Exhibit 10.20

NORCRAFT COMPANIES, L.P.

3020 Denmark Avenue, Suite 100

Eagan, MN 55121

March 9, 2006

David Romeo

21025 Laurel Drive

Deer Park, IL 60010

Dear David:

I am pleased to confirm our offer and your acceptance for employment with
Norcraft Companies, L.P. (the “Company”). This letter will set forth the terms
of the employment agreement between you and the Company.

1. Effective Date; Term. The “Effective Date” of this Agreement will be
March 13, 2006, or such other date as is mutually agreed between you and the
Company. Unless earlier terminated pursuant to Section 6, the term of your
employment shall continue until December 31, 2006. Thereafter, the employment
term shall be automatically extended for consecutive one-year periods unless
either you or the Company declines to extend the employment term no later than
forty five (45) days prior to the expiration of such term.

2. Duties, etc. You will be employed as the Chief Executive Officer of
UltraCraft Cabinetry. In this capacity, you will be one of the highest ranking
management personnel of the Company. In addition, you will serve without
additional compensation as an officer of any of the Company’s affiliates, as
designated by the General Partner of the Company, unless such designation
materially increases your responsibilities. You will be accountable to, and will
also have such powers, duties and responsibilities as may from time to time be
prescribed by the Chief Executive Officer of the Company or such other officer
designated by him or the General Partner of the Company, provided that such
duties and responsibilities are consistent with your position. You will perform
and discharge your duties and responsibilities faithfully, diligently and to the
best of your ability. You will devote substantially all of your working time and
efforts to the business and affairs of the Company.

3. Cash Compensation. During the term of your employment, the Company will pay
you a base salary at the annual rate of $225,000.00. You will also be eligible
for an annual bonus for each fiscal year completed during the term of your
employment pursuant to the bonus plan for such year to be put in place by the
Board of Managers of the General Partner of the Company for employees in the
UltraCraft Cabinetry division; provided that, your annual bonus target for 2006
will be 30% of your annual base salary. The Board of Managers of the General
Partner of the Company will determine the bonus plans for each fiscal year after
completing an assessment of business objectives and existing plans. All payments
under this section or any other section of this letter agreement will be made in
accordance with the regular payroll practices of the Company, reduced by
applicable withholding.

4. Equity. Upon commencement of your employment, you will also become entitled
to receive 632,089 Class D limited partnership units (“Class D Units”) of the
Company’s parent, Norcraft Holdings, L.P., a Delaware limited partnership
(“Holdings”), which units will be subject to the terms (including with respect
to vesting) of the Amended and Restated Norcraft Holdings, L.P. Management
Incentive Plan (as such may be further amended from time to time, the “Plan”).
In accordance with the terms of the Plan, of such Class D Units, 50% will be
Performance-Based Units (as defined in the Plan) and 50% will be Time-Based
Units (as defined in the Plan). The first potential vesting of the Class D Units

 

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will be as of December 31, 2006. In connection with your receipt of Class D
Units, you will agree to become a party to the Amended and Restated Agreement of
Limited Partnership of Holdings, dated as of October 21, 2003 (as such may be
further amended from time to time, the “Holdings L.P. Agreement”), and
accordingly, shall be subject to all of the obligations, and entitled to all of
the benefits of a Management Limited Partner (as defined in the Holdings L.P.
Agreement) thereunder with respect to such Class D Units.

5. Benefits. You will be entitled to no less than twenty (20) paid vacation days
per calendar year during the term of your employment. You will also be eligible
to participate in all benefits and welfare plans which are generally available
to senior employees of the Company’s UltraCraft division. The Board of Managers
of the General Partner of the Company will undertake a review of any benefit and
welfare plans and may modify the existing package of plans or adopt new plans
after completing its assessment, with the intent of retaining a level of overall
benefits substantially similar to those currently in place.

6. Termination of Employment. Your employment under this Agreement shall be for
the term set forth in Section 1 hereof, except as provided below. You or the
Company may terminate your employment prior to the end of this term, as set
forth in this Section, subject to applicable statutory and common law
restrictions. The parties’ rights and duties in the event of a termination of
employment will be as set forth below.

If (x) the Company terminates your employment other than for Cause (as defined
below) or (y) you terminate your employment for Good Reason (defined below), the
Company will, in lieu of any other payments or benefits hereunder or otherwise
(except for payment of base salary through the Date of Termination (as defined
below), at the rate then in effect, plus benefits accrued pursuant to Section 5
above), continue to pay your base salary at the rate in effect on the Date of
Termination and continue to provide or cause to be provided health, life and
disability insurance benefits to the extent permitted under such plans until the
one year anniversary of the Date of Termination and the pro-rated portion of any
bonus accrued for the year in which the Date of Termination occurs (payable when
such bonus ordinarily would have been paid); provided that you make such
affirmative COBRA or other elections as are required for such benefits to
continue. Any payments under this Section 6 shall be made in accordance with the
Company’s standard practices and shall be dependent upon your performance of the
obligations under this letter agreement and your timely execution of an
effective release of claims substantially in the form of Exhibit A hereto.

If your employment terminates for any other reason, the Company will, in lieu of
any other payments hereunder or otherwise, continue to pay your base salary
through the Date of Termination, at the rate then in effect, plus benefits
accrued pursuant to Section 5 above.

For purposes of this letter: “Date of Termination” shall mean the date your
employment with the Company terminates regardless of the reason. “Cause” shall
mean (A) any material failure by you to perform your duties under this letter
agreement or to obey policy directives from any superior executive officer of
the Company or the General Partner of the Company, it being understood that how
well you perform such duties or carry out such directives shall not give rise to
“Cause” under this clause (A), (B) your reporting to work under the influence of
alcohol or illegal drugs, the use of illegal drugs (whether or not at the
workplace) or other repeated conduct causing the Company or any of its
affiliates public disgrace or disrepute or material economic harm, (C) your
material violation of any of the policies and guidelines for the Company,
including, without limitation, those relating to conflicts of interest, ethical
practices, trade regulation, payment and procurement policies, legal compliance,
employment discrimination, and/or sexual harassment, (D) your commission of a
felony or an act of fraud, misappropriation, embezzlement or any other act
involving moral turpitude, (E) your commission of any act of dishonesty which
materially injures the Company or any of its affiliates, or (F) material breach
by you of this letter agreement (including any covenant or representation
herein) or the Holdings L.P. Agreement, provided, that in the circumstances
described in clauses (A), (C), or (F) you shall have thirty (30) days to cure
the default after notice by the Company. “Good Reason” shall mean (w) any
material diminution of your duties, (x) a material breach by the Company of this
letter or the Holdings L.P. Agreement, (y) relocation by the Company outside of
the United States, or (z) change of your title, provided, that in the
circumstances described in clauses (w), (x), and (z) the Company shall have
thirty (30) days to cure the default after notice by you.

 

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7. Confidentiality; Proprietary Rights. Without the written consent of the
General Partner of the Company, you will not during or after the term of your
employment with the Company disclose to any person or entity (other than a
person or entity to which disclosure is in your reasonable judgment necessary or
appropriate in connection with the performance of your duties for the Company),
any confidential or trade secret information obtained by you while in the employ
of the Company the disclosure of which may be adverse to the interests of the
Company or any of its affiliates, or use any such information to the detriment
of the Company or any of its affiliates; provided, however, that such
restriction shall not apply to information that is generally known to the public
other than as a result of unauthorized disclosure by you.

All inventions, developments, methods, processes and ideas conceived, developed
or reduced to practice by you during your employment, and for three months
thereafter, which are directly or indirectly useful in, or relate to, the
business of or services provided by or sold by the Company or any of its
affiliates shall be promptly and fully disclosed by you to an appropriate
executive officer of the Company (accompanied by all papers, drawings, data and
other materials relating thereto) and shall be the Company’s exclusive property
as against you. You will, upon the Company’s request and at its expense (but
without any additional compensation to you), execute all documents reasonably
necessary to assign your right, title and interest in any such invention,
development, method or idea (and to direct issuance to the Company of all
patents or copyrights with respect thereto).

8. Restricted Activities. You agree that, during the term of your employment
with the Company and thereafter until at least the first anniversary of the Date
of Termination, you will not compete with the Company in the North American
branded cabinet business. To this end, you agree that you will not directly or
indirectly, be connected as an officer, director, employee, consultant, owner or
otherwise with any business in North America which competes with the Company in
the North American branded cabinet business. In addition, during the term of
your employment with the Company and thereafter during the period ending on the
second-year anniversary of the Date of Termination, you agree to not directly
(or indirectly through another person or entity) (i) induce or attempt to induce
any employee of the Company or any of its affiliates to leave the employ of the
Company or any of its affiliates, as the case may be, or in any way interfere
with the relationship between the Company or any of its affiliates and any
employee thereof, or (ii) hire any person who was an employee of the Company or
any of its affiliates at any time during the term of your employment with the
Company or the period ending on the second-year anniversary of the Date of
Termination. You agree that the restrictions contained in this Section 8 are
reasonably necessary for the protection of the Company and that a violation of
such provisions will cause damage that may be irreparable or impossible to
ascertain and, accordingly, that the Company will be entitled to injunctive or
other similar relief in equity from a court of competent jurisdiction to enforce
or restrain a violation of these restrictions.

9. Conflicting Agreements. You represent and warrant that the execution of this
letter agreement and the performance by you of your obligations hereunder will
not breach or be in conflict with any other agreement to which you are a party
or are bound and that you are not now subject to any covenants against
competition or similar covenants or any court order or other legal obligation
that would affect the performance of your obligations hereunder. You will not
disclose to or use on behalf of the Company any proprietary information of a
third party without such party’s consent.

10. Miscellaneous. The headings in this letter are for convenience only and
shall not affect the meaning hereof. This letter agreement, together with the
Holdings L.P. Agreement constitutes the entire agreement between the Company and
you, and supersedes any prior communications, agreements and understandings,
written or oral, with respect to your employment and compensation and all
matters pertaining thereto. If any provision in this letter agreement should,
for any reason, be held invalid or unenforceable in any respect, it shall be
construed by limiting it so as to be enforceable to the maximum extent
compatible with applicable law. This letter agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
Minnesota without giving effect to any choice or conflict of laws provision or
rule that would cause the application of the domestic substantive laws of any
other jurisdiction. Should any action or proceeding be brought to construe or
enforce the terms and conditions of this Agreement or the rights of the parties
hereunder, the losing party shall pay to the prevailing party all court costs
and reasonable attorneys’ fees and costs incurred in such action or proceeding.

[Remainder of Page Intentionally Blank]

 

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11. Acceptance. In accepting this offer, you represent that you have not relied
on any agreement or representation, oral or written, express or implied, that is
not set forth expressly in this letter agreement or the Holdings L.P. Agreement.

 

Very truly yours, NORCRAFT COMPANIES, L.P.

By NORCRAFT GP, L.L.C.,

its general partner

By:  

/s/ Leigh Ginter

Name:  

Leigh Ginter

Title:  

CFO

Accepted and Agreed To:

/s/ David Romeo

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David Romeo

 

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