Exhibit 10.1
SEPARATION AGREEMENT AND GENERAL RELEASE
     This SEPARATION AGREEMENT AND GENERAL RELEASE (this “Agreement”), dated as
of April 11, 2006 (the “Effective Date”), is by and among AMH Holdings II, Inc.,
a Delaware corporation (“AMH II”), AMH Holdings, Inc. (“AMH”), a Delaware
corporation and wholly owned subsidiary of AMH II, Associated Materials
Holdings, Inc. (“AMHI”), a Delaware corporation and wholly owned subsidiary of
AMH, Associated Materials Incorporated, a Delaware corporation and wholly owned
subsidiary of AMH I (“Employer” and together with AMH II, AMHI and AMH,
“Associated”), and Michael Caporale, Jr. (“Executive”).
     WHEREAS, Employer and Executive are parties to that certain Amended and
Restated Employment Agreement, dated as of July 27, 2004 (the “Employment
Agreement”);
     WHEREAS, Executive serves as a member of the Boards of Directors of each of
AMH II, AMHI, AMH and AMI (each, a Board of Directors, and collectively, the
“Boards of Directors”);
     WHEREAS, Executive owns beneficially and of record 71,688 shares (the
“Class B Shares”) of Class B Series II (Non-Voting) Common Stock of AMH II (the
“Class B Common Stock”);
     WHEREAS, Executive has resigned as Employer’s Chairman, President and Chief
Executive Officer by mutual agreement with Employer’s Board of Directors, such
resignation to be effective in accordance with the terms and conditions of this
Agreement; and
     WHEREAS, the parties hereto desire to clarify and settle all existing legal
rights and obligations related to (i) Executive’s employment with Employer,
(ii) the Class B Shares and (iii) options Executive holds to purchase additional
equity securities of AMH II and of AMH (subject to Executive’s agreement to
exchange any equity securities of AMH issued upon the exercise of such options
for equity securities of AMH II).
     NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
representations and undertakings of the parties set forth herein, the adequacy
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
     1. Termination Date; Board Membership.
          (a) The parties hereto acknowledge and agree that Executive’s
employment with Employer shall terminate effective on the close of business on
June 30, 2006 (the “Termination Date”). Executive shall remain employed by
Employer through the Termination Date in accordance with the terms of the
Employment Agreement, except as provided in Section 3 below. Executive
acknowledges and agrees that after the Termination Date, he will not report to
work for Associated or hold himself out as being employed by Associated,
notwithstanding the fact that Executive may continue as a member of the Boards
of Directors pursuant to Section 1(b) below.

 

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          (b) Subject to Section 3 below, Executive will remain as a member of
the Boards of Directors through December 31, 2006, serving in the capacity of
non-executive Chairman of the Boards of Directors through such time. After such
time, Executive shall continue to serve as a member of the Boards of Directors
at the pleasure of AMH II, AMHI, AMH or AMI and their respective stockholders.
If, from and after the Termination Date, AMH II, AMHI, AMH or AMI elects to
designate Executive as a non-voting member of the applicable Board of Directors
and all requisite Board and stockholder approvals are obtained for such
designation, Executive shall become a non-voting member of the applicable Board
of Directors, with all rights of a director other than the right to vote on
matters before the Board of Directors.
     2. Payments to Executive.
          (a) Subject to Section 3 below, (i) until the earlier of (x) the
Termination Date and (y) the date, if any, on which the Executive accepts full
time salaried employment with any third party, Employer will continue to pay
Executive’s base salary at the annual rate currently in effect and (ii) from the
Termination Date until the earlier of (x) December 31, 2006 and (y) the date, if
any, on which the Executive accepts full time salaried employment with any third
party, Employer will pay to the Executive, as complete and total compensation
for Executive’s duties as a member of the Boards of Directors and in
consideration of the Executive entering into this Agreement and the covenants
and agreements contained herein, including without limitation those contained in
Sections 7 and 8 hereof, and the general release of claims in Section 9 hereof,
a fee of $10,000 per month (and a pro-rated portion for any partial months) (the
“Fee Payments”), in accordance with Employer’s normal payroll practices and as
reduced by deductions or withholdings required by law.
          (b) Subject to Section 3 below, and provided that the Executive has
signed (and not revoked) a General Release in the form attached hereto as
Exhibit A (the “General Release”) and provided that the General Release is
signed within the requisite time periods stated therein and has become
effective, then, starting on July 1, 2006, Employer shall provide the Executive
with the following:
               (i) A severance payment equal to $1,000,000 per year for the two
year period following the Termination Date (the “Severance Period”) in
accordance with Section 7 of the Employment Agreement. Such payment shall be
made in accordance with Employer’s normal payroll practices and be reduced by
deductions or withholdings required by law. The amount paid to Executive
pursuant to the foregoing sentence is referred to herein as the “Severance
Payment.”
               (ii) Employer will continue to provide Executive with the medical
and dental benefits currently provided to Executive from the date hereof through
the Severance Period, at the same rate of employee and Employer shared costs of
such coverage as in effect from time to time for active employees of Employer.
               (iii) To the extent incentive bonuses are payable to the top five
(5) most senior executives of Employer (other than the Executive) for the fiscal
year 2006, Employer will pay Executive one half of the incentive bonus that
would be payable to the

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Executive for the fiscal year 2006 based upon the same performance criteria with
respect to Associated that are applicable to such five executives
(notwithstanding anything to the contrary contained in the Employment
Agreement), in accordance with Executive’s Board-approved bonus policy for such
executives, payable when incentive bonuses, if any, are paid to the executives
of Employer.
               (iv) Employer’s agreement to make the payments and provide the
benefits described in this Section 2(b) will be made in consideration of the
Executive entering into the General Release. The Executive’s execution of this
Agreement does not constitute an agreement to sign the General Release or
otherwise waive any legal rights that Executive may have with respect to claims
arising subsequent to Executive’s execution of this Agreement. Rather, in the
event that the General Release is provided to Executive, Executive will be
afforded the opportunity to review and determine whether to sign the General
Release in accordance with relevant laws.
          (c) No payment made or benefit provided by Associated to Executive on
or after the Termination Date shall in any way be treated as continuing any
employment relationship between Executive and Employer beyond such date.
          (d) The payments under this Agreement shall be in lieu of any other
severance-related payments to which Executive otherwise could claim entitlement,
including without limitation the Employment Agreement and any severance plan or
policy of Associated.
     3. Early Termination of Executive. If, prior to the Termination Date, the
Board of Directors of Employer determines in good faith (with Executive recusing
himself from such vote) that (x) Executive should be terminated based upon a
breach of the covenants contained in Section 7(a) or (y) Executive should be
terminated for “Cause” (as defined in the Employment Agreement), then:
     (a) Executive shall not be entitled to receive the continuation of base
salary and/or Fee Payments (as applicable) pursuant to Section 2(a) of this
Agreement (as applicable) pursuant to Section 2(b) from and after the date the
Board makes such determination;
     (b) Executive shall not be entitled to receive the extension of the
exercise period for the options in accordance with Section 5 of this Agreement
(but rather, in accordance with the terms of the governing option agreements,
Executive will have 90 days from the date he no longer serves as Chief Executive
Officer of Employer to exercise the options to the extent vested as of the
Termination Date);
     (c) Executive shall not be entitled to the Severance Payment and the
continuation of benefits; and
     (iv) Executive will not be entitled to continue as a member of the Boards
of Directors in accordance with Section 1(b) above.
     4. Repurchase Rights With Respect to Class B Shares.

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     AMH II hereby waives its rights, pursuant to the Option Agreements (as
defined below), to repurchase after the Termination Date any or all of the
Class B Shares that are held by Employee as of the date hereof.
     5. Treatment of Options; Repurchase of Option Shares. Executive holds
options to purchase Class B Common Stock as set forth on Schedule 1 hereto (the
“Options”) pursuant to the option agreement identified on Schedule 1 hereto (the
“Option Agreements”). The parties hereto acknowledge and agree that
notwithstanding any provisions contained in the Option Agreements that state
that Executive will have 90 days from the termination of employment to exercise
Options to the extent vested on the Termination Date, Executive shall be
entitled to exercise any such Options at any time prior to December 31, 2006;
provided, however, that if Executive is terminated pursuant to Section 3 above,
the post-termination exercise periods shall remain 90 days. In the event that
Executive exercises any Options, AMH II shall have the right, exercisable upon
written notice to Executive no later than June 15, 2007 (a “Repurchase Notice”),
to repurchase all of the shares of Class B Common Stock issued to Executive upon
the exercise of such Options (“the “Option Shares”) for an aggregate purchase
price equal to the lesser of (i) $2,000,000 and (ii) the fair market value of
the Option Shares to be repurchased as of the Repurchase Date (as defined
below), as determined in good faith by the Board of Directors of AMH II, without
discount for lack of marketability or minority interest, based upon a customary
appraisal prepared by an independent appraisal company, or such other reasonable
valuation method as the Board of Directors shall select and apply (the
“Repurchase Price”). If AMH II elects to repurchase the Option Shares pursuant
to a Repurchase Notice, the closing of such repurchase shall occur, subject to
the following proviso and to the immediately succeeding sentence, on June 30,
2007; provided, however, that if the Repurchase Price on such date would be less
than $1,500,000, then Executive shall be entitled to defer the date of such
repurchase until December 31, 2007, and the Repurchase Price shall be calculated
as of December 31, 2007 (the date on which such repurchase occurs, the
“Repurchase Date”); provided, however, that the Repurchase Price shall not in
any event exceed $2,000,000. Notwithstanding the foregoing or anything to the
contrary contained in any Option Agreement, the Executive hereby agrees that, in
the event that (i) AMH II exercises its repurchase right as described above and
(ii) either (x) AMH II’s payment of the Repurchase Price for all or a portion of
the Option Shares to be repurchased is not then permitted under Delaware law or
under the terms of any of the Company’s or any of its Affiliates’ debt or equity
financing agreements, including, without limitation, the Indenture with respect
to AMH II’s 13.625% Senior Notes Due 2014 (the “Mezz Notes”) or (y) such payment
would, in the reasonable judgment of AMH II’s Board of Directors, render AMH II
unable to pay when due its next scheduled installment of interest in respect of
the Mezz Notes, then the repurchase of such Option Shares shall be deferred as
follows:
     (A) if such deferral is pursuant to clause (x) above, AMH II shall purchase
such quantity of Option Shares on the Repurchase Date as it shall be permitted
to do so in compliance with all of the restrictions described in such clause
(x), for a purchase price per Option Share equal to the Repurchase Price divided
by the number of Option Shares to be repurchased at such time (the “Price Per
Share”), and the purchase of any Option Shares that AMH II is prohibited by such
restrictions from purchasing on the Repurchase Date shall be deferred until the
date that is ten days after the end of the first fiscal quarter in which AMH II
shall be permitted to purchase such Option Shares in compliance with such
restrictions, subject to additional quarterly deferrals in

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like manner until all Option Shares elected to be purchased by AMH II shall have
been purchased and paid for; and
     (B) if such deferral is pursuant to clause (y) above, AMH II shall purchase
such quantity of Option Shares, on the Repurchase Date and for the Price Per
Share, as would, in the reasonable judgment of AMH II’s Board of Directors,
enable AMH II to pay the full amount of the next scheduled interest payment in
respect of the Mezz Notes, and the purchase of any Option Shares which AMH II
does not purchase on the Repurchase Date shall be deferred until the next
scheduled interest payment date in respect of the Mezz Notes on which AMH II is
able, in the reasonable judgment of the Board of Directors to (I) first, pay the
scheduled interest payment in respect of the Mezz Notes on such date and
(II) second, purchase any Option Shares in compliance with such all of the
restrictions described in clause (x) above, subject to additional deferrals as
provided herein until all Option Shares elected to be purchased by AMH II shall
have been purchased and paid for;
The purchase price in respect of each Option Share purchased by AMH II after the
Repurchase Date (whether pursuant to clause (A) or clause (B) above) shall be
the Price Per Share, together with accrued interest thereon from the Repurchase
Date to the date of repurchase at the rate of 8% per annum; provided, however,
that the aggregate purchase price in respect of all repurchased Option Shares
shall not in any event exceed $2,000,000. Executive expressly acknowledges and
agrees that AMH II’s right to defer any purchase of Option Shares in the manner
described above shall be in addition to, and not in lieu or limitation of, any
other right of AMH II to defer cash payment of the purchase price for
repurchased Option Shares contained in any Option Agreement.
     6. Representations of Executive. Executive represents and warrants to
Associated that he has the capacity to enter into this Agreement and this
Agreement constitutes a legal, valid and binding obligation of him.
     7. General Covenants and Agreements.
          (a) Executive covenants and agrees not to make any derogatory or
disparaging statements about Associated, its officers, directors, agents,
employees, representatives, related or affiliated corporations, their successors
and assigns, their products or services, their customers at any time in the
future without limitation of any kind, except as otherwise required by law.
Associated, on behalf of itself and its officers, directors, agents, employees,
representatives, related or affiliated corporations, their successors and
assigns, covenants and agrees not to make any derogatory or disparaging
statements about Executive at any time in the future without limitation of any
kind, or otherwise interfere with his efforts to secure future employment,
except as otherwise required by law.
          (b) Executive agrees to (i) voluntarily appear, if requested by
Associated, without a subpoena to testify in any legal proceeding, meet with
Associated counsel prior to such testimony as and when reasonably requested by
Associated and advise such counsel truthfully of all facts known to him, and
(ii) for a period of twelve months from the Termination Date, provide reasonable
consultation, cooperation and assistance as and when reasonably requested by
Associated with respect to matters in which Executive was involved or had
knowledge of during

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his employment by Employer, provided, that, Associated shall reimburse Executive
for all reasonable out-of-pocket expenses incurred by Executive in order to
comply with this Section 7(b).
          (c) Executive covenants and agrees that he will execute such
additional documents and take such additional actions as may be reasonably
requested by Associated in furtherance or connection with this Agreement.
     8. Non-Competition, Non-Solicitation, Non-Disclosure of Proprietary
Information, Surrender of Records, Inventions and Patents.
          (a) Non-Competition. Executive acknowledges that in the course of his
employment with Employer he has become familiar with the trade secrets and other
confidential information of Employer. Therefore, and in consideration of, among
other things, the Severance Payment, Executive agrees that from the date hereof
through the Severance Period (the “Noncompete Period”), he shall not directly or
indirectly within any jurisdiction or marketing area in which Associated is
doing or is qualified to do business, directly or indirectly, own, manage,
operate, control, be employed by or participate in the ownership, management,
operation or control of, or be connected in any manner with, any manufacturing,
production, distribution or sale of exterior residential building products,
including, without limitation, vinyl siding, windows, fencing, decking, railings
and garage doors, or any other business of a type and character engaged in by
Associated during Executive’s employment with Employer. Nothing herein shall
prohibit Executive from being a passive owner of not more than 2% of the
outstanding stock of any class of a competing corporation which is publicly
traded so long as Executive has no direct or indirect active participation in
the business of such corporation.
          (b) Non-Solicitation. During the Noncompete Period, Executive shall
not, directly or indirectly, (i) employ any individual who is or was an employee
of Associated during Executive’s with Employer and who is or was granted options
to purchase stock of Associated or who is or was a party to an employment or
severance agreement with Associated; (ii) solicit for employment or otherwise
contract for the services of any individual who is or was an employee of
Associated during Executive’s employment with Employer; (iii) otherwise induce
or attempt to induce any employee of Associated to leave the employ of
Associated, or in any way knowingly interfere with the relationship between
Associated and any employee respectively thereof; or (iv) induce or attempt to
induce any customer, supplier, licensee or other business relation of Associated
to cease doing business with Associated.
          (c) Proprietary Information. Executive agrees that he shall not use
for his own purpose or for the benefit of any person or entity other than
Employer or its shareholders or affiliates, nor shall Executive otherwise
disclose to any individual or entity any proprietary information of Employer
unless such disclosure (i) has been authorized by Employer’s board of directors
or (ii) is required by law, a court of competent jurisdiction or a governmental
or regulatory agency. For purposes of this Agreement, “proprietary information”
shall mean: (a) the name or address of any customer, supplier or affiliate of
Employer or any information concerning the transactions or relations of any
customer, supplier or affiliate of Employer or any of its shareholders; (b) any
information concerning any product, service, technology or procedure offered or
used by Employer, or under development by or being considered for use by
Employer;

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(c) any information relating to marketing or pricing plans or methods, capital
structure, or any business or strategic plans of Employer; (d) any inventions,
innovations, trade secrets or other items covered by Section 8(d) below; and
(e) any other information which the Board has determined by resolution and
communicated to Executive in writing to be proprietary information for purposes
hereof. However, proprietary information shall not include any information that
is or becomes generally known to the public other than through actions of
Executive in violation of this Section 8.
          (d) Surrender of Records. Executive agrees that he shall not retain
and shall promptly after the date hereof surrender to Employer all
correspondence, memoranda, files, manuals, financial, operating or marketing
records, magnetic tape, or electronic or other media of any kind which may be in
Executive’s possession or under his control or accessible to him which contain
any proprietary information as defined in Section 8(c) above. Upon written and
specific request by Executive, Employer will consider permitting Executive to
retain one copy of management presentations and similar items which do not
contain any proprietary information as defined in Section 8(c) above.
          (e) Inventions and Patents. Executive agrees that all inventions,
innovations, trade secrets, patents and processes in any way relating, directly
or indirectly, to Employer’s business developed by him alone or in conjunction
with others at any time during his employment by Employer shall belong to
Employer. Executive will use his best efforts to perform all actions reasonably
requested by the Board of Directors of Employer to establish and confirm such
ownership by Employer.
          (f) Enforcement. The parties hereto agree that the duration and area
for which the covenants set forth in this Section 8 are to be effective are
reasonable. The periods under the covenants in this Section 8 shall be extended
by one day for each day that Executive is in violation thereof. In the event
that any court or arbitrator determines that the time period or the area, or
both of them, are unreasonable and that any of the covenants are to that extent
unenforceable, the parties hereto agree that such covenants will remain in full
force and effect, first, for the greatest time period, and second, in the
greatest geographical area that would not render them unenforceable. The parties
intend that this Agreement will be deemed to be a series of separate covenants,
one for each and every county of each and every state of the United States of
America. Executive agrees that damages are an inadequate remedy for any breach
of the covenants in this Section 8 and that Associated will be entitled, in
addition to and not in lieu of monetary damages or any other remedy available to
Associated at law, to equitable relief in the form of preliminary and permanent
injunctions without bond or other security upon any actual or threatened breach
of this Agreement.
     9. Release. For valuable consideration, including without limitation the
Fee Payments, Executive hereby for himself and his successors, heirs, executors,
administrators and assigns, does hereby remise, release and forever discharge
Associated and Associated’s parent(s), predecessors, successors, divisions,
subsidiaries, affiliates and assigns and their respective current and former
officers, directors, agents, employees and counsel, individually and in their
official capacities, from all manner of actions, causes of action, suits, debts,
sums of money, bonds, bills, contracts, controversies, agreements,
indemnification rights, promises, damages, judgments, claims and demands
whatsoever, at law or in equity, whether known or unknown, up

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until the time that this Agreement is executed by Executive, including but not
limited to claims pursuant to federal, state or local law, regulation or
executive order prohibiting discrimination in employment, including, but not
limited to, all claims under the Age Discrimination in Employment Act, Title VII
of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Employee
Retirement Income Security Act and the Americans with Disabilities Act, which
Executive or his successors, heirs, executors, administrators or assigns ever
had, now has or hereafter can, shall or may have, for, upon or by reason of his
employment by Employer or any interest in Associated, or the shares of the
capital stock of AMH II, or any agreement, instrument, matter, cause or thing
whatsoever, including any action alleging a supposed breach of contract or tort,
claims for severance pay, back pay, wage/salary increase, expenses, benefits,
bonus(es), options, phantom stock, severance, re-employment, service letters,
compensatory or punitive damages, attorneys’ fees and all claims for any other
type of damage relief or any other theory of law. The release contained in this
Section 9 shall not release AMH II from its obligations under the terms of this
Agreement.
     10. Miscellaneous.
          (a) Entire Agreement. This Agreement, together with the Option
Agreements, the Employment Agreement (as modified by this Agreement) and, if
executed in accordance with the terms hereof, the General Release, is the entire
agreement between Executive and Associated with regard to the clarification of
all existing legal rights and obligations related to (i) Executive’s employment
by Employer, (ii) the Class B Shares and (iii) the Options.
          (b) Disclaimer of Wrongdoing. This Agreement shall not be construed as
an admission by Associated of any wrongdoing or any violation of federal, state
or local law, statute or ordinance, and Associated specifically disclaims and
denies any wrongdoing whatsoever against Executive by it, its employees,
representatives, or agents.
          (c) No Representations, Warranties, Promises or Inducements. Executive
acknowledges that the only consideration for him signing this Agreement are the
terms stated herein, that no other promise, agreement, statement or
representation of any kind has been made to him by any person or entity to cause
him to sign this Agreement, that he is competent to execute this Agreement, that
he fully understands the meaning and intent of the promises and covenants
contained herein, and that he is voluntarily executing this Agreement without
reservation and of his own free will. Other than as stated herein, no promises
of inducement have been offered to Executive in consideration for his acceptance
and agreement to the terms of this Agreement.
          (d) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon AMH II and Employer and their successors and assigns and
Executive and his heirs and personal representatives, but Executive’s rights
hereunder are personal to him and shall not be subject to voluntary or
involuntary alienation, assignment or transfer.
          (e) Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without reference to its
choice of law rules.

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          (f) Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by AMH II, Employer and
Executive or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part
any party hereto of any right, power or privilege hereunder, or any single or
partial exercise of any right, power or privilege hereunder, preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies that any party hereto may otherwise
have at law or in equity.
          (g) Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
          (h) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
          (i) Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
          (j) Conflicts. In the event that any of the terms or conditions
contained in this Agreement are inconsistent or otherwise conflict with any of
the terms and conditions of the Employment Agreement, the terms and conditions
of this Agreement shall govern and control.
          (k) Age Discrimination in Employment Act. Executive hereby represents
and acknowledges that he is being given 21 days to consider whether to sign this
Agreement (including the general release of claims set forth in Section 9
hereof) and that he has seven (7) days from the date that he signs this
Agreement to revoke this Agreement. Any revocation of this Agreement must be in
writing and personally delivered to Employer, 3737 State Road, Cuyahoga Falls,
Ohio 44224, Attn: Chief Financial Officer, or if mailed, postmarked within seven
(7) days of the date upon which it was signed by you.
          (l) EXECUTIVE HEREBY ACKNOWLEDGES AND AGREES THAT HE HAS READ THIS
AGREEMENT; FULLY UNDERSTANDS AND ACCEPTS ALL OF ITS TERMS AND CONDITIONS OF HIS
OWN FREE WILL; AND THAT HE HAS HAD AN ADEQUATE OPPORTUNITY TO DISCUSS THIS
AGREEMENT WITH AN ATTORNEY OF HIS CHOOSING AND HAS DONE SO OR VOLUNTARILY
ELECTED NOT TO DO SO.
[the remainder of this page is intentionally left blank]

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     IN WITNESS WHEREOF, this Agreement is made effective as of the Effective
Date.

            AMH HOLDINGS II, INC.
      By:   /s/ D. Keith LaVanway         Name:   D. Keith LaVanway       
Title:   Vice President - Finance,
Chief Financial Officer,
Treasurer and Secretary        AMH HOLDINGS, INC.
      By:   /s/ D. Keith LaVanway         Name:   D. Keith LaVanway       
Title:   Vice President - Finance,
Chief Financial Officer,
Treasurer and Secretary        ASSOCIATED MATERIALS HOLDINGS, INC.
      By:   /s/ D. Keith LaVanway         Name:   D. Keith LaVanway       
Title:   Vice President - Finance,
Treasurer and Secretary        ASSOCIATED MATERIALS INCORPORATED
      By:   /s/ D. Keith LaVanway         Name:   D. Keith LaVanway       
Title:   Vice President - Finance,
Treasurer and Secretary              /s/ Michael Caporale, Jr       Michael
Caporale, Jr.         

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Schedule 1
Options and Option Agreements
Options to purchase 134,204 shares of Class B, Series II (Non-Voting) Common
Stock of AMH Holdings II, Inc., subject to vesting, granted pursuant to the
Stock Option Award Agreement, dated September 4, 2002, between Michael Caporale
and AMH Holdings, Inc.

 

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EXHIBIT A
April 11, 2006
Michael Caporale, Jr.
c/o Associated Materials Incorporated
3773 State Road
Cuyahoga Falls, OH 44223
Re:     General Release
          Dear Michael:
          In connection with the termination of your employment, Associated
Materials Incorporated (“AMI”) is prepared to provide you with the following
severance payments and benefits (which are described in Section 5 of your
employment agreement, dated July 27, 2004 (the “Employment Agreement”) and
Section 2 of your Separation Agreement and General Release, dated April 11, 2006
(the “Separation Agreement”)):
               (i) A severance payment equal to $1,000,000 per year for two
years, with such payment(s) to commence on July 1, 2006 (the “Severance
Period”). Such payment(s) shall be made in accordance with AMI’s normal payroll
practices and be reduced by deductions or withholdings required by law.
               (ii) Employer will continue to provide Executive with the medical
and dental benefits currently provided to Executive from the date hereof through
the Severance Period, at the same rate of employee and Employer shared costs of
such coverage as in effect from time to time for active employees of Employer.
               (iii) To the extent incentive bonuses are payable to the top five
(5) most senior executives of Employer (other than the Executive) for the fiscal
year 2006, Employer will pay Executive one half of the incentive bonus that
would be payable to the Executive for the fiscal year 2006 based upon the same
performance criteria with respect to Associated that are applicable to such five
executives (notwithstanding anything to the contrary contained in the Employment
Agreement), in accordance with Executive’s Board-approved bonus policy for such
executives, payable when incentive bonuses, if any, are paid to the executives
of Employer.
          In order to be eligible to receive the payments and benefits described
above to which you are not otherwise entitled, you are required to agree to the
terms contained in this

 

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General Release, indicate your agreement by signing and returning this General
Release and not revoke this General Release as provided below.
          In consideration for the payments and other benefits described above
to which you are not otherwise entitled, you hereby for yourself and your
successors, heirs, executors, administrators and assigns, do hereby remise,
release and forever discharge AMI, AMH Holdings II, Inc., AMH Holdings, Inc. and
Associated Materials Holdings, Inc. and each of their respective parent(s),
predecessors, successors, divisions, subsidiaries, affiliates and assigns and
their respective current and former officers, directors, agents, employees and
counsel, individually and in their official capacities, from all manner of
actions, causes of action, suits, debts, sums of money, bonds, bills, contracts,
controversies, agreements, indemnification rights, promises, damages, judgments,
claims and demands whatsoever, at law or in equity, whether known or unknown, up
until the time that this Agreement is executed by Executive, including but not
limited to claims pursuant to federal, state or local law, regulation or
executive order prohibiting discrimination in employment, including, but not
limited to, all claims under the Age Discrimination in Employment Act, Title VII
of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Employee
Retirement Income Security Act and the Americans with Disabilities Act, which
Executive or his successors, heirs, executors, administrators or assigns ever
had, now has or hereafter can, shall or may have, for, upon or by reason of his
employment by Employer or any interest in Associated, or the shares of the
capital stock of Associated, or any agreement, instrument, matter, cause or
thing whatsoever, including any action alleging a supposed breach of contract or
tort, claims for severance pay, back pay, wage/salary increase, expenses,
benefits, bonus(es), options, phantom stock, severance, re-employment, service
letters, compensatory or punitive damages, attorneys’ fees and all claims for
any other type of damage relief or any other theory of law. By signing this
Agreement and Release, you are providing a complete waiver of all claims that
may have arisen, whether known or unknown, up until the time that this Agreement
and Release is executed. Notwithstanding the foregoing, this General Release
does not release AMI from its obligations under the terms of this General
Release.
          You acknowledge and agree that you continue to be bound by the terms
of the Separation Agreement, including the covenants contained in Sections 7 and
8 thereof, and the General Release contained in Section 9 thereof (relevant
sections of the Separation Agreement and General Release and the Employment
Agreement are attached hereto and incorporated herein as Exhibits A and B
respectively).
          If you breach this Agreement and Release, AMI will seek restitution
and/or offset of any payments or benefits provided to the extent permitted by
law.
          You represent that you have not commenced or participated in any
proceeding of any kind (on behalf of yourself, any other person or as a member
of any alleged class of persons) that is pending in any court or before any
administrative or investigative body or agency (whether public, quasi-public or
private) against or involving any of Associated or any Associated Officials and
that you have not assigned or transferred your rights with respect to any Claims
covered by this General Release. In addition, if you do commence or participate
in any such proceeding, you agree that this General Release will be a complete
defense in any such proceeding and you (and your heirs, administrators,
executors, successors and assigns) will not

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seek, obtain or receive, and that you will have no right to seek, obtain or
receive any award, recovery, settlement or relief of any kind whatsoever as a
result of any such proceeding.
          Since your execution of this Agreement and Release releases Associated
and any Associated Officials from all claims you may have, you should review
this carefully before signing it. You can take at least twenty-one (21) days
from your receipt of this Agreement and Release to consider its meaning and
effect and to determine whether you wish to enter into it. You are advised to
consult with anyone of your choosing, including an attorney, prior to executing
this Agreement and Release.
          Once you have signed this Agreement and Release, you may choose to
revoke your execution within seven (7) days. Any revocation of this Agreement
and Release must be in writing and personally delivered to Keith LaVanway,
Associated Materials, Inc., 3773 State Road, Cuyahoga Falls, OH 44223 or, if
mailed, postmarked within seven (7) days of the date upon which it was signed by
you.
          TO RECEIVE THE PAYMENTS AND OTHER BENEFITS DESCRIBED ABOVE TO WHICH
YOU ARE NOT OTHERWISE ENTITLED, YOU MUST SIGN AND RETURN THE AGREEMENT AND
RELEASE NO LATER THAN May 2, 2006. This Agreement and Release should be returned
to Keith LaVanway, Associated Materials, Inc., 3773 State Road, Cuyahoga Falls,
OH 44223. AMI will not make any payments or provide any benefits pursuant to
this Agreement and Release until after the seven (7) day period expires and
provided that you have not revoked this General Release.
          This Agreement and Release (including the relevant sections of the
Separation Agreement and General Release and the Employment Agreement) contains
the entire understanding of the parties relating to the subject matter hereof.
You acknowledge that no representations, oral or written, have been made other
than those expressly set forth herein, and that you have not relied on any other
representations in executing this Agreement and Release. This Agreement and
Release may be modified only in a document signed by the parties and referring
specifically hereto.
Sincerely yours,
Associated Materials Incorporated

/s/ D. Keith LaVanway
D. Keith LaVanway
Vice-President and CFO
AGREED TO AND ACCEPTED:
/s/ Michale Caporale, Jr.                                        
Michael Caporale, Jr.
Date: April 11, 2006

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