exv10w1



 





Exhibit 10.1




AGREEMENT




        THIS AGREEMENT (the “Agreement”) made effective as of October 26, 2004
(the “Effective Date”), by and between NCI Building Systems, Inc., a Delaware
corporation with its principal office in the State of Texas (the “Company”) and
Robert J. Medlock (the “Employee”);



WITNESSETH:




        WHEREAS, the Employee has served as an employee and executive officer of
the Company, including its Chief Financial Officer, since 1992; and



        WHEREAS, the Employee desires to retire as an executive officer of the
Company and all of its subsidiaries, including the positions of Executive Vice
President, Chief Financial Officer and Treasurer of Company; and



        WHEREAS, the Company desires that the Employee remain, and the Employee
has agreed to remain, as an employee of the Company in his current position
until the earlier to occur of certain events or a date specified herein, and
thereafter the Employee has agreed to remain an employee in a consultant
capacity; and



        WHEREAS, in consideration of the mutual promises contained herein, the
parties hereto are willing to enter into this Agreement upon the terms and
conditions herein set forth.



        NOW, THEREFORE, in consideration of the premises, the terms and provisions
set forth herein, the mutual benefits to be gained by the performance thereof
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:



     1. Resignation from Officer Positions. The Employee agrees to remain
employed in his current positions in a full-time capacity through the
Transition Date (as defined below). Effective as of the Transition Date, the
Employee agrees to resign each of his officer positions with the Company and
any of its subsidiaries. “Transition Date” means the earlier of (i) the close
of business on April 30, 2005, or (ii) the date that the Board of the Directors
of the Company appoints an individual to assume, and that individual begins to
serve in, the position of Chief Financial Officer of the Company.



     2. Employment and Separation from Employment. Following the Transition
Date, the Company hereby agrees to continue the Employee in its employ, and the
Employee hereby agrees to remain in the employ of the Company, for the Advisory
Period (as defined below). During the Advisory Period, the Employee agrees to
perform the services set forth below up to a maximum time commitment of 120
hours per year, prorated for partial years; provided, however, that the
Employee shall not be obligated



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to perform such services to the extent they would interfere with the Employee’s pursuit
of other personal and business interests not inconsistent with the terms
of this Agreement:




     A. Provide such services as are reasonably necessary to assist
the Company in a transition of the Employee’s responsibilities as an
officer of the Company and its subsidiaries to any successor to such
responsibilities,




     B. Respond to the best of his knowledge and belief to any
questions posed by or on behalf of the Company regarding any
litigation in which the Company or any affiliate is then or may become
involved, and




     C. Perform such other consulting services for the Company and its
affiliates as shall be reasonably requested by the Chief Executive
Officer of the Company and are not inconsistent with the Employee’s
prior duties and responsibilities as an officer of the Company.


The “Advisory Period” shall be the period from the Transition Date through
November 1, 2014 (the “Termination Date”). Unless earlier terminated pursuant
to Section 4, the Employee’s employment with the Company shall terminate as of
the Termination Date.



     3. Salary and Benefits. Except as otherwise set forth in Section 4, the
Employee shall be entitled to the consideration set forth below during the
period beginning on the Effective Date and ending on the Termination Date.




     A. Salary. From the Effective Date through April 30, 2005, the
Employee shall continue to receive the Employee’s base salary as in
effect as of the Effective Date, payable in accordance with the
Company’s regular payroll practices. From May 1, 2005 through the
Termination Date, the Employee shall receive a base salary of $50,000
per annum, payable in accordance with the Company’s regular payroll
practices.




     B. Bonus. The Employee shall be eligible for a bonus for the
Company’s 2004 fiscal year at the executive bonus level in effect for
Employee on the Effective Date. The Employee shall not be eligible
for a bonus thereafter unless approved by the senior management or
Board of Directors of the Company, in their discretion. The senior
management and Board of Directors shall give consideration to paying a
bonus to the Employee for the 2005 fiscal year.




     C. Restricted Stock and Options. From May 1, 2005 through
December 31, 2009, the Employee shall be eligible for ten semi-annual
awards of restricted stock of the Company (“Restricted Stock Awards”).
Each semi-annual Restricted Stock Award shall be for a number of
shares that as of the date of such award have an aggregate Fair Market
Value (as defined in the appropriate stock incentive plan) of $25,000.
The Restricted Stock Awards shall be subject to vesting terms
consistent with such terms under the most recent Restricted Stock
Agreement issued to the Employee prior to the Effective Date,
including the provision for full vesting in the event of the



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Employee’s death, and shall be subject to all other terms and
conditions of the plan and award agreements under which the Restricted
Stock Awards are granted. Notwithstanding the foregoing, for purposes
of determining the exercisability and term of stock options and
vesting of restricted stock granted to the Employee prior to April 30,
2005 (including Restricted Stock Awards granted hereunder), the
Employee shall be deemed to have retired effective April 30, 2005, and
for purposes of the Restricted Stock Awards granted hereunder after
April 30, 2005 the Executive shall not be eligible for vesting due to
retirement.




     D. Welfare Benefits. The Employee and his spouse shall be
eligible to participate in the group health and medical benefit
programs that are generally made available to active employees of the
Company at the applicable active employee premium rate. In addition,
the Employee shall be eligible to participate in long-term healthcare
insurance coverage, if any, which is made available to employees of
the Company, subject to the terms and conditions of such coverage and
to payment of applicable premiums.




     E. Other Benefits. From the Effective Date through April 30,
2005, the Employee shall continue to participate in the Company’s
employee benefit plans and programs and perquisites on the same terms
and conditions applicable to executive management employees on the
Effective Date. Except as specifically set forth above in subsection
D., from and after May 1, 2005, the Employee shall not be eligible to
participate in any employee benefit plan or program, including without
limitation 401(k), retirement, profit-sharing, bonus, severance or any
other plan or program made available to employees of the Company and
its affiliates. The Employee shall be eligible for payment of
vacation and sick day accruals through April 30, 2005, payable as soon
as practicable after that date.




     F. Reimbursement of Expenses. The Company will reimburse the
Employee for reasonable travel and other business expenses incurred by
him in the fulfillment of his duties hereunder upon presentation by
the Employee of an itemized account of such expenditures, in
accordance with Company practices and policies.



     4. Termination of Employment. Notwithstanding the provisions of Sections
1 and 2, the Employee’s employment with the Company may be terminated in any of
the following ways:




     A. Termination without Cause, Disability. If the Employee’s
employment with the Company is terminated by the Company without Cause
(as defined in Section 4.B. below) or if the Employee or Employer
terminates employment due to total and permanent disability, the
Employee shall continue to receive the salary and benefits provided
under Section 3 as if he had remained employed through the Termination
Date. In the event of the Employee’s death after termination under
this Section 4.A., the Employee’s



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surviving spouse, if any, shall be entitled to receive continued
salary payments as provided in Section 3.A., and to continued health
and medical coverage as provided under Section 3.D., through the
period ending on the earlier of (i) the Termination Date, or (ii) the
date of her death.




     B. Termination for Cause and Voluntary Termination. If the
Employee’s employment with the Company is terminated by the Company
for Cause (as defined below) or if the Employee voluntarily terminates
employment for any reason other than a total and permanent disability,
the Company’s obligation to make the payments or provide the benefits
listed under Section 3 of this Agreement shall immediately terminate
as of the date of the Employee’s termination. For purposes of this
Agreement, “Cause” shall mean: (A) the Employee’s willful and
continued failure to substantially perform his duties and other
obligations under this Agreement and such failure continues for a
period of thirty (30) days after written notice by the Company of the
existence of such failure; provided, however, that only one such
notice by the Company need be sent and, if such failure re-occurs
thereafter, no further notice and opportunity to cure such failure
shall be required; or (B) the Employee’s willful misconduct that is
materially and demonstrably injurious to the Company or its
affiliates; provided, however, that the Board of Directors of the
Company or the Chairman of the Board must first provide to Employee
written notice clearly and fully describing the particular acts or
omissions which the Board or the Chairman of the Board reasonably
believes in good faith constitutes Cause under this clause (B) and an
opportunity, within thirty (30) days following this receipt of such
notice, to meet in person with the Board of Directors or the Chairman
of the Board to explain or defect the alleged acts or omissions relied
upon by the Board of Directors and, to the extent practicable, to cure
such acts or omissions. For purposes of this Agreement, any
termination of Employee’s employment for Cause shall be effective only
upon delivery to Employee of a certified copy of a resolution of the
Board of Directors of the Company, adopted by the affirmative vote of
a majority of the entire membership of the Board of Directors
following a meeting at which Employee was given an opportunity to be
heard on at least five business days’ advance notice, finding that
Employee was guilty of the conduct constituting Cause, and specifying
the particulars thereof.




     C. Death. The Employee’s employment under this Agreement shall
terminate automatically upon his death, and the Employee’s surviving
spouse, if any, shall be entitled to receive continued salary payments
as provided in Section 3.A., and to continued health and medical
coverage as provided under Section 3.D., through the period ending on
the earlier of (i) the Termination Date, or (ii) the date of her
death.



     5. Restrictive Covenants. As a material inducement to the Company to
enter into this Agreement, the Employee agrees to the restrictive covenants set
forth below:



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     A. Non-Competition. During the Advisory Period and for a period
of five (5) years following the termination of employment, the
Employee shall not, directly or indirectly and whether on his own
behalf or on behalf of any other person, partnership, association,
corporation or other entity, engage in or be an owner, director,
officer, employee, agent, consultant or other representative of or
for, or lend money or equipment to or otherwise support, any business
that manufactures, engineers, markets, sells or provides, within a
250-mile radius of any then existing manufacturing facility of the
Company and its subsidiaries and affiliates, metal building systems or
components (including, without limitation, primary and secondary
framing systems, roofing systems, end or side wall panels, doors,
windows or other metal components of a building structure), coated or
painted steel or metal coils, coil coating or painting services, or
any other products or services that are the same as or similar to
those manufactured, engineered, marketed, sold or provided by the
Company or its subsidiaries and affiliates prior to the Termination
Date. Ownership by the Employee of equity securities of the Company,
or of equity securities in other publicly owned companies constituting
less than 1% of the voting securities in such companies, shall be
deemed not to be a breach of this covenant.




     B. Non-Solicitation. During the Advisory Period and for a period
of five (5) years following the termination of employment, the
Employee shall not, directly or indirectly and whether on his own
behalf or on behalf of any other person, partnership, association,
corporation or other entity, either (i) hire, seek to hire or solicit
the employment or service of any employee, agent or consultant of the
Company or its Subsidiaries and affiliates; (ii) in any manner attempt
to influence or induce any employee, agent or consultant of the
Company or its Subsidiaries and affiliates to leave the employment or
service of the Company or its Subsidiaries and affiliates; (iii) use
or disclose to any person, partnership, association, corporation or
other entity any information concerning the names and addresses of any
employees, agents or consultants of the Company or its Subsidiaries
and affiliates unless required by due process of law; or (iv) call
upon, solicit, divert or attempt to call upon, solicit or divert the
business of any customer, vendor or acquisition prospect of the
Company or any of its Subsidiaries or affiliates with whom the
Employee dealt, directly or indirectly, during his engagement with the
Company or its Subsidiaries or affiliates.




     C. Confidential Information. For purposes of the covenants made
in this Section 5, the Company promises to provide the Employee (as is
necessary for the Employee’s position) with various trade secrets and
proprietary and confidential information consisting of, but not
limited to, processes, computer programs, compilations of information,
records, sales procedures, customer requirements, pricing techniques,
customer lists, methods of doing business and other confidential
information (collectively referred to as the “Trade Secrets”), which
are owned by the Company and regularly used in the operation of its
business, but in connection with which



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the Company takes precautions to prevent dissemination to persons
other than certain directors, officers and employees. The Employee
acknowledges and agrees that the Trade Secrets (i) are secret and not
known in the industry or to the public; (ii) are entrusted to him
after being informed of their confidential and secret status by the
Company and because of the fiduciary position occupied by him with the
Company; (iii) have been developed by the Company for, and on behalf
of, the Company through substantial expenditures of time, effort and
money and are used in its business; (iv) give the Company an advantage
over competitors who do not know or use the Trade Secrets; (v) are of
such value and nature as to make it reasonable and necessary to
protect and preserve the confidentiality and secrecy of the Trade
Secrets; and (vi) the Trade Secrets are valuable, special and unique
assets of the Company, the disclosure of which could cause substantial
injury and loss of profits and goodwill to the Company. The Employee
shall not use in any way or disclose any of the Trade Secrets,
directly or indirectly, during the Advisory Period, or at any time
thereafter, except as required in the course of his employment with
the Company. All files, records, documents, information, data and
similar items relating to the business of the Company, whether
prepared by the Employee or otherwise coming into his possession,
shall remain the exclusive property of the Company and shall not be
removed from the premises of the Company under any circumstances
without the prior written consent of the Board of Directors of the
Company (except in the ordinary course of business during the
Employee’s employment with the Company), and in any event shall be
promptly delivered to the Company upon termination of the Employee’s
employment for any reason. The Employee agrees that, upon his receipt
of any subpoena, process or other request to produce or divulge,
directly or indirectly, any Trade Secrets to any entity, agency,
tribunal or person, he shall timely notify and promptly deliver a copy
of the subpoena, process or other request to the Chairman of the Board
and Chief Executive Officer of the Company. For this purpose, the
Employee irrevocably nominates and appoints the Company (including any
attorney retained by the Company), as his true and lawful
attorney-in-fact, to act in his name, place and stead to perform any
act that he might perform to defend and protect against any disclosure
of any Trade Secrets.




     D. Non-Disparagement. The Employee agrees to refrain from any
criticisms or disparaging comments about the Company or any affiliates
(including any current or former officer, director or employee of the
Company), and the Employee agrees not to take any action, or assist
any person in taking any other action, that is adverse to the
interests of the Company or any affiliate or inconsistent with
fostering the goodwill of the Company and its affiliates; provided,
however, that nothing in this Agreement shall apply to or restrict in
any way the communication of information by the Company or the
Employee to any state or federal law enforcement agency or to the
Board of Directors or senior management of the Company or require
notice to the Company thereof, and the Employee will not be in breach
of the



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covenant contained above solely by reason of testimony which is
compelled by process of law.




     E. Enforcement.




     1. If in connection with the challenge by the Employee of any
provision of Section 5.A., any court of competent jurisdiction
determines that the non-competition agreement in Section 5.A.
hereof is void or unenforceable, or if the court modifies Section
5.A. and the Company declines to accept the modification, the
Employee shall forfeit all stock granted to the Employee under the
Restricted Stock Awards granted after the Effective Date which have
not vested and agrees to return to the Company (i) any vested
shares of stock granted to the Employee under such Restricted Stock
Awards (the “Vested Shares”) still owned by the Employee, and (ii)
an amount in cash or immediately available funds equal to the
aggregate net sales price received by the Employee for such shares
that are no longer held by the Employee or, if any of such shares
were transferred by the Employee for less than fair market value,
then an amount equal to the fair market value of the transferred
shares as of the trading date immediately prior to payment to the
Company, determined by using the last sales price of the Company’s
common stock (as reported by the New York Stock Exchange) on such
trading date.




     2. The Employee hereby agrees that a breach of any of the
provisions of this Section 5 would cause irreparable injury to the
Company and its affiliates, for which they would have no adequate
remedy at law. If the Employee breaches or threatens to breach any
of the covenants set forth in this Section 5, then without regard
for any provision to the contrary, the Company shall have the right
to immediately discontinue all payments and benefits under Section
3 to the Employee and his spouse and to immediately seek injunctive
relief from a court having jurisdiction for any actual or
threatened breach of this Section 5 without necessity of complying
with any requirement as to the posting of a bond or other security
(it being understood that the Employee hereby waives any such
requirement). Any such injunctive relief shall be in addition to
any other remedies to which the Company may be entitled at law, in
equity or otherwise. The Employee hereby agrees that upon receipt
of notice of the Company’s intent to seek injunctive relief, the
Employee will not sell, transfer, pledge, exchange, hypothecate, or
otherwise encumber or dispose of any shares of stock granted to the
Employee under the Restricted Stock Awards, or any right or
interest therein, pending the final resolution of such injunctive
relief proceeding. In addition, the Employee shall, within ten
(10) business days after it is ultimately determined that he has
committed such a breach hereof, either (i) redeliver to the Company
the Vested Shares, if still owned by the Employee, or (ii)
reimburse the Company an amount in cash or immediately available
funds equal to the aggregate net sales price received by the
Employee or, if any of said



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shares were transferred by the Employee for less than fair
market value, then an amount equal to the fair market value of the
transferred shares as of the trading date immediately prior to
payment to the Company, determined by using the last sales price of
the Company’s common stock (as reported by the New York Stock
Exchange) on such trading date. If it is determined that the
Employee has not committed a breach thereof, the Company shall
resume the payments and benefits under Section 3 and pay to
Employee and his spouse all payments and benefits under Section 3
that had been suspended pending such determination. The monetary
remedies set forth in this subsection shall be the sole and
exclusive remedies of the Company for monetary damages arising out
of a breach of the provisions of this Section 5.




     3. The parties hereto intend all provisions of subsections
(A), (B), (C) and (D) of this Section 5 to be enforced to the
fullest extent permitted by law. Accordingly, should a court of
competent jurisdiction determine that the scope of any provision of
subsections (A), (B), (C) or (D) of this Section 5 is too broad to
be enforced as written, the parties intend that the court may
reform the provision to such narrower scope as it determines to be
reasonable and enforceable, and, in the event the court reforms
Section 5.A hereof, the Company may elect to either accept
enforcement of the provision as so modified or require the return
of Vested Shares or cash as set forth in Section 5.E.1. In
addition, however, the Employee agrees that the non-competition
agreements, non-solicitation agreements, non-disclosure and
non-disparagement agreements set forth above each constitute
separate agreements independently supported by good and adequate
consideration and shall survive this Agreement. The existence of
any claim or cause of action of the Employee against the Company,
except for a breach of this Agreement by the Company or its
subsidiaries, shall not constitute a defense to the enforcement by
the Company of the covenants and agreements of the Employee
contained in the non-competition, non-employment, non-disclosure
and no litigation agreements.



     6. Stock Trading and Company Policies. During the period beginning on the
Effective Date and ending on the Transition Date, the Employee agrees to comply
with all of the Company’s policies with respect to trading in the Company’s
securities to the same extent as such policies are applicable to executive
officers of the Company including, without limitation, “blackout” periods
restricting or prohibiting trading in the Company’s securities, whether
regularly scheduled or imposed under special circumstances, and any “lockup”
requested by any underwriter with respect to an offering of the Company’s
securities, and during the Advisory Period the Employee agrees to comply with
the foregoing if he is in possession of material non-public information
relating to the Company.



     7. Non-Alienation. The Employee shall not have any right to pledge,
hypothecate, anticipate, or in any way create a lien upon any amounts provided
under



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this Agreement, and no payments or benefits due hereunder shall be
assignable in anticipation of payment either by voluntary or involuntary acts
or by operation of law. So long as the Employee lives, no person, other than
the parties hereto, shall have any rights under or interest in this Agreement
or the subject matter hereof. Upon the death of the Employee, his surviving
spouse, if any, shall have the right to enforce the provisions hereof.



     8. Assumption by Successors. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company to
assume expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no
succession had taken place and (a) if such successor does not expressly assume
and agree to perform this Agreement, or if such assumption does not occur by
operation of law, and (b) if such transaction satisfies the requirements to
avoid the imposition of an excise tax under the provisions of Section 409A of
the Internal Revenue Code and related regulations and Treasury pronouncements
(“Section 409A”) or such payment restrictions are otherwise inapplicable, then
the Company shall be obligated to make a cash payment to the Employee,
immediately following such succession (or, if later, the first date at which
payment can be made without incurring an excise tax under Section 409A of the
Code), equal to the aggregate value of (i) the salary otherwise payable
pursuant to Section 3.A. for the remainder of the term of this Agreement,
without reduction for early payout, (ii) a sum equivalent to the number of
months remaining under the term of the Agreement, multiplied by the most recent
applicable rate charged to terminated employees for continuation of comparable
health insurance coverage (COBRA coverage), with no offset for the Employee’s
portion of the premium, and (iii) a sum equal to $25,000, without reduction for
early payout, multiplied by the number of remaining semi-annual grants of
Restricted Stock Awards that otherwise would have been made under this
Agreement had no succession taken place.



     9. Amendment of Agreement. This Agreement may not be modified or amended
except by an instrument in writing signed by the parties hereto.



     10. Waiver. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be an estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel.



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     11. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:


To the Company:


NCI Building Systems, Inc.

10943 North Sam Houston Parkway West

Houston, Texas 77064

Attention: General Counsel


To the Employee:


Robert J. Medlock

13826 Quail Forest

Cypress, Texas 77429


Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto.



     12. Source of Payments: All cash payments provided in this Agreement will
be paid from the general funds of the Company. The Employee’s status with
respect to amounts owed under this Agreement will be that of a general
unsecured creditor of the Company, and the Employee will have no right, title
or interest whatsoever in or to any investments which the Company may make to
aid the Company in meeting its obligations hereunder. Nothing contained in
this Agreement, and no action taken pursuant to this provision, will create or
be construed to create a trust of any kind between the Company and the Employee
or any other person.



     13. Tax Withholding. The Company may withhold from any benefits payable
under this Agreement all federal, state, city or other taxes that will be
required pursuant to any law or governmental regulation or ruling.



     14. Severability. If any provision of this Agreement is held to be
invalid, illegal or unenforceable, in whole or part, such invalidity will not
affect any otherwise valid provision, and all other valid provisions will
remain in full force and effect.



     15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, and all of which
together will constitute one document.



     16. Titles. The titles and headings preceding the text of the paragraphs
and subparagraphs of this Agreement have been inserted solely for convenience
of reference and do not constitute a part of this Agreement or affect its
meaning, interpretation or effect.



     17. Governing Law. This Agreement will be construed and enforced in
accordance with the laws of the State of Texas.



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     18. Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof, and supersedes all prior
agreements between the parties concerning the subject hereof. Nothing in this
Agreement shall affect the Employee’s right to benefits under the terms of any
employee benefit plan of the Company in which the Employee has participated or
may participate. It is specifically understood and agreed that the Employee
shall be entitled to the benefit provided to him under the terms of the NCI
Building Systems, Inc. Supplemental Benefit Plan, as amended and restated on
December 12, 2002, determined in accordance with the terms of that plan using
April 30 2005 as the “Normal Retirement Date” for purposes of the plan, and
subject to such modifications as the Employee and the Company determine are
appropriate to comply with Section 409A.




     IN WITNESS WHEREOF, the parties have executed this Agreement in multiple
counterparts, all of which shall constitute one agreement, effective as of the
date of execution by all parties hereto.



	 	 	 	 	 
	 
	 	NCI BUILDING SYSTEMS, INC.
	  
	 	 	 	 
	

	 	By:	 	/s/ A.R. Ginn 
	

	 	 	 	

	

	 	 	 	A.R. Ginn
	

	 	 	 	Chairman of the Board, President
	

	 	 	 	and Chief Executive Officer
	 
	 	 	 	 
	

	 	Date:	 	October 26, 2004 
	

	 	 	 	

	 
	 	 	 	 
	ATTEST:
	 	 	 	 
	 
	/s/ Todd R. Moore 
	 	 	 	 
	

	 	 	 	 
	Todd R. Moore
	 	 	 	 
	Vice President & General Counsel
	 	 	 	 
	 
	 	 	 	 
	 
	 	ROBERT J. MEDLOCK
	 
	 
	 	/s/ Robert J. Medlock 
	 
	 	
 
	 
	 	 	 	 
	 
	 	Date:    October
26, 2004











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