
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Without
your express written consent, your Employer’s requiring you to be based
anywhere other than within 50 miles of your office location immediately
prior to such required relocation, except for required travel on your
Employer’s business to an extent substantially consistent with your
business travel obligations immediately prior to such required
relocation;
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(4)
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Any
action by your Employer that would deprive you of any material employee
benefit enjoyed by you, except where such change is applicable to all
employees participating in such benefit
plan;
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(5)
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Any
breach by Ply Gem or your Employer of any provision of this letter
agreement or the Release and Restrictive Covenant
Agreement.
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For
purposes of this letter agreement, you shall be considered “Disabled” in the
event that you suffer any illness or disability, the nature of which as to
render you incapable of performing your duties and responsibilities for your
Employer for a period of six (6) consecutive months or for an aggregate of
twelve (12) months within any consecutive eighteen (18) month
period. If there is a dispute as to whether you are or were incapable
of performing your duties and responsibilities for your Employer, such dispute
shall be submitted for resolution to an independent licensed physician chosen by
your Employer. If such a dispute arises, you shall submit to such
examinations and shall provide such information as such physician may request,
and the determination of the physician shall be released to your Employer and,
as to your physical or mental condition, shall be binding and
conclusive.
5. Release
and Restrictive Covenant Agreement
All
payments and benefits described in Section 2 of this letter agreement are
conditional upon and subject to your execution of the Release and Restrictive
Covenant Agreement.
6. Notices
Any
notice required by this letter agreement must be in writing and will be deemed
to have been duly given (i) if delivered personally or by overnight courier
service, sent by
facsimile transmission or mailed by United States registered mail, return
receipt requested, postage prepaid, and (ii) addressed to the respective
addresses or sent via facsimile to the respective facsimile numbers, as the case
may be, as set forth below, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt; provided, however, that
(X) notices sent by personal delivery or overnight courier shall be deemed given
when delivered, (Y) notices sent by facsimile transmission shall be deemed given
upon the sender’s receipt of confirmation of complete transmission, and (Z)
notices sent by United States registered mail shall be deemed given two days after the date of
deposit in the United States mail.
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If
to you, to the address as shall most currently appear on the records of
your Employer
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If to Ply
Gem, to:
Ply Gem
Industries, Inc.
0000
Xxxxxx Xxxxxxx, Xxxxx 000
Xxxx,
X.X. 00000
Fax:
(000) 000-0000
Attn: President
7. General
Your
Employer may withhold from any amounts payable under Section 2 and Section 3 of
this letter agreement such federal, state, local or other taxes required to be
withheld pursuant to applicable law or regulation.
The
payments and benefits provided for in Section 2 and Section 3 of this letter
agreement shall not be counted as compensation for purposes of determining
benefits under other benefit plans, programs, policies and agreements of your
Employer, except to the extent expressly provided therein or
herein.
This
letter agreement is not intended to result in any duplication of payments or
benefits to you and does not give you any right to any compensation or benefits
from Ply Gem or your Employer except as specifically stated in this letter
agreement.
For you
to receive the payments and benefits described in Section 2 of this letter
agreement, you will not be required to seek other employment or otherwise
mitigate the obligations of your Employer under this letter
agreement. Except as described in Sections 2(d) and 2(f) of this
letter agreement, there will be no offset against any amounts due under this
letter agreement on account of any remuneration attributable to any subsequent
employment that you may obtain.
This
letter agreement is not a contract of employment and does not give you any right
of continued employment or limit the right of your Employer to terminate or
change the status of your employment at any time or change any employment
policies.
This
letter agreement is governed by the laws of the state of Delaware, without
reference to the principles of conflict of laws which would cause the laws of
another state to apply. By signing this letter agreement, you and Ply
Gem irrevocably agree, for the exclusive benefit of the other, that any and all
suits, actions or proceedings relating to Section VI of the Release and
Restrictive Covenant Agreement (collectively, “Proceedings” and, individually, a
“Proceeding”) will 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 exclusive
jurisdiction to hear and determine or settle any such Proceeding and that any
such Proceedings shall only be brought in the Chosen Courts. You and
Ply Gem irrevocably waive any objection that you or Ply Gem may have now or
hereafter to the laying of the venue of any Proceedings in the Chosen Courts and
any claim that any Proceedings have been brought in an inconvenient forum and
further irrevocably agree that a judgment in any Proceeding brought in the
Chosen Courts shall be conclusive and binding upon you and Ply Gem and may be
enforced in the courts of any other jurisdiction.
You and
Ply Gem agree that this letter agreement involves at least $100,000 and that
this letter agreement has been entered into in express reliance on Section 2708
of Title 6 of the Delaware Code. You and Ply Gem irrevocably and
unconditionally agree (i) that, to the extent you or Ply Gem are not otherwise
subject to service of process in the State of Delaware, you or Ply Gem will
appoint (and maintain an agreement with respect to) an agent in the State of
Delaware as your agent for acceptance of legal process and notify Ply Gem or
you, as applicable, of the name and address of said agent, (ii) that service of
process may also be made on you or Ply Gem by pre-paid certified mail with a
validated proof of mailing receipt constituting evidence of valid service sent
to you or Ply Gem at the address set forth in this letter 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.
Your
rights under this letter agreement are not transferable, assignable or subject
to lien or attachment.
You and
Ply Gem acknowledge that you intend that the compensation arrangements set forth
in this agreement either are not governed by or are in compliance with Section
409A of the Code; however, owing to the uncertain application of Section 409A of
the Code, Ply Gem agrees to use its reasonable best efforts such that no earlier
and/or additional taxes to you will arise under Section 409A of the Code as a
result of any compensation payable under this letter agreement.
This
letter agreement contains the entire understanding and agreement between you and
Ply Gem in respect of the matters addressed herein, and supersedes any and all
prior agreements and understandings, whether written or oral, with respect to
such matters including, without limitation, the Original Retention
Agreement. This letter agreement may not be amended except in a
writing signed by you and by an authorized officer on behalf of Ply
Gem.
Sincerely,
PLY GEM
INDUSTRIES, INC.
By: /s/Xxxx X.
Robinette__________________
Name: Xxxx
X. Xxxxxxxxx
Title: President
and Chief Executive Officer
Acknowledged
and Agreed:
/s/Xxxxx X.
Xxx
Xxxxx X.
Xxx
Exhibit
A
RELEASE AND RESTRICTIVE
COVENANT AGREEMENT
This
Release and Restrictive Covenant Agreement (this “Agreement”) is entered into by
and between Xxxxx X. Xxx (the “Employee”) and Ply Gem Industries, Inc. (the
“Company”), on ____________.
I. Release of
Claims
In
partial consideration of certain of the payments and benefits described in
Section 2 of the letter agreement between you and the Company, dated December 1,
2005, as amended and restated on November __, 2008 (the “Letter”), to which the
Employee agrees the Employee is not entitled until and unless he executes this
Agreement, the Employee, for and on behalf of himself and his heirs and assigns,
subject to the last sentence of this paragraph, hereby waives and releases any
common law, statutory or other complaints, claims, charges or causes of action
of any kind whatsoever, both known and unknown, in law or in equity, which the
Employee ever had, now has or may have against the Company and its shareholders
and their respective subsidiaries, successors, assigns, affiliates, directors,
officers, partners, members, employees or agents (collectively, the “Releasees”)
by reason of facts or omissions which have occurred on or prior to the date that
the Employee signs this Agreement, including, without limitation, any complaint,
charge or cause of action arising under federal, state or local laws pertaining
to employment, including the Age Discrimination in Employment Act of 1967
(“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, all as
amended; and all other federal, state and local laws and
regulations. By signing this Agreement, the Employee acknowledges
that he intends to waive and release any rights known or unknown that he may
have against the Releasees under these and any other laws; provided, that the
Employee does not waive or release claims with respect to the right to enforce
his rights under the Letter (the “Unreleased Claims”).
II. Proceedings
The
Employee acknowledges that he has not filed any complaint, charge, claim or
proceeding, except with respect to an Unreleased Claim, if any, against any of
the Releasees before any local, state or federal agency, court or other body
(each individually a “Proceeding”). The Employee represents that he
is not aware of any basis on which such a Proceeding could reasonably be
instituted. The Employee (a) 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 (b) 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
Employee understands that, by executing this Agreement, he will be limiting the
availability of certain remedies that he may have against the Company and
limiting also his ability to pursue certain claims against the
Releasees. Notwithstanding the above, nothing in Section I of this
Agreement shall prevent the Employee from (x) initiating or causing to be
initiated on his behalf any complaint, charge, claim or proceeding against the
Company before any local, state or federal agency, court or other body
challenging the validity of the waiver of his claims under the ADEA contained in
Section I of this Agreement (but no other portion of such waiver); or (y)
initiating or participating in an investigation or proceeding conducted by the
EEOC.
III. Time to
Consider
The
Employee acknowledges that he has been advised that he has 21 days from the date
of receipt of this Agreement to consider all the provisions of this Agreement
and he does hereby knowingly and voluntarily waive said given 21 day
period. THE EMPLOYEE FURTHER ACKNOWLEDGES THAT HE HAS READ THIS
AGREEMENT CAREFULLY, HAS BEEN ADVISED BY THE COMPANY TO, AND HAS IN FACT,
CONSULTED 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 SECTION I OF THIS AGREEMENT AND THE OTHER PROVISIONS
HEREOF. THE EMPLOYEE ACKNOWLEDGES THAT HE HAS NOT BEEN FORCED OR
PRESSURED IN ANY MANNER WHATSOEVER TO SIGN THIS AGREEMENT, AND THE EMPLOYEE
AGREES TO ALL OF ITS TERMS VOLUNTARILY.
IV. Revocation
The
Employee hereby acknowledges and understands that the Employee shall have seven
days from the date of the Employee’s execution of this Agreement to revoke this
Agreement (including, without limitation, any and all claims arising under the
ADEA) and that neither the Company nor any other person is obligated to provide
any benefits to the Employee pursuant to Section 2 and Section 3 of the Letter
until eight days have passed since the Employee’s signing of this Agreement
without the Employee having revoked this Agreement, in which event the Company
immediately shall arrange and/or pay for any such benefits otherwise
attributable to said eight-day period, consistent with the terms of the
Letter. If the Employee revokes this Agreement, the Employee will be
deemed not to have accepted the terms of this Agreement, and no action will be
required of the Company under any section of this Agreement.
V. No
Admission
This
Agreement does not constitute an admission of liability or wrongdoing of any
kind by the Employee or the Company.
VI. Restrictive
Covenants
A. Non-Competition/Non-Solicitation
The
Employee 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 date of the Employee’s termination of employment
and ending on the last day of the Payment Period (the “Restricted Period”), or
such longer period as described in the last sentence of Section VII of this
Agreement, the Employee will not, directly or indirectly, (w) engage in any
“Competitive Business” (as defined below) for the Employee’s own account,
(x) enter the employ of, or render any services to, any person engaged in
any Competitive Business, (y) 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 (z) interfere with
business relationships between the Company and customers or suppliers of, or
consultants to, the Company.
2. For
purposes of this Section VI, 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 Employee works does
business: the manufacture and sale of vinyl, vinyl clad and aluminum
windows, vinyl and composite siding and vinyl and composite fencing, decking and
railing.
3. For
purposes of this Section VI and of Section VII 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 Employee 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 Employee (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.
5. During
the Restricted Period, the Employee 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 Employee 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
Employee understands that the provisions of this Section VI.A may limit the
Employee’s ability to earn a livelihood in a business similar to the business of
the Company, but the Employee 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 Employee. In
consideration of the foregoing and in light of the Employee’s education, skills
and abilities, the Employee agrees that he shall not assert that, and it should
not be considered that, any provisions of Section VI.A. otherwise are void,
voidable or unenforceable or should be voided or held
unenforceable.
7. It is
expressly understood and agreed that, although the Employee and the Company
consider the restrictions contained in this Section VI.A 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 VI.A or
elsewhere in this Agreement is an unenforceable restriction against the
Employee, the provisions of this 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.
B. Nondisparagement
The
Employee agrees (whether during or after the Employee’s employment with the
Company) not to issue, circulate, publish or utter any false or disparaging
statements, remarks or rumors about the Company or the shareholders, officers,
directors or managers of the Company other than to the extent reasonably
necessary in order to (i) assert a bona fide claim against the Company arising out of the Employee’s employment with the
Company, 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.
C. Company
Policies
The
Employee agrees to abide by the terms of any employment policies or codes of
conduct of the Company that apply to the Employee after termination of
employment.
D. Confidentiality/Company
Property
The
Employee shall not, without the prior written consent of the Company, 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 Company, in furtherance of the business of and for
the benefit of the Company, or any “Personal Information” (as defined below);
provided that the Employee may disclose such information when required to do so
by a court of competent jurisdiction, by any governmental agency having
supervisory authority over the business of the Company and/or its affiliates, as
the case may be, or by any administrative body or legislative body (including a
committee thereof) with jurisdiction to order the Employee to divulge, disclose
or make accessible such information; provided, further, that in the event that
the Employee is ordered by a court or other government agency to disclose any
Confidential Information or Personal Information, the Employee shall
(i) promptly notify the Company of such order, (ii) at the written
request of the Company, diligently contest such order at the sole expense of the
Company as expenses occur, and (iii) at the written request of the Company,
seek to obtain, at the sole expense of the Company, such confidential treatment
as may be available under applicable laws for any information disclosed under
such order. For purposes of this Section VI.D,
(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 Company
or its affiliates or customers, that, in any case, is not otherwise available to
the public (other than by the Employee’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 Company. Upon termination of the Employee’s
employment with the Company, the Employee shall return all Company property,
including, without limitation, files, records, disks and any media containing
Confidential Information or Personal Information.
E. 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 Employee, alone or with others, and in any way
relating to the business or any proposed business of the Company of which the
Employee has been made aware, or the products or services of the Company of
which the Employee 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 Employee’s employment with the Company or any subsidiary of
the Company (“Developments”), shall be the sole and exclusive property of the
Company. The Employee agrees to, and hereby does, assign to the
Company, without any further consideration, all of the Employee’s right, title
and interest throughout the world in and to all Developments. The
Employee 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 Company is the author of such Developments and owns all of
the rights comprised in the copyright of such Developments, and the Employee
hereby assigns to the Company, without any further consideration, all of the
rights comprised in the copyright and other proprietary rights the Employee may
have in any such Development to the extent that it might not be considered a
work made for hire. The Employee shall make and maintain adequate and
current written records of all Developments and shall disclose all Developments
promptly, fully and in writing to the Company promptly after development of the
same, and at any time upon request.
F. Cooperation
At any
time after the date of the Employee’s termination of employment, the Employee
agrees to cooperate (i) with the Company in the defense of any legal matter
involving any matter that arose during the Employee’s employment with the
Company and (ii) with all government authorities on matters pertaining to any
investigation, litigation or administrative proceeding pertaining to the
Company. The Company will reimburse the Employee for any earnings
lost by the Employee and any reasonable travel and out of pocket expenses
incurred by the Employee in providing such cooperation.
VII. Enforcement
The
Employee acknowledges and agrees that the Company’s remedies at law for a breach
or threatened breach of any of the provisions of Sections VI.A,B,D and E of this
Agreement would be inadequate, and, in recognition of this fact, the Employee
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, the Company shall be
entitled to immediately cease paying any amounts remaining due or providing any
benefits to the Employee pursuant to Section 2 of the Letter and, subject to
applicable state law, to reclaim any amounts already paid under Section 2 of the
Letter upon a good faith determination by the Board of Directors of the Company
that the Employee has violated any provision of Section VI of this Agreement,
subject to payment of all such amounts upon a final determination that the
Employee had not violated Section VI of this Agreement. If the
Employee breaches any of the covenants contained in Section VI.A, B, D or E of
this Agreement, and the Company Group obtains injunctive relief with respect
thereto, the period during which the Employee is required to comply with that
particular covenant shall be extended by the same period that the Employee was
in breach of such covenant prior to the effective date of such injunctive
relief.
VIII. General
Provisions
A. No
Waiver; Severability
A failure
of the Company or any of the Releasees to insist on strict compliance with any
provision of this Agreement shall not be deemed a waiver of such provision or
any other provision hereof. If any provision of this Agreement is
determined to be so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable, and in the event that any
provision is determined to be entirely unenforceable, such provision shall be
deemed severable, such that all other provisions of this Agreement shall remain
valid and binding upon the Employee and the Releasees.
B. 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 VI of
this Agreement (collectively, “Proceedings” and, individually, a
“Proceeding”) shall 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
exclusive jurisdiction to hear and determine or settle any such Proceeding and
that any such Proceedings shall only 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 Proceedings in the Chosen
Courts and any claim that any Proceedings have been brought in an inconvenient
forum and further irrevocably agrees that a judgment in any Proceeding brought
in the Chosen Courts shall be conclusive and binding upon it and may be enforced
in the courts of any other jurisdiction.
Each of
the parties hereto 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 hereto 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.
C. Counterparts
This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.
D. Notice
For the
purpose of this Agreement, notices and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given
if delivered personally, if delivered by overnight courier service, if sent by facsimile
transmission or if mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses or
sent via facsimile to the respective facsimile numbers, as the case may be, as
set forth below, or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt; provided, however, that (i)
notices sent by personal delivery or overnight courier shall be deemed given
when delivered; (ii) notices sent by facsimile transmission shall be deemed
given upon the sender’s receipt of confirmation of complete transmission, and
(iii) notices sent by United States registered mail shall be deemed given two days after the date of
deposit in the United States mail.
|
|
If
to the Employee, to the address as shall most currently appear on the
records of the Company
|
If to the
Company, to:
Ply Gem
Industries, Inc.
0000
Xxxxxx Xxxxxxx, Xxxxx 000
Xxxx,
X.X. 00000
Fax:
(000)-000-0000
Attn: President
IN WITNESS WHEREOF, the
parties hereto have duly executed this Agreement as of the day and year first
above written.
EMPLOYEE
______________________________
PLY GEM
INDUSTRIES, INC.
By:
_ ________________
Name:
Title:
