AGREEMENT
Exhibit 10.1
AGREEMENT
THIS AGREEMENT (the “Agreement”) made effective as of February 4, 2008 (the
“Effective Date”), by and between NCI Building Systems, Inc., a Delaware corporation with
its principal office in the State of Texas (the “Company”), and Xxxxxxx X. Xxxxxx (the
“Consultant”).
WITNESSETH:
WHEREAS, the Consultant has served as an employee and executive officer of the Company,
including as its Executive Vice President—Administration, since May 1998; and
WHEREAS, the Consultant desires to retire as an executive officer of the Company and all of
its subsidiaries and related entities, including the position of Executive Vice
President—Administration; and
WHEREAS, the Company desires that the Consultant remain, and the Consultant has agreed to
remain, as a employee of the Company in his current position until January 31, 2008 and,
thereafter, the Consultant has agreed to remain in a consulting capacity; and
WHEREAS, in consideration of the mutual promises contained herein, the parties hereto are
willing to enter into this Agreement upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises, the terms and provisions set forth herein,
the mutual benefits to be gained by the performance thereof and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Resignation from Officer/Director Positions. The Consultant agrees to remain
employed in his current position in a full-time capacity through the dates specified herein.
Effective as of January 31, 2008, the Consultant agrees to hereby resigns each of his officer
positions with the Company and any of its subsidiaries, and the Consultant further agrees to resign
each of his director positions with any of the Company’s subsidiaries effective as of such date and
time. The Consultant shall remain employed in his position as Executive Vice
President—Administration through the Transition Date, and shall resign from such position on that
date. “Transition Date,” as used herein, shall mean January 31, 2008.
2. Separation from Employment. Following the Transition Date, the Consultant hereby
agrees to continue to act in a consulting capacity on behalf of the Company during the Advisory
Period (as defined below) on an as-needed basis. The Consultant agrees to perform such limited
services as shall be requested by the Company and agreed to by the Consultant at such times and
rates as are mutually agreeable to the Consultant and the Company; provided, however, that the
Consultant shall not be obligated to perform such services to the extent such services would
interfere with the Consultant’s pursuit of other personal and/or business interests that are not
inconsistent with the terms of this Agreement. Further, the Consultant may elect to accept such
assignments offered to
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him at his own volition and without any risk of being in breach of this Agreement in the event
that he declines an offered assignment. Services required of the Consultant may include, but are
not limited to, the following:
a. Provide such services as are reasonably necessary to assist the Company in a transition
of the Consultant’s responsibilities as an officer of the Company and its subsidiaries to any
successor to such responsibilities,
b. Respond to the best of his knowledge and belief to any questions posed by or on behalf
of the Company regarding any litigation in which the Company or any affiliate is then or may
become involved, and
c. Perform such other consulting services for the Company and its affiliates as shall be
reasonably requested by the Chief Executive Officer of the Company and that are not materially
different from Consultant’s prior duties and responsibilities as an officer of the Company.
The “Advisory Period” shall be the period from the Transition Date through January 31, 2012
(the “Termination Date”). Unless earlier terminated pursuant to Section 4, the
Consultant’s consulting relationship with the Company shall terminate as of the Termination Date.
3. Salary and Benefits. Except as otherwise set forth in this Section 3 or in Section
4, the Consultant shall be entitled to the consideration set forth below during the period
beginning on the Effective Date and ending on the Termination Date. In addition, provided that the
Consultant does not violate the material provisions of this Agreement or the Supplemental Benefit
Agreement (as defined below), it is specifically understood and agreed that the Consultant shall be
entitled to the benefit provided to him under the terms of the Supplemental Benefit Agreement
between the Company and the Consultant, dated August 26, 2004 (the “Supplemental Benefit
Agreement”).
a. Salary Prior to the Transition Date. From the Effective Date through the Transition
Date, the Consultant shall continue to receive the Consultant’s base salary in effect as of the
Effective Date, payable in accordance with the Company’s regular payroll practices.
b. Compensation during the Advisory Period. From February 1, 2008 through January 31, 2012,
the Consultant shall be paid on an hourly basis for approved assignments and consulting services
requested by an executive officer of the Company. Any and all such assignments and consulting
services shall be subject to the negotiation of a mutually agreeable hourly rate.
c. Bonus. The Consultant shall not be eligible for a bonus hereafter unless expressly
approved by the senior management or Board of Directors of the Company, in their sole
discretion.
d. Restricted Stock. The Consultant shall be eligible for awards of restricted stock of the
Company (“Restricted Stock Awards”) pursuant to the Company’s 2003
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Long-Term Stock Incentive Plan, as amended from time to time (as amended, the “2003
Plan”) through the Transition Date at the executive level in effect for Consultant on the
Effective Date. The Restricted Stock Awards granted after December 31, 2006, if any, shall vest
ratably over four (4) years subject to the Consultant’s continued service to the Company and
shall have terms consistent with the terms generally applicable to other executive officers of
the Company; provided, however, that such Restricted Stock Awards shall not provide for full
vesting solely due to attainment of retirement age. Notwithstanding the foregoing, all
Restricted Stock Awards granted to the Consultant prior to December 31, 2006 will fully vest as
of February 4, 2008, or the Consultant’s earlier Disability (as defined herein) or death.
e. Options. For purposes of determining the exercisability and term of stock options
granted to the Consultant prior to the Effective Date, the Consultant shall be deemed to have
retired effective on the Transition Date.
f. Welfare Benefits. From the Effective Date through the Transition Date, the Consultant
and his spouse shall remain eligible to participate in the group health and medical benefit
programs that are generally made available to active employees of the Company at the applicable
active employee premium rate. In addition, the Consultant shall be eligible to participate in
long-term healthcare insurance coverage, if any, which is made available to employees of the
Company, subject to the terms and conditions of such coverage and to payment of applicable
premiums. From and after the Transition Date, the Consultant and his spouse shall not be
eligible to participate in the group health and medical benefit programs that are generally made
available to active employees of the Company at the applicable active employee premium rate;
provided, however, that nothing in this Agreement shall be deemed to waive any rights that the
Consultant and/or other covered individuals may have under the Consolidated Ominbus Budget
Reconciliation Act of 1985 (“COBRA”). In addition, effective as of February 1, 2008, the
Consultant shall no longer be eligible to participate in long-term healthcare insurance
coverage, except as provided above.
g. Other Benefits. From the Effective Date through the Transition Date, the Consultant
shall continue to participate in the Company’s employee benefit plans and programs and
perquisites on the same terms and conditions applicable to executive management employees on the
Effective Date. Effective as of the Transition Date, the Consultant shall be deemed to have
terminated for purposes of the Company’s Deferred Compensation Plan. Further, effective as of
the Transition Date, the Consultant shall be deemed to have retired at “Normal Retirement Age”
(as defined in the Supplemental Benefit Agreement) for purposes of the Supplemental Benefit
Agreement, and the Consultant shall begin to receive his benefit under thereunder in accordance
with Article III thereof, provided that the Consultant is considered to have a “termination from
employment” on the Transition Date as determined pursuant to Section 409A (defined in Section 9
hereof). Except as specifically set forth above herein, from and after February 1, 2008, the
Consultant shall not be eligible to participate in any employee benefit plan or program
including, without limitation 401(k), retirement, profit-sharing, bonus, Deferred Compensation
Plan, severance or any other plan or program made available to employees of the Company and its
affiliates. The Consultant shall be considered to have reached retirement under the provisions
of Section 506:1(10) of the NCI
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Employment Manual (regarding payment of all accumulated sick days) and, further, shall be
eligible for payment of vacation and sick day accruals, if any, through the Transition Date,
payable as soon as practicable after that date.
h. Reimbursement of Expenses. The Company will reimburse the Consultant for reasonable
travel and other business expenses incurred by him in the fulfillment of his duties hereunder
upon presentation by the Consultant of an itemized account of such expenditures, in accordance
with Company practices and policies.
i. Use of Office/Administrative Support Staff During Advisory Period. The Consultant may
continue the use and occupancy of his current office at the Company’s headquarters in Houston,
Texas, until January 31, 2008. During the Advisory Period, the Company may provide to the
Consultant a temporary office as the Company in its discretion determines appropriate.
4. Termination of Employment. Notwithstanding the provisions of Sections 1 and 2, the
Consultant’s employment with the Company may be terminated in any of the following ways:
a. Termination without Cause, Disability. If the Consultant’s employment with the
Company is terminated by the Company without Cause (as defined in Section 4(b) below) or if
the Consultant or Employer terminates employment due to Disability (“Disability,” as
used herein, shall have the meaning ascribed to it in the 2003 Plan), the Consultant shall
continue to receive the salary and benefits provided under Sections 3(a)-(i), to the extent
applicable and as provided therein, as if he had remained employed through the Transition
Date. In the event of the Consultant’s death after termination under this Section 4(a), the
Consultant’s surviving spouse, if any, shall be entitled to receive continued salary
payments as provided in Sections 3(a) and (b) through the period ending on the Transition
Date.
b. Termination for Cause and Voluntary Termination. If the Consultant’s employment with
the Company is terminated by the Company for Cause (as defined below) or if the Consultant
voluntarily terminates employment for any reason other than Disability, the Company’s
obligation to make the payments or provide the benefits listed under Section 3 of this
Agreement shall immediately terminate as of the date of the Consultant’s termination except
to the extent that such payment(s) or benefit(s) are earned as of such date. For purposes
of this Agreement, “Cause” shall mean: (i) the Consultant’s willful and continued
failure to substantially perform his duties and other obligations under this Agreement and
such failure continues for a period of thirty (30) days after written notice by the Company
of the existence of such failure; provided, however, that only one such notice by the
Company need be sent and, if such failure re-occurs thereafter, no further notice and
opportunity to cure such failure shall be required; (ii) the willful engaging by the
Consultant in gross misconduct materially and demonstrably injurious to the Company, as
determined by the Company; or (iii) the Consultant’s conviction for committing an act of
fraud, embezzlement, theft or other act constituting a felony (which shall not include any
act or offense involving the operation of a motor vehicle); provided, however, that the
Board of Directors of the Company or the then current Chairman of the Board must
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first provide to Consultant written notice clearly and fully describing the particular
acts or omissions which the Board or the then current Chairman of the Board reasonably
believes in good faith constitutes Cause under this subsection (b) and an opportunity,
within thirty (30) days following the receipt of such notice, to meet in person with the
Board of Directors or the then current Chairman of the Board to explain the alleged acts or
omissions relied upon by the Board of Directors and, to the extent practicable, to cure such
acts or omissions. For purposes of this Agreement, any termination of the Consultant’s
employment for Cause shall be effective only upon delivery to the Consultant of a certified
copy of a resolution of the Board of Directors of the Company, adopted by the affirmative
vote of a majority of the entire membership of the Board of Directors following a meeting at
which the Consultant was given an opportunity to be heard on at least five (5) business
days’ advance notice, finding that the Consultant was guilty of the conduct constituting
Cause, and specifying the particulars thereof. Further, for the purposes of this Agreement,
no act or failure to act on the Consultant’s part shall be considered willful unless done,
or omitted from being done, by the Consultant not in good faith and without reasonable
belief that his action or omission was in the best interest of the Company.
c. Death. The Consultant’s employment under this Agreement shall terminate
automatically upon his death, and the Consultant’s surviving spouse, if any, shall be
entitled to receive continued salary payments as provided in Sections 3(a) and (b) through
the period ending on the Transition Date.
5. Restrictive Covenants. As a material inducement to the Company to enter into this
Agreement, the Consultant agrees to the restrictive covenants set forth below:
a. Non-Competition. During the Advisory Period and for the period ending five (5) years
following the Termination Date, the Consultant shall not, directly or indirectly and whether
on his own behalf or on behalf of any other person, partnership, association, corporation or
other entity, engage in or be an owner, director, officer, employee, agent, consultant or
other representative of or for, or lend money or equipment to or otherwise support, any
business that manufactures, engineers, markets, sells or provides, within a 250-mile radius
of any then existing manufacturing facility of the Company and its subsidiaries and
affiliates, metal building systems or components (including, without limitation, primary and
secondary framing systems, roofing systems, end or side wall panels, sectional or roll-up
doors, or other metal components of a building structure), coated or painted steel or metal
coils, coil coating or coil painting services, or any other products or services that are
the same as or similar to those manufactured, engineered, marketed, sold or provided by the
Company or its subsidiaries and affiliates prior to the Termination Date. Ownership by the
Consultant of equity securities of the Company, or of equity securities in other public or
privately-owned companies that compete with the Company constituting less than 1% of the
voting securities in such companies, shall be deemed not to be a breach of this covenant.
The Consultant agrees and stipulates that in any action or claim brought by him or in any
action or claim brought against him involving the provisions of this Section 5, the
Consultant hereby waives
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any claim or defense that the above non-competition covenants are unenforceable, void
or voidable, for any reason, including, but not limited to, fraud, misrepresentation,
illegality, unenforceable restraint of trade, failure of consideration, illusory contract,
mistake, or any other substantive legal defense. Further, the Consultant agrees and
stipulates that the provisions of this section comport with and are in strict compliance
with Section 15.50, et seq. of the Texas Business & Commerce Code.
b. Non-Solicitation. During the Advisory Period and for the period ending five (5)
years following the Termination Date, the Consultant shall not, directly or indirectly and
whether on his own behalf or on behalf of any other person, partnership, association,
corporation or other entity, either (i) hire, seek to hire or solicit the employment or
service of any employee, agent or consultant of the Company or its Subsidiaries and
affiliates in a commercial capacity; (ii) in any manner attempt to influence or induce any
employee, agent or consultant of the Company or its Subsidiaries and affiliates to leave the
employment or service of the Company or its Subsidiaries and affiliates; (iii) use or
disclose to any person, partnership, association, corporation or other entity any
information concerning the names and addresses of any employees, agents or consultants of
the Company or its Subsidiaries and affiliates unless such use or disclosure is of a
personal nature, is requested by the Company or is required by due process of law; or (iv)
call upon, solicit, divert or attempt to call upon, solicit or divert the business of any
customer, vendor or acquisition prospect of the Company or any of its Subsidiaries or
affiliates with whom the Company dealt, directly or indirectly, during his engagement with
the Company or its Subsidiaries or affiliates. The Consultant shall not be prohibited from
hiring or soliciting the employment or service of an agent or consultant of the Company for
purposes which do not violate Section 5(a) of this Agreement. The Consultant agrees and
stipulates that in any action or claim brought by him or in any action or claim brought
against him involving the provisions of this Section 5, the Consultant hereby waives any
claim or defense that the above non-solicitation covenants are unenforceable, void or
voidable, for any reason, including, but not limited to, fraud, misrepresentation,
illegality, unenforceable restraint of trade, failure of consideration, illusory contract,
mistake, or any other substantive legal defense.
c. Confidential Information. For purposes of the covenants made in this Section 5, the
Company promises to provide the Consultant (as is necessary for the Consultant’s position)
with various trade secrets and proprietary and confidential information consisting of, but
not limited to, business and/or strategic plans, budgets, fiscal plans, processes, computer
programs, compilations of information, records, sales procedures, customer requirements,
pricing techniques, customer lists, methods of doing business and other confidential
information (collectively referred to as the “Trade Secrets”), which are owned by
the Company and regularly used in the operation of its business, but in connection with
which the Company takes precautions to prevent dissemination to persons other than certain
directors, officers and employees. As used herein, “Trade Secrets” do not include any
information that, at the time of disclosure or thereafter, is generally available to or
known by the public (other than as a result of a disclosure by the Consultant or any of his
representatives in violation of the terms of this Agreement). The Consultant
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acknowledges and agrees that the Trade Secrets (i) are secret and not known in the
industry or to the public; (ii) are entrusted to him after being informed of their
confidential and secret status by the Company and because of the fiduciary position occupied
by him with the Company; (iii) have been developed by the Company for, and on behalf of, the
Company through substantial expenditures of time, effort and money and are used in its
business; (iv) give the Company an advantage over competitors who do not know or use the
Trade Secrets; (v) are of such value and nature as to make it reasonable and necessary to
protect and preserve the confidentiality and secrecy of the Trade Secrets; and (vi) the
Trade Secrets are valuable, special and unique assets of the Company, the disclosure of
which could cause substantial injury and loss of profits and goodwill to the Company. The
Consultant shall not use in any way or disclose any of the Trade Secrets, directly or
indirectly, during the Advisory Period, or at any time thereafter, except as required in the
course of his employment with the Company. The Consultant agrees that in any action or
claim brought by him or in any action or claim brought against him involving the provisions
of this Section 5, the Consultant hereby waives any claim or defense that the above
covenants are unenforceable, void or voidable, for any reason, including, but not limited
to, fraud, misrepresentation, illegality, unenforceable restraint of trade, failure of
consideration, illusory contract, mistake, or any other substantive legal defense. All
files, records, documents, information, data and similar items relating to the business of
the Company, whether prepared by the Consultant or otherwise coming into his possession,
shall remain the exclusive property of the Company and shall not be removed from the
premises of the Company under any circumstances without the prior written consent of the
Board of Directors of the Company (except in the ordinary course of business during the
Consultant’s employment with the Company), and in any event shall be promptly delivered to
the Company upon termination of the Consultant’s employment for any reason. The Consultant
agrees that, upon his receipt of any subpoena, process or other request to produce or
divulge, directly or indirectly, any Trade Secrets to any entity, agency, tribunal or
person, he shall timely notify and promptly deliver a copy of the subpoena, process and
stipulates or other request to the Chairman of the Board and Chief Executive Officer of the
Company. For this purpose, the Consultant irrevocably nominates and appoints the Company
(including any attorney retained by the Company), as his true and lawful attorney-in-fact,
to act in his name, place and xxxxx to perform any act that he might perform to defend and
protect against any disclosure of any Trade Secrets.
d. Non-Disparagement. The Consultant agrees to refrain from any criticisms or
disparaging comments about the Company or any affiliates (including any current officer,
director or employee of the Company), and the Consultant agrees not to take any action, or
assist any person in taking any other action, that is adverse to the interests of the
Company or any affiliate or inconsistent with fostering the goodwill of the Company and its
affiliates; provided, however, that nothing in this Agreement shall apply to or restrict in
any way the communication of information by the Company or the Consultant to any state or
federal law enforcement agency or to the Board of Directors or senior management of the
Company or require notice to the Company thereof, and the Consultant will not be in breach
of the covenant contained above solely by reason of testimony which is compelled by process
of law.
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e. Standstill. The Consultant agrees that during the Advisory Period and for the period
ending five (5) years after the Termination Date, neither he nor anyone acting on his behalf
will, without the prior written consent of the Company’s Board of Directors, directly or
indirectly: (i) except for a written offer or proposal submitted confidentially to the
Company, acquire, offer, propose or seek to acquire, or agree to acquire, by purchase or
otherwise, any securities or assets of the Company, or direct or indirect rights to acquire
securities or assets of the Company exceeding one percent (1%) of the then outstanding
securities or assets of the Company; (ii) make, or in any way participate, in any
“solicitation” of “proxies” or consents to vote (as such terms are used in the rules of the
Securities and Exchange Commission), or otherwise act, alone or in concert with others, to
seek to control or influence the management, Board of Directors or policies of the Company;
(iii) make any public announcement with respect to, or offers of, (with or without
conditions) any Extraordinary Transaction involving the Company or any of its securities or
assets, or otherwise take any actions, other than submitting to the Company a confidential
written offer or proposal, which might force the Company to make a public announcement
regarding such matters; (iv) form, join or in any way participate in a “group” as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, in connection with any
of the foregoing; or (v) request the Company to amend or waive any provision of this
paragraph; provided, however, (A) this subparagraph (e) shall not apply to the acquisition
by the Consultant of any securities of the Company directly from the Company, whether
pursuant to the exercise of options or vesting of restricted stock or otherwise; (B) this
subparagraph (e) shall terminate and the restrictions contained herein shall cease to apply
to the Consultant upon the earliest to occur of any of the following with respect to the
Company: (x) the Company enters into a definitive agreement with respect to an Extraordinary
Transaction, (y) any person makes an unsolicited public offer for an Extraordinary
Transaction for the Company, or (z) a Change of Control of the Company; (C)
“Extraordinary Transaction,” as used herein, means any acquisition of a significant
amount of securities or assets of the Company or any of its affiliates, including in
connection with any extraordinary transaction, such as a merger, reorganization,
recapitalization, tender or exchange offer, or asset disposition involving the Company or
any of its affiliates that, if consummated, such acquisition, transaction, merger,
reorganization, recapitalization, tender or exchange offer, or asset disposition would
result in a Change in Control of the Company; and (D) “Change in Control,” as used
herein shall have the meaning set forth in the 2003 Plan.
f. Enforcement.
1. Generally. The Consultant hereby agrees that a breach of any of the provisions of
this Section 5 would cause irreparable injury to the Company and its affiliates, for which
they would have no adequate remedy at law. If the Consultant breaches any of the covenants
set forth in this Section 5, then without regard for any provision to the contrary, the
Company shall have the right to immediately discontinue all payments and benefits under
Section 3 hereof to the Consultant and his spouse, except to the extent that such payment(s)
or benefit(s) are earned as of
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such date, and to immediately seek injunctive relief from a court having jurisdiction for
any actual breach of this Section 5. Any such injunctive relief shall be in addition to any
other remedies to which the Company may be entitled at law, in equity or otherwise. The
Consultant hereby agrees that upon receipt of notice of the Company’s intent to seek
injunctive relief, the Consultant will not sell, transfer, pledge, exchange, hypothecate, or
otherwise encumber or dispose of any shares of stock granted to the Consultant under the
Restricted Stock Awards awarded after December 31, 2006, or any right or interest therein,
pending the final resolution of such injunctive relief proceeding. In addition, the
Consultant shall, within ten (10) business days after it is ultimately determined that he
has committed such a breach hereof, either (i) redeliver to the Company the Vested Shares
(as defined herein), if still owned by the Consultant, or (ii) reimburse the Company an
amount in cash or immediately available funds equal to the aggregate net sales price
received by the Consultant or, if any of said shares were transferred by the Consultant for
less than fair market value, then an amount equal to the fair market value of the
transferred shares as of the trading date immediately prior to payment to the Company,
determined by using the last sales price of the Company’s common stock (as reported by the
New York Stock Exchange) on such trading date. If it is determined that the Consultant has
not committed a breach thereof, the Company shall resume the payments and benefits under
Section 3 and pay to Consultant and his spouse all payments and benefits under Section 3
that had been suspended pending such determination. Any equity award granted prior to
December 31, 2006 shall be governed by the terms of the award agreement for such award
except as otherwise provided with respect to vesting as set forth in Section 3(d) and (e) of
this Agreement.
The parties hereto intend all provisions of subsections (a), (b), (c), (d), (e) and (f) of
this Section 5 to be enforced to the fullest extent permitted by law. Accordingly, should a
court of competent jurisdiction determine that the scope of any provision of subsections
(a), (b), (c), (d) and (e) of this Section 5 is too broad to be enforced as written, the
parties intend that the court may reform the provision to such narrower scope as it
determines to be reasonable and enforceable and, in the event the court reforms Section 5(a)
hereof, the Company may elect to either accept enforcement of the provision as so modified
or require the return of Vested Shares (as defined herein) or cash as set forth in Section
5(f)(2) of this Agreement. In addition, however, the Consultant agrees and stipulates that
the non-competition agreements, non-solicitation agreements, non-disclosure,
non-disparagement and standstill agreements (set forth above in subsections (a), (b), (c),
(d), and (e) of Section 5 of this Agreement, respectively) each constitute separate
agreements independently supported by good and adequate consideration and shall survive this
Agreement. The existence of any claim or cause of action of the Consultant against the
Company, except for a breach of this Agreement by the Company or its subsidiaries, shall not
constitute a defense to the enforcement by the Company of the covenants and agreements of
the Consultant contained in the non-competition, non-solicitation, non-disclosure,
non-disparagement and standstill agreements (set forth above in subsections (a), (b), (c),
(d), and (e) of Section 5 of this Agreement, respectively). The Consultant agrees and
stipulates that in any action or claim brought by him or in any action or claim brought
against him involving the provisions of this Section 5, the
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Consultant hereby expressly waives any claim or defense that the above covenants are
unenforceable, void or voidable, for any reason, including, but not limited to, fraud,
misrepresentation, illegality, unenforceable restraint of trade, failure of consideration,
illusory contract, mistake, or any other substantive legal defense.
2. Non-Competition. If in connection with the challenge by the Consultant of any
provision of Section 5(a) of this Agreement, any court of competent jurisdiction determines
that the non-competition agreement in Section 5(a) hereof is void or unenforceable, or if
the court modifies Section 5(a) and the Company declines to accept the modification, then
(i) the Consultant shall forfeit all stock granted to the Consultant under any and all
Restricted Stock Awards dated after December 31, 2006 which have not vested and agrees to
return to the Company (A) any such vested shares of stock granted to the Consultant under
such Restricted Stock Awards (the “Vested Shares”) still owned by the Consultant,
and (B) an amount in cash or immediately available funds equal to the aggregate net sales
price received by the Consultant for such shares that are no longer held by the Consultant
or, if any of such shares were transferred by the Consultant for less than fair market
value, then an amount equal to the fair market value of the transferred shares as of the
trading date immediately prior to payment to the Company, determined by using the last sales
price of the Company’s common stock (as reported by the New York Stock Exchange) on such
trading date, and (ii) any equity award granted prior to December 31, 2006 shall be governed
by the terms of the award agreement for such award.
6. Release of Claims by the Consultant. In exchange for the consideration offered to
the Consultant under this Agreement, the Consultant, on his behalf and on behalf of his heirs,
devisees, legatees, executors, administrators, personal and legal representatives, assigns and
successors in interest, hereby IRREVOCABLY, UNCONDITIONALLY AND GENERALLY RELEASES, ACQUITS, AND
FOREVER DISCHARGES, to the fullest extent permitted by law, the Company, its subsidiaries and each
of the their directors, officers, employees, representatives, stockholders, predecessors,
successors, assigns, agents, attorneys, divisions, subsidiaries and affiliates (and agents,
directors, officers, employees, representatives and attorneys of such stockholders, predecessors,
successors, assigns, divisions, subsidiaries and affiliates), and all persons acting by, through,
under or in concert with any of them (collectively, the “Releasees” and each a
“Releasee”), or any of them, from any and all charges, complaints, claims, damages,
actions, causes of action, suits, rights, demands, grievances, costs, losses, debts, and expenses
(including attorneys’ fees and costs incurred), of any nature whatsoever, known or unknown, that
the Consultant now has, owns, or holds, or claims to have, own, or hold, or which the Consultant at
any time heretofore had, owned, or held, or claimed to have, own, or hold from the beginning of
time to the date that the Consultant signs this Agreement, including, but not limited to, those
claims arising out of or relating to (i) any agreement, commitment, contract, mortgage, deed of
trust, bond, indenture, lease, license, note, franchise, certificate, option, warrant, right or
other instrument, document, obligation or arrangement, whether written or oral, or any other
relationship, involving the Consultant and/or any Releasee, (ii) breach of any express or implied
contract, breach of implied covenant of good faith and fair dealing, misrepresentation,
interference with contractual or business relations, personal injury, slander, libel, assault,
battery, negligence,
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negligent or intentional infliction of emotional distress or mental suffering, false
imprisonment, wrongful termination, wrongful demotion, wrongful failure to promote, wrongful
deprivation of a career opportunity, discrimination (including disparate treatment and disparate
impact), hostile work environment, sexual harassment, retaliation, any request to submit to a drug
or polygraph test, and/or whistleblowing, whether said claim(s) are brought pursuant to laws of the
United States or any other jurisdiction applicable to the Consultant’s actions on behalf of the
Company or any of its subsidiaries or affiliates, and (iii) any other matter; provided, however,
that nothing contained herein shall operate to release any obligations of the Company or its
successors or assigns arising under this Agreement. Notwithstanding anything in this Agreement to
the contrary, it is the express intention of the Consultant and the Company that this Agreement
shall not act as a release or waiver of (1) any rights of defense or indemnification which would be
otherwise afforded to the Consultant under the Certificate of Incorporation, By-Laws or similar
governing documents of the Company or its subsidiaries or under that certain Indemnification
Agreement by and between the Company and the Consultant, dated October 13, 2000; (2) any rights of
defense or indemnification which would be otherwise afforded to the Consultant under any director
or officer liability or other insurance policy maintained by the Company or its subsidiaries; (3)
any rights of the Consultant to benefits accrued under any Company employee benefit plans,
including but not limited to the NCI 401(k) Profit Sharing Plan, the NCI Building Systems, Inc.
Deferred Compensation Plan (as amended), applicable health, medical and welfare benefit programs,
and the like; (4) any rights under this Agreement; and (5) such other rights or claims as may arise
after the date of this Agreement. The Consultant acknowledges that he has had at least 21 calendar
days after this Agreement was presented to him to consider whether to sign this Agreement. The
Consultant has until the date that is seven (7) days after the date this Agreement is executed by
him to revoke the release set forth in this Section 6, after which this Section 6 shall become
irrevocable, provided, however, that if the Consultant so revokes this Section 6, the Company shall
have no obligation to provide to the Consultant the payments specified in Section 3(b) hereof.
Effective as of February 1, 2008, Consultant shall execute that certain release agreement attached
hereto as Exhibit “A.”
7. Stock Trading and Company Policies. During the period beginning on the Effective
Date and ending two (2) business days after the Company first issues an earnings release following
the date as of which the Consultant is no longer serving as a director or executive officer of the
Company or any of its related entities, the Consultant agrees to comply with all of the Company’s
policies with respect to trading in the Company’s securities to the same extent as such policies
are applicable to executive officers of the Company including, without limitation, “blackout”
periods restricting or prohibiting trading in the Company’s securities, whether regularly scheduled
or imposed under special circumstances, and any “lockup” requested by any underwriter with respect
to an offering of the Company’s securities and, during the Advisory Period, the Consultant agrees
to comply with the foregoing to the extent that he is in possession of material non-public
information relating to the Company.
8. Non-Alienation. The Consultant shall not have any right to pledge, hypothecate,
anticipate, or in any way create a lien upon any amounts due or payable under this Agreement, and
no payments or benefits due hereunder shall be assignable in anticipation of payment either by
voluntary or involuntary acts or by operation of law. So
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long as the Consultant lives, no person, other than the parties hereto, shall have any rights
under or interest in this Agreement or the subject matter hereof. Upon the death of the
Consultant, his surviving spouse, if any, shall have the right to enforce the provisions hereof.
9. Assumption by Successors. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform it if no
succession had taken place and (a) if such successor does not expressly assume and agree to perform
this Agreement, or if such assumption does not occur by operation of law and, to the extent
applicable, (b) if such transaction satisfies the requirements to avoid the imposition of an excise
tax under the provisions of Section 409A of the Internal Revenue Code and related regulations and
Treasury pronouncements (“Section 409A”) or such payment restrictions are otherwise
inapplicable, then the Company shall be obligated to make a cash payment to the Consultant,
immediately following such succession (or, if later, the first date at which payment can be made
without incurring an excise tax under Section 409A), equal to the aggregate value of (i) the salary
otherwise payable pursuant to Sections 3(a) and (b) for the remainder of the term of this
Agreement, without reduction for early payout, and (ii) a sum equivalent to the number of months
remaining under the term of the Agreement, multiplied by the most recent applicable rate charged to
terminated employees for continuation of comparable health insurance coverage (COBRA coverage),
with no offset for the Consultant’s portion of the premium.
10. Non-Mitigation. The Consultant shall not be required to mitigate the amount of any
payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Agreement be reduced by any
compensation or benefit earned by the Consultant as a result of employment by another employer or
by deferred compensation or retirement benefits received by the Consultant.
11. Amendment of Agreement. This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.
12. Waiver. No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement,
except by written instrument of the party charged with such waiver or estoppel.
13. Notices. For purposes of this Agreement, all notices or other communications
hereunder shall be in writing and shall be given in person and/or by United States Certified Mail,
return receipt requested, postage prepaid (with evidence of receipt by the party to whom the notice
is given), addressed as follows:
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To the Company:
NCI Building Systems, Inc.
00000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
00000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
To the Consultant:
Xxxxxxx X. Xxxxxx
0000 Xxxxxxx 00 X.
Xxxxxxxxx, XX 00000
0000 Xxxxxxx 00 X.
Xxxxxxxxx, XX 00000
Either party hereto may designate a different address by providing written notice of such new
address to the other party hereto.
14. Source of Payments. All cash payments provided in this Agreement will be paid from
the general funds of the Company. The Consultant’s status with respect to amounts owed under this
Agreement will be that of a general unsecured creditor of the Company, and the Consultant will have
no right, title or interest whatsoever in or to any investments which the Company may make to aid
the Company in meeting its obligations hereunder. Nothing contained in this Agreement, and no
action taken pursuant to this provision, will create or be construed to create a trust of any kind
between the Company and the Consultant or any other person.
15. Tax Withholding. The Company may withhold from any benefits payable under this
Agreement all federal, state, city or other taxes that will be required pursuant to any law or
governmental regulation or ruling.
16. Severability. If any provision of this Agreement is held to be invalid, illegal or
unenforceable, in whole or part, such invalidity will not affect any otherwise valid provision, and
all other valid provisions will remain in full force and effect.
17. Counterparts. This Agreement may be executed in two or more counterparts, each of
which will be deemed an original, and all of which together will constitute one document.
18. Titles. The titles and headings preceding the text of the paragraphs and
subparagraphs of this Agreement have been inserted solely for convenience of reference and do not
constitute a part of this Agreement or affect its meaning, interpretation or effect.
19. Governing Law. This Agreement will be construed and enforced in accordance with
the laws of the State of Texas.
20. Alternative Dispute Resolution. If a dispute arises out of or related to this
Agreement, and if the dispute cannot be settled through direct discussions, the aggrieved party
shall by written notice demand that the dispute be submitted to non-binding mediation. The
Consultant and the Company hereby agree to endeavor to settle the dispute in an
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amicable manner by participating in non-binding mediation held in Houston, Texas before a
mediator jointly selected by the parties, before either party seeks recourse in any other
proceeding or forum. This mediation shall be conducted pursuant to the Rules and Procedures of the
American Arbitration Association for the resolution of employment disputes, or as otherwise
stipulated by the parties. The parties agree to make a good faith attempt to resolve the dispute
through mediation within thirty (30) days after the written demand for mediation is received by the
non-aggrieved party. The Company shall pay all costs of such mediation, exclusive of the
Consultant’s legal fees.
21. Entire Agreement. This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof, and supersedes all prior agreements between the parties
concerning the subject hereof. Nothing in this Agreement shall affect the Consultant’s right to
benefits under the terms of any employee benefit plan of the Company in which the Consultant has
participated or may participate.
22. Section 409A. Notwithstanding anything in this Agreement to the contrary, if any
provision of this Agreement would result in the imposition of an applicable tax under Section 409A,
such provision will be reformed to avoid imposition of the applicable tax, and any payment due
under this Agreement shall be paid on the first day on which no tax under Section 409A would be
imposed. No action taken to comply with Section 409A shall be deemed to adversely affect the
Consultant’s rights under this Agreement
IN WITNESS WHEREOF, the parties have executed this Agreement in multiple counterparts, all of
which shall constitute one agreement, effective as of the Effective Date.
NCI BUILDING SYSTEMS, INC.
By:
|
||||
| Xxxxxx X. Xxxxxxxx | ||||
| Chairman, President & Chief Executive Officer |
Witness |
||
| Xxxx X. Xxxxx |
CONSULTANT
Xxxxxxx X. Xxxxxx |
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EXHIBIT A
WAIVER AND RELEASE
Date: February 5, 2008
In exchange for the consideration offered to the Consultant under that certain Agreement by and
between Consultant and NCI Building Systems, Inc., dated January 31, 2008 (the
“Agreement”), the Consultant, on his behalf and on behalf of his heirs, devisees, legatees,
executors, administrators, personal and legal representatives, assigns and successors in interest,
hereby IRREVOCABLY, UNCONDITIONALLY AND GENERALLY RELEASES, ACQUITS, AND FOREVER DISCHARGES, to the
fullest extent permitted by law, the Company, its subsidiaries and each of the their directors,
officers, employees, representatives, stockholders, predecessors, successors, assigns, agents,
attorneys, divisions, subsidiaries and affiliates (and agents, directors, officers, employees,
representatives and attorneys of such stockholders, predecessors, successors, assigns, divisions,
subsidiaries and affiliates), and all persons acting by, through, under or in concert with any of
them (collectively, the “Releasees” and each a “Releasee”), or any of them, from
any and all charges, complaints, claims, damages, actions, causes of action, suits, rights,
demands, grievances, costs, losses, debts, and expenses (including attorneys’ fees and costs
incurred), of any nature whatsoever, known or unknown, that the Consultant now has, owns, or holds,
or claims to have, own, or hold, or which the Consultant at any time heretofore had, owned, or
held, or claimed to have, own, or hold from the beginning of time to the date that the Consultant
signs this Waiver and Release (the “Release”), including, but not limited to, those claims
arising out of or relating to (i) any agreement, commitment, contract, mortgage, deed of trust,
bond, indenture, lease, license, note, franchise, certificate, option, warrant, right or other
instrument, document, obligation or arrangement, whether written or oral, or any other
relationship, involving the Consultant and/or any Releasee, (ii) breach of any express or implied
contract, breach of implied covenant of good faith and fair dealing, misrepresentation,
interference with contractual or business relations, personal injury, slander, libel, assault,
battery, negligence, negligent or intentional infliction of emotional distress or mental suffering,
false imprisonment, wrongful termination, wrongful demotion, wrongful failure to promote, wrongful
deprivation of a career opportunity, discrimination (including disparate treatment and disparate
impact), hostile work environment, sexual harassment, retaliation, any request to submit to a drug
or polygraph test, and/or whistleblowing, whether said claim(s) are brought pursuant to laws of the
United States or any other jurisdiction applicable to the Consultant’s actions on behalf of the
Company or any of its subsidiaries or affiliates, and (iii) any other matter; provided, however,
that nothing contained herein shall operate to release any obligations of the Company or its
successors or assigns arising under the Agreement or this Release. Notwithstanding anything in
this Release to the contrary, it is the express intention of the Consultant and the Company that
this Release shall not act as a release or waiver of (1) any rights of defense or indemnification
which would be otherwise afforded to the Consultant under the Certificate of Incorporation, By-Laws
or similar governing documents of the Company or its subsidiaries or under that certain
Indemnification Agreement by and between the Company and the Consultant, dated October 13, 2000;
(2) any rights of defense or indemnification which would be otherwise afforded to the Consultant
under any
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director or officer liability or other insurance policy maintained by the Company or its
subsidiaries; (3) any rights of the Consultant to benefits accrued under any Company employee
benefit plans, including but not limited to the NCI 401(k) Profit Sharing Plan, the NCI Building
Systems, Inc. Deferred Compensation Plan (as amended), applicable health, medical and welfare
benefit programs, and the like; (4) any rights under this Release; and (5) such other rights or
claims as may arise after the date of this Release. The Consultant acknowledges that he has had at
least 21 calendar days after this Release was presented to him to consider whether to sign this
Release. The Consultant has until the date that is seven (7) days after the date this Release is
executed by him to revoke the release set forth herein, after which this Release shall become
irrevocable, provided, however, that if the Consultant so revokes this Release, the Company shall
have no obligation to provide to the Consultant the payments specified in Section 3(b) of the
Agreement.
CONSULTANT
Date: February 5, 2008
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