Document:

Exhibit 10.18

    GREAT
      LAKES WINDOWS

     

    SEPARATION
      AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS

     

    This
      Separation Agreement and General Release of all Claims (the “Agreement”),
      dated
      as of November 28, 2005, is entered into by and between Great Lakes Windows,
      a
      wholly owned subsidiary of Ply Gem Holdings, Inc., a Delaware corporation (the
      “Company”),
      Mark
      A. Watson (the “Executive”)
      and,
      with respect to Section 2C only, Ply Gem Investment Holdings, Inc., a Delaware
      corporation (“PIHI”).

     

    WHEREAS,
      the Executive is currently employed by the Company as its President;
      and

     

    WHEREAS,
      the Company and the Executive have agreed that the Executive’s employment with
      the Company and its subsidiaries and affiliates shall terminate effective
      November 28, 2005 (the “Termination
      Date”),
      and
      the Executive shall relinquish his title of President of the Company and, except
      as specifically provided herein, all other positions of employment, service
      or
      responsibility that he presently holds (whether as an officer, director,
      employee or otherwise) with the Company or any of its subsidiaries or
      affiliates, including, without limitation, PIHI and Ply Gem Industries, Inc.
      (“Ply
      Gem”)
      (collectively, the “Company
      Group”);
      and

     

    WHEREAS,
      the Company desires to provide the Executive with certain benefits upon the
      Executive’s termination of employment with the Company, in exchange for the
      Executive’s agreement to comply with certain restrictive covenants in favor of
      the Company and to release certain claims against the Company and its
      subsidiaries, parents, shareholders and their respective executives, officers,
      directors, partners, members and agents, on the terms and subject to the
      conditions more fully set forth in this Agreement.

     

    NOW
      THEREFORE, in consideration of the promises, mutual covenants and other good
      and
      valuable consideration set forth in this Agreement, the receipt and sufficiency
      of which is hereby acknowledged, the Executive and the Company (the
“Parties”)
      agree
      as follows:

     

    1.  Continuation
      and Termination of Employment; Performance of Mutually Agreed
      Tasks.

     

    A.  The
      Executive will continue working for the Company pursuant to the terms of the
      Employment Agreement through the Termination Date. Pursuant to Section 2 of
      the
      Employment Agreement, the Executive confirms that he and the Chairman and Chief
      Executive Officer of the Company (the “CEO”)
      have
      mutually agreed that the Executive will continue to perform the Tasks for the
      period commencing on the Termination Date and ending on the earlier of January
      27, 2006 or the completion of the Tasks (the “Task
      Completion Date”)
      (with
      both the Executive and the Company acknowledging that the Executive has been
      engaged in the performance of the Tasks prior to the Termination Date), that
      the
      Tasks are consistent with the Executive’s prior status as President of the
      Company and that the Executive will use his best efforts to perform the Tasks
      and complete then as soon as reasonably practicable. The Tasks will be to
      provide advice, support and services (including attending meetings if requested)
      necessary to effect a succesful transition to the new President of the Company.
      Notwithstanding clause (ii) of Section 4(a) of the Employment Agreement, during
      the period following the Termination Date the Company may terminate the
      Executive’s employment with the Company only for “Cause,” as defined in the
      Employment Agreement, or upon the reasonable determination of the Board of
      Directors of the Company (the “Board”)
      that
      the Executive has failed to attempt in good faith to perform the Tasks. The
      Tasks need not be performed by the Executive at the Company’s offices, but the
      Executive may be required to attend specific meetings outside of the Company’s
      offices at specific times as directed by the CEO (it being understood that
      the
      Company will use its reasonable efforts to minimize the number of such meetings
      following the Termination Date). The Executive will stay on the Company’s e-mail
      system until January 27, 2006.

     

    B.  The
      Executive will provide a written report to the CEO no later than five (5)
      business days following the Termination Date, and no later than the fifth (5th)
      day of each calendar month through the Task Completion Date, describing in
      reasonable detail the status of each of the Tasks and the remaining items to
      be
      completed for each of the Tasks.

     

    C.  The
      Executive and the Company hereby agree that Executive’s employment and any and
      all titles, positions and appointments he holds with the Company and any of
      its
      affiliates or subsidiaries (collectively, the “Company
      Group”),
      whether as officer, director, employee, consultant, agent or otherwise
      (including, without limitation as President of the Company) shall cease as
      of
      the Termination Date, unless earlier terminated by the Company for Cause, by
      the
      Executive by resignation or on account of the Executive’s death or disability.
      Effective as of the Termination Date, the Executive shall have no authority
      to
      act on behalf of the Company or any other member of the Company Group, and
      shall
      not hold himself out as having such authority, enter into any agreement or
      incur
      any obligations on behalf of any member of the Company Group, commit any member
      of the Company Group in any manner or otherwise act in an executive or other
      decision-making capacity with respect to any member of the Company
      Group.

     

    2.  Payments
      and Benefits.

     

    In
      consideration for the Executive’s entering into this Agreement, specifically
      including the general release in Section 6 of this Agreement and the restrictive
      covenants contained in Section 5 of this Agreement, the Executive shall be
      entitled to the following payments and benefits, subject to the general release
      becoming effective (i.e., the Executive not exercising his right to revoke
      the
      release as described in Section 6 of this Agreement) and the Executive’s
      continued compliance with the restrictive covenants contained in Section 5
      of
      this Agreement:

     

    A.  Payment
      by the Company of severance pay at an annual rate in an amount equal to
      $234,875.00, which represents the Executive’s annual base salary and performance
      incentive bonus in 2003 (for the avoidance of doubt this amount shall not,
      and
      no portion of any severance paid to the Executive pursuant to this Agreement
      shall include any amounts in respect of any car allowance or payments for any
      other perquisites or benefits for the Executive) and which is subject to
      reduction by the Company to satisfy any applicable federal, state and local
      income and employment tax withholding obligations of the Company. This payment
      shall be made in 24 equal monthly installments during the period from the
      Termination Date until the second anniversary of the Termination Date the
      (“Severance
      Period”).
      The
      Company shall mail the first payment on the day following the date the general
      release described in Section 6 of this Agreement becomes effective (i.e., the
      Executive’s not exercising his right to revoke the release as described in
      Section 6 of this Agreement) and shall make each of the following 23 payments
      on
      the 15th day of each of the months of December 2005 through October 2007
      occurring during the Severance Period by direct deposit into an account of
      the
      Executive; provided, that, if the 15th day of any such month falls on a weekend
      or on a Company holiday, the Company shall make such direct deposit payment
      no
      later than the Monday or first business day (as applicable) following the
      15th;

     

    B.  Provided
      that the Executive, or any of his covered dependents, as applicable, timely
      elects to continue medical and dental coverage in accordance with the
      Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
      (“COBRA”),
      payment by the Company of the COBRA premiums for the Executive and each of
      his
      eligible covered dependents for whom continuation coverage is elected, for
      the
      period commencing on the Termination Date and ending on the earlier of (i)
      last
      day of the Severance Period, and (ii) the date on which the Executive’s COBRA
      coverage otherwise terminates as provided by law;

     

     

     

     

    C.  An
      amount
      equal to $423,000.00 (the “Stock
      Repurchase Amount”),
      shall
      be paid to you by PIHI, which shall constitute a repurchase by PIHI of (A)
      the
      28,710 shares of common stock par value $0.01 per share of PIHI (“PIHI
      Stock”)
      held
      by the Executive as of the Termination Date that were purchased by the Executive
      pursuant to the Ply Gem Investment Holdings, Inc. Subscription Agreement, dated
      as of February 12, 2004, by and between PIHI and the Executive (the
“Subscription
      Agreement”)
      and
      (B) the 13,590 phantom
      incentive units
      held by
      the Executive as of the Termination Date that were acquired by the Executive
      pursuant to the “Ply
      Gem
      Investment Holdings, Inc. Amended and Restated Phantom Stock Plan” (the
“Amended
      and Restated Phantom Stock Plan”),
      calculated
      based on a $10.00 purchase price per share of PHIC Stock. All phantom
      incentive units
      belonging to the Executive as well as all of Executive’s rights under the
Amended
      and Restated Phantom Stock Plan
      are
      terminated in full as of the Termination Date. The Stock Repurchase Amount
      shall
      be mailed to the Executive on February 15, 2006 (the “Stock
      Repurchase Payment Date”),
      assuming that the general release has become effective as of the Stock
      Repurchase Payment Date, i.e., that the Executive has not exercised any of
      his
      rights to revoke as described in Section 6 of this Agreement. The Executive
      acknowledges and agrees that, except as provided in this Section 2C, as of
      the
      date of this Agreement, there are no outstanding stock options or other equity
      awards held by the Executive that were granted to the Executive by the Company,
      PIHI or any other member of the Company Group and the Executive does not hold
      any other shares of PIHI Stock, or hold or have any rights relating to PIHI
      Stock or any other securities of the Company or of any member of the Company
      Group;

     

    D.  Regardless
      of whether the Executive signs this Agreement, as soon as reasonably practicable
      following the Termination Date or such earlier date as may be required by
      applicable state statute or regulation, (i) any annual base salary earned but
      unpaid through the Termination Date, (ii) payment in respect of any vacation
      time that is accrued but unused through the Termination Date, and (iii)
      reimbursement for all un-reimbursed business expenses properly incurred by
      the
      Executive in accordance with Company policy prior to the Termination Date and
      not yet reimbursed by the Company; provided, that, the Executive must submit
      to
      the Company, within 21 days after the Termination Date, any outstanding expense
      reports within his possession, and the Executive shall not receive reimbursement
      in respect of any expense reports submitted after such date.

     

    E.  All
      benefits accrued up to the Termination Date, to the extent vested, under all
      employee benefit plans of the Company and any member of the Company Group,
      except for any plan that provides for severance, separation pay or termination
      benefits, in accordance with the terms of such plans and under the Option
      Agreement, Subscription Agreement, Stockholders Agreement or any other agreement
      governing any securities of any member of the Company Group that are held by
      the
      Executive as of the Termination Date. 

     

    The
      Executive acknowledges and agrees that (i) the Executive’s receipt of all
      payments and benefits provided in Section 2 of this Agreement constitutes full
      and final payment, accord and satisfaction of any and all potential claims
      to
      the extent described in Section 6 of this Agreement, (ii) except for the
      payments and benefits described in Sections 2A through 2C of this Agreement,
      to
      which the Executive is only entitled if he does not exercise his rights of
      revocation as provided in Section 6 of this Agreement and continues to comply
      with the restrictive covenants contained in Section 5 of this Agreement, the
      Executive is not entitled to any other compensation or benefits from the Company
      or any member of the Company Group (including without limitation any severance
      or termination compensation or benefits), and (iii) as of and after the
      Termination Date, the Executive shall no longer participate in, accrue service
      credit or have contributions made on his behalf under any employee benefit
      plan
      sponsored by any member of the Company Group in respect of periods commencing
      on
      and following the Termination Date, including without limitation, any plan
      which
      is intended to qualify under Section 401(a) of the Internal Revenue Code of
      1986, as amended (a “Qualified
      Plan”);
      provided, that, except as expressly provided herein, nothing in this Agreement
      shall constitute a waiver by the Executive of his rights to vested benefits,
      if
      any, under any Qualified Plan or under any Company group health plan or to
      any
      other fringe benefits to which he may be entitled under applicable law in
      respect of his services to the Company prior to the Termination
      Date.

     

    If
      the
      Executive revokes the Initial Release pursuant to Sections 6A-6F of this
      Agreement during the revocation period described in such section, then this
      Agreement shall be void as of and following the date of this Agreement, and
      the
      Executive shall be deemed to have resigned from the Company as of such date
      and
      the applicable provisions of employee benefit plans and of the Ply Gem
      Investment Holdings, Inc. Stockholders Agreement, dated as of February 12,
      2004,
      by and between PIHI, Caxton-Iseman (Ply Gem), L.P. and certain other investors
      in and management stockholders of PIHI (the “Stockholders
      Agreement”)
      shall
      apply. If the Executive does not revoke the Initial Release, but fails to give
      or revokes after giving the Task Completion Date Release, then the provisions
      of
      Section 6G shall apply.

     

    3.  Additional
      Consideration.

     

    The
      Executive acknowledges that, except with respect to the payments described
      in
      Section 2D of this Agreement, pursuant to this Agreement he is receiving
      consideration in addition to any amounts to which he would have otherwise been
      entitled but for this Agreement.

     

    4.  Return
      of Company Property.

     

      No
      later
      than the Task Completion Date, the Executive shall return to the Company all
      originals and copies of papers, notes and documents (in any medium, including
      computer disks), whether property of any member of the Company Group or not,
      prepared, received or obtained by the Executive during the course of, and in
      connection with, his employment with or services for the Company or any member
      of the Company Group, and all equipment and property of any member of the
      Company Group which may be in the Executive’s possession or under his control,
      whether at the Company’s offices, the Executive’s home or elsewhere, including
      all such papers, work papers, notes, documents and equipment in the possession
      of the Executive. The Executive agrees that he and his family shall not retain
      copies of any such papers, work papers, notes and documents. Notwithstanding
      the
      foregoing, the Executive may retain copies of any employment, compensation,
      benefits or shareholders agreements between the Executive and the Company,
      this
      Agreement and any employee benefit plan materials distributed generally to
      participants in any such plan by the Company. On the Task Completion Date,
      all
      telephone and other accounts being paid by the Company on the Executive’s
      behalf, shall be terminated and all company credit cards shall be returned
      to
      the Company and canceled. To the extent any charges are made by the Executive
      using company accounts or credit cards after the Task Completion Date, such
      charges will be solely the Executive’s responsibility. 

    

    5.  Restrictive
      Covenants

     

    A.  Survival
      of Non-Disclosure Agreement; Employee Information Agreement; Ply Gem Code of
      Ethics

     

    Notwithstanding
      anything to the contrary in this Agreement, the covenants and other provisions
      set forth in the Employee’s Non-Disclosure Agreement, previously signed by the
      Executive (the “Non-Disclosure
      Agreement”),
      the
      Great Lakes Windows Employee Information Agreement, (the “Employee
      Information Agreement”),
      the
      Ply Gem Industries, Inc. Code of Ethics (the “Ply
      Gem Code of Ethics”)
      and
      Section 6.3 of the Stockholders Agreement that expressly survive termination
      of
      the Executive’s employment shall survive the Termination Date and be effective
      for the periods described therein.

     

    B.  Non-Competition/Non-Solicitation

     

    The
      Executive acknowledges and recognizes the highly competitive nature of the
      Company and accordingly agrees as follows:

     

    1.  During
      the period commencing on the Termination Date and ending on the second
      anniversary of such date (the “Restricted
      Period”)
      or
      such longer period as described in the last sentence of Section 5G of this
      Agreement, the Executive will not, directly or indirectly, (w) engage
      in any “Competitive Business” (defined below) for the Executive’s own account,
      (x) enter the employ of, or render any services to, any person engaged in
      any Competitive Business, (y) acquire a financial interest in, or otherwise
      become actively involved with, any person engaged in any Competitive Business,
      directly or indirectly, as an individual, partner, shareholder, officer,
      director, principal, agent, trustee or consultant, or (z) interfere with
      business relationships between the Company and customers or suppliers of, or
      consultants to the Company.

     

    2.  For
      purposes of this Section 5B, a “Competitive
      Business”
means,
      as of any date, including during the Restricted Period, (A) any person or entity
      (including any joint venture, partnership, firm, corporation or limited
      liability company) that engages in or proposes to engage in the manufacturing
      of
      windows, doors or siding, or (B) any business or activity that relates to the
      design, marketing, distribution, resale, wholesale or retailing of windows,
      doors or siding, in the case of clause (A) or (B), in any geographical area
      in
      which the Company does business.

     

    3.  For
      purposes of this Section 5B, the Company shall be construed to include the
      Company and its subsidiaries and controlled affiliates.

     

    4.  Notwithstanding
      anything to the contrary in this Agreement, the Executive may, directly or
      indirectly, own, solely as an investment, securities of any person engaged
      in
      the business of the Company which are publicly traded on a national or regional
      stock exchange or on the over-the-counter market if the Executive (A) is
      not a controlling person of, or a member of a group which controls, such person
      and (B) does not, directly or indirectly, own one percent (1%) or more of
      any class of securities of such person.

     

    5.  During
      the Restricted Period, the Executive will not, directly or indirectly, without
      the Company’s written consent, solicit or encourage to cease to work with the
      Company any employee or any consultant of the Company or any person who was
      an
      employee of or consultant then under contract with the Company within the
      24-month period preceding such solicitation or encouragement activity. In
      addition, during the Restricted Period, the Executive will not, without the
      Company’s written consent, directly or indirectly hire any person who is or who
      was, within the 24-month period preceding such hiring activity, an employee
      of
      the Company.

     

    6.  The
      Executive understands that the provisions of this Section 5B may limit the
      Executive’s ability to earn a livelihood in a business similar to the business
      of the Company, but the Executive nevertheless agrees and hereby acknowledges
      that (A) such provisions do not impose a greater restraint than is necessary
      to
      protect the goodwill or other business interests of the Company, (B) such
      provisions contain reasonable limitations as to time and scope of activity
      to be
      restrained, (C) such provisions are not harmful to the general public and (D)
      such provisions are not unduly burdensome to the Executive. In consideration
      of
      the foregoing and in light of the Executive’s education, skills and abilities,
      the Executive agrees that he shall not assert that, and it should not be
      considered that, any provisions of Section 5B otherwise are void, voidable
      or
      unenforceable or should be voided or held unenforceable.

     

    7.  It
      is
      expressly understood and agreed that, although the Executive and the Company
      consider the restrictions contained in this Section 5B to be reasonable, if
      a judicial determination is made by a court of competent jurisdiction that
      the
      time or territory or any other restriction contained in this Section 5B or
      elsewhere in this Agreement is an unenforceable restriction against the
      Executive, the provisions of the Agreement shall not be rendered void but shall
      be deemed amended to apply as to such maximum time and territory and to such
      maximum extent as such court may judicially determine or indicate to be
      enforceable. Alternatively, if any court of competent jurisdiction finds that
      any restriction contained in this Agreement is unenforceable, and such
      restriction cannot be amended so as to make it enforceable, such finding shall
      not affect the enforceability of any of the other restrictions contained
      herein.

     

    C.  Nondisparagement

     

      The
        Executive agrees not to issue, circulate, publish or utter any false or
        disparaging statements, remarks or rumors about any member of the Company
        Group
        or any of their respective shareholders, officers, directors or managers
        other
        than to the extent reasonably necessary in order to (i) assert a bona fide
        claim
        against a member of the Company Group arising out of the Executive’s employment
        with the Company, or (ii) respond in a truthful and appropriate manner to
        any
        legal process or give truthful and appropriate testimony in a legal or
        regulatory proceeding. 

     

    D.  References

     

    The
      Company agrees that, in response to a request from any person or entity for
      a
      reference check on the Executive, the Company shall only provide such person
      or
      entity with the Executive’s dates of employment and title and position held.
      Nothing herein precludes employees of the Company or any employee of any member
      of the Company Group from providing a reference if so requested by the
      Executive, and the Company agrees not to prohibit such provision.

     

    E.  Confidentiality/Company
      Property

     

    The
      Executive shall not, without the prior written consent of the Company or any
      applicable member of the Company Group, use, divulge, disclose or make
      accessible to any other person, firm, partnership, corporation or other entity,
      any “Confidential Information” or any “Personal Information” (as such terms are
      defined below); provided that the Executive may disclose such information when
      required to do so by a court of competent jurisdiction, by any governmental
      agency having supervisory authority over the business of any member of the
      Company Group, as the case may be, or by any administrative body or legislative
      body (including a committee thereof) with jurisdiction to order the Executive
      to
      divulge, disclose or make accessible such information; provided, further, that
      in the event that the Executive is ordered by a court or other government agency
      to disclose any Confidential Information or Personal Information, the Executive
      shall (i) promptly notify the applicable member of the Company Group of
      such order, (ii) at the written request of such member, diligently contest
      such order at the sole expense of such member as expenses occur, and
      (iii) at the written request of such member, seek to obtain, at the sole
      expense of the member, such confidential treatment as may be available under
      applicable laws for any information disclosed under such order. For purposes
      of
      this Section 5E, (i) “Confidential
      Information”
shall
      mean non-public information concerning the financial data, strategic business
      plans, product development (or other proprietary product data), customer lists,
      marketing plans and other non-public, proprietary and confidential information
      relating to the business of any member of the Company Group or customers, that,
      in any case, is not otherwise available to the public (other than by the
      Executive’s breach of the terms hereof) and (ii) “Personal
      Information”
shall
      mean any information concerning the personal, social or business activities
      of
      the shareholders, officers or directors of any member of the Company Group.
      Upon
      termination of the Executive’s employment with the Company, and except as
      provided in Section 4 of this Agreement, the Employee shall return all Company
      property, including, without limitation, files, records, disks and any media
      containing Confidential Information or Personal Information.

     

    F.  Cooperation

     

    At
      any
      time after the Termination Date, the Executive agrees to cooperate (i) with
      any
      member of the Company Group in the defense of any legal matter involving any
      matter that arose during the Executive’s employment with the Company or service
      to any member of the Company Group and (ii) with all government authorities
      on
      matters pertaining to any investigation, litigation or administrative proceeding
      pertaining to any member of the Company Group. The applicable member of the
      Company Group will reimburse the Executive for any reasonable travel and out
      of
      pocket expenses incurred by the Executive in providing such cooperation. In
      addition, with respect to any time after the Severance Period, the Company,
      or
      any applicable member of the Company Group, as applicable, shall pay the
      Executive a fee equal to $2,000 per day, pro-rated for any partial days, that
      the Executive is required to cooperate with any member of the Company Group
      or
      any government authorities in compliance with this Section 5F.

     

     

     

    G.  Enforcement

     

    The
      Executive acknowledges and agrees that the Company Group’s remedies at law for a
      breach or threatened breach of any of the provisions of Sections 5.A, 5B, 5C
      and
      5E of this Agreement would be inadequate, and, in recognition of this fact,
      the
      Executive agrees that, in the event of such a breach or threatened breach,
      in
      addition to any remedies at law, the Company Group, without posting any bond,
      shall be entitled to obtain equitable relief in the form of specific
      performance, temporary restraining order, temporary or permanent injunction
      or
      any other equitable remedy which may then be available, and the Executive shall
      reimburse any member of the Company Group for all reasonable attorneys’ fees,
      expenses and costs incurred by such member in connection with such member’s
      efforts to enforce such covenants. In addition, the Company shall be entitled
      to
      immediately cease paying any amounts remaining due or providing any benefits
      to
      the Executive pursuant to Section 2 of this Agreement and, subject to applicable
      state law, to reclaim any amounts already paid to the Executive under this
      Agreement upon a determination by the Company Group that the Executive has
      violated any provision of Section 5 of this Agreement that is listed above,
      subject to payment of all such amounts upon a final determination that the
      Executive had not violated such section. If the Executive breaches any of the
      covenants contained in Section 5 of this Agreement and any member of the Company
      Group obtains injunctive relief with respect thereto, the period during which
      the Executive is required to comply with that particular covenant shall be
      extended by the same period that the Executive was in breach of such covenant
      prior to the effective date of such injunctive relief.

     

    6.  Acknowledgment
      and Release.
      

     

    A.  Initial
      Release
      The
      Executive acknowledges and agrees that the payments and benefits described
      in
      Sections 2A, 2B and 2C above shall be contingent on the Executive’s not revoking
      the Agreement during the seven-day revocation period described in Section 6B
      of
      this Agreement. If the Executive revokes this Agreement during such revocation
      period, this Agreement shall be null and void and of no further force and
      effect.

     

    B.  The
      Executive shall have seven days from the date of his execution of this Agreement
      to revoke this Agreement, including the release given under this Section 6
      with
      respect to all claims referred to herein (including, without limitation, any
      and
      all claims arising under the ADEA). If the Executive revokes this Agreement
      including, without limitation, the release given under this Section 6, the
      Executive will be deemed not to have accepted the terms of this Agreement,
      including any action required of the Company by any section of this
      Agreement.

     

    C.  In
      consideration of the Company’s execution of this Agreement, and except with
      respect to the Company’s obligations arising under or preserved in this
      Agreement, the Executive, for and on behalf of himself and his heirs and
      assigns, hereby waives and releases any common law, statutory or other
      complaints, claims, charges or causes of action arising out of or relating
      to
      the Executive’s employment or termination of employment with, or his serving in
      any capacity in respect of, any member of the Company Group, both known and
      unknown, in law or in equity, which the Executive may now have or ever had
      against any member of the Company Group or any shareholder, employee, director
      or officer of any member of the Company Group (collectively, the “Releasees”),
      including, without limitation, any claim for any severance benefit which but
      for
      this Agreement might have been due the Executive under any previous agreement
      executed by and between any member of the Company Group and the Executive,
      and
      any complaint, charge or cause of action arising out of his employment with
      the
      Company Group under the Age Discrimination in Employment Act of 1967
      (“ADEA,”
a
      law
      which prohibits discrimination on the basis of age), the National Labor
      Relations Act, the Civil Rights Act of 1991, the Americans With Disabilities
      Act
      of 1990, Title VII of the Civil Rights Act of 1964, the Employee Retirement
      Income Security Act of 1974, all as amended; and all other federal, state and
      local laws. By signing this Agreement the Executive acknowledges that he intends
      to waive and release any rights known or unknown he may have against the
      Releasees under these and any other laws; provided, that the Executive does
      not
      waive or release claims with respect to the right to enforce this
      Agreement.

     

    D.  The
      Executive acknowledges that he has not filed any complaint, charge, claim or
      proceeding against any of the Releasees before any local, state or federal
      agency, court or other body relating to his employment or the resignation
      thereof (each individually a “Proceeding”).
      The
      Executive represents that he is not aware of any basis on which such a
      Proceeding could reasonably be instituted.

     

    E.  The
      Executive (i) acknowledges that he will not initiate or cause to be initiated
      on
      his behalf any Proceeding and will not participate in any Proceeding, in each
      case, except as required by law; and (ii) waives any right he may have to
      benefit in any manner from any relief (whether monetary or otherwise) arising
      out of any Proceeding, including any Proceeding conducted by the Equal
      Employment Opportunity Commission (“EEOC”).
      Further, the Executive understands that by entering into this Agreement, he
      will
      be limiting the availability of certain remedies that he may have against the
      Company and also limiting his ability to pursue certain claims against the
      Releasees. Notwithstanding the above, nothing in this Section 12 shall prevent
      the Executive from (i) initiating or causing to be initiated on his behalf
      any
      complaint, charge, claim or proceeding against the Company before any local,
      state or federal agency, court or other body challenging the validity of the
      waiver of his claims under ADEA contained in this Section 12 (but no other
      portion of such waiver); or (ii) initiating or participating in an investigation
      or proceeding conducted by the EEOC with respect to the ADEA.

     

    F.  The
      Executive acknowledges that he has been given 21 days from the date of receipt
      of this Agreement to consider all the provisions of this Agreement and he does
      hereby knowingly and voluntarily waive said given 21-day period. THE
      EXECUTIVE FURTHER ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT CAREFULLY, HAS
      BEEN ADVISED BY THE COMPANY TO CONSULT AN ATTORNEY, AND FULLY UNDERSTANDS THAT,
      BY SIGNING BELOW, HE IS GIVING UP CERTAIN RIGHTS WHICH HE MAY HAVE TO SUE OR
      ASSERT A CLAIM AGAINST ANY OF THE RELEASEES, AS DESCRIBED IN THIS SECTION 12
      AND
      THE OTHER PROVISIONS HEREOF. THE EXECUTIVE ACKNOWLEDGES THAT HE HAS NOT BEEN
      FORCED OR PRESSURED IN ANY MANNER WHATSOEVER TO SIGN THIS AGREEMENT, AND THE
      EXECUTIVE AGREES TO ALL OF ITS TERMS VOLUNTARILY.

     

    G.  Task
      Completion Date Release
      Those
      payments and benefits described in Sections 2A, 2B and 2C above which are due
      after the Termination Date shall be contingent on the Executive’s execution on
      the Task Completion Date of a release of claims substantially in the form
      attached to this Agreement as Exhibit A (the “Task
      Completion Date Release”),
      and
      not revoking such Task Completion Date Release during the applicable seven-day
      revocation period. If the Executive revokes such Task Completion Date Release
      during the period described in the immediately preceding sentence, this
      Agreement (other than the Release given in Sections 6A-6F, and other than the
      payments and benefits due between the Termination Date and the Task Completion
      Date) shall be void as of and following the Termination Date.

     

    7.  Miscellaneous.

     

    A.  Entire
      Agreement.
      This
      Agreement is the entire agreement between the Parties with respect to the
      subject matter hereof and contains all agreements, whether written, oral,
      express or implied, between the Parties relating thereto and supersedes and
      extinguishes any other agreement relating thereto, whether written, oral,
      express or implied, between the Parties, including, without limitation, the
      Subscription Agreement and the Amended
      and Restated Phantom Stock Plan;
      provided, that the Non-Disclosure Agreement, the Employee Information Agreement
      and the Executive’s obligations pursuant to the Ply Gem Code of Ethics shall not
      be superseded by this Agreement and shall remain in full force and effect,
      and
      provided, further, that no rights or obligations established under any
      superseded agreement and specifically preserved by this Agreement are
      extinguished. All phantom
      incentive units
      belonging to the Executive as well as all of Executive’s rights under the
Amended
      and Restated Phantom Stock Plan
      are
      terminated in full as of the Termination Date. Other than this Agreement and
      as
      otherwise explicitly stated herein, there are no agreements of any nature
      whatsoever between the Executive and any member of the Company Group that
      survive this Agreement. Notwithstanding the foregoing or anything to the
      contrary in this Agreement, the Executive agrees that, as of the Termination
      Date, the Executive shall have no further rights pursuant to the Stockholders
      Agreement; provided that the provisions of Section 6.3 of the Stockholders
      Agreement regarding post-employment covenants of the Executive shall remain
      binding on the Executive and survive in accordance with their
      terms.

     

    B.  Modification.
      This
      Agreement may not be modified or amended, nor may any rights under it be waived,
      except in a writing signed and agreed to by the Parties. 

     

    C.  Notices.
      Any
      notice given pursuant to the Agreement to any party hereto shall be deemed
      to
      have been duly given when mailed by registered or certified mail, return receipt
      requested, or by overnight courier, or when hand delivered as
      follows:

    

    If
      to the
      Company:

    

    Great
      Lakes Windows

    c/o
      Ply
      Gem Holdings, Inc.                

    P.O.
      Box
      1017

    Kearney,
      MO 64060

    Attention:  Lee
      Meyer, Chief Executive Officer

     

     

    Paul,
      Weiss, Rifkind, Wharton & Garrison LLP

    1285
      Avenue of the Americas

    New
      York,
      New York 10019-6064

    Attention:  Carl
      Reisner, Esq. 

     

                    If
      to the
      Executive:

     

    [Address]

     

    or
      at
      such other address as either party shall from time to time designate by written
      notice, in the manner provided herein, to the other party hereto.

     

    D.  Successors;
      Death Benefit.
      The
      Agreement shall be binding upon and inure to the benefit of the Parties, their
      respective heirs, successors and assigns. In the event the Executive dies at
      any
      time before any amounts payable to him under this Agreement are paid in full,
      the amounts remaining to be paid under this Agreement at the time of his death
      shall be paid (at such times as such amounts would have been paid to the
      Executive) to his surviving spouse, if any, and otherwise to his
      estate.

     

    E.  Taxes.
      Notwithstanding any other provision of this Agreement to the contrary, the
      Company or any member of the Company Group, as applicable, may withhold from
      all
      amounts payable under this Agreement all federal, state, local and foreign
      taxes
      that are required to be withheld pursuant to any applicable laws and
      regulations. The Executive shall be responsible for the payment of his portion
      of any and all required federal, state, local and foreign taxes incurred, or
      to
      be incurred, in connection with any amounts payable to the Executive under
      this
      Agreement. 

     

    F.  Severability.
      In the
      event that any provision of the Agreement is determined to be invalid or
      unenforceable, the remaining terms and conditions of the Agreement shall be
      unaffected and shall remain in full force and effect. In addition, if any
      provision is determined to be invalid or unenforceable due to its duration
      and/or scope, the duration and/or scope of such provision, as the case may
      be,
      shall be reduced, such reduction shall be to the smallest extent necessary
      to
      comply with applicable law, and such provision shall be enforceable, in its
      reduced form, to the fullest extent permitted by applicable law.

     

    G.  Non-Admission.
      Nothing
      contained in the Agreement shall be deemed or construed as an admission of
      wrongdoing or liability on the part of the Executive or on the part of any
      member of the Company Group.

     

    H.  No
      Mitigation.
      The
      Executive shall not be required to mitigate the amount of any payment provided
      for pursuant to this Agreement by seeking other employment and, to the extent
      that the Executive obtains or undertakes other employment, the payment will
      not
      be reduced by the earnings of the Executive from the other
      employment.

     

    I.  Venue.
      Any
      action or other legal proceeding arising under or relating to any provision
      of
      this Agreement shall be commenced only in a court of the State of Ohio (or,
      if
      appropriate, a federal court located within the State of Ohio), and the Company
      and the Executive hereby consent to the jurisdiction of such a court.

     

    J.  Governing
      Law/Waiver of Jury Trial.
      The
      Agreement shall be governed by, and construed in accordance with the internal
      laws of the State of Ohio, without regard to principles of conflicts of laws
      of
      such state that may cause the laws of another state to apply. The Company and
      the Executive each hereby waive any right to a trial by jury in any action,
      suit
      or other legal proceeding arising under or relating to any provision of this
      Agreement.

     

    K.  Counterparts.
      The
      Agreement may be executed by one or more of the Parties hereto on any number
      of
      separate counterparts and all such counterparts shall be deemed to be one and
      the same instrument. Each party hereto confirms that any facsimile copy of
      such
      party’s executed counterpart of the Agreement (or its signature page thereof)
      shall be deemed to be an executed original thereof.

     

    [Remainder
      of Page Intentionally Left Blank]

     

    
      
        

        Doc
          #:NY7:89700.2

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    IN
      WITNESS WHEREOF, the undersigned have executed the Agreement on the date first
      written above.

     

                        GREAT
      LAKES
      WINDOWS

     

                        By:_________________________________

                        Title:

    

    

    

    

                        _________________________________
      

                        Mark
      A.
      Watson

                        [Address]

     

    

     

                        With
      respect to
      Section 2C only, 

     

                        PLY
      GEM INVESTMENT
      HOLDINGS, INC.

     

                        By:_________________________________

                        Title:

    
      
        

        Doc
          #:NY7:89700.2

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

     

    RELEASE
      OF CLAIMS

     

    [Great
      Lakes Windows, a wholly owned subsidiary of Ply Gem Holdings, Inc., a Delaware
      corporation] (the “Company”)
      and
      Mark A. Watson (the “Executive”)
      are
      parties to a Separation Agreement and General Release of all Claims, dated
      as of
      November 28, 2005, under which the parties mutually agreed to terminate the
      Employment Agreement by and between the Company and the Executive, (the
“Employment
      Agreement”),
      and
      the Executive’s employment thereunder (the “Termination
      Agreement”).
      In
      consideration of the promises set forth in this Release and the Termination
      Agreement, the Executive agrees as follows:

     

    1.  Acknowledgment
      and Release

     

    In
      consideration of the Company’s execution of the Termination Agreement, and
      except with respect to the Company’s obligations arising under or preserved in
      the Termination Agreement, the Executive, for and on behalf of himself and
      his
      heirs and assigns, hereby waives and releases all common law, statutory or
      other
      complaints, claims, charges or causes of action arising out of or relating
      to
      the Executive’s employment or termination of employment with, or his serving in
      any capacity in respect of, any member of the Company Group (as defined in
      the
      Termination Agreement), both known and unknown, in law or in equity, which
      the
      Executive may now have or ever had against any member of the Company Group
      or
      any shareholder, employee, director or officer of any member of the Company
      Group (collectively, the “Releasees”), including, without limitation, any claim
      for any severance benefit which but for this Release and the Termination
      Agreement might have been due the Executive under any previous agreement
      executed by and between any member of the Company Group and the Executive,
      and
      any complaint, charge or cause of action arising out of his employment with
      the
      Company Group under the Age Discrimination in Employment Act of 1967 (“ADEA,” a
      law which prohibits discrimination on the basis of age), the National Labor
      Relations Act, the Civil Rights Act of 1991, the Americans With Disabilities
      Act
      of 1990, Title VII of the Civil Rights Act of 1964, the Employee Retirement
      Income Security Act of 1974, all as amended; and all other federal, state and
      local laws. By signing this Release the Executive acknowledges that he intends
      to waive and release all rights known or unknown he may have against the
      Releasees under these and any other laws; provided, that the Executive does
      not
      waive or release claims with respect to the right to enforce this Release or
      the
      Termination Agreement.

     

    The
      Executive acknowledges that he has not filed any complaint, charge, claim or
      proceeding against any of the Releasees before any local, state or federal
      agency, court or other body relating to his employment or the resignation
      thereof (each individually a “Proceeding”).
      The
      Executive represents that he is not aware of any basis on which such a
      Proceeding could reasonably be instituted.

     

    The
      Executive (i) acknowledges that he will not initiate or cause to be
      initiated on his behalf any Proceeding and will not participate in any
      Proceeding, in each case, except as required by law; and (ii) waives any
      right he may have to benefit in any manner from any relief (whether monetary
      or
      otherwise) arising out of any Proceeding, including any Proceeding conducted
      by
      the Equal Employment Opportunity Commission (“EEOC”).
      Further, the Executive understands that by entering into this Release, he will
      be limiting the availability of certain remedies that he may have against the
      Company and also limiting his ability to pursue certain claims against the
      Releasees. Notwithstanding the above, nothing in this Release shall prevent
      the
      Executive from (i) initiating or causing to be initiated on his behalf any
      complaint, charge, claim or proceeding against the Company before any local,
      state or federal agency, court or other body challenging the validity of the
      waiver of his claims under ADEA contained in this Release (but no other portion
      of such waiver); or (ii) initiating or participating in an investigation or
      proceeding conducted by the EEOC with respect to ADEA.

     

    The
      Executive acknowledges that he has been given 21 days from the date of receipt
      of this Release to consider all the provisions of this Release and he does
      hereby knowingly and voluntarily waive said given 21 day period. THE
      EXECUTIVE FURTHER ACKNOWLEDGES THAT HE HAS READ THIS RELEASE CAREFULLY, HAS
      BEEN
      ADVISED BY THE COMPANY TO CONSULT AN
      ATTORNEY, AND FULLY UNDERSTANDS THAT BY SIGNING BELOW, HE IS GIVING UP CERTAIN
      RIGHTS WHICH HE MAY HAVE TO SUE OR ASSERT A CLAIM AGAINST ANY OF THE RELEASEES,
      AS DESCRIBED IN THIS RELEASE AND THE OTHER PROVISIONS HEREOF. THE EXECUTIVE
      ACKNOWLEDGES THAT HE HAS NOT BEEN FORCED OR PRESSURED IN ANY MANNER WHATSOEVER
      TO SIGN THIS RELEASE, AND THE EXECUTIVE AGREES TO ALL OF ITS TERMS
      VOLUNTARILY.

     

    The
      Executive shall have seven days from the date of his execution of this Release
      to revoke this Release. If the Executive revokes this, the Executive will be
      deemed not to have accepted the terms of the Termination Agreement (other than
      the Release given in Sections 6A-6F thereof from and after the Task Completion
      Date), including any action required of the Company after the Task Completion
      Date by any Section of the Termination Agreement.

     

    The
      Executive acknowledges that nothing in this Release shall constitute any
      admission of wrongdoing by the Company or any Releasee.

     

    

    

                        _________________________________
      

                        Mark
      A.
      Watson

    

     

    Dated: January
      27, 2006EX-10.1

STOCK APPRECIATION RIGHT AWARD AGREEMENT

National Atlantic Holdings Corporation

2004 Stock and Incentive Plan

This Award Agreement (this “Agreement”) made as of this      day of      ,
20     , between National Atlantic Holdings Corporation, a New Jersey corporation (the
“Company”), and      (the “Participant”), is made pursuant to the
terms of the National Atlantic Holdings Corporation 2004 Stock and Incentive Plan (the
“Plan”). Capitalized terms used herein but not defined shall have the meanings set forth
in the Plan.

Section 1. Grant of Stock Appreciation Right. The Company grants to the
Participant, on the terms and conditions set forth herein, a stock appreciation right (the
“SAR”) in respect of [ ] shares of the Company’s Common Stock, effective as of the date
hereof (the “Date of Grant”).

Section 2. Base Price. The base price per share of the SAR shall be $[ ],
which is the Fair Market Value of a share of Common Stock as of the Date of Grant (the “Base
Price”).

Section 3. Vesting of SAR.

(a) Vesting Schedule. The SAR shall vest and become exercisable in six (6) equal
semi-annual installments, each of which shall relate to one-sixth of the shares of Common Stock
subject to the SAR, commencing on June 30, 2006 and continuing on December 31, 2006, June 30,
2007, December 31, 2007, June 30, 2008 and ending on December 31, 2008 subject to the
Participant’s continued employment with the Company or any Subsidiary on each such vesting date.

(b) Acceleration Events. Notwithstanding the provisions of Section 3(a) hereof, to
the extent that the SAR has not previously been forfeited in accordance with the terms of this
Agreement, the SAR shall become fully and immediately vested and exercisable upon (i) the
Participant’s termination of employment by the Company without “Cause” (as defined in Section 5(b)
hereof) or as a result of death or Disability, or (ii) the occurrence of a Change in Control of the
Company, provided that the SAR remains outstanding immediately prior to the effective date
of the Change in Control.

Section 4. SAR Term. The portion of the SAR that becomes vested pursuant to
Section 3 hereof may be exercised at any time on or after the date of such vesting and prior to the
expiration of the term of the SAR (the “SAR Term”). The SAR Term shall expire on the day
prior to the tenth anniversary of the Date of Grant, unless earlier terminated in accordance with
the terms of the Plan or upon termination of the Participant’s employment with the Company or any
Subsidiary (“Termination of Employment”) in accordance with Section 5 hereof. Upon the
expiration of the SAR Term, any unexercised portion of the SAR shall be cancelled and shall be of
no further force or effect.

Section 5. Termination of Employment.

(a) General. In the event of a Termination of Employment for any reason prior to the
date that the SAR becomes fully vested in accordance with Section 3 hereof, the Participant shall
forfeit the Participant’s interest in the portion of the SAR that has not yet become vested, which
shall be cancelled and be of no further force or effect. In the event of a Termination of
Employment for any reason following vesting, the Participant shall retain the right to exercise the
portion of the SAR that has previously become vested until the expiration of 90 days following the
effective date of such Termination of Employment (or the expiration of the applicable SAR Term, if
earlier).

(b) Cause. Notwithstanding the provisions of Section 5(a) hereof, in the event of a
Termination of Employment for “Cause” (as defined below), the Participant’s right to exercise the
SAR, whether or not vested, shall immediately terminate and all rights hereunder shall cease as of
the effective date of such Termination of Employment. For purposes hereof, the term
“Cause” shall mean (i) a willful and continuing failure of the Participant to substantially
perform the Participant’s duties to the Company (other than as a result of the Participant’s death
or Disability), or the Participant’s gross negligence in the performance of such duties, (ii) the
conviction of the Participant of a felony under the laws of the United States or any state thereof,
or (iii) the Participant’s willful breach of a fiduciary duty, willful disregard of material
Company rules, or an act of embezzlement or fraud involving the Company or any of its Subsidiaries.
Notwithstanding the foregoing, if the Participant is a party to an employment or similar agreement
with the Company or any Subsidiary, the term “Cause” shall, for the purposes of this Agreement,
have the same meaning set forth in such employment or similar agreement if and to the extent such
term is defined therein.

(c) Death or Disability. Notwithstanding the provisions of the second sentence of
Section 5(a) hereof, in the event of a Termination of Employment as a result of death or
Disability, the Participant, or the Participant’s legal representative, shall retain the right to
exercise the SAR in accordance with the terms hereof until the expiration of 12 months following
the effective date of such Termination of Employment (or the expiration of the applicable SAR Term,
if earlier).

Section 6. Procedure for Exercise; Payment of SAR.

(a) Notice of Exercise. The SAR may be exercised, in whole or in part, with respect
to the vested portion of the SAR, at any time during the term hereof by notice to the Company in
the form required by the Committee.

(b) Amount and Form of Payment. The SAR will entitle the holder, upon exercise of the
SAR, to receive payment of an amount determined by multiplying: (i) the excess of the Fair Market
Value of a share of Common Stock on the date of exercise of the SAR over the Base Price, by (ii)
the number of shares of Common Stock as to which the SAR is being exercised. Payment of the amount
determined under the foregoing formula shall be made in cash, subject to the payment of all
applicable Federal, state and local income, employment and other withholding taxes.

Section 7. Limitation of Rights. The Participant shall not have any
privileges of a stockholder of the Company with respect to the shares of Common Stock subject to
the SAR, including without limitation any right to vote such shares or to receive dividends or
other distributions in respect thereof. Nothing in this Agreement shall confer upon the
Participant any right to continued employment with the Company or to interfere in any way with the
right of the Company to terminate the Participant’s employment at any time.

Section 8. Adjustments. The SAR granted hereunder shall be subject to the
provisions of Section 4.2 of the Plan relating to adjustments for recapitalizations,
reclassifications and other changes in the Company’s corporate structure.

Section 9. Transfer Restrictions. The SAR may not be transferred, pledged,
assigned, hypothecated or otherwise disposed of in any way by the Participant, except by will or by
the laws of descent and distribution. In the event that the Participant becomes legally
incapacitated, the SAR shall be exercisable by the Participant’s legal guardian, committee or legal
representative. If the Participant dies, the SAR shall thereafter be exercisable by the
Participant’s beneficiary as designated by the Participant in the manner prescribed by the
Committee or, in the absence of an authorized beneficiary designation, by the legatee of such SAR
under the Participant’s will, or by the Participant’s estate in accordance with the Participant’s
will or the laws of descent and distribution, in each case in the same manner and to the same
extent that the SAR was exercisable by the Participant on the date of the Participant’s death. The
SAR shall not be subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the SAR contrary to the provisions hereof,
and the levy of any execution, attachment or similar process upon the SAR, shall be null and void
and without effect.

Section 10. Notices. Any notice hereunder by the Participant shall be given
to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by
the Secretary of the Company. Any notice hereunder by the Company shall be given to the
Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such
address as the Participant may have on file with the Company.

Section 11. Construction. The SAR hereunder is granted pursuant to the Plan
and is in all respects subject to the terms and conditions of the Plan. The Participant hereby
acknowledges that a copy of the Plan has been delivered to the Participant and accepts the SAR
hereunder subject to all of the terms and provisions of the Plan, which is incorporated herein by
reference. In the event of a conflict or ambiguity between any term or provision contained herein
and a term or provision of the Plan, the Plan will govern and prevail. The construction of and
decisions under the Plan are vested in the Committee, whose determinations shall be final,
conclusive and binding upon the Participant.

Section 12. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Jersey, without giving effect to the choice of law
principles thereof.

Section 13. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which together shall constitute one and
the same instrument.

Section 14. Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors, administrators,
successors and assigns.

Section 15. Entire Agreement. This Agreement and the Plan constitute the
entire agreement between the parties with respect to the subject matter hereof and thereof, merging
any and all prior agreements.

[SIGNATURES ON FOLLOWING PAGE]

1

IN WITNESS WHEREOF, the Company and the Participant have executed this Agreement effective as
of the date first above written.

NATIONAL ATLANTIC HOLDINGS CORPORATION

By:

Name:

Title:

PARTICIPANT

  Signature of Participant

Print Name

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}]]