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Exhibit 12
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, made as of this 17th day of June, 1997,
by and between J. Xxxx Xxxxxxx, residing at 00 Xxxx Xxxxxxx, Xx. Xxxxx, XX
00000, and Ply Gem Industries, Inc., a corporation organized under the laws of
the State of Delaware.
WITNESSETH
WHEREAS, the Employer (as hereinafter defined) wishes to
employ the Employee (as hereinafter defined) as Vice President, Corporate
Development of the Employer and the Employee wishes to serve the Employer in
such capacity.
WHEREAS, upon the earlier of a Relocation (as hereinafter
defined) or a Change in Control (as hereinafter defined), the Employer and the
Employee agree that the Employer shall employ the Employee, and the Employee
shall serve the Employer, as Executive Vice President of the Employer.
NOW, THEREFORE, in consideration of the conditions and
covenants set forth herein, it is agreed as follows:
1. Definitions.
(a) Agreement. This "Agreement" shall mean this employment
agreement between Ply Gem Industries, Inc. and J. Xxxx Xxxxxxx.
(b) Balance of the Term. "Balance of the Term," as of any
date, shall mean the period of time commencing on such date and ending on the
date the Term would have expired pursuant to Subparagraph (v) of Paragraph (r)
of this Section, assuming, if such notice of non-renewal has not already been
given by such date, that each party would have given notice of non-renewal on
such date.
(c) Base Salary. "Base Salary" shall mean the base salary
payable to the Employee determined pursuant to Section 5.
(d) Beneficiary. "Beneficiary" shall mean the person or
persons designated by the Employee to receive payments hereunder due upon the
Employee's death or, in the absence of such a designation, the Employee's
estate.
(e) Board of Directors. "Board of Directors" shall mean the
Board of Directors of Ply Gem Industries, Inc. and any committees organized to
implement the policies of the Board of Directors.
(f) Bonus. "Bonus" shall mean the bonus available to the
Employee pursuant to Section 6.
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(g) Cause. "Cause" shall mean:
(i) any willful violation by the Employee of this
Agreement that has a material adverse effect on the Employer;
(ii) any willful failure by the Employee
substantially to perform his duties hereunder, other than a failure resulting
from the Employee's illness;
(iii) any repeated and willful refusal by the
Employee to obey the lawful orders of the Board of Directors or any other person
or committee to whom the Employee reports;
(iv) any willful engaging by the Employee, in the
Employee's capacity as an employee of the Employer, in gross misconduct
materially injurious to the Employer;
(v) any willful and unauthorized disclosure by the
Employee of any information described in Section 12 to any person other than the
Employer or its officers, directors, employees or its agents, except to the
extent that such disclosure is required in order for the Employee to perform the
duties contemplated hereunder; or
(vi) any conviction of the Employee of a felony or
other serious crime involving moral turpitude.
For purposes of this Paragraph, any act or failure to act of
the Employee shall not be considered "willful" unless done or omitted to be done
by the Employee not in good faith and without reasonable belief that the
Employee's action or omission was in the best interest of the Employer.
If, subsequent to the termination of the Employee's employment
for reasons other than for Cause, it is determined that the Employee's
employment could have been terminated for Cause, such termination shall be
deemed to have been a termination for Cause.
(h) Change in Control. "Change in Control" shall mean the
occurrence of any of the following during the Term:
(i) When any "person" as defined in Section 3(a)(9)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and as
used in Sections 13(d) and 14(d) thereof, including a "group" as defined in
Section 13(d) of the Exchange Act, but excluding the Employer or any subsidiary
or any affiliate of the Employer or any employee benefit plan sponsored or
maintained by the Employer or any subsidiary of the Employer (including any
trustee of such plan acting as trustee), becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of securities of the Employer
representing
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20% or more of the combined voting power of the Employer's then outstanding
securities; or
(ii) When, during any period of 24 consecutive
months, the individuals who, at the beginning of such period, constitute the
Board of Directors (the "Incumbent Directors") cease for any reason other than
death to constitute at least a majority thereof, provided, however, that a
director who was not a director at the beginning of such 24-month period shall
be deemed to have satisfied such 24-month requirement (and be an Incumbent
Director) if such director was elected by, or on the recommendation of or with
the approval of, at least two-thirds of the directors who then qualified as
Incumbent Directors either actually (because they were directors at the
beginning of such 24-month period) or through the operation of this proviso; or
(iii) The occurrence of a transaction requiring
stockholder approval for the acquisition of the Employer by an entity other than
the Employer or a subsidiary or an affiliated company of the Employer through
purchase of assets, or by merger, or otherwise; or
(iv) A Potential Change in Control.
(i) Common Stock. "Common Stock" shall mean common stock of
the Employer, par value $.25.
(j) Disability. "Disability" shall mean a physical or mental
incapacity of the Employee that entitles the Employee to benefits under the
Employer's long-term disability plan.
(k) Employee. "Employee" shall mean J. Xxxx Xxxxxxx.
(l) Employer. "Employer" shall mean Ply Gem Industries, Inc.
(m) Effective Date. "Effective Date" shall mean the date
that this Agreement is approved by the Board of Directors.
(n) Good Reason. "Good Reason," when used with reference to
the voluntary termination by the Employee of his employment with the Employer,
shall mean:
(i) the assignment to the Employee of any duties
inconsistent with his positions, duties, responsibilities and status with the
Employer as contemplated hereunder, or any removal of the Employee from any
positions or offices the Employee held as contemplated hereunder, except in
connection with the termination of the Employee's employment by the Employer for
Cause or on account of Disability pursuant to the requirements of this
Agreement;
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(ii) a reduction by the Employer of the Employee's
Base Salary as in effect as contemplated hereunder, except in connection with
the termination of the Employee's employment by the Employer for Cause or on
account of Disability pursuant to the requirements of this Agreement;
(iii) any termination of the Employee's employment
by the Employer during the Term that is not effected pursuant to the
requirements of this Agreement;
(iv) any material breach by the Employer of the
terms of this Agreement; or
(v) the relocation of the Employee's principal work
location from New York, NY to anywhere other than West Palm Beach, Fl.
(o) Potential Change in Control. "Potential Change in Control"
shall mean the occurrence of any of the following:
(i) The approval by stockholders of an agreement by
the Employer, the consummation of which would result in a Change in Control
(within the meaning of Subparagraphs (i), (ii) and (iii) of Paragraph (h) of
this Section) of the Employer and the adoption by the Board of Directors of a
resolution to the effect that a Potential Change in Control of the Employer has
occurred for purposes of this Agreement; or
(ii) The acquisition of beneficial ownership,
directly or indirectly, by any entity, person or group (other than the Employer
or a subsidiary or an affiliate of the Employer or any employee benefit plan
sponsored or maintained by the Employer or any subsidiary of the Employer
(including any trustee of such plan acting as trustee)) of securities of the
Employer representing 5% or more of the combined voting power of the Employer's
outstanding securities and the adoption by the Board of Directors of a
resolution to the effect that a Potential Change in Control has occurred for
purposes of this Agreement; or
(iii) The commencement by any person, entity or
group of a tender offer and the adoption by the Board of Directors of a
resolution to the effect that a Potential Change in Control has occurred for
purposes of this Agreement.
(p) Relocation. "Relocation" shall mean the occurrence during
the Term of the later of (i) an announcement of the relocation of the Employer's
corporate headquarters to a location other than the New York City metropolitan
area and (ii) an agreement by the Employee to relocate his principal work
location from New York, NY to a location other than the New York City
metropolitan area.
(q) Stock Options. "Stock Options" shall mean the options to
purchase stock of the Employer as described in Section 7.
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(r) Term. "Term" shall mean the period commencing on the
Effective Date and ending on the earliest to occur of:
(i) the death of the Employee;
(ii) the termination of the Employee's employment by
reason of his Disability;
(iii) the termination of the Employee's employment
by the Employer for Cause or without Cause;
(iv) the voluntary termination of the Employee's
employment by the Employee with Good Reason or without Good Reason; or
(v) the third anniversary of the Effective Date,
provided that the Term shall be extended automatically by one day each day of
the Term, unless written notice of an election not to renew is given by either
party to the other.
2. Employment. The Employer hereby employs the Employee, and
the Employee hereby agrees to be employed by the Employer, as the Vice
President, Corporate Development of the Employer on the terms and conditions set
forth herein. The Employer and the Employer hereby further agree that upon the
earlier of a Relocation or a Change in Control, the Employer shall employ, and
the Employee shall agree to be employed by the Employer, as the Executive Vice
President of the Employer on the terms and conditions set forth herein.
3. Responsibilities and Duties. The Employee shall have such
responsibilities and duties as the Chairman of the Board of Directors, the Chief
Executive Officer, the President and/or the Chief Operating Officer of the
Employer (together, the "Senior Executives") may from time to time determine
consistent with the Employee's position as Vice President, Corporate Development
of the Employer (or, after the earlier of a Relocation or a Change in Control,
as Executive Vice President of the Employer). The Employee shall devote the
Employee's full working time to the performance of the Employee's
responsibilities and duties hereunder. The Employee will not, without the prior
written consent of the Senior Executives, render services, whether or not
compensated, to any other person or entity as an employee, independent
contractor or otherwise, provided, however, that nothing herein shall restrict
the Employee from rendering services to charitable organizations or managing the
Employee's personal investments during the Employee's non-working time.
The Employee, without the prior written consent of the Senior
Executives, which consent will not be unreasonably withheld, will not: (a) enter
into any other business affiliation, including, without limitation, the
establishment of a proprietorship or the participation in a partnership or joint
venture or (b) acquire any equity or other interest in any entity other than the
Employer, except equity or other interests that are publicly
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syndicated or publicly traded and that are issued by entities which are not in
direct competition with the Employer. The Employee represents and warrants that,
except as set forth on Schedule A hereto, as of the Effective Date, the Employee
is not engaged in any such business affiliation and does not own any such equity
or other interests.
4. Principal Work Location. The Employee's principal work
location shall be New York, NY (or such other place to which the Employer has
relocated its corporate headquarters), but in any case the Employee will be
required to do such traveling as the Board of Directors and/or Senior Executives
may from time to time determine.
5. Base Salary. During the Term prior to the earlier of a
Relocation or a Change in Control, the Employer shall pay the Employee a Base
Salary at the rate of $169,000 per annum. During the Term after the earlier of a
Relocation or a Change in Control, the Employer shall pay the Employee a Base
Salary at the rate of $275,000 per annum. In each case, Base Salary shall be
payable in accordance with the Employer's customary payroll practices applicable
to senior executives of the Employer and the Senior Executives shall review the
Employee's performance and compensation at least annually and may, in their sole
discretion, increase his Base Salary based on such factors as the Senior
Executives deem appropriate.
6. Bonus. During the Term, the Employee shall be paid an
annual Bonus, the amount of which shall be determined in accordance with a
reasonable formula established in advance of the applicable year by the Chief
Executive Officer or President of the Employer, after consultation with the
Employee, based upon a target level of 50% of Base Salary. Any such Bonus shall
be paid to the Employee not later than April 10 of the calendar year following
the calendar year for which it is earned. The amount of a Bonus for any calendar
year may be $0.
7. Stock Options.
(a) Grant of Stock Options. The Employer shall grant to the
Employee non-qualified stock options to purchase 20,000 shares of Common Stock
at the time general grants are made to the employees of the Employer in calendar
year 1997, or if no such general grants are made in calendar year 1997, on
December 31, 1997, subject to the approval of the Compensation Committee of the
Board of Directors (the "Compensation Committee") and the continued employment
of the Employee by the Employer upon the applicable grant date. The Employer
shall grant to the Employee non-qualified stock options to purchase 20,000
shares of Common Stock at the time general grants are made to the employees of
the Employer in calendar year 1998, or if no such general grants are made in
calendar year 1998, on December 31, 1998, subject to the approval of the
Compensation Committee and the continued employment of the Employee by the
Employer upon the applicable grant date. Such Stock Options shall be granted at
the fair market value of the Common Stock on each date of grant and are in
addition to any stock options which the
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Employee may be granted by the Employer as part of a general grant made to
employees of the Employer in accordance with the directions of the Compensation
Committee.
(b) Change in Control. Subject to the approval of the
Compensation Committee, the grants of the Stock Options shall be made
immediately upon a Change in Control, to the extent such grants have not already
been made pursuant to Section 7(a) above.
(c) Stock Option Plan. The Stock Options are subject to the
terms and conditions of the stock option plan of the Employer under which the
Stock Options are granted and, to the extent there is any inconsistency between
the terms of such plan and the terms of this Agreement, the terms of such plan
shall control.
8. Vacation. During the Term, the Employee shall be entitled
to 4 weeks of paid vacation during each year of the Employee's employment
hereunder, but shall not take more than 2 consecutive weeks of vacation without
the prior consent of the Board of Directors and/or Senior Executives. The
Employee shall take vacations only at such times as are consistent with the
reasonable business needs of the Employer. Any vacation not taken during the
year in which the Employee is entitled to the vacation shall be forfeited at the
end of such year, unless otherwise approved in writing by the Senior Executives.
Upon termination of the Employee's employment, any vacation earned by the
Employee but not taken shall be forfeited, subject to applicable law.
9. Reimbursement of Expenses. The Employer shall reimburse the
Employee for all reasonable, ordinary and necessary expenses incurred by the
Employee in the performance of the Employee's duties hereunder, provided that
the Employee accounts to the Employer for such expenses in a manner prescribed
by the Employer.
10. Other Fringe Benefits. During the Term, the Employee shall
be entitled to such benefits and perquisites as he was entitled to immediately
prior to the Effective Date or such other benefits and perquisites as may
generally be made available to senior executives of the Employer. After the
earlier of a Relocation or a Change in Control, the Employer shall also provide
the Employee with the following benefits during the Term:
(a) Life Insurance. The Employer shall provide the Employee
with split dollar life insurance with a death benefit of $1,000,000. The life
insurance cost payable by the Employee shall be determined under the appropriate
provisions of the Internal Revenue Code of 1986. The Employer shall be entitled
to reimbursement of any cash contributions made by the Employer toward the
policy. The Employer's obligation to provide such insurance shall be subject to
(i) the condition that the Employee provide the Employer (or the insurance
company selected by the Employer) with evidence acceptable to the Employer (or
insurance company) of the Employee's insurability at standard rates and (ii) the
Employee's execution of a split dollar life insurance agreement and collateral
assignment in form and substance satisfactory to the Employer.
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(b) Country Club Dues. In respect of a country club selected
by the Employee, the Employer shall pay up to $15,000 in initiation fees and any
reasonable periodic membership fees incurred by the Employee and approved by the
Board of Directors and/or Senior Executives within a reasonable time after
presentation by the Employee of an invoice specifying the amount of such
initiation fees and periodic membership fees.
(c) Automobile. The Employer shall make available to the
Employee an automobile approved by the Employer. In addition, the Employer shall
reimburse the Employee for the reasonable costs of operation and maintenance
with respect to such automobile, provided the Employee accounts to the Employer
for such expenses in a manner prescribed by the Employer. The Employee shall be
required to reimburse the Employer for personal use of such car in accordance
with procedures established by the Employer from time to time.
(d) Relocation. In connection with a Relocation, the Employee
shall be entitled to the benefits of the Ply Gem Industries, Inc. Executive
Relocation Program.
11. Termination of Employment.
(a) Disability. During the Term, the Employer shall have the
right to terminate the Employee's employment by reason of Disability, effective
upon written notice to the Employee by the Employer specifying Disability as the
basis for such termination. In respect of such termination, the Employer shall
pay to the Employee the Employee's earned but unpaid Base Salary, and any Bonus
earned or awarded but unpaid for the year preceding such termination. In
addition, the Employer shall continue to pay to the Employee 50% of the
Employee's Base Salary for the Balance of the Term, provided however, that any
such payments shall be reduced by any amounts received by the Employee pursuant
to the Employer's long-term disability plan during the Balance of the Term. The
amounts required to be paid to the Employee under this Paragraph will be paid in
lieu of any other severance payments from the Employer or its affiliates to
which the Employee may otherwise have been entitled.
(b) Cause. During the Term, the Employer shall have the right
to terminate the Employee's employment for Cause.
(i) Procedure for Termination. The Employer shall
give the Employee ten (10) days' prior written notice of the Employer's intent
to terminate the Employee's employment for Cause. Such notice shall set forth in
reasonable detail the proposed basis giving rise to Cause. The Employee shall
have the right, if the basis for such Cause is curable, to cure the same within
a reasonable period of time not to exceed fifteen (15) days after the date of
such written notice, provided that the Employee begins such cure within five (5)
days of the date of such written notice and diligently prosecutes such efforts
thereafter. The Employee's termination for Cause shall be effective ten (10)
days after the date of such written notice, or, if the Employee timely begins
but does not complete a cure, fifteen (15) days after the date of such written
notice.
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(ii) Amount of Payments. In respect of such
termination, the Employer shall pay to the Employee, within thirty (30) days
after such termination, the Employee's earned but unpaid Base Salary as of the
date of such termination and any Bonus earned or awarded but unpaid for the year
preceding such termination. The Employee shall not be entitled to any other
amounts hereunder in the event of a termination for Cause.
(c) Death. Upon the termination of the Employee's employment
by reason of the Employee's death, the Employer shall pay to the Employee's
Beneficiary (i) the Employee's earned but unpaid Base Salary, (ii) any Bonus
earned or awarded but unpaid for the year preceding the Employee's death and
(iii) a pro rata portion of any Bonus (at the target level) which the Employee
would otherwise have earned or been awarded for the year in which the Employee's
death occurs. (Such Bonus shall be prorated by multiplying the amount of such
Bonus (at the target level) by a fraction, the numerator of which is the number
of days during such year prior to the Employee's death and the denominator of
which is 365.) The amounts required to be paid to the Employee under this
Paragraph will be paid in lieu of any other severance payments from the Employer
or its affiliates to which the Employee may otherwise have been entitled.
(d) Without Cause or for Good Reason. During the Term, the
Employer shall have the right to terminate the Employee's employment hereunder
without Cause and the Employee shall have the right to voluntarily terminate his
employment hereunder for Good Reason.
(i) Procedure for Termination. The Employee's
termination of employment by the Employer without Cause shall be effective upon
written notice to the Employee from the Employer of such termination. The
Employee's voluntary termination of his employment for Good Reason shall be
effective only if the Employer receives thirty (30) days' prior written notice
from the Employee of such termination specifying in reasonable detail the act or
omission of the Employer alleged to constitute Good Reason, and the Employer
does not cure such act or omission within such 30-day period.
(ii) Amount of Payments. In respect of such
termination, the Employer shall pay to the Employee the Employee's earned but
unpaid Base Salary and any Bonus earned or awarded but unpaid for the year
preceding the termination. In addition, the Employer shall continue to pay to
the Employee the Employee's Base Salary for the Balance of the Term, provided,
however, that if the Employee voluntarily terminates his employment for Good
Reason within the meaning of Subparagraph (v) of Paragraph (n) of Section 1
after a Change in Control, the Base Salary to be so continued shall be the
Employee's Base Salary in effect immediately prior to such Change in Control.
The Employer shall also pay to the Employee the Bonuses (at the target level) to
which the Employee would have been entitled for the Balance of the Term,
provided, however, that if the Employee voluntarily terminates his employment
for Good Reason within the meaning of Subparagraph (v) of Paragraph (n) of
Section 1 after a Change in Control, the amount of each Bonus to be so paid to
the Employee shall be based upon the Employee's Base Salary
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in effect immediately prior to such Change in Control. Such Bonuses shall be
paid at the time that such Bonuses would otherwise have been paid had the Term
continued. In addition, the Employer shall maintain in full force and effect for
the Employee's continued benefit until the earlier of (x) the end of the Balance
of the Term or (y) the Employee's commencement of full time employment with a
new employer, all life, medical and dental insurance plans, programs or
arrangements (but excluding any short- or long-term disability plans, programs
or arrangements) in which the Employee was entitled to participate immediately
prior to his termination of employment without Cause or for Good Reason,
provided that the Employee's continued participation is possible under the
general terms and provisions of such plans, programs or arrangements, and
further provided that continued coverage under any such life insurance plan,
program or arrangement shall be at the expense of the Employee. In the event
that the Employee's participation in any such plan, program or arrangement is
prohibited, the Employer shall arrange to provide the Employee with benefits
substantially similar to those which the Employee is entitled to received under
such plans, programs or arrangements for such period. The Employee's damages as
a result of such termination shall be limited to the amounts required to be paid
to the Employee under this Paragraph and such amounts will be paid in lieu of
any other severance payments from the Employer or its affiliates to which the
Employee may otherwise have been entitled.
(iii) Mitigation. Prior to a Change in Control, the
Employee shall not be required to mitigate the amount of any damages that the
Employee may incur as a result of such termination of employment for the lesser
of (x) eighteen (18) months after the date of such termination or (y) the
Balance of the Term. After such 18-month period, the Employee shall be required
to mitigate any damages that the Employee may incur as a result of such
termination and the amount of payments due hereunder for the remaining Balance
of the Term, if any, by seeking employment comparable in terms of compensation,
position and location to the Employee's employment hereunder (other than such
employment as would result in a breach of Section 13 hereof). After a Change in
Control, the Employee shall not be required to mitigate the amount of any
damages that the Employee may incur as a result of such termination of
employment.
(iv) Offset. If, following such termination prior
to a Change in Control, the Employee obtains any other employment, then any
amounts that the Employee earns from such other employment during the Balance of
the Term remaining after the 18-month anniversary of the date of such
termination, if any, shall offset and reduce the amounts payable to the Employee
as a result of the termination of the Employee's employment without Cause or for
Good Reason. The Employee shall be required to notify the Employer immediately
in the event he obtains such other employment and shall provide such evidence as
the Employer may reasonably request regarding the amount of such earnings with
respect to such period. For purposes of this Paragraph, employment shall mean
any activity for which the Employee is compensated as a result of the rendering
of services, whether such services are rendered as an employee, a partner, sole
proprietor, independent contractor or otherwise.
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(e) Without Good Reason. In the event that the Employee
voluntarily terminates his employment without Good Reason, the Employee shall
adopt the following procedure and shall receive the following payments:
(i) Procedure for Termination. The Employee's
voluntary termination of his employment without Good Reason shall be effective
upon the expiration of thirty (30) days after the Employer's receipt of a
written notice from the Employee specifying his intent to terminate his
employment without Good Reason.
(ii) Amount of Payments. In respect of such
termination, the Employer shall pay to the Employee the Employee's earned but
unpaid Base Salary and any Bonus earned or awarded but unpaid for the year
preceding the termination. The Employee shall not be entitled to any other
amounts or benefits hereunder in the event of his voluntary termination without
Good Reason.
12. Non-Disclosure Agreement.
(a) Non-Disclosure. The Employee agrees that all information
pertaining to the prior, current or contemplated business of the Employer and
its affiliates, and their officers, directors, employees, agents, shareholders
and customers (excluding (a) publicly available information (in substantially
the form in which it is publicly available) unless such information is publicly
available by reason of unauthorized disclosure and (b) information of a general
nature not pertaining exclusively to the Employer that generally would be
acquired in similar employment with another company) constitutes a valuable and
confidential asset of the Employer. Such information includes, without
limitation, information related to trade secrets, customer lists, production
financing techniques and financial information of the Employer. The Employee
shall hold all such information in trust and confidence for the Employer and its
affiliates, and shall not use or disclose any such information to any person,
firm, corporation or other entity, except as may be required pursuant to the
order of a court of competent jurisdiction, and shall be liable for damages
incurred by the Employer as a result of disclosure of such information by the
Employee for any purpose other than the Employer's business, either during the
Employee's employment or after the Employee's employment terminates for whatever
reason, other than as a result of disclosure required pursuant to the order of a
court of competent jurisdiction.
13. Non-Competition Agreement. During the Term and continuing
for the longer of (x) a period ending twelve (12) months after the Employee's
employment terminates for any reason whatsoever or (y) the Balance of the Term,
the Employee agrees that the Employee will not, directly or indirectly, own,
manage, operate, control, be employed by (whether as an employee, consultant,
independent contractor or otherwise, and whether or not for compensation) or
render services to any person, firm, corporation or other entity, in whatever
form, engaged in any business that is competitive with any business in which the
Employer was engaged at the time the Employee's employment terminated and with
which the Employee was involved while employed by the Employer. This Section
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shall not prevent the Employee from owning not more than one percent of the
total shares of all classes of stock outstanding of any publicly held
corporation engaged in such business, nor will it restrict the Employee from
rendering services to charitable organizations.
14. Non-Solicitation. During the Term and continuing for the
longer of (x) a period ending twelve (12) months after the Employee's employment
terminates for any reason whatsoever or (y) the Balance of the Term, the
Employee agrees that the Employee will not, directly or indirectly, individually
or on behalf of other persons, solicit, aid or induce (a) then remaining
employees of the Employer or its affiliates to leave their employment with the
Employer or its affiliates in order to accept employment with or render services
to or with another person, firm, corporation or other entity, or assist or aid
any other person, firm, corporation or other entity in identifying or hiring
such employees or (b) any customer of the Employer or its affiliates who was a
customer of the Employer or its affiliates at any time during which the Employee
was actively employed by the Employer to purchase services then sold by the
Employer or its affiliates from another person, firm, corporation or other
entity, or assist or aid any other person or entity in identifying or soliciting
any such customer.
15. Employee Disclosure. Prior to agreeing to, or commencing
to, act as an employee, officer, director, trustee, principal, agent or other
representative of any type of business service other than as an employee of the
Employer during the period in which the non-competition agreement, as described
in Section 13, applies, the Employee shall (a) disclose such agreement in
writing to the Employer and (b) disclose to the other entity with which he
proposes to act in such capacity, or to the other principal together with whom
he proposes to act as a principal, the existence of the non-disclosure agreement
contained in Section 12, the non-competition agreement contained in Section 13,
and the non-solicitation agreement contained in Section 14.
16. Acknowledgments Respecting Restrictive Covenants. With
respect to the restrictive covenants set forth in Section 12, Section 13, and
Section 14, the Employee acknowledges and agrees as follows.
(a) Extension of Covenants. The specified duration of a
restrictive covenant shall be extended by and for the term of any period during
which the Employee is in violation of such covenant.
(b) Covenants Not Exclusive. The restrictive covenants are in
addition to any rights the Employer may have in law or at equity.
(c) No Adequate Remedy at Law. It is impossible to measure in
money the damages which will accrue to the Employer in the event that the
Employee breaches any of the restrictive covenants. Therefore, if the Employee
breaches any restrictive covenant, the Employer and its affiliates shall have a
right to seek an injunction restraining the Employee from violating such
restrictive covenants. If the Employer or any of its affiliates shall institute
any action or proceeding to enforce a restrictive covenant, the Employee hereby
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waives the claim or defense that the Employer or any of its affiliates has an
adequate remedy at law and the Employee agrees not to assert in any such action
or proceeding the claim or defense that the Employer or any of its affiliates
has an adequate remedy at law. The foregoing shall not prejudice the Employer's
or its affiliates' right to require the Employee to account for and pay over to
the Employer or its affiliates, and the Employee hereby agrees to account for
and pay over, the compensation, profits, monies, accruals or other benefits
derived or received by the Employee as a result of any transaction constituting
a breach of the restrictive covenants.
17. Severability. Each provision hereof is severable from this
Agreement, and if one or more provisions hereof are declared invalid the
remaining provisions shall nevertheless remain in full force and effect. If any
provision of this Agreement is so broad, in scope or duration or otherwise, as
to be unenforceable, such provision shall be interpreted to be only so broad as
is enforceable.
18. Employee's Right to Contract. The Employee represents and
warrants to the Employer that the Employee is legally free to make and perform
this Agreement, that he has no obligation (including, without limitation, an
obligation under any non-competition, non-solicitation, non-disclosure or
similar agreement) to any other person or entity that would affect or conflict
with any of the Employee's obligations hereunder, or otherwise hinder the
Employee's ability to perform the services contemplated hereunder and that the
complete performance of the Employee's obligations hereunder will not violate
any law, regulation, order or decree of any governmental or judicial body or
contract by which he is bound. The Employee agrees not to use in the course of
the Employee's employment hereunder any information obtained in the Employee's
employment with any previous employer to the extent that such use would violate
any contract by which he is bound or decision, law, regulation, order or decree
of any governmental or judicial body.
19. Notice. Any notice to be given hereunder shall be given in
writing. Notice shall be deemed to be given when delivered by hand to the party
to whom notice is being given, or ten (10) days after being mailed, postage
prepaid, registered with return receipt requested, or sent by facsimile
transmission with a confirmation by registered or certified mail, postage
prepaid.
Notices to the Employee should be addressed to the Employee as follows:
J. Xxxx Xxxxxxx
00 Xxxx Xxxxxxx
Xx. Xxxxx, XX 00000
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Notices to the Employer should be sent as follows:
Ply Gem Industries, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxx, President
with copies sent to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: A. Xxxxxxx Xxxxx, Esq.
Either party may change the address or person to whom notices
should be sent to by notifying the other party in accordance with this Section
19.
20. No Waiver. The failure to enforce at any time any of the
provisions of this Agreement or to require at any time performance by the other
party of any of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect the validity of this Agreement, or any
part hereof, or the right of either party thereafter to enforce each and every
such provision in accordance with the terms of this Agreement.
21. Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the employment of Employee by the
Employer and supersedes any and all prior understandings, agreements or
correspondence between the parties. It may not be amended or extended in any
respect except by a writing signed by both parties hereto.
22. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of New York, without
reference to its principles of conflicts of law.
23. Assignment. This Agreement shall not be assignable by
either party hereto without the written consent of the other, provided, however,
that the Employer may, without the written consent of the Employee, assign this
Agreement to (a) any entity into which the Employer is merged or to which the
Employer transfers substantially all of its assets or (b) any entity
controlling, under common control with or controlled by the Employer.
24. Approval. This Agreement shall be submitted for approval
of the Board of Directors at a meeting of the Board of Directors occurring
within 90 days after the date hereof.
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In the event that this Agreement is not approved at such meeting of the Board of
Directors, this Agreement shall be null and void.
IN WITNESS WHEREOF, the Employer has caused this Agreement to
be signed by its duly authorized representative and the Employee has hereunto
set his hand as of the day and year first above written.
PLY GEM INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------
Name: Xxxx X. Xxxxxx
Title: President and COO
/s/ J. Xxxx Xxxxxxx
----------------------
J. Xxxx Xxxxxxx
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AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to the Employment Agreement, dated as of June 17,
1997 (the "Employment Agreement"), between J. Xxxx Xxxxxxx and Ply Gem
Industries, Inc.("Ply Gem") is entered into as of June 23, 1997.
The undersigned hereby agrees, notwithstanding any provisions
contained in the Employment Agreement, that the transactions contemplated by
(i) that certain Merger Agreement, to be dated as of June 24, 1997 (the
"Merger Agreement"), by and among Atrium Acquisition Holdings Corp.
("Parent"), Atrium/PG Acquisition Corp. ("Sub"), Atrium Corporation ("Atrium")
and Ply Gem; (ii) the Stockholders Agreements, to be dated as of June 24,
1997, by and among certain beneficial owners of Ply Gem common stock and
options; and (iii) the other Transaction Documents (as defined in the Merger
Agreement) shall not constitute a "change of control" or transaction of
similar import pursuant to the terms of the Employment Agreement until such
time as the merger of Sub with and into Ply Gem has been consummated.
IN WITNESS WHEREOF, the undersigned has affixed his signature
hereto as of the 23rd day of June, 1997.
/s/ J. Xxxx Xxxxxxx
------------------------
J. Xxxx Xxxxxxx
Accepted and Agreed as of
the 23rd day of June, 1997
PLY GEM INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Executive Vice President
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