4. Compensation and Benefits. (a) Salary. As compensation for his services hereunder and in consideration ofExecutive’s other agreements hereunder, during the Employment Term, the Company shall pay Executivea base salary, payable in equal installments in accordance with the Company’s payroll procedures,at an annual rate of $250,000, subject to annual review by the Board (or its compensationcommittee) which may increase, but not decrease, Executive’s base salary.(b) Annual Incentive Bonus; Stock Options. Commencing on the Commencement Date,Executive shall be entitled to participate in an annual incentive bonus arrangement established bythe Company on terms and conditions substantially as set forth in Exhibit A hereto. Anyannual incentive bonus to which Executive is entitled under this Agreement for any calendar yearshall be paid in a cash lump-sum within 30 days following the close of Intermediate’s books andcompletion of Intermediate’s annual audit by its external accountants for such calendar year but inany event shall not be paid later than March 15th of the calendar year immediatelyfollowing the calendar year to which the bonus relates. Executive shall also be entitled toparticipate in the stock option plan established by Parent.(c) Retirement, Medical, Dental and Other Benefits. During the Employment Term,Executive 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, Executive shall be entitled tonot less than three weeks of vacation during each calendar year and sick leave in accordance withthe Company’s policies and practices with respect to its executive officers.(e) Business Expenses. The Company shall reimburse or advance payment to Executivefor all reasonable expenses actually incurred by him in connection with the performance of hisduties hereunder in accordance with policies established by the Company from time to time andsubject to receipt by the Company of appropriate documentation.5. Covenants of Executive. 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 Executive mutually agree that it is in the interest of bothparties for Executive to enter into the restrictive covenants set forth in this Section 5 and thatsuch restrictions and covenants are reasonable given the nature of Executive’s duties and thenature of the Company’s business.(a) Noncompetition. During the Employment Term and for the two year period followingtermination of the Employment Term (the “Restricted Period”), 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 Executive’s ownership ofsecurities of two percent (2%) or less of any class of securities of a public company shall not, byitself, be considered to be competition with the Company or any Affiliate. For purposes of thisAgreement, “Business” shall mean the manufacturing, production, distribution or sale ofexterior residential building products, including, without limitation, vinyl siding, windows,fencing, decking, railings and garage doors, or any other business of a type and character engagedin by the Company or an Affiliate during the Employment Term (including, without limitation, anybusiness in which the Company or any Affiliate has specific plans to conduct in the future and asto which Executive was aware of such planning at or prior to the time Executive’s employment isterminated).
 
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(b) Nonsolicitation. During the Employment Term and the Restricted Period, Executiveshall not, directly or indirectly, (i) hire or employ, solicit for employment or otherwise contractfor the services of any individual who is or was an employee or consultant of the Company or anyAffiliate; (ii) otherwise induce or attempt to induce any employee or consultant of the Company oran Affiliate to leave the employ or service of the Company or such Affiliate, or in any wayinterfere with the relationship between the Company or any Affiliate and any employee or consultantrespectively thereof; or (iii) induce or attempt to induce any customer, supplier, licensee orother business relation of the Company or any Affiliate to cease doing business with the Company orsuch 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 at all times thereafter,(i) Executive shall not divulge, transmit or otherwise disclose (except as legally compelled bycourt order, and then only to the extent required, after prompt notice to the Board of any suchorder), directly or indirectly, other than in the regular and proper course of business of theCompany and the Affiliates, any customer lists, trade secrets or other confidential knowledge orinformation with respect to the operations or finances of the Company or any Affiliates or withrespect to confidential or secret processes, services, techniques, customers or plans with respectto the Company or the Affiliates, including, without limitation, any know-how, research anddevelopment, software, databases, inventions, processes, formulae, technology, designs and otherintellectual property, information concerning finances, investments, profits, pricing, costs,products, services, vendors, customers, clients, partners, investors, personnel, compensation,recruiting, training, advertising, sales, marketing, promotions, government and regulatoryactivities and approvals concerning the past, current or future business, activities and operationsof the Company and the Affiliates (all of the foregoing collectively hereinafter referred to as“Confidential Information”), and (ii) Executive will not use, directly or indirectly, anyConfidential Information for the benefit of anyone other than the Company and the Affiliates;provided, that Executive has no obligation, express or implied, to refrain from using ordisclosing to others any such knowledge or information which is or hereafter shall become availableto the general public other than through disclosure by Executive. All Confidential Information, newprocesses, techniques, know-how, methods, inventions, plans, products, patents and devicesdeveloped, made or invented by Executive, alone or with others, while an employee of the Companywhich are related to the business of the Company and the Affiliates shall be and become the soleproperty of the Company, unless released in writing by the Board, and Executive hereby assigns anyand all rights therein or thereto to the Company.(d) Nondisparagement. During the Employment Term and at all times thereafter,Executive shall not take any action to disparage or criticize the Company or any Affiliate or theirrespective employees, directors, owners or customers or to engage in any other action that injuresor hinders the business relationships of the Company or any Affiliate. Nothing contained in thisSection 5(d) shall preclude 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 Executive or otherwise coming into his possession in the course of the performance ofhis services under this Agreement, shall be the exclusive property of the Company and shall bedelivered to the Company, and not retained by Executive (including, without limitations, any copiesthereof), promptly upon request by the Company and, in any event, promptly upon termination of theEmployment Term.
 
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(f) Enforcement. Executive acknowledges that a breach of his covenants contained inthis Section 5 may cause irreparable damage to the Company and the Affiliates, the exact amount ofwhich would be difficult to ascertain, and that the remedies at law for any such breach orthreatenedbreach would be inadequate. Accordingly, Executive agrees that if he breaches or threatens tobreach any of the covenants contained in this Section 5, in addition to any other remedy which maybe available at law or in equity, the Company and the Affiliates shall be entitled to specificperformance and injunctive relief to prevent the breach or any threatened breach thereof withoutbond or other security or a showing that monetary damages will not provide an adequate remedy.(g) Scope of Covenants. The Company and Executive further acknowledge that the time,scope, geographic area and other provisions of this Section 5 have been specifically negotiated bysophisticated commercial parties and agree that all such provisions are reasonable under thecircumstances of the activities contemplated by this Agreement. In the event that the agreements inthis Section 5 shall be determined by any court of competent jurisdiction to be unenforceable byreason of their extending for too great a period of time or over too great a geographical area orby reason of their being too extensive in any other respect, they shall be interpreted to extendonly over the maximum period of time for which they may be enforceable and/or over the maximumgeographical area as to which they may be enforceable and/or to the maximum extent in all otherrespects as to which they may be enforceable, all as determined by such court in such action.6. Termination. The employment of Executive hereunder shall automatically terminateat the end of the Employment Term. The employment of Executive hereunder and the Employment Termmay also be terminated at any time by the Company with or without Cause. For purposes of thisAgreement, except as otherwise provided in Section 8, “Cause” shall mean: (i) embezzlement,theft or misappropriation by Executive of any property of the Company or an Affiliate; (ii) anybreach by Executive of Executive’s covenants under Section 5; (iii) any breach by Executive of anyother material provision of this Agreement which breach is not cured, to the extent susceptible tocure, within 30 days after the Company has given written notice to Executive describing suchbreach; (iv) willful failure by Executive to perform the duties of his employment hereunder whichcontinues for a period of 14 days following written notice thereof by the Company to Executive; (v)the conviction of, or a plea of nolo contendere (or a similar plea) to, any criminal offense thatis a felony or involves fraud, or any other criminal offense punishable by imprisonment of at leastone year or materially injurious to the business or reputation of the Company or an Affiliateinvolving theft, dishonesty, misrepresentation or moral turpitude; (vi) gross negligence or willfulmisconduct on the part of Executive in the performance of his duties as an employee, officer ordirector of the Company or an Affiliate; (vii) Executive’s breach of his fiduciary obligations tothe Company or an Affiliate; (viii) Executive’s commission of intentional, wrongful damage toproperty of the Company or an Affiliate; (ix) any chemical dependence of Executive which adverselyaffects the performance of his duties and responsibilities to the Company or an Affiliate; or (x)Executive’s violation of the Company’s or an Affiliate’s code of ethics, code of business conductor similar policies applicable to Executive. The existence or non-existence of Cause shall bedetermined in good faith by the Board. The employment of Executive may also be terminated at anytime by Executive by notice of resignation delivered to the Company not less than 90 days prior tothe effective date of such resignation.7. Severance for Terminations Other Than During the Post-Change Period. Except asotherwise provided in Section 8 and subject to Section 9, if Executive’s employment hereunder isterminated during the Employment Term (other than during the Post-Change Period) by the Company oris terminated due to expiration of the Employment Term following notice by the Company not toextend the Employment Term in accordance with Section 3, in each case other than for Cause or dueto disability (as determined in the good faith discretion of the Board) or death, Executive shallbe entitled to receive as severance: (i) an amount equal to Executive’s base salary pursuant toSection 4(a) (at the rate in effect immediately prior to the Termination Date), which amount shallbe payable, commencing no earlier than the sixty-first day following such termination, in 12 equalmonthly installments (other than the first such installment, which shall include all amounts thatwould otherwise have been paid to Executive if paymenthad commenced
 
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 immediately following such termination of employment) in accordance with theCompany’s payroll procedures over the 12-month period following the date of Executive’s termination(such 12-month period, the “Severance Period”); (ii) continued medical and dental benefitsdescribed in Section 4(c) for the Severance Period, at the same rate of employee and Company sharedcosts of such coverage as in effect from time to time for active employees of the Company; and(iii) a pro rata portion (based on the number of days Executive was employed by the Company duringthe calendar year of termination) of any annual incentive bonus otherwise payable in accordancewith Section 4(b) for the year of termination of Executive’s employment, payable no earlier thanthe date on which such bonus, if any, would have been paid under the applicable plan or policy ofthe Company absent such termination of employment, but no later than March 15th of thecalendar year immediately following the calendar year of such termination. With respect to any suchcontinued medical and dental benefits described in clause (ii) of the first sentence of thisSection 7 for which Executive is eligible, (I) if the Company cannot continue such benefitswithout adverse tax consequences to Executive or the Company or for any other reason, the Companyshall pay Executive for the cost of such benefits; (II) such benefits shall be discontinued in theevent Executive becomes eligible for similar benefits from a successor employer (and Executive’seligibility for any such benefits shall be reported by Executive to the Company); and (III)Executive’s period of “continuation coverage” for purposes of Section 4980B of the Internal RevenueCode of 1986, as amended (the “Code”), shall be deemed to commence on the date ofExecutive’s termination of employment.8. Post-Change Period.(a) Termination During the Post-Change Period. If Executive’s employment isterminated by the Company or an Affiliate during the “Post-Change Period” (as defined below), then,subject to Section 9, Executive shall be entitled to the benefits provided by Section 8(c) unlesssuch termination is the result of the occurrence of one or more of the following events:(i) Executive’s death;(ii) Executive’s employment is terminated by the Company or an Affiliate due todisability (as determined in the good faith discretion of the Board); or(iii) Cause (as defined in Section 8(e)(i)).If, during the Post-Change Period, Executive’s employment is terminated by the Company or anAffiliate as described in clause (i), (ii) or (iii) of this Section 8(a), Executive will not beentitled to the benefits provided by Section 8(c).(b) Good Leaver Termination by Executive. Executive may terminate employment with theCompany during the Post-Change Period with the right to severance compensation as provided inSection 8(c) upon the occurrence of one or more of the following events without Executive’s priorwritten consent (regardless of whether any other reason, other than death, disability (asdetermined in the good faith discretion of the Board) or Cause, for such termination has occurred,including other employment) and any termination following the occurrence of one or more of suchevents shall hereafter be referred to as a “Good Leaver Termination”:(i) the failure to maintain Executive in the position, or a substantially equivalent orsuperior position, with the Company and/or with a direct or indirect parent company of theCompany that Executive held immediately prior to the Commencement Date, which is notremedied by the Company within 10 calendar days after receipt by the Company of notice fromExecutive of such failure;
 
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(ii) (A) a reduction in Executive’s base salary pursuant to Section 4(a) hereof or (B)the termination or significant reduction in the aggregate of Executive’s right toparticipate in employee benefit plans or programs of the Company as in effect on the datehereof (other than Incentive Pay (as hereinafter defined) or any other bonus, incentive orstock or equity-based compensation or benefits), in either case which is not remedied by theCompany within 10 calendar days after receipt by the Company of notice from Executive ofsuch reduction or termination;(iii) a reduction or elimination of Executive’s opportunity to earn Incentive Paypursuant to any plan or program in effect on the date hereof which is not remedied by theCompany within 10 calendar days after receipt by the Company of notice from Executive ofsuch reduction or elimination (for the avoidance of doubt, changes in the value orperformance of the Company or an Affiliate or successor of either following the CommencementDate shall not be considered a reduction or elimination of Executive’s opportunity to earnIncentive Pay); or(iv) the Company requires Executive to have his principal place of work changed to anylocation that is more than 35 miles from the location thereof on the date hereof.(c) Post-Change Period Severance. If the Company or an Affiliate terminatesExecutive’s employment during the Post-Change Period other than as described in clause (i), (ii) or(iii) of Section 8(a), or if Executive terminates his employment pursuant to a Good LeaverTermination, Executive shall not be entitled to the severance compensation described in Section 7,and, subject to Section 9, the Company will instead pay or provide to Executive the followingpayments and benefits:(1) A lump sum payment in an amount equal to all Base Pay and Incentive Pay (other thanfor the calendar year of such termination of employment) owed to Executive for periods on orprior to the Termination Date, which payment shall be made no later than the first regularlyscheduled payroll period following the Termination Date.(2) An amount equal to the sum of (x) two times Executive’s base salary pursuant toSection 4(a) (at the rate in effect immediately prior to the Termination Date) and (y) twotimes Incentive Pay (in an amount equal to the highest amount of Incentive Pay earned byExecutive in any calendar year during the three calendar years immediately preceding theyear in which the Commencement Date occurred), which amount shall be payable, commencing noearlier than the sixty-first day following such termination, in twenty-four (24) equalmonthly installments (other than the first such installment, which shall include all amountsthat would otherwise have been paid to Executive if payment had commenced immediatelyfollowing such termination of employment) in accordance with the Company’s payrollprocedures over the 24-month period following the date of Executive’s termination.(3) In the event that the Termination Date occurs after June 30th in anycalendar 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 (andincluding) January 1st of the calendar year in which the Termination Date occursand the Termination Date, and the denominator of which is 365, which amount shall be payableno earlier than the date on which such Incentive Pay, if any, would have been paid under theapplicable plan or policy of the Company absent such termination of employment, but no laterthan March 15th of the calendar year immediately following the calendar year ofsuch termination.
 
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(4) For a period of 24 months following the Termination Date (the “ContinuationPeriod”), the Company will provide Executive with medical, dental and lifeinsurance benefits consistent with the terms in effect for such benefits for activeemployees of the Company during the Continuation Period. If and to the extent that anybenefit described in this Section 8(c)(4) is not or cannot be paid or provided under anyCompany plan or program without adverse tax consequences to Executive or the Company or forany other reason, then the Company shall pay Executive for the cost of such benefits.Without otherwise limiting the purposes of Section 8(d), employee benefits otherwisereceivable by Executive pursuant to this Section 8(c)(4) will be reduced to the extentcomparable welfare benefits are actually received by Executive from another employer duringthe Continuation Period following Executive’s Termination Date, and any such benefitsactually received by Executive shall be reported by Executive to the Company. The foregoingto the contrary notwithstanding, to the extent required in order to comply with Section 409Aof the Code, in no event shall any such benefits be provided beyond the end of the secondcalendar year that begins after Executive’s “separation from service” within the meaning ofSection 409A of the Code.(5) The Company will provide Executive outplacement services in the amount of $30,000.(d) No Mitigation Obligation; Effect on Other Rights. The payment of the severancecompensation by the Company to Executive in accordance with the terms of this Section 8 is herebyacknowledged by the Company to be reasonable, and Executive will not be required to mitigate theamount of any payment provided for in this Section 8 by seeking other employment or otherwise,except as expressly provided in the penultimate sentence of Section 8(c)(4). This Section 8 willnot affect any rights (other than any rights to severance, termination, retention or similarcompensation or benefits) that Executive may have pursuant to any agreement, plan or policy of theCompany or a subsidiary thereof providing employee benefits, which rights shall be governed by theterms thereof.(e) Certain Defined Terms. The following terms have the following meanings when usedin this Section 8:(i) “Cause” means that Executive shall have:(1) been convicted of a criminal violation involving fraud, embezzlement ortheft(2) committed intentional wrongful damage to property of the Company or anyAffiliate; or(3) committed intentional wrongful disclosure of confidential information ofthe Company or any Affiliate.Nothing herein will limit the right of Executive or his beneficiaries to contest the validity ofany determination by the Company to terminate Executive for Cause.(ii) “Incentive Pay” means the annual incentive bonus arrangement described inSection 4(b).(iii) “Post-Change Period” means the period of time commencing on theCommencement Date and continuing until the second anniversary of the Commencement Date.(iv) “Termination Date” means the date on which Executive’s employment with theCompany and its Affiliates is terminated.
 
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9. Termination of Compensation and Benefits; Execution of Release; Coordination ofProvisions. If Executive’s employment terminates otherwise than in a termination entitling himto severance pay and benefits pursuant to Section 7 or Section 8, Executive shall not be entitledto any severance, termination pay or similar compensation or benefits, provided that Executiveshall be entitled to any benefits then due or accrued in accordance with the applicable employeebenefit plans of the Company or applicable law, including “continuation coverage” under theCompany’s group health plans for purposes of Section 4980B of the Code. As a condition ofreceiving any severance compensation for which Executive otherwise qualifies under Section 7 orSection 8, Executive agrees to execute within sixty (60) days following the date of Executive’stermination of employment a general release in favor of the Company in substantially the form setforth hereto as Exhibit B, such release to be delivered, and to have become fully irrevocable, onor before the end of such 60-day period. It is expressly agreed and understood that if such arelease has not been executed and delivered and become fully irrevocable by the end of such 60-dayperiod, no amounts or benefits under Section 7 or 8 shall be or become payable (except that anycontinued medical, dental or life insurance benefits may be provided during such 60-day periodpursuant to Section 7 or 8, as the case may be, but will cease to be provided on the last day ofsuch period). Any severance compensation and benefits to which Executive may be entitled underSection 8 shall be in lieu of any severance compensation or benefits to which Executive may beentitled under Section 7. Executive acknowledges and agrees that, except as specifically describedin Section 7 and Section 8, all of Executive’s rights to any compensation, benefits (other thanbase salary earned through the date of termination of employment and any benefits due or accruedprior to termination of employment in accordance with the applicable employee benefit plans of theCompany or applicable law), bonuses or severance from the Company or any Affiliate aftertermination of the Employment Term shall cease upon such termination.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 orotherwise to an extent or in a manner that would result in payments or benefits (or othercompensation) not being fully deductible by the Company or an Affiliate for federal income taxpurposes because of Section 280G of the Code, or any successor provision thereto (or that wouldresult in Executive being subject to the excise tax imposed by Section 4999 of the Code, or anysuccessor provision thereto). The determination of whether any such payments or benefits to beprovided under this Agreement or otherwise would not be so deductible (or whether Executive wouldbe subject to such excise tax) shall be made at the expense of the Company, if requested by eitherExecutive or the Company, by a firm of independent accountants or a law firm selected by theCompany and reasonably acceptable to Executive. In the event that any payment or benefit intendedto be provided under this Agreement or otherwise would constitute a “parachute payment,” as definedin Section 280G of the Code, the Company shall designate the payments and/or benefits (beginningwith cash payments) to be reduced or modified so that the Company or an Affiliate is not denied anyfederal income tax deductions for any such parachute payment because of Section 280G of the Code(or so that Executive is not subject to the excise tax imposed by Section 4999 of the Code).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 LLC