EXHIBIT 10.11
AMENDED AND RESTATED
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EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made effective as of the 1st day of July, 2008, by and
among CPG International I Inc. (formerly known as Compression Polymers Holding
Corporation), a Delaware Corporation, and its wholly owned subsidiaries,
Scranton Products Inc., a Delaware corporation ("SP"), and AZEK Building
Products Inc. (formerly known as Vycom Corp.), a Delaware corporation ("AZEK")
(SP and AZEK, collectively, the "Employers" and individually an "Employer"), and
Xxxxx Xxxxxxxx ("Executive").
RECITALS
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WHEREAS, the Employers and Executive entered into an Employment Agreement
dated as of October 4, 2005 (the "Prior Agreement");
WHEREAS, Executive currently serves as Executive Vice President and Chief
Financial Officer of the Employers; and
WHEREAS, the parties desire to amend and restate the Prior Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
PROVISIONS
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1. Term and Duties. The Employers hereby agree to continue to employ
Executive as Vice President and Chief Financial Officer until May 30, 2011 (the
"Initial Term") or until terminated in accordance with this Section 1 or Section
4. Unless terminated by written notice delivered at least thirty (30) days prior
to the expiration of the Initial Term, Executive's employment shall continue for
successive one (1) year terms (each one (1) year term hereinafter referred to as
a "Subsequent Term" and together with the Initial Term, the "Term") until
terminated by written notice delivered at least thirty (30) days prior to the
expiration of the Subsequent Term. Subject to the provisions of this Agreement,
during the Term, Executive shall devote his best efforts and abilities to the
performance of Executive's duties on behalf of Employers, including treasury,
accounting, audit, investor relations, information technology and procurement
functions, and to the promotion of their interests consistent with and subject
to the direction and control of the Board of Directors of each Employer (the
"Board"). Executive shall devote substantially all of his business time,
energies, attention and abilities to the operation of the business of Employers
and shall not be actively involved in any other trade or business or as an
employee of any other trade or business.
2. Compensation During Term.
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(a) Base Compensation. In consideration of the services to be rendered
by Executive during the Term, Employers shall pay to Executive, in the
aggregate, an annual base salary of $235,000 ("Base Compensation"), payable
bi-weekly and prorated for any partial employment period. Such Base Compensation
shall be reviewed annually by the Board of Directors of CPG International I
Inc., or any compensation committee thereof, for purposes of considering an
increase to (but never a decrease of) such Base Compensation in its sole
discretion.
(b) Bonus. Executive shall be entitled to receive an annual incentive
bonus (the "Incentive Bonus") based upon the achievement of certain personal and
Employer performance goals as the Compensation Committee of the Board shall
determine. The Incentive Bonus shall have a target of not less than sixty (60)
percent of his Base Compensation. Each Incentive Bonus shall be paid no later
than 75 days following the end of the fiscal year to which it relates.
3. Benefits.
(a) Executive shall be eligible to participate in such benefit
programs offered by each Employer (other than bonus plans), such as health,
dental, life insurance, vision, vacations and 401(k), as are offered to
similarly-situated employees (except in the case of equity-based incentive plans
where awards are subject to the approval of the Board or a committee thereof)
and in each case on terms no more favorable than the terms of benefits generally
available to the employees of Employers (based on seniority and salary level),
subject in each case to the generally applicable terms and conditions of the
plan, benefit or program in question.
(b) For each calendar year, Executive shall be entitled to four (4)
weeks of vacation.
4. Termination. Executive's employment shall terminate upon the first to
occur of the following (each, a "Termination Date"):
(a) The expiration of the Term;
(b) Executive's death or Executive's disability (mental, physical or
emotional), so that Executive cannot substantially perform his duties hereunder
for a period of ninety (90) consecutive days or for one hundred eighty (180)
days during any 365-day period during the Term;
(c) Executive's voluntary termination of his employment for any reason
other than pursuant to Section 4(d) hereof, upon not less than 10 business days'
written notice to Employers;
(d) Executive's termination of his employment for Good Reason (as
hereinafter defined);
(e) Employers' termination of Executive's employment for Cause (as
hereinafter defined); or
(f) Employers' termination of Executive's employment without Cause.
5. Termination Payments.
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(a) Except as otherwise provided herein, if Executive's employment is
terminated by thirty (30) days' prior written notice pursuant to Section 1 or
Section 4 hereof, Executive's Base Compensation and other benefits (it being
understood that no Incentive Bonus shall be payable), if any, shall terminate at
the end of the month during which such termination occurs.
(b) Upon the termination of Executive's employment pursuant to Section
4(d) or 4(f) hereof, Employers shall be obligated, in lieu of any other remedies
available to Executive, to (i) continue to pay Executive his Base Compensation
at the rate in effect at the date of termination for a period of twelve (12)
months following the termination date (the "Termination Payment") and (ii) pay
Executive an amount of cash equal to the Incentive Bonus that the Executive
would have earned if he had remained employed for the entirety of the fiscal
year in which the termination occurs based on the Employers' actual performance
during such fiscal year and Executive's target bonus percentage, multiplied by a
fraction, the numerator of which is the number of days from the commencement of
the then-current fiscal year of the Employer through the effective date of such
termination and the denominator of which is 365, with such payment being made as
and when annual bonuses are paid to the members of senior management of the
Employer. Except as required under Section 5(e) hereof, the Termination Payment
shall be paid in installments on Employer's regular payroll dates occurring
during the 12-month period immediately following Executive's termination date.
(c) In the event of a termination of Executive's employment pursuant
to Section 4(b) as a result of his death or disability, Employers shall pay to
Executive, his estate or legal representative, as the case may be, all amounts
accrued to the date of termination and payable to Executive hereunder and under
any other bonus, incentive or other plan.
(d) Any termination of the Term shall not adversely affect or alter
Executive's rights under any employee benefit plan of either Employer in which
Executive, at the date of termination, has a vested interest, unless otherwise
provided in such employee benefit plan or any agreement or other instrument
attendant thereto.
(e) If Executive is a "specified employee" for purposes of Section
409A ("Section 409A") of the Internal Revenue Code of 1986, as amended, any
payments required to be made pursuant to this Section 5 that are subject to
Section 409A shall not commence until six months from the Termination Date, with
the first payment equaling the first six months of Termination Payments.
(f) "Cause" as used herein shall mean Executive's (i) commission of an
act which constitutes common law fraud, embezzlement (other than occasional,
customary and de minimis use of Employers' property for personal purposes) or a
felony, an act of moral turpitude, or any tortious or unlawful act causing
material harm to either Employer's business, standing or reputation; (ii) gross
negligence on the part of Executive in the performance of his duties hereunder;
(iii) breach of Executive's duty of loyalty or care to either Employer; (iv)
other misconduct that is materially detrimental to either Employer; (v) ongoing
refusal or failure to perform Executive's duties or the deliberate and
consistent refusal to conform to or follow any reasonable policy adopted by the
Board, in each case after receiving written notice describing his noncompliance
and being given a ten (10) business days opportunity to cure (to the extent
curable) such non-compliance; or (vi) material breach by Executive of this
Agreement, the Non-Competition Agreement among Compression Polymers Holding
Corporation, Vycom Corp., Compression Polymers Corp. and Executive, dated as
November 1, 2005 (the "Non-Competition Agreement"), or any other agreement with
or for the benefit of Employers to which Executive is a party or by which
Executive is bound, which is not cured (to the extent curable) within five (5)
business days following written notice from Employers.
(g) "Good Reason" shall mean (i) without Executive's express written
consent, the assignment to Executive of any duties materially inconsistent with
his positions, duties, responsibilities and status with the Employers, or a
material adverse change in his Base Compensation or target bonus as a percentage
of Base Compensation, reporting responsibilities, titles or offices, or any
demotion of Executive from any of such positions, in each case as in effect on
the date hereof; (ii) Employers' requirement of Executive, without his express
written consent, to be based at a location more than 50 miles away from
Executive's current office location in Moosic, Pennsylvania; or (iii) any
material breach by the Employers of this Agreement, which material breach is not
cured (to the extent curable) within ten (10) business days following written
notice from Executive.
6. Consideration. Executive acknowledges and agrees that the consideration
set forth in the recitals to this Agreement and the rights and benefits
hereunder are all and singularly valuable consideration that are sufficient for
any or all of Executive's covenants set forth herein or in the Non-Competition
Agreement.
7. No Prior Agreements. Executive represents and warrants that his
performance of all the terms of this Agreement does not and shall not breach any
fiduciary or other duty or any covenant, agreement or understanding (including,
without limitation, any agreement relating to any proprietary information,
knowledge or data acquired in confidence, trust or otherwise) to which he is a
party or by the terms of which he may be bound. Executive further covenants and
agrees not to enter into any agreement or understanding, either written or oral,
in conflict with the provisions of this Agreement.
8. Notices. All notices, requests, consents and demands by the parties
hereto shall be delivered by hand, by confirmed facsimile transmission, by
recognized national overnight courier service or by deposit in the United States
mail, postage prepaid, by registered or certified mail, return receipt
requested, addressed to the party to be notified at the addresses set forth
below:
if to Executive:
Xxxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
if to Employers:
c/o AEA Investors LLC
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
with a copy to:
Fried, Frank, Harris, Xxxxxxx and Xxxxxxxx LLP
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx Xxxx
Notices shall be effective immediately upon personal delivery or facsimile
transmission, one (1) business day after deposit with an overnight courier
service or three (3) business days after the date of mailing thereof. Other
notices shall be deemed given on the date of receipt. Any party hereto may
change the address specified herein by written notice to the other parties
hereto.
9. Withholding. Anything in this Agreement to the contrary notwithstanding,
all payments required to be made by the Employers to the Executive or to the
Executive's estate or beneficiaries in connection with the Executive's
employment hereunder shall be subject to the withholding of such amounts as the
Employers may reasonably determine pursuant to any applicable law or regulation.
The Executive shall be solely responsible for the payment of all taxes relating
to the payment or provision of any amounts or benefits hereunder.
10. Entire Agreement. This Agreement cancels and supersedes any and all
prior agreements and understandings between the parties hereto with respect to
the obligations of Executive. Executive hereby agrees that, as of the date
hereof, this Agreement shall take effect and no further obligations of any kind
whatsoever shall be owed by Employers. This Agreement constitutes the entire
agreement between the parties with respect to the matters herein provided, and
no modifications or waiver of any provision hereof shall be effective unless in
writing and signed by each Employer and Executive.
11. Binding Effect. All of the terms and provisions of this Agreement shall
be binding upon the parties hereto and its or his heirs, executors,
administrators, legal representatives, successors and assigns, and inure to the
benefit of and be enforceable by either Employer and its successors and assigns,
except that the duties and responsibilities of Executive hereunder are of a
personal nature and shall not be assignable or delegable in whole or in part.
12. Severability. In the event that any provision of this Agreement or
application thereof to anyone or under any circumstance is found to be invalid
or unenforceable in any jurisdiction to any extent for any reason, such
invalidity or unenforceability shall not affect any other provision or
application of this Agreement which can be given effect without the invalid or
unenforceable provision or application and shall not invalidate or render
unenforceable such provision or application in any other jurisdiction.
13. Remedies; Waiver. No remedy conferred upon either Employer by this
Agreement is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given hereunder or now or hereafter existing at law or in equity. No delay or
omission by either Employer in exercising any right, remedy or power hereunder
or existing at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by the party possessing the same
from time to time and as often as may be deemed expedient or necessary by such
party in its sole discretion.
14. Counterparts. This Agreement may be executed in several counterparts,
each of which is an original and all of which shall constitute one instrument.
It shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.
15. Governing Law. The validity, interpretation, construction, performance
and enforcement of this Agreement shall be governed by the laws of the State of
New York, without application of conflict of laws principles.
16. Headings. The captions and headings contained in this Agreement are for
convenience only and shall not be construed as a part of the Agreement.
[signature page follows]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
CPG INTERNATIONAL I INC.
By:
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Name:
Title:
EMPLOYERS:
SCRANTON PRODUCTS INC.
By:
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Name:
Title:
AZEK BUILDING PRODUCTS INC.
By:
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Name:
Title:
EXECUTIVE:
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Name: Xxxxx Xxxxxxxx
