EXHIBIT 10.12
AMENDED AND RESTATED AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT (this "Agreement"), made and
entered into this 5th day of February 2002, by and between Associated Materials
Incorporated, a Delaware corporation ("AMI"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
("▇▇▇▇▇▇▇▇").
WITNESSETH:
WHEREAS, AMI and ▇▇▇▇▇▇▇▇ are parties to an Agreement, dated December
18, 1999 (the "Prior Agreement"), setting forth the terms and conditions of
▇▇▇▇▇▇▇▇'▇ employment with AMI; and
WHEREAS, AMI and ▇▇▇▇▇▇▇▇ each desire to amend and restate in its
entirety the Prior Agreement as set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, AMI hereby agrees to continue to employ ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇▇ hereby agrees to continue to be employed by AMI upon the terms and
conditions hereinafter set forth.
1. Employment. AMI agrees to employ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ agrees to be employed
by AMI as President and Chief Executive Officer of Alside, a division of AMI
("Alside"). ▇▇▇▇▇▇▇▇'▇ duties and responsibilities shall be those traditionally
associated with the president and chief executive officer of a corporation.
▇▇▇▇▇▇▇▇ shall not be required to report to anyone other than the President of
AMI or Board of Directors of AMI.
2. Compensation.
(a) Base Salary. ▇▇▇▇▇▇▇▇ shall be paid a base salary of $475,000 per
annum to be reviewed annually by the Board of Directors of AMI. ▇▇▇▇▇▇▇▇'▇
salary shall be subject to all appropriate federal and state withholding taxes
and shall be payable in accordance with the normal payroll procedures of AMI.
(b) Bonus Payments. For calendar year 2002 and for each calendar year
thereafter during the term of this Agreement, ▇▇▇▇▇▇▇▇ shall be paid a cash
bonus equal to 0.0079 times Alside's earnings before income taxes and after
interest expense allocated to Alside, as determined by AMI consistent with AMI's
past practice. On or prior to December 31 of each calendar year, AMI will pay
▇▇▇▇▇▇▇▇ an amount equal to 90% of ▇▇▇▇▇▇▇▇'▇ estimated bonus, as reasonably
determined by AMI and consistent with this Section 2(b). The final bonus amount
will be determined, and any supplemental payment (or reimbursement of any over
payment) will be made at such times as other bonuses are paid to Alside's
executives.
3. Benefits.
(a) Benefit Plans. ▇▇▇▇▇▇▇▇ shall participate in all benefit programs
and plans provided to other Alside executives in accordance with the terms and
conditions of those programs and plans. Such benefits currently include medical,
dental, short and long-term disability and group life insurance, an employee
spending account, employee stock purchase plan, and the Alside 401(k) Plan.
▇▇▇▇▇▇▇▇'▇ group life insurance benefit shall be two times his base salary and
cash bonus for the preceding calendar year, adjusted annually on or before March
31st of each year; provided, however, that the amount of ▇▇▇▇▇▇▇▇'▇ group life
insurance benefit shall not exceed the maximum life insurance benefit permitted
for any individual under Alside's then-current group life insurance plan.
(b) Car Allowance. ▇▇▇▇▇▇▇▇ shall be paid a car allowance as provided
to other executives of Alside. Currently the car allowance is $1,000 per month.
Such allowance shall be paid by AMI to ▇▇▇▇▇▇▇▇ on the last business day of each
month or on such other day during the month as these payments are made to other
executives of Alside.
(c) Club Membership. AMI shall reimburse ▇▇▇▇▇▇▇▇ for monthly dues and
business related expenses in connection with his country club membership
throughout the term of this Agreement.
4. Vacations. ▇▇▇▇▇▇▇▇ shall be permitted to take vacation time in each calendar
year as determined by the Board of Directors of AMI. ▇▇▇▇▇▇▇▇ shall be entitled
to four weeks paid vacation during each calendar year. In addition, ▇▇▇▇▇▇▇▇
shall be entitled to such holidays as may be established by Alside for employees
generally and a reasonable number of personal and sick days not inconsistent
with the performance of his duties hereunder.
5. Term of Employment. This Agreement shall be effective when executed by both
▇▇▇▇▇▇▇▇ and AMI and shall expire on the close of business on December 31, 2004;
provided, however, that commencing on January 1, 2005 and each January 1
thereafter, the term of this Agreement shall automatically be extended for one
additional year unless, not later than September 30 of the immediately preceding
year, either AMI or ▇▇▇▇▇▇▇▇ shall have given written notice that it or he, as
the case may be, does not desire to have the term of this Agreement extended.
6. Termination. The employment relationship between AMI and ▇▇▇▇▇▇▇▇ created
hereunder shall terminate before the expiration of the term of this Agreement
upon the occurrence of any one of the following events:
(a) Mutual Agreement. Upon mutual written agreement between ▇▇▇▇▇▇▇▇
and AMI. Any severance hereunder shall be payable as mutually agreed.
(b) Death. Upon ▇▇▇▇▇▇▇▇'▇ death, AMI shall have no further obligations
hereunder other than for amounts accrued and unpaid prior to the date of his
death.
(c) Termination by AMI for Cause. AMI may terminate this Agreement for
Cause (as defined below). If ▇▇▇▇▇▇▇▇'▇ employment is terminated for Cause by
AMI pursuant to this Section 6(c), AMI shall have no further obligations
hereunder other than for amounts
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accrued and unpaid prior to the date of termination for Cause. As used herein,
"Cause" for termination by AMI shall mean that ▇▇▇▇▇▇▇▇ shall have (i) been
convicted of a criminal violation involving fraud, embezzlement or theft; (ii)
committed intentional wrongful damage to property of AMI or any subsidiary of
AMI; or (iii) committed intentional wrongful disclosure of confidential
information of AMI or any subsidiary of AMI, and any such act shall have been
materially harmful to AMI. For purposes of this Agreement, no act or failure to
act on the part of ▇▇▇▇▇▇▇▇ shall be deemed "intentional" if it was due
primarily to an error in judgment or negligence, but shall be deemed
"intentional" only if done or omitted to be done by ▇▇▇▇▇▇▇▇ not in good faith
and without reasonable belief that ▇▇▇▇▇▇▇▇'▇ action or omission was in the best
interest of AMI. Nothing herein will limit the right of ▇▇▇▇▇▇▇▇ or his
beneficiaries to contest the validity of any determination by ▇▇▇▇▇▇▇▇ to
terminate ▇▇▇▇▇▇▇▇ for Cause.
(d) Termination by AMI Without Cause. AMI may terminate this Agreement
at any time with or without Cause.
(e) Termination by ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ may terminate this Agreement at
any time with or without Good Reason (as defined).
(f) Termination by ▇▇▇▇▇▇▇▇ for Good Reason. ▇▇▇▇▇▇▇▇ may terminate
this Agreement and become entitled to the rights set forth in Section 6(g)
hereof, if ▇▇▇▇▇▇▇▇ has Good Reason to terminate his employment with AMI. As
used herein, "Good Reason" to terminate employment with AMI occurs if: (1)
without his consent, duties are assigned to ▇▇▇▇▇▇▇▇ that are materially
inconsistent with his current duties or with his position as President and Chief
Executive Officer of Alside; (2) without his consent, duties and
responsibilities previously performed by ▇▇▇▇▇▇▇▇ are substantially reduced or
assigned to others; or (3) AMI breaches any of its material obligations under
this Agreement, including without limitation payment obligations and obligations
to provide benefits and, in each case specified in clauses (1), (2) and (3) of
this Section 6(f), AMI fails to cure any such alleged breach within 30 days
after AMI receives written notice of such alleged breach from ▇▇▇▇▇▇▇▇.
(g) Severance Payments. In the event ▇▇▇▇▇▇▇▇'▇ employment has been
terminated (x) by AMI without Cause, (y) by ▇▇▇▇▇▇▇▇ for Good Reason or (z) as a
result of AMI giving ▇▇▇▇▇▇▇▇ written notice that it does not desire to have the
term of this Agreement extended pursuant to Section 5 hereof, ▇▇▇▇▇▇▇▇ shall
receive the following:
(i) An amount equal to three times ▇▇▇▇▇▇▇▇'▇
then-current base salary;
(ii) An amount equal to three times ▇▇▇▇▇▇▇▇'▇ annual cash
incentive payment (determined by reference to the
highest cash incentive payment received by ▇▇▇▇▇▇▇▇
for services rendered in any calendar year during the
three full calendar years immediately prior to the
termination of his employment).
(iii) If ▇▇▇▇▇▇▇▇'▇ employment is terminated after June 30
of any calendar year, an additional payment in an
amount equal to the cash bonus (calculated in
accordance with Section 2(b) hereof) based upon
Alside's earnings for the then-current calendar year
from January 1 through the end
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of the last full calendar month immediately prior to
the effective date of his termination of employment
and budgeted Alside earnings for the remaining full
calendar months of that calendar year. The actual
bonus payment will be prorated on the actual number
of days ▇▇▇▇▇▇▇▇ was employed by AMI during the
calendar year in which his employment with AMI was
terminated.
(iv) For a period of three years following the effective
date of the termination of his employment with AMI,
AMI will provide or arrange to provide ▇▇▇▇▇▇▇▇ with
the benefits he was receiving pursuant to Section 3
hereof on the effective date of the termination of
his employment (other than stock options, stock
purchase or similar stock-based benefits).
Notwithstanding the foregoing, benefits otherwise
receivable by ▇▇▇▇▇▇▇▇ pursuant to this Section
6(g)(iv) will be reduced to the extent comparable
benefits are actually received by ▇▇▇▇▇▇▇▇ from
another employer during the three-year period
following ▇▇▇▇▇▇▇▇'▇ termination of employment, and
any such benefits actually received by ▇▇▇▇▇▇▇▇ shall
be reported by ▇▇▇▇▇▇▇▇ to AMI.
(v) The options to purchase 100,000 shares of AMI's
common stock granted to ▇▇▇▇▇▇▇▇ in 2000 under
Section 2(d) of the Prior Agreement (the "Options")
shall become fully and immediately vested and the
Options shall remain exercisable for 10 years from
the grant date, as provided in the agreement under
which the Options were granted.
7. Limitation on Payments and Benefits. Notwithstanding any provision of this
Agreement to the contrary, if any amount or benefit to be paid or provided to
▇▇▇▇▇▇▇▇ under this Agreement (or any other agreement to which ▇▇▇▇▇▇▇▇ is a
party, including any stock option agreement) would be an "Excess Parachute
Payment," within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), or any successor provision thereto, but for the
application of this sentence, then the payments and benefits to be paid or
provided under this Agreement shall be reduced to the minimum extent necessary
(but in no event to less than zero) so that no portion of any such payment or
benefit, as so reduced, constitutes an Excess Parachute Payment. The
determination of whether any reduction in such payments or benefits to be
provided under this Agreement or otherwise is required pursuant to the preceding
sentence shall be made at the expense of AMI, if requested by the ▇▇▇▇▇▇▇▇ or
AMI, by a firm of independent accountants or a law firm selected by AMI and
reasonably acceptable to ▇▇▇▇▇▇▇▇. The fact that ▇▇▇▇▇▇▇▇'▇ right to payments or
benefits may be reduced by reason of the limitations contained in this Section 7
shall not of itself limit or otherwise affect any other rights of ▇▇▇▇▇▇▇▇ other
than pursuant to this Agreement. In the event that any payment or benefit
intended to be provided under this Agreement or otherwise is required to be
reduced pursuant to this Section 7, ▇▇▇▇▇▇▇▇ shall be entitled to designate the
payments and/or benefits to be so reduced in order to give effect to this
Section 7. AMI shall provide ▇▇▇▇▇▇▇▇ with all information reasonably requested
by ▇▇▇▇▇▇▇▇ to permit ▇▇▇▇▇▇▇▇ to make such designation. In the event that
▇▇▇▇▇▇▇▇ fails to make such designation within 10 business days of the date of
his termination of employment, AMI may effect such reduction in any manner it
deems appropriate.
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8. Trade Secrets. ▇▇▇▇▇▇▇▇ recognizes and acknowledges that during his term of
employment hereunder, he will come into possession of trade secrets, customer
lists, and other confidential information in connection with the business of AMI
and Alside. ▇▇▇▇▇▇▇▇ agrees that he will not at any time disclose to any other
third party any trade secrets, business policies or other confidential
information pertaining to AMI's or Alside's business.
9. Legal Fees and Expenses.
(a) It is the intent of AMI that ▇▇▇▇▇▇▇▇ not be required to incur
legal fees and the related expenses associated with the interpretation,
enforcement or defense of ▇▇▇▇▇▇▇▇'▇ rights under this Agreement by litigation
or otherwise because the cost and expense thereof would substantially detract
from the benefits intended to be extended to ▇▇▇▇▇▇▇▇ under this Agreement.
Accordingly, if it should appear to ▇▇▇▇▇▇▇▇ that AMI has failed to comply with
any of its obligations under this Agreement or in the event that AMI or any
other person takes or threatens to take any action to declare this Agreement
void or unenforceable, or institutes any litigation or other action or
proceeding designed to deny, or to recover from, ▇▇▇▇▇▇▇▇ the benefits provided
or intended to be provided to ▇▇▇▇▇▇▇▇ hereunder, AMI irrevocably authorizes
▇▇▇▇▇▇▇▇ from time to time to retain counsel of ▇▇▇▇▇▇▇▇'▇ choice, at the
expense of AMI as hereafter provided, to advise and represent ▇▇▇▇▇▇▇▇ in
connection with any such interpretation, enforcement or defense, including
without limitation the initiation or defense of any litigation or other legal
action, whether by or against AMI or any director, officer, stockholder or other
person affiliated with AMI, in any jurisdiction. Without respect to whether
▇▇▇▇▇▇▇▇ prevails, in whole or in part, in connection with any of the foregoing,
AMI will pay and be solely financially responsible for any and all attorneys'
and related fees and expenses incurred by ▇▇▇▇▇▇▇▇ in connection with any of the
foregoing; provided that, in regard to such matters, ▇▇▇▇▇▇▇▇ has not acted in
bad faith or with no colorable claim of success. The fees and expenses of
counsel solicited from time to time by ▇▇▇▇▇▇▇▇ shall be paid, or reimbursed to
▇▇▇▇▇▇▇▇ if paid, as promptly as practicable (and in any event within 15
calendar days) upon presentation of a statement or statements prepared by such
counsel in accordance with its customary practices.
(b) Notwithstanding anything contained in this Agreement to the
contrary, the provisions of Section 9(a) shall not be operative unless and until
a Change in Control (as defined herein) occurs. Upon the occurrence of a Change
in Control, the provisions of Section 9(a) shall become immediately operative
without further action.
10. Certain Defined Terms. In addition to terms defined elsewhere herein, the
following terms have the following meanings when used in this Agreement with
initial capital letters:
(a) "Change in Control" means any transaction or series of
transactions, the result of which causes any person (as the term "person" is
used in Section 13(d)(3) of the Securities Exchange Act (any such person being
hereafter referred to as a "Person"), other than one or more members of the
Winspear Family, to become the beneficial owner (as the term "beneficial owner"
is defined in Rule 13d-3 or any successor rule or regulation promulgated under
the Securities Exchange Act) of securities representing more than 50% of the
combined voting power of the then-outstanding Voting Stock of AMI. For the
purpose of this Agreement, any
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Person (including any member of the Winspear Family) shall be deemed to
beneficially own shares of Voting Stock of AMI held directly or indirectly in
accordance with Rule 13d-3.
(b) "Voting Stock" means securities entitled to vote generally in an
election of directors.
(c) "Winspear Family" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, his affiliates
(including the Winspear Family Limited Partnership and Winspear Family
Investments Ltd.), the members of his immediate family (as the term "immediate
family" is defined in Rule 16a-1(e) or any successor rule under the Securities
Exchange Act), any trust established for the benefit of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or
members of his immediate family and any private charitable foundation controlled
by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or members of his immediate family.
11. Miscellaneous.
(a) Successors Bound. This Agreement shall be binding upon AMI and
▇▇▇▇▇▇▇▇ and their respective heirs, executors, administrators or successors in
interest.
(b) Notices. All notices and other communications required or permitted
to be given hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally, mailed by certified mail (return receipt
requested) or sent by overnight delivery service or facsimile transmission (with
electronic confirmation of successful transmission) to the parties at the
following addresses or at such other addresses as shall be specified by the
parties by like notice:
If to AMI: Associated Materials Incorporated
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile number: 214.220.4607
Attention: President
If to ▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile number: 330.922.5373
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal law, and not the law of conflicts, of the State of
Ohio.
12. Indemnification. AMI acknowledges that AMI and ▇▇▇▇▇▇▇▇ are parties to an
Indemnification Agreement, dated as of August 20, 2000, providing for the
indemnification of ▇▇▇▇▇▇▇▇ by AMI.
13. Prior Agreement. This Agreement supercedes the Prior Agreement, which Prior
Agreement shall, without further action, be terminated as of the date hereof.
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The parties have caused this Agreement to be duly executed and
delivered as of the date first written above.
ASSOCIATED MATERIALS INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman of the Board,
President and Chief Executive Officer
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
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