**EXHIBIT 10.16**
**AMENDED AND RESTATED****EMPLOYMENT AGREEMENT**
          **EMPLOYMENT AGREEMENT**(this “Agreement”), originally dated as of August 21, 2002, andhereby amended and restated in its entirety, as of July 27, 2004 (the “Restatement Date”),by and between ASSOCIATED MATERIALS INCORPORATED, a Delaware corporation (the “Company”),and KENNETH L. BLOOM, an individual residing in the State of Ohio (the “Executive”).
W I T N E S S E T H :
          WHEREAS, the Executive previously served as President of Alside Siding and Window Company, adivision of the Company;
          WHEREAS, pursuant to that certain Agreement and Plan of Merger, dated as of March 16, 2002,among Associated Materials Holdings Inc. (formerly known as Harvest/AMI Holdings Inc.)(“Parent”), Simon Acquisition Corp. and the Company (the “Merger Agreement”), theCompany became a wholly-owned subsidiary of Parent upon consummation of the transactionscontemplated by the Merger Agreement (the “Merger”);
          WHEREAS, since the Merger, the Executive has served as President of Alside Siding and WindowCompany;
          WHEREAS, on March 4, 2004, all of the stock of Parent was exchanged for stock of AMH Holdings,Inc. (“AMH”) as part of a series of corporate reorganization transactions, and Parent became awholly-owned subsidiary of AMH;
          WHEREAS, the Company desires to continue to retain the services and employment of theExecutive on behalf of the Company, and the Executive desires to continue his employment with theCompany, upon the terms and conditions hereinafter set forth;
          WHEREAS, pursuant to Section 12(g) of this Agreement, this Agreement may be amended in writingby the parties hereto; and
          WHEREAS, the Company and the Executive mutually desire to amend and restate this Agreement asset forth herein.
          NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and forgood 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, theCompany hereby employs the Executive as the President of Alside Siding and Window Company, and theExecutive accepts such employment, for the Employment Term (as defined in Section 3). During theEmployment Term, the Executive shall serve as the President of Alside
 

 

Siding and Window Company and shall report to the President and Chief Executive Officer of theCompany, performing such duties as shall be reasonably required of a president, and shall have suchother powers and perform such other duties as may from time to time be assigned to him by thePresident 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 Officeror the Board, the Executive shall also serve on the Board or any committee of the Board and/or as adirector, officer or employee of AMH or any other person or entity which, from time to time, is adirect or indirect subsidiary of AMH (AMH and each such subsidiary, person or entity, other thanthe Company, are hereinafter referred to collectively as the “Affiliates,” and individuallyas 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 ofhis ability and will devote his full business time, energy, experience and talents to the businessof the Company and the Affiliates; *provided*, *however*, that it shall not be a violation of thisAgreement for the Executive to manage his personal investments and business affairs, or to engagein or serve such civic, community, charitable, educational, or religious organizations as he mayreasonably select so long as such service does not interfere with the Executive’s performance ofhis duties hereunder.
     3. Employment Term. Subject to earlier termination pursuant to Section 6, theExecutive’s term of employment hereunder shall begin on the Offer Completion Date (hereinafterreferred 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 anniversaryof the Commencement Date, and on each subsequent anniversary of the Commencement Date, such termshall be automatically extended by an additional one (1) year beyond the end of the then-currentterm, unless, at least thirty (30) days before such first anniversary of the Commencement Date, orthirty (30) days before any such subsequent anniversary of the Commencement Date, the Company giveswritten notice to the Executive that the Company does not desire to extend the term of thisAgreement, in which case, the term of employment hereunder shall terminate as of the secondanniversary of the Commencement Date or the end of the then-current term, as applicable (the termof employment hereunder, including any extensions, in accordance with this Section 3, shall bereferred to herein as the “Employment Term”).
     4. Compensation and Benefits.
          (a) Salary. As compensation for his services hereunder and in consideration of theExecutive’s other agreements hereunder, during the Employment Term, the Company shall pay theExecutive a base salary, payable in equal installments in accordance with the Company’s payrollprocedures, at an annual rate of Two Hundred Seventy Five Thousand Dollars ($275,000), subject toannual review by the Board, which may increase, but not decrease, the Executive’s base salary.
          (b) Annual Incentive Bonus; Stock Options. The Executive shall be entitled toparticipate in an annual incentive bonus arrangement established by the Company on terms andconditions substantially as set forth in Exhibit A hereto. The Executive shall not beentitled to
-2-

 

participate in any other annual cash bonus plan, program or arrangement with respect to anyperiod to which the annual incentive bonus arrangement described in the immediately precedingsentence applies. The Executive shall also be entitled to participate in the stock option planestablished by Parent or AMH.
          (c) Retirement, Medical, Dental and Other Benefits. During the Employment Term, theExecutive shall, in accordance with the terms and conditions of the applicable plan documents andall applicable laws, be eligible to participate in the various retirement, medical, dental andother 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 entitledto not less than three (3) weeks of vacation during each calendar year and sick leave in accordancewith the Company’s policies and practices with respect to its executives.
          (e) Business Expenses. (1) The Company shall reimburse or advance payment to theExecutive for all reasonable expenses actually incurred by him in connection with the performanceof his duties hereunder in accordance with policies established by the Company from time to timeand subject to receipt by the Company of appropriate documentation.
     (2) During the Employment Term, the Executive shall be paid an automobile allowance inthe amount of $900 per month. Such allowance shall be paid by the Company to the Executiveon the last business day of each month or otherwise in accordance with Company policy.
     5. Covenants of the Executive. The Executive acknowledges that in the course of hisemployment 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 theAffiliates. Therefore, the Company and the Executive mutually agree that it is in the interest ofboth parties for the Executive to enter into the restrictive covenants set forth in this Section 5and that such restrictions and covenants are reasonable given the nature of the Executive’s dutiesand the nature of the Company’s business.
          (a) Noncompetition. During the Employment Term and for the Restricted Period (ashereinafter defined) following termination of the Employment Term, the Executive shall not, withinany jurisdiction or marketing area in which the Company or any Affiliate is doing or is qualifiedto do business, directly or indirectly, own, manage, operate, control, be employed by orparticipate in the ownership, management, operation or control of, or be connected in any mannerwith, any Business (as hereinafter defined), *provided*that the Executive’s ownership of securitiesof two percent (2%) or less of any class of securities of a public company shall not, by itself, beconsidered to be competition with the Company or any Affiliate. For purposes of this Agreement,“Business” shall mean the manufacturing, production, distribution or sale of exteriorresidential 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 theCompany or an Affiliate during the Employment Term. For purposes of this Agreement, the“Restricted Period” shall be two (2) years.
-3-

 

          (b) Nonsolicitation. During the Employment Term and for the Restricted Periodfollowing 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 orwas an employee of the Company or any Affiliate during the Employment Term; (ii) otherwise induceor attempt to induce any employee of the Company or an Affiliate to leave the employ of the Companyor such Affiliate, or in any way knowingly interfere with the relationship between the Company orany Affiliate and any employee respectively thereof; or (iii) induce or attempt to induce anycustomer, supplier, licensee or other business relation of the Company or any Affiliate to ceasedoing business with the Company or such Affiliate, or interfere in any way with the relationshipbetween any such customer, supplier, licensee or business relation and the Company or anyAffiliate.
          (c) Nondisclosure; Inventions. For the Employment Term and thereafter, (i) theExecutive shall not divulge, transmit or otherwise disclose (except as legally compelled by courtorder, 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 andthe Affiliates, any customer lists, trade secrets or other confidential knowledge or informationwith respect to the operations or finances of the Company or any Affiliates or with respect toconfidential or secret processes, services, techniques, customers or plans with respect to theCompany 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 usingor disclosing to others any such knowledge or information which is or hereafter shall becomeavailable to the general public other than through disclosure by the Executive. All ConfidentialInformation, new processes, techniques, know-how, methods, inventions, plans, products, patents anddevices developed, made or invented by the Executive, alone or with others, while an employee ofthe Company which are related to the business of the Company and the Affiliates shall be and becomethe sole property of the Company, unless released in writing by the Board, and the Executive herebyassigns any and all rights therein or thereto to the Company.
          (d) Nondisparagement. During the Employment Term and thereafter, the Executive shallnot take any action to disparage or criticize the Company or any Affiliate or their respectiveemployees, directors, owners or customers or to engage in any other action that injures or hindersthe 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 incomputer-readable form) or property relating or belonging to the Company or an Affiliate, whetherprepared by the Executive or otherwise coming into his possession in the course of the performanceof his services under this Agreement, shall be the exclusive property of the Company and shall bedelivered to the Company, and not retained by the Executive (including, without limitations, anycopies thereof), promptly upon request by the Company and, in any event, promptly upon terminationof the Employment Term.
-4-

 

          (f) Enforcement. The Executive acknowledges that a breach of his covenants containedin this Section 5 may cause irreparable damage to the Company and the Affiliates, the exact amountof which would be difficult to ascertain, and that the remedies at law for any such breach orthreatened breach would be inadequate. Accordingly, the Executive agrees that if he breaches orthreatens to breach any of the covenants contained in this Section 5, in addition to any otherremedy which may be available at law or in equity, the Company and the Affiliates shall be entitledto specific performance and injunctive relief to prevent the breach or any threatened breachthereof without bond or other security or a showing that monetary damages will not provide anadequate remedy.
          (g) Scope of Covenants. The Company and the Executive further acknowledge that thetime, scope, geographic area and other provisions of this Section 5 have been specificallynegotiated by sophisticated commercial parties and agree that all such provisions are reasonableunder the circumstances of the activities contemplated by this Agreement. In the event that theagreements in this Section 5 shall be determined by any court of competent jurisdiction to beunenforceable by reason of their extending for too great a period of time or over too great ageographical area or by reason of their being too extensive in any other respect, they shall beinterpreted to extend only over the maximum period of time for which they may be enforceable and/orover the maximum geographical area as to which they may be enforceable and/or to the maximum extentin all other respects as to which they may be enforceable, all as determined by such court in suchaction.
     6. Termination. The employment of the Executive hereunder shall automaticallyterminate at the end of the Employment Term. The employment of the Executive hereunder and theEmployment Term may also be terminated at any time by the Company with or without Cause. Forpurposes 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 anAffiliate; (ii) any breach by the Executive of the Executive’s covenants under Section 5; (iii) anybreach by the Executive of any other material provision of this Agreement which breach is notcured, to the extent susceptible to cure, within thirty (30) days after the Company has givennotice to the Executive describing such breach; (iv) willful failure by the Executive to performthe duties of his employment hereunder which continues for a period of fourteen (14) days followingwritten notice thereof by the Company to the Executive; (v) the conviction of, or a plea of *nolocontendere*(or a similar plea) to, any criminal offense that is a felony or involves fraud, or anyother criminal offense punishable by imprisonment of at least one year or materially injurious tothe business or reputation of the Company involving theft, dishonesty, misrepresentation or moralturpitude; (vi) gross negligence or willful misconduct on the part of the Executive in theperformance 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) theExecutive’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 dutiesand responsibilities to the Company or an Affiliate; or (x) the Executive’s violation of theCompany’s or an Affiliate’s code of ethics, code of business conduct or similar policies applicableto the Executive. The existence or non-existence of Cause shall be determined in good faith by theBoard. The employment of the Executive may also be terminated at any time by the Executive bynotice of resignation delivered to the Company not less than ninety (90) days prior to theeffective date of such resignation.
-5-

 

     7. Severance. Except as otherwise provided in Section 8, if the Executive’semployment hereunder is terminated during the Employment Term by the Company or is terminated dueto expiration of the Employment Term following notice by the Company not to extend the EmploymentTerm in accordance with Section 3, in each case *other than*for Cause or due to disability (asdetermined in the good faith discretion of the Board) or death, the Executive shall be entitled toreceive as severance an amount equal to the Executive’s base salary as in effect immediately priorto 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 or inequal installments in accordance with the Company’s payroll procedures during such applicableperiod following the date of the Executive’s termination), and a *pro rata*portion (based on thenumber of days the Executive was employed by the Company during the calendar year of termination)of any incentive bonus otherwise payable in accordance with Section 4(b) for the year oftermination of the Executive’s employment, payable no earlier than the date on which such bonus, ifany, would have been paid under the applicable plan or policy of the Company absent suchtermination of employment.
     8. Change in Control. This Section 8 will be binding upon the Restatement Date, butnotwithstanding anything in this Agreement to the contrary, this Section 8 will not be operativeunless and until a Change in Control occurs. Upon the occurrence of a Change in Control at anytime during the Employment Term, this Section 8 shall become immediately operative without furtheraction; *provided, however*, that if, prior to a Change in Control, the Executive ceases for anyreason to be an employee of the Company or any Affiliate, the effectiveness of this Section 8 willimmediately terminate without further action and be of no further effect. Certain capitalizedterms 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 thePost-Change Period, the Executive shall be entitled to the benefits provided by Section8(c) unless such termination is the result of the occurrence of one or more of the followingevents:
 (i)  The Executive’s death;  (ii)  If the Executive becomes permanently disabledwithin the meaning of, and begins actually to receive disabilitybenefits under, the long-term disability plan applicable to theExecutive 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 Companyor 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 mayterminate employment with the Company during the Post-Change Period with the right to severancecompensation 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 suchtermination has occurred, including other employment):
-6-

 

 (i)  the failure to maintain the Executive in the position, or asubstantially equivalent or superior position, with the Company and/or with adirect or indirect parent company of the Company that the Executive heldimmediately prior to the Change in Control, which is not remedied by theCompany within 10 calendar days after receipt by the Company of notice from theExecutive of such failure;  (ii)  (A) a reduction in the Executive’s base salary pursuant toSection 4(a) hereof or (B) the termination or significant reduction in theaggregate of the Executive’s right to participate in employee benefit plans orprograms of the Company as in effect prior to the Change in Control (other thanIncentive Pay (as hereinafter defined) or any other bonus, incentive or stockor equity-based compensation or benefits), in either case which is not remediedby the Company within 10 calendar days after receipt by the Company of noticefrom the Executive of such reduction or termination;  (iii)  a reduction or elimination of the Executive’s opportunity toearn Incentive Pay pursuant to any plan or program in effect immediately priorto the Change in Control which is not remedied by the Company within 10calendar days after receipt by the Company of notice from the Executive of suchreduction or elimination (for the avoidance of doubt, changes in the value orperformance of the Company or an Affiliate or successor of either following theChange in Control shall not be considered a reduction or elimination of theExecutive’s opportunity to earn Incentive Pay); or  (iv)  the Company requires the Executive to have his principal placeof work changed to any location that is more than 35 miles from the locationthereof immediately prior to the Change in Control, without his prior writtenconsent.
          (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 Periodother than as described in clause (i), (ii) or (iii) of Section 8(a), or if the Executiveterminates his employment pursuant to Section 8(b), the Executive shall not be entitled to theseverance compensation described in Section 7, and the Company will (i) pay or cause to be paid tothe Executive the amounts described in Sections 8(c)(1), 8(c)(2), 8(c)(3), 8(c)(6) and 8(c)(7)within five business days after the Termination Date; (ii) pay or cause to be paid to the Executivethe amount described in Section 8(c)(4), such amount to be payable no earlier than the date onwhich such Incentive Pay, if any, would have been paid under the applicable plan or policy of theCompany absent such termination of employment; and (iii) provide the Executive the benefitsdescribed in Section 8(c)(5) for the period described therein.
 (1)  A lump sum payment in an amount equal to all Base Pay andIncentive Pay (other than for the calendar year of such termination ofemployment) owed to the Executive for periods on or prior to the TerminationDate.
-7-

 

 (2)  A lump sum payment in an amount equal to two times theExecutive’s base salary pursuant to Section 4(a) (at the rate in effectimmediately prior to the Termination Date).  (3)  A lump sum payment equal to two times Incentive Pay (in anamount equal to the highest amount of Incentive Pay earned by the Executive inany calendar year during the three calendar years immediately preceding thecalendar year in which the Change in Control occurred).  (4)  In the event that the Termination Date occurs after June 30 inany calendar year, a lump sum payment equal to one times Incentive Pay for suchcalendar year, multiplied by a fraction, the numerator of which is the numberof days between (and including) January 1 of the calendar year in which theTermination Date occurs and the Termination Date, and the denominator of whichis 365.  (5)  For a period of 24 months following the Termination Date (the“Continuation Period”), the Company will provide the Executive withmedical, dental and life insurance benefits consistent with the terms in effectfor such benefits for active employees of the Company during the ContinuationPeriod. If and to the extent that any benefit described in this Section8(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, hisdependants and beneficiaries, of such employee benefits. Without otherwiselimiting the purposes of Section 8(d), employee benefits otherwise receivableby the Executive pursuant to this Section 8(c)(5) will be reduced to the extentcomparable welfare benefits are actually received by the Executive from anotheremployer during the Continuation Period following the Executive’s TerminationDate, and any such benefits actually received by the Executive shall bereported by the Executive to the Company.  (6)  The Company will pay to the Executive the cost of employeeoutplacement services for the Executive in the amount of $30,000.  (7)  The Company will pay the Executive a two-year automobileallowance in the amount provided to the Executive immediately prior to theTermination Date.
          (d) No Mitigation Obligation; Effect on Other Rights The payment of the severancecompensation by the Company to the Executive in accordance with the terms of this Section 8 ishereby acknowledged by the Company to be reasonable, and the Executive will not be required tomitigate the amount of any payment provided for in this Section 8 by seeking other employment orotherwise, except as expressly provided in the last sentence of Section 8(c)(5). This Section 8will not affect any rights (other than any rights to severance, termination, retention or similarcompensation or benefits) that the Executive may have pursuant to any
-8-

 

agreement, plan or policy of the Company or a Subsidiary providing employee benefits, whichrights shall be governed by the terms thereof.
          (e) Certain Defined Terms. The following terms have the following meanings when usedin this Section 8:
 (i)  “Cause” means that, prior to any termination pursuantto Section 8(b), the Executive shall have:
 (1)  been convicted of a criminal violationinvolving fraud, embezzlement or theft;  (2)  committed intentional wrongful damage toproperty of the Company or any Affiliate; or  (3)  committed intentional wrongful disclosure ofconfidential information of the Company or any Affiliate.
Nothing herein will limit the right of the Executive or hisbeneficiaries to contest the validity of any determination by theCompany to terminate the Executive for Cause.
 (ii)  “Change in Control” means (A) a stock sale, merger,consolidation, combination, reorganization or other transaction involving theCompany resulting in less than fifty percent (50%) of the combined voting powerof the surviving or resulting entity being owned by the shareholders of theCompany immediately prior to such transaction; (B) a stock sale, merger,consolidation, combination, reorganization or other transaction involving AMHor Parent resulting in less than fifty percent (50%) of the combined votingpower of the surviving or resulting entity being owned by the shareholders ofAMH or Parent, as applicable, immediately prior to such transaction or (C) theliquidation or dissolution of the Company, AMH or Parent or the sale or otherdisposition of all or substantially all of the assets or business of theCompany, AMH or Parent (other than, in the case of either clause (A), (B) or(C) above, in connection with any employee benefit plan of the Company or anAffiliate).  (iii)  “Incentive Pay” means an annual cash bonus or annualcash incentive compensation, in addition to base salary, made or to be made inregard 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 oran Affiliate, or any successor thereto; provided that the Incentive Payshall not include any stock options or other stock-based compensation or anyspecial management bonuses paid in connection with the debt offering orrecapitalization of AMH and/or another Affiliate during calendar year 2004.For the avoidance of doubt, as of the date
-9-

 

    hereof, Incentive Pay shall mean the annual incentive bonus arrangementdescribed in Section 4(b).  (iv)  “Post-Change Period” means the period of timecommencing on the date of the first occurrence of a Change in Control andcontinuing until the second anniversary of the occurrence of such Change inControl.  (v)  “Termination Date” means the date on which theExecutive’s employment with the Company or an Affiliate is terminated.
     9. Termination of Compensation and Benefits; Execution of Release; Coordination ofProvisions. If the Executive’s employment terminates otherwise than in a termination entitlinghim to severance pay and benefits pursuant to Section 7 or Section 8, the Executive shall not beentitled to any severance, termination pay or similar compensation or benefits, *provided*that theExecutive shall be entitled to any benefits then due or accrued in accordance with the applicableemployee benefit plans of the Company or applicable law, including “continuation coverage” underthe Company’s group health plans for purposes of Section 4980B of the Internal Revenue Code of1986, as amended (the “Code”). As a condition of receiving any severance compensation forwhich the Executive otherwise qualifies under Section 7 or Section 8, the Executive agrees toexecute 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 kindwhatsoever arising from or in connection with the Executive’s employment or termination ofemployment 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 theExecutive may be entitled under Section 8 shall be in lieu of any severance compensation orbenefits to which the Executive may be entitled under Section 7. The Executive acknowledges andagrees that, except as specifically described in Section 7 and Section 8, all of the Executive’srights to any compensation, benefits (other than base salary earned through the date of terminationof employment and any benefits due or accrued prior to termination of employment in accordance withthe applicable employee benefit plans of the Company or applicable law), bonuses or severance fromthe Company or any Affiliate after termination of the Employment Term shall cease upon suchtermination.
     10. Limitation on Payments and Benefits. Notwithstanding any provision of thisAgreement to the contrary, no amount or benefit shall be paid or provided under this Agreement toan extent or in a manner that would result in payments or benefits (or other compensation) notbeing fully deductible by the Company or an Affiliate for federal income tax purposes because ofSection 280G of the Code, or any successor provision thereto (or that would result in the Executivebeing subject to the excise tax imposed by Section 4999 of the Code, or any successor provisionthereto). The determination of whether any such payments or benefits to be provided under thisAgreement or otherwise would not be so deductible (or whether the Executive would be subject tosuch excise tax) shall be made at the expense of the Company, if requested by either the Executiveor the Company, by a firm of independent accountants or a law firm selected by the Company andreasonably acceptable to the Executive. In the event that any payment or benefit intended to beprovided under this Agreement or otherwise would constitute a “parachute payment,” as defined inSection 280G of the Code, the Executive shall be entitled to designate the payments and/or benefitsto be reduced or modified so that the Company or an Affiliate is not
-10-

 

denied any federal income tax deductions for any such parachute payment because of Section280G of the Code (or so that the Executive is not subject to the excise tax imposed by Section 4999of the Code). The Company shall provide the Executive with all information reasonably requested bythe Executive to permit the Executive to make such designation. In the event that the Executivefails to make such designation within 10 business days of the Termination Date, the Company mayeffect such reduction in any manner it deems appropriate.
     11. Notice. Any notices required or permitted hereunder shall be in writing and shallbe deemed to have been given when personally delivered or when mailed, certified or registeredmail, or sent by reputable overnight courier, postage prepaid, to the addresses set forth asfollows:       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   1155 Avenue of the Americas   New York, New York 10036   Attention: Oliver C. Brahmst, Esq.      If to the Executive: Kenneth L. Bloom   6487 Dorset Lane   Solon, OH 44139
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 bythe other party.
     12. General.
          (a) Governing Law. The validity, interpretation, construction and performance of thisAgreement shall be governed by the laws of the State of New York applicable to contracts executedand to be performed entirely within said State.
          (b) Construction and Severability. If any provision of this Agreement shall be heldinvalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability ofthe remaining provisions contained herein shall not in any way be affected or impaired, and theparties 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 withenforceable and valid provisions which would produce as nearly as may be possible the resultpreviously intended by the parties without renegotiation of any material terms and conditionsstipulated herein.
-11-

 

          (c) Assignability. The Executive may not assign his interest in or delegate hisduties 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 otherperson. This Agreement shall be binding upon and inure to the benefit of and be enforceable by theCompany and its successors and assigns. Without limiting the foregoing and notwithstandinganything else in this Agreement to the contrary, the Company may assign this Agreement to, and allrights hereunder shall inure to the benefit of, any subsidiary of the Company or any person, firmor corporation resulting from the reorganization of the Company or succeeding to the business orassets of the Company by purchase, merger, consolidation or otherwise.
          (d) Warranty by the Executive. The Executive represents and warrants to the Companythat the Executive is not subject to any contract, agreement, judgment, order or decree of anykind, or any restrictive agreement of any character, that restricts the Executive’s ability toperform his obligations under this Agreement or that would be breached by the Executive upon hisperformance of his duties pursuant to this Agreement.
          (e) Compliance with Rules and Policies. The Executive shall perform all services inaccordance 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 generallyapplicable to the Company or its subsidiaries and their respective employees, directors andofficers.
          (f) Withholding Taxes. All amounts payable hereunder shall be subject to thewithholding of all applicable taxes and deductions required by any applicable law.
          (g) Entire Agreement; Modification. This Agreement constitutes the entire agreementof the parties hereto with respect to the subject matter hereof, supersedes all prior agreementsand undertakings, both written and oral, and may not be modified or amended in any way except inwriting by the parties hereto. As of the date hereof, the Severance Agreement, dated as ofDecember 2, 2001, between the Company and the Executive shall be cancelled and be of no furtherforce or effect, without the payment of any additional consideration by or to either of the partiesthereto.
          (h) Duration. Notwithstanding the Employment Term hereunder, this Agreement shallcontinue for so long as any obligations remain under this Agreement.
          (i) Survival. The covenants set forth in Section 5 and the parties’ respective rightsand obligations under Section 8 shall survive and shall continue to be binding upon the Executiveand the Company, as the case may be, notwithstanding the termination or expiration of thisAgreement or the termination of the Executive’s employment following a Change in Control for anyreason whatsoever.
          (j) Waiver. No waiver by either party hereto of any of the requirements imposed bythis Agreement on, or any breach of any condition or provision of this Agreement to be performedby, the other party shall be deemed a waiver of a similar or dissimilar requirement, provision orcondition of this Agreement at the same or any prior or subsequent time. Any such
-12-

 

waiver shall be express and in writing, and there shall be no waiver by conduct. Pursuit byeither party of any available remedy, either in law or equity, or any action of any kind, does notconstitute 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 ofwhich taken together shall constitute one instrument.
          (l) Section References. The words Section and paragraph herein shall refer toprovisions of this Agreement unless expressly indicated otherwise.
          IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have hereunto executedthis Agreement as of the day and year first written above.         ASSOCIATED MATERIALS INCORPORATED         Date: July 28, 2004 By: /s/ Michael Caporale, Jr.          Name: Michael Caporale, Jr.    Title: President and Chief Executive Officer           KENNETH L. BLOOM         Date: July 28, 2004 /s/ Kenneth L. Bloom       
-13-

 

Exhibit A
Annual Incentive Bonus
     The Executive’s annual incentive bonus for each calendar year during the Employment Term,beginning with calendar year 2004, shall be an amount based upon the year over year growth inEBITDA stated as a percentage change in EBITDA (the “Growth Rate”) as follows:     Growth Rate Hurdles Bonus Less than 5.00% Zero     5.00% $28,000      10.00% $140,000      15.00% or greater $210,000 
          If the actual Growth Rate for a particular calendar year is between two Growth Rate Hurdles,the applicable amount of bonus shall be determined by linear interpolation based on the differencebetween such Growth Rate Hurdles. Notwithstanding the foregoing, if the actual Growth Rate is lessthan 5.00% the bonus shall be zero, and if the actual Growth Rate is equal to or greater than15.00% the bonus shall be $210,000. For purposes of the Executive’s annual incentive bonus and thecomputation thereof:
1.  EBITDA shall mean the consolidated net income of AMH, adjusted to exclude deduction ofinterest expense (net of interest income), income taxes, depreciation and amortization and theHarvest Fee pursuant to the Management Agreement, dated as of April 19, 2002, between HarvestPartners, Inc. and Associated Materials Incorporated, as amended from time to time, and toexclude gain or loss from sale of capital assets, and including deduction of all bonuses paidor accrued with respect to the Executive and all other officers and employees of AMH and itssubsidiaries (including, without limitation, the Executive’s bonus hereunder), for therelevant calendar year, calculated otherwise in accordance with generally accepted accountingprinciples, subject to any adjustments made in good faith by the Board. EBITDA shall bedetermined by the Company’s management, subject to audit or review by AMH’s externalaccountants and approval, in good faith, by the Board. EBITDA shall exclude, withoutduplication, any transaction- or merger-related costs which are expensed rather thancapitalized; any revenue, expense, gain or loss from operations divested during the relevantcalendar year; the effect of inventory write-ups made due to purchase accounting; any specialmanagement bonuses paid in connection with the debt offering or recapitalization of AMH and/oranother Affiliate during calendar year 2004; and any other non-recurring, extraordinary itemssubject to approval, in good faith, by the Board. 2.  Any annual incentive bonus to which the Executive is entitled under this Agreement for anycalendar year shall be paid in a cash lump-sum within thirty days following the close
-14-

 

 of AMH’s books and completion of AMH’s annual audit by its external accountants for suchcalendar year.
The Executive’s entitlement to an annual incentive bonus shall be determined by the Board in goodfaith in accordance with this Exhibit A.
-15-