Exhibit 10.1



 






Exhibit 10.1




EMPLOYMENT AGREEMENT




          EMPLOYMENT AGREEMENT (this “Agreement”), dated as of November 28, 2005, by and between
ASSOCIATED MATERIALS INCORPORATED, a Delaware corporation (the “Company”), and a wholly
owned indirect subsidiary of AMH Holdings II, Inc., a Delaware corporation (“AMH”), and
TREVOR DEIGHTON, an individual residing in the State of Maryland (the “Executive”).




W I T N E S S E T H :




          WHEREAS, the Company desires to retain the services and employment of the Executive on behalf
of the Company, and the Executive desires to enter into such employment with the Company, upon the
terms and conditions hereinafter set forth.




          NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and for
good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto,
each intending to be legally bound hereby, agree as follows:




     1. Employment. On the terms and subject to the conditions set forth herein, the
Company hereby employs the Executive as the Vice President and Chief Operating Officer of the
Company, and the Executive accepts such employment, for the Employment Term (as defined in Section
3). During the Employment Term, the Executive shall serve as the Vice President and Chief
Operating Officer of the Company and shall report to the President and Chief Executive Officer of
the Company, performing such duties as shall be reasonably required of a Vice President and Chief
Operating Officer, and shall have such other powers and perform such other duties as may from time
to time be assigned to him by the President and Chief Executive Officer of the Company and the
Board of Directors of the Company (the “Board”). To the extent requested by the Company’s
President and Chief Executive Officer or the Board, the Executive shall also serve on the Board or
any committee of the Board and/or as a director, officer or employee of AMH or any other person or
entity which, from time to time, is a direct or indirect subsidiary of AMH (AMH and each such
subsidiary, person or entity, other than the Company, are hereinafter referred to collectively as
the “Affiliates,” and individually as an “Affiliate”). The Executive’s service as
a director of the Company or as a director, officer or employee of any Affiliate shall be without
additional compensation.



     2. Performance. The Executive will serve the Company faithfully and to the best of
his ability and will devote his full business time, energy, experience and talents to the business
of the Company and the Affiliates; provided, however, that it shall not be a violation of this
Agreement for the Executive to manage his personal investments and business affairs, or to engage
in or serve such civic, community, charitable, educational, or religious organizations as he may
reasonably select so long as such service does not interfere with the Executive’s performance of
his duties hereunder.



     3. Employment Term. Subject to earlier termination pursuant to Section 6, the
Executive’s term of employment hereunder shall begin on November 28, 2005 (hereinafter




 









 







referred to
as the “Commencement Date”) and continue through the date which is two (2) years following
the Commencement Date; provided, however, that beginning on the first anniversary of the
Commencement Date, and on each subsequent anniversary of the Commencement Date, such term shall be
automatically extended by an additional one (1) year beyond the end of the then-current term,
unless, at least thirty (30) days before such first anniversary of the Commencement Date, or thirty
(30) days before any such subsequent anniversary of the Commencement Date, the Company gives
written notice to the Executive that the Company does not desire to extend the term of this
Agreement, in which case, the term of employment hereunder shall terminate as of the second
anniversary of the Commencement Date or the end of the then-current term, as applicable (the term
of employment hereunder, including any extensions, in accordance with this Section 3, shall be
referred to herein as the “Employment Term”).




     4. Compensation and Benefits.



          (a) Salary. As compensation for his services hereunder and in consideration of the
Executive’s other agreements hereunder, during the Employment Term, the Company shall pay the
Executive a base salary, payable in equal installments in accordance with the Company’s payroll
procedures, at an annual rate of Four Hundred Thousand Dollars ($400,000), subject to annual review
by the Board, which may increase, but not decrease, the Executive’s base salary.




          (b) Annual Incentive Bonus and Long-Term Incentive Bonus. (1) Beginning with the
2006 calendar year, the Executive shall be entitled to participate in an annual incentive bonus
arrangement established by the Company on terms and conditions substantially as set forth in
Exhibit A hereto; provided, however, that with respect to calendar year 2005, the Executive
shall receive an annual incentive bonus in the amount equal to $280,000, payable after December 31,
2005; provided further, however, that with respect to the 2006 calendar year, the Executive’s
minimum annual incentive bonus shall be $100,000.





     (2) The Executive shall also be entitled to participate in a long-term incentive bonus
arrangement established by the Company on terms and conditions substantially as set forth in
Exhibit B hereto.



          (c) Retirement, Medical, Dental and Other Benefits. During the Employment Term, the
Executive shall, in accordance with the terms and conditions of the applicable plan documents and
all applicable laws, be eligible to participate in the various retirement, medical, dental and
other employee benefit plans made available by the Company, from time to time, for its executives.




          (d) Vacation; Sick Leave. During the Employment Term, the Executive shall be entitled
to not less than four (4) weeks of vacation during each calendar year and sick leave in accordance
with the Company’s policies and practices with respect to its executives.




          (e) Business Expenses. The Company shall reimburse or advance payment to the
Executive for all reasonable expenses actually incurred by him in connection with the
performance of his duties hereunder in accordance with policies established by the Company
from time to time and subject to receipt by the Company of appropriate documentation.





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     5. Covenants of the Executive. The Executive acknowledges that in the course of his
employment with the Company he has and will become familiar with the Company’s and the Affiliates’
trade secrets and with other confidential information concerning the Company and the Affiliates,
and that his services are of special, unique and extraordinary value to the Company and the
Affiliates. Therefore, the Company and the Executive mutually agree that it is in the interest of
both parties for the Executive to enter into the restrictive covenants set forth in this Section 5
and that such restrictions and covenants are reasonable given the nature of the Executive’s duties
and the nature of the Company’s business.



          (a) Noncompetition. During the Employment Term and for the Restricted Period (as
hereinafter defined) following termination of the Employment Term, the Executive shall not, within
any jurisdiction or marketing area in which the Company or any Affiliate 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 Business (as hereinafter defined), provided that the Executive’s ownership of securities
of two percent (2%) or less of any class of securities of a public company shall not, by itself, be
considered to be competition with the Company or any Affiliate. For purposes of this Agreement,
“Business” shall mean the manufacturing, production, distribution or sale of exterior
residential building products, including, without limitation, vinyl siding, windows, fencing,
decking, railings, or any other business of a type and character engaged in by the Company or an
Affiliate during the Employment Term. For purposes of this Agreement, the “Restricted
Period” shall be two (2) years.




          (b) Nonsolicitation. During the Employment Term and for the Restricted Period
following termination of the Employment Term, the Executive shall not, directly or indirectly, (i)
employ , solicit for employment or otherwise contract for the services of any individual who is or
was an employee of the Company or any Affiliate during the Employment Term; (ii) otherwise induce
or attempt to induce any employee of the Company or an Affiliate to leave the employ of the Company
or such Affiliate, or in any way knowingly interfere with the relationship between the Company or
any Affiliate and any employee respectively thereof; or (iii) induce or attempt to induce any
customer, supplier, licensee or other business relation of the Company or any Affiliate to cease
doing business with the Company or such Affiliate, or interfere in any way with the relationship
between any such customer, supplier, licensee or business relation and the Company or any
Affiliate.




     (c) Nondisclosure; Inventions. For the Employment Term and thereafter, (i) the
Executive shall not divulge, transmit or otherwise disclose (except as legally compelled by court
order, and then only to the extent required, after prompt notice to the Board of any such order),
directly or indirectly, other than in the regular and proper course of business of the Company and
the Affiliates, any customer lists, trade secrets or other confidential knowledge or information
with respect to the operations or finances of the Company or any Affiliates or with respect to
confidential or secret processes, services, techniques, customers or plans with respect to the
Company or the Affiliates (all of the foregoing collectively hereinafter referred to as,
“Confidential Information”), and (ii) the Executive will not use, directly or indirectly,
any
Confidential Information for the benefit of anyone other than the Company and the Affiliates;
provided, however, that the Executive has no obligation, express or implied, to refrain from using
or disclosing to others any such knowledge or information which is or hereafter shall become



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available to the general public other than through disclosure by the Executive. All Confidential
Information, new processes, techniques, know-how, methods, inventions, plans, products, patents and
devices developed, made or invented by the Executive, alone or with others, while an employee of
the Company which are related to the business of the Company and the Affiliates shall be and become
the sole property of the Company, unless released in writing by the Board, and the Executive hereby
assigns any and all rights therein or thereto to the Company.




          (d) Nondisparagement. During the Employment Term and thereafter, the Executive shall
not take any action to disparage or criticize the Company or any Affiliate or their respective
employees, directors, owners or customers or to engage in any other action that injures or hinders
the business relationships of the Company or any Affiliate. Nothing contained in this Section 5(d)
shall preclude the Executive from enforcing his rights under this Agreement.




          (e) Return of Company Property. All Confidential Information, files, records,
correspondence, memoranda, notes or other documents (including, without limitation, those in
computer-readable form) or property relating or belonging to the Company or an Affiliate, whether
prepared by the Executive or otherwise coming into his possession in the course of the performance
of his services under this Agreement, shall be the exclusive property of the Company and shall be
delivered to the Company, and not retained by the Executive (including, without limitations, any
copies thereof), promptly upon request by the Company and, in any event, promptly upon termination
of the Employment Term.




          (f) Enforcement. The Executive acknowledges that a breach of his covenants contained
in this Section 5 may cause irreparable damage to the Company and the Affiliates, the exact amount
of which would be difficult to ascertain, and that the remedies at law for any such breach or
threatened breach would be inadequate. Accordingly, the Executive agrees that if he breaches or
threatens to breach any of the covenants contained in this Section 5, in addition to any other
remedy which may be available at law or in equity, the Company and the Affiliates shall be entitled
to specific performance and injunctive relief to prevent the breach or any threatened breach
thereof without bond or other security or a showing that monetary damages will not provide an
adequate remedy.




          (g) Scope of Covenants. The Company and the Executive further acknowledge that the
time, scope, geographic area and other provisions of this Section 5 have been specifically
negotiated by sophisticated commercial parties and agree that all such provisions are reasonable
under the circumstances of the activities contemplated by this Agreement. In the event that the
agreements in this Section 5 shall be determined by any court of competent jurisdiction to be
unenforceable by reason of their extending for too great a period of time or over too great a
geographical area or by reason of their being too extensive in any other respect, they shall be
interpreted to extend only over the maximum period of time for which they may be enforceable and/or
over the maximum geographical area as to which they may be enforceable and/or to the maximum extent
in all other respects as to which they may be enforceable, all as determined by such court in such
action.




     6. Termination. The employment of the Executive hereunder shall automatically
terminate at the end of the Employment Term. The employment of the Executive hereunder and the
Employment Term may also be terminated at any time by the Company with or without



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Cause. For
purposes of this Agreement, except as otherwise provided in Section 8, “Cause” shall mean:
(i) embezzlement, theft or misappropriation by the Executive of any property of the Company or an
Affiliate; (ii) any breach by the Executive of the Executive’s covenants under Section 5; (iii) any
breach by the Executive of any other material provision of this Agreement which breach is not
cured, to the extent susceptible to cure, within thirty (30) days after the Company has given
notice to the Executive describing such breach; (iv) willful failure by the Executive to perform
the duties of his employment hereunder which continues for a period of fourteen (14) days following
written notice thereof by the Company to the Executive; (v) the conviction of, or a plea of nolo
contendere (or a similar plea) to, any criminal offense that is a felony or involves fraud, or any
other criminal offense punishable by imprisonment of at least one year or materially injurious to
the business or reputation of the Company involving theft, dishonesty, misrepresentation or moral
turpitude; (vi) gross negligence or willful misconduct on the part of the Executive in the
performance of his duties as an employee, officer or director of the Company or an Affiliate; (vii)
the Executive’s breach of his fiduciary obligations to the Company or an Affiliate; (viii) the
Executive’s commission of intentional, wrongful damage to property of the Company or an Affiliate;
(ix) any chemical dependence of the Executive which adversely affects the performance of his duties
and responsibilities to the Company or an Affiliate; or (x) the Executive’s violation of the
Company’s or an Affiliate’s code of ethics, code of business conduct or similar policies applicable
to the Executive. The existence or non-existence of Cause shall be determined in good faith by the
Board. The employment of the Executive may also be terminated at any time by the Executive by
notice of resignation delivered to the Company not less than ninety (90) days prior to the
effective date of such resignation.




     7. Severance. Except as otherwise provided in Section 8, if the Executive’s
employment hereunder is terminated during the Employment Term by the Company or is terminated due
to expiration of the Employment Term following notice by the Company not to extend the Employment
Term in accordance with Section 3, in each case other than for Cause or due to disability (as
determined in the good faith discretion of the Board) or death, the Executive shall be entitled to
receive as severance an amount equal to the Executive’s base salary as in effect immediately prior
to the date of the Executive’s termination of employment for the longer period of twelve (12)
months or the remaining Employment Term (payable, at the Company’s option, in a lump-sum on the
Termination Date or within five (5) business days thereafter, or in equal installments in
accordance with the Company’s payroll procedures during such applicable period following the date
of the Executive’s termination), and a pro rata portion (based on the number of days the Executive
was employed by the Company during the calendar year of termination) of any annual incentive bonus
otherwise payable in accordance with Section 4(b)(1) for the year of termination of the Executive’s
employment, payable no earlier than the date on which such bonus, if any, would have been paid
under the applicable plan or policy of the Company absent such termination of employment.



     8. Change in Control. Notwithstanding anything in this Agreement to the contrary,
this Section 8 will not be operative unless and until a Change in Control occurs. Upon the
occurrence of a Change in Control at any time during the Employment Term, this Section 8 shall
become immediately operative without further action; provided, however, that if, prior to a
Change in Control, the Executive ceases for any reason to be an employee of the Company or any
Affiliate, the effectiveness of this Section 8 will immediately terminate without further



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action
and be of no further effect. Certain capitalized terms used in this Section 8 are defined for
purposes of this Section 8 in Section 8(e).




          (a) Termination Following a Change in Control. In the event of a Change in Control,
if the Executive’s employment is terminated by the Company or an Affiliate during the Post-Change
Period (as defined below), the Executive shall be entitled to the benefits provided by Section 8(c)
unless such termination is the result of the occurrence of one or more of the following events:





	 	(i)	 	The Executive’s death;
	 
	 	(ii)	 	If the Executive becomes permanently disabled
within the meaning of, and begins actually to receive disability
benefits under, the long-term disability plan applicable to the
Executive immediately prior to the Change in Control; or
	 
	 	(iii)	 	Cause (as defined in Section 8(e)(i)).






If, during the Post-Change Period, the Executive’s employment is terminated by the Company
or an Affiliate other than as described in clause (i), (ii) or (iii) of this Section 8(a),
the Executive will be entitled to the benefits provided by Section 8(c).



          (b) Termination by Executive. In the event of a Change in Control, the Executive may
terminate employment with the Company during the Post-Change Period with the right to severance
compensation as provided in Section 8(c) upon the occurrence of one or more of the following events
(regardless of whether any other reason, other than death, permanent disability or Cause, for such
termination has occurred, including other employment):





	 	(i)	 	the failure to maintain the Executive in the position, or a
substantially equivalent or superior position, with the Company and/or with a
direct or indirect parent company of the Company that the Executive held
immediately prior to the Change in Control, which is not remedied by the
Company within 10 calendar days after receipt by the Company of written notice
from the Executive of such failure;
	 
	 	(ii)	 	(A) a reduction in the Executive’s base salary pursuant to
Section 4(a) hereof or (B) the termination or significant reduction in the
aggregate of the Executive’s right to participate in employee benefit plans or
programs of the Company as in effect prior to the Change in Control (other than
Incentive Pay (as hereinafter defined) or any other bonus, incentive or stock
or equity-based compensation or benefits), in either case which is not remedied
by the Company within 10 calendar days after receipt by the Company of written
notice from the Executive of such reduction or termination;
	 
	 	(iii)	 	a reduction or elimination of the Executive’s opportunity to
earn Incentive Pay pursuant to any plan or program in effect immediately prior
to the Change in Control which is not remedied by the Company within 10




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	 	 	 	calendar days after receipt by the Company of written notice from the Executive
of such reduction or elimination (for the avoidance of doubt, changes in the
value or performance of the Company or an Affiliate or successor of either
following the Change in Control shall not be considered a reduction or
elimination of the Executive’s opportunity to earn Incentive Pay); or
	 
	 	(iv)	 	the Company requires the Executive to have his principal place
of work changed to any location that is more than 35 miles from the location
thereof immediately prior to the Change in Control, without his prior written
consent.





          (c) Change in Control Severance. If, following the occurrence of a Change in Control,
the Company or an Affiliate terminates the Executive’s employment during the Post-Change Period
other than as described in clause (i), (ii) or (iii) of Section 8(a), or if the Executive
terminates his employment pursuant to Section 8(b), the Executive shall not be entitled to the
severance compensation described in Section 7, and the Company will (i) pay or cause to be paid to
the Executive the amounts described in Sections 8(c)(1), 8(c)(2), 8(c)(3) and 8(c)(6) on the
Termination Date or within five (5) business days thereafter; (ii) pay or cause to be paid to the
Executive the amount described in Section 8(c)(4), such amount to be payable no earlier than the
date on which such Incentive Pay, if any, would have been paid under the applicable plan or policy
of the Company absent such termination of employment; and (iii) provide the Executive the benefits
described in Section 8(c)(5) for the period described therein.





	 	(1)	 	A lump sum payment in an amount equal to all base salary and
Incentive Pay (other than for the calendar year of such termination of
employment) owed to the Executive for periods on or prior to the Termination
Date.
	 
	 	(2)	 	A lump sum payment in an amount equal to two times the
Executive’s base salary pursuant to Section 4(a) (at the rate in effect
immediately prior to the Termination Date).
	 
	 	(3)	 	A lump sum payment equal to two times Incentive Pay (in an
amount equal to the highest amount of Incentive Pay earned by the Executive in
any calendar year during the three calendar years immediately preceding the
calendar year in which the Change in Control occurred).
	 
	 	(4)	 	In the event that the Termination Date occurs after June 30 in
any calendar year, a lump sum payment equal to one times Incentive Pay for such
calendar year, multiplied by a fraction, the numerator of which is the number
of days between (and including) January 1 of the calendar year in which the
Termination Date occurs and the Termination Date, and the denominator of which
is 365.
	 
	 	(5)	 	For a period of 24 months following the Termination Date (the
“Continuation Period”), the Company will provide the Executive with
medical and dental insurance benefits consistent with the terms in effect




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	 	 	 	for
such benefits for active employees of the Company during the Continuation
Period. If and to the extent that any benefit described in this Section
8(c)(5) is not or cannot be paid or provided under any Company plan or program,
then the Company will pay or provide for the payment to the Executive, his
dependants and beneficiaries, of such employee benefits. Without otherwise
limiting the purposes of Section 8(d), employee benefits otherwise receivable
by the Executive pursuant to this Section 8(c)(5) will be reduced to the extent
comparable welfare benefits are actually received by the Executive from another
employer during the Continuation Period following the Executive’s Termination
Date, and any such benefits actually received by the Executive shall be
reported by the Executive to the Company.
	 
	 	(6)	 	The Company will pay to the Executive the cost of employee
outplacement services for the Executive in the amount of $30,000.





          (d) No Mitigation Obligation; Effect on Other Rights The payment of the severance
compensation by the Company to the Executive in accordance with the terms of this Section 8 is
hereby acknowledged by the Company to be reasonable, and the Executive will not be required to
mitigate the amount of any payment provided for in this Section 8 by seeking other employment or
otherwise, except as expressly provided in the last sentence of Section 8(c)(5). This Section 8
will not affect any rights (other than any rights to severance, termination, retention or similar
compensation or benefits) that the Executive may have pursuant to any agreement, plan or policy of
the Company or a Subsidiary providing employee benefits, which rights shall be governed by the
terms thereof.




          (e) Certain Defined Terms. The following terms have the following meanings when used
in this Section 8:





	 	(i)	 	“Cause” means that, prior to any termination pursuant
to Section 8(b), the Executive shall have:






	 	(1)	 	been convicted of a criminal violation
involving fraud, embezzlement or theft;
	 
	 	(2)	 	committed intentional wrongful damage to
property of the Company or any Affiliate; or
	 
	 	(3)	 	committed intentional wrongful disclosure of
confidential information of the Company or any Affiliate.






Nothing herein will limit the right of the Executive or his
beneficiaries to contest the validity of any determination by the
Company to terminate the Executive for Cause.




	 	(ii)	 	“Change in Control” means (A) a stock sale, merger,
consolidation, combination, reorganization or other transaction involving the
Company resulting in less than fifty percent (50%) of the combined voting power
of




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	 	 	 	the surviving or resulting entity being owned by the shareholders of the
Company immediately prior to such transaction; (B) a stock sale, merger,
consolidation, combination, reorganization or other transaction involving AMH,
AMH Holdings, Inc. (“AMH Holdings”) or Associated Materials Holdings
(“Holdings”) resulting in less than fifty percent (50%) of the combined
voting power of the surviving or resulting entity being owned by the
shareholders of AMH, AMH Holdings or Holdings, as applicable, immediately prior
to such transaction or (C) the liquidation or dissolution of the Company, AMH,
AMH Holdings or Holdings or the sale or other disposition of all or
substantially all of the assets or business of the Company, AMH, AMH Holdings
or Holdings (other than, in the case of either clause (A), (B) or (C) above, in
connection with any employee benefit plan of the Company or an Affiliate).
	 
	 	(iii)	 	“Incentive Pay” means an annual cash bonus or annual
cash incentive compensation, in addition to base salary, made or to be made in
regard to services rendered in any year or other period pursuant to any bonus,
incentive, profit-sharing, performance, discretionary pay or similar agreement,
policy, plan, program or arrangement (whether or not funded) of the Company or
an Affiliate, or any successor thereto; provided that the Incentive Pay shall
not include any stock options or other stock-based compensation or any special
management bonuses paid in connection with any debt offering or
recapitalization of AMH and/or another Affiliate. For the avoidance of doubt,
as of the date hereof, Incentive Pay shall mean the annual incentive bonus
arrangement described in Section 4(b)(1) but shall not mean the long-term
incentive bonus arrangement described in Section 4(b)(2).
	 
	 	(iv)	 	“Post-Change Period” means the period of time
commencing on the date of the first occurrence of a Change in Control and
continuing until the second anniversary of the occurrence of such Change in
Control.
	 
	 	(v)	 	“Termination Date” means the date on which the
Executive’s employment with the Company or an Affiliate is terminated.





     9. Termination of Compensation and Benefits; Execution of Release; Coordination of
Provisions. If the Executive’s employment terminates otherwise than in a termination entitling
him to severance pay and benefits pursuant to Section 7 or Section 8, the Executive shall not be
entitled to any severance, termination pay or similar compensation or benefits, provided that the
Executive shall be entitled to any benefits then due or accrued in accordance with the applicable
employee benefit plans of the Company or applicable law, including “continuation coverage” under
the Company’s group health plans for purposes of Section 4980B of the Internal Revenue Code of
1986, as amended (the “Code”). As a condition of receiving any severance compensation for
which the Executive otherwise qualifies under Section 7 or Section 8, the
Executive agrees to execute a general release of the Company and the Affiliates and their
respective officers, directors and employees from any and all claims, obligations and liabilities
of any kind whatsoever arising from or in connection with the Executive’s employment or



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termination
of employment with the Company or this Agreement (including, without limitation, civil rights
claims), in such form as is requested by the Company. Any severance compensation and benefits to
which the Executive may be entitled under Section 8 shall be in lieu of any severance compensation
or benefits to which the Executive may be entitled under Section 7. The Executive acknowledges and
agrees that, except as specifically described in Section 7 and Section 8, all of the Executive’s
rights to any compensation, benefits (other than base salary earned through the date of termination
of employment and any benefits due or accrued prior to termination of employment in accordance with
the applicable employee benefit plans of the Company or applicable law), bonuses or severance from
the Company or any Affiliate after termination of the Employment Term shall cease upon such
termination.




     10. Limitation on Payments and Benefits. Notwithstanding any provision of this
Agreement to the contrary, no amount or benefit shall be paid or provided under this Agreement to
an extent or in a manner that would result in payments or benefits (or other compensation) not
being fully deductible by the Company or an Affiliate for federal income tax purposes because of
Section 280G of the Code, or any successor provision thereto (or that would result in the Executive
being subject to the excise tax imposed by Section 4999 of the Code, or any successor provision
thereto). The determination of whether any such payments or benefits to be provided under this
Agreement or otherwise would not be so deductible (or whether the Executive would be subject to
such excise tax) shall be made at the expense of the Company, if requested by either the Executive
or the Company, by a firm of independent accountants or a law firm selected by the Company and
reasonably acceptable to the Executive. In the event that any payment or benefit intended to be
provided under this Agreement or otherwise would constitute a “parachute payment,” as defined in
Section 280G of the Code, the Executive shall be entitled to designate the payments and/or benefits
to be reduced or modified so that the Company or an Affiliate is not denied any federal income tax
deductions for any such parachute payment because of Section 280G of the Code (or so that the
Executive is not subject to the excise tax imposed by Section 4999 of the Code). The Company shall
provide the Executive with all information reasonably requested by the Executive to permit the
Executive to make such designation. In the event that the Executive fails to make such designation
within 10 business days of the Termination Date, the Company may effect such reduction in any
manner it deems appropriate.



     11. Notice. Any notices required or permitted hereunder shall be in writing and shall
be deemed to have been given when personally delivered or when mailed, certified or registered
mail, or sent by reputable overnight courier, postage prepaid, to the addresses set forth as
follows:



	 	 	 	 	 
	 

	 	If to the Company:
	 	Associated Materials Incorporated
	 

	 	 	 	3773 State Road
	 

	 	 	 	Cuyahoga Falls, Ohio 44223
	 
	 	 	 	 
	 

	 	With copies to:
	 	Harvest Partners, Inc.
	 

	 	 	 	280 Park Avenue, 33rd Floor
	 

	 	 	 	New York, New York 10017
	 

	 	 	 	Attention: Ira D. Kleinman
	 
	 	 	 	 
	 

	 	and	 	 
	 
	 	 	 	 
	 

	 	 	 	White & Case LLP






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	 	 	 	1155 Avenue of the Americas
	 

	 	 	 	New York, New York 10036
	 

	 	 	 	Attention: Oliver C. Brahmst, Esq.
	 
	 	 	 	 
	 

	 	If to the Executive:
	 	Trevor Deighton





or to such other address as shall be furnished in writing by either party to the other party;
provided that such notice or change in address shall be effective only when actually received by
the other party.




     12. General.



          (a) Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York applicable to contracts executed
and to be performed entirely within said State.




          (b) Construction and Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or impaired, and the
parties undertake to implement all efforts which are necessary, desirable and sufficient to amend,
supplement or substitute all and any such invalid, illegal or unenforceable provisions with
enforceable and valid provisions which would produce as nearly as may be possible the result
previously intended by the parties without renegotiation of any material terms and conditions
stipulated herein.




          (c) Assignability. The Executive may not assign his interest in or delegate his
duties under this Agreement. This Agreement is for the employment of the Executive, personally,
and the services to be rendered by him under this Agreement must be rendered by him and no other
person. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the
Company and its successors and assigns. Without limiting the foregoing and notwithstanding
anything else in this Agreement to the contrary, the Company may assign this Agreement to, and all
rights hereunder shall inure to the benefit of, any subsidiary of the Company or any person, firm
or corporation resulting from the reorganization of the Company or succeeding to the business or
assets of the Company by purchase, merger, consolidation or otherwise.




          (d) Warranty by the Executive. The Executive represents and warrants to the Company
that the Executive is not subject to any contract, agreement, judgment, order or decree of any
kind, or any restrictive agreement of any character, that restricts the Executive’s ability to
perform his obligations under this Agreement or that would be breached by the Executive upon his
performance of his duties pursuant to this Agreement.




          (e) Compliance with Rules and Policies. The Executive shall perform all services in
accordance with the lawful policies, procedures and rules established by the Company and the
Board. In addition, the Executive shall comply with all laws, rules and regulations that are
generally applicable to the Company or its subsidiaries and their respective employees, directors
and officers.




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          (f) Withholding Taxes. All amounts payable hereunder shall be subject to the
withholding of all applicable taxes and deductions required by any applicable law.




          (g) Entire Agreement; Modification. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof, supersedes all prior agreements
and undertakings, both written and oral, and may not be modified or amended in any way except in
writing by the parties hereto.




          (h) Duration. Notwithstanding the Employment Term hereunder, this Agreement shall
continue for so long as any obligations remain under this Agreement.




          (i) Survival. The covenants set forth in Section 5 and the parties’ respective rights
and obligations under Section 8 shall survive and shall continue to be binding upon the Executive
and the Company, as the case may be, notwithstanding the termination or expiration of this
Agreement or the termination of the Executive’s employment following a Change in Control for any
reason whatsoever.




          (j) Waiver. No waiver by either party hereto of any of the requirements imposed by
this Agreement on, or any breach of any condition or provision of this Agreement to be performed
by, the other party shall be deemed a waiver of a similar or dissimilar requirement, provision or
condition of this Agreement at the same or any prior or subsequent time. Any such waiver shall be
express and in writing, and there shall be no waiver by conduct. Pursuit by either party of any
available remedy, either in law or equity, or any action of any kind, does not constitute waiver of
any other remedy or action. Such remedies are cumulative and not exclusive.




          (k) Counterparts. This Agreement may be executed in two or more counterparts, all of
which taken together shall constitute one instrument.




          (l) Section References. The words Section and paragraph herein shall refer to
provisions of this Agreement unless expressly indicated otherwise.




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          IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have hereunto executed
this Agreement as of the day and year first written above.




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	ASSOCIATED MATERIALS INCORPORATED	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	TREVOR DEIGHTON	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 






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Exhibit A




Annual Incentive Bonus




          The Executive’s annual incentive bonus for each calendar year during the Employment Term shall
be an amount based upon the achievement of annual EBITDA Hurdles as follows:




	 	 	 
	EBITDA Hurdles	 	Percentage of Base Salary
	Less than threshold
	 	Zero
	 
	 	 
	Threshold
	 	20.00%
	 
	 	 
	Target
	 	50.00%
	 
	 	 
	Maximum
	 	100.00%






          If the actual EBITDA for a particular calendar year is between two Hurdles, the applicable
percentage of base salary shall be determined by linear interpolation based on the difference
between such EBITDA Hurdles. For purposes of the Executive’s annual incentive bonus and the
computation thereof:





	1.	 	Base salary shall mean the annual rate of base salary in effect under this Agreement as of
April 1 of the calendar year to which the bonus relates.
	 
	2.	 	EBITDA shall mean the consolidated net income of AMH, adjusted to exclude deduction of
interest expense (net of interest income), income taxes, depreciation and amortization and the
Harvest Fee pursuant to the Management Agreement, dated as of April 19, 2002, between Harvest
Partners, Inc. and Associated Materials Incorporated, as amended from time to time, and to
exclude gain or loss from sale of capital assets, and including deduction of all bonuses paid
or accrued with respect to the Executive and all other officers and employees of AMH and its
subsidiaries (including, without limitation, the Executive’s bonus hereunder), for the
relevant calendar year, calculated otherwise in accordance with generally accepted accounting
principles, subject to any adjustments made in good faith by the Board. EBITDA shall be
determined by the Company’s management, subject to audit or review by AMH’s external
accountants and approval, in good faith, by the Board. EBITDA shall exclude, without
duplication, any transaction- or merger-related costs which are expensed rather than
capitalized; any revenue, expense, gain or loss from operations divested during the relevant
calendar year; the effect of inventory write-ups made due to purchase accounting; and any
other non-recurring, extraordinary items subject to approval, in good faith, by the Board.
	 
	3.	 	Any annual incentive bonus to which the Executive is entitled under this Agreement for any
calendar year shall be paid in a cash lump-sum within thirty days following the close of AMH’s
books and completion of AMH’s annual audit by its external accountants for such calendar year.




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The Executive’s entitlement to an annual incentive bonus shall be determined by the Board in good
faith in accordance with this Exhibit A.





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Exhibit B




Long-Term Incentive Bonus



Provided that the Executive has been continuously employed by the Company or an Affiliate during
the period commencing on the Commencement Date and ending on the date of a Liquidity Event (as
defined below), the Executive shall be entitled to receive a long-term incentive bonus, in an
amount based upon the Equity Value (as defined below) determined as of such Liquidity Event as
follows:




	 	 	 	 	 
	 	Equity Value Hurdles	 	 	Bonus
	 	Less than $155,000,000
	 	 	Zero
	 
	 	 	 	 
	 	$155,000,000
	 	 	$3,000,000
	 
	 	 	 	 
	 	$353,000,000
	 	 	$5,000,000
	 
	 	 	 	 
	 	$597,000,000
	 	 	$10,000,000
	 
	 	 	 	 
	 	$811,000,000
	 or greater	 	$15,000,000





The bonus amounts set forth above are noncumulative. If the actual Equity Value is between two
Equity Value Hurdles, the applicable amount of bonus shall be determined by linear interpolation
based on the difference between such Equity Value Hurdles. Notwithstanding the foregoing, if the
actual Equity Value is less than $155,000,000, the bonus shall be zero, and if the actual Equity
Value is equal to or greater than $811,000,000, the bonus shall be $15,000,000. For purposes of
the Executive’s long-term incentive bonus and the computation thereof:





	1.	 	“Equity Value” shall mean the net cash proceeds distributed to shareholders upon a
Liquidity Event after extinguishment and/or assumption of indebtedness and payment of all
related transaction fees and expenses.
	 
	2.	 	“Liquidity Event” shall mean the occurrence of either of the events described in
paragraphs (A) and (B) below:






	 	(A)	 	a transaction or series of transactions (whether structured as a stock sale,
merger, consolidation, reorganization, asset sale or otherwise) which results in the
sale or transfer of more than a majority of the assets of AMH and its subsidiaries or
of a majority of the capital stock of AMH to a person other than the Preferred Holders
or their affiliates; or
	 
	 	(B)	 	a widely distributed sale of the common stock of AMH in an underwritten public
offering pursuant to an effective registration statement filed with the Securities and
Exchange Commission which yields at least $150,000,000 of net proceeds to the Company.




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	3.	 	“Preferred Holders” shall mean all of the following persons collectively: Harvest
Partners III, L.P., Harvest Partners III Beteiligungsgesellschaft Bürgerlichen Rechts (mit
Haftungsbeschränkung), Harvest Partners IV, L.P., Harvest Partners IV GmbH & Co. KG, AM
Holdings Limited, AM Equity Limited, AM Investments Limited, Associated Equity Limited and
Associated Investments Limited.
	 
	4.	 	Any long-term incentive bonus to which the Executive is entitled under this Agreement shall
be paid in a cash lump-sum within thirty days following the Liquidity Event to which such
bonus relates. Notwithstanding the foregoing in the event of, (i) a Liquidity Event described
in 2(A) above results in persons other than the Preferred Holders or their affiliates
investing in an entity other than the Company, AMH Holdings, Holdings or AMH (the “New
Entity”), the Company retains the right to require the Executive to transfer a portion of any
long-term incentive bonus received under this Agreement to such New Entity in an amount which
is proportionally consistent with those amounts transferred by the Company’s senior executives
to such New Entity, in exchange for an equity interest in, or promissory note from, such New
Entity and (ii) a Liquidity Event as described in 2(B) above, one-half of any long-term
incentive bonus shall be paid in a cash lump-sum and the remaining one-half of such long-term
incentive bonus shall be paid in the form of shares of stock of the resulting publicly traded
company with the value of each such share of stock determined at the initial public offering
price.




The Executive’s entitlement to the long-term incentive bonus shall be determined by the Board in
good faith in accordance with this Exhibit B.





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