Document:

exv10w1

 

    Exhibit
10.1

 

 

    SANDRIDGE
    ENERGY, INC.

 

    2009
    INCENTIVE PLAN

 

 

 

    TABLE OF
    CONTENTS

 

	 	 	 	 	 	 	 
	

    ARTICLE 1. INTRODUCTION

	
 
	 
	
    1
	 

	

    1.1.

	
 
	
    Purpose of the Plan
	
 
	 
	
    1
	 

	

    1.2.

	
 
	
    Nature of Awards
	
 
	 
	
    1
	 

	

    1.3.

	
 
	
    Effective Date and Term of Plan
	
 
	 
	
    1
	 

	

    ARTICLE 2. DEFINITIONS AND CONSTRUCTION

	
 
	 
	
    2
	 

	

    2.1.

	
 
	
    Definitions
	
 
	 
	
    2
	 

	

    2.2.

	
 
	
    Construction
	
 
	 
	
    3
	 

	

    ARTICLE 3. ELIGIBILITY

	
 
	 
	
    4
	 

	

    3.1.

	
 
	
    In General
	
 
	 
	
    4
	 

	

    ARTICLE 4. ADMINISTRATION OF THE PLAN

	
 
	 
	
    5
	 

	

    4.1.

	
 
	
    In General
	
 
	 
	
    5
	 

	

    4.2.

	
 
	
    Delegation to Committees and Officers
	
 
	 
	
    5
	 

	

    ARTICLE 5. STOCK SUBJECT TO THE PLAN

	
 
	 
	
    6
	 

	

    5.1.

	
 
	
    Number of Shares
	
 
	 
	
    6
	 

	

    5.2.

	
 
	
    Substitute Awards
	
 
	 
	
    6
	 

	

    ARTICLE 6. TYPES OF AWARDS

	
 
	 
	
    7
	 

	

    6.1.

	
 
	
    Stock Options
	
 
	 
	
    7
	 

	

    6.2.

	
 
	
    Stock Appreciation Rights
	
 
	 
	
    8
	 

	

    6.3.

	
 
	
    Restricted Stock
	
 
	 
	
    9
	 

	

    6.4.

	
 
	
    Restricted Stock Units
	
 
	 
	
    9
	 

	

    6.5.

	
 
	
    Other Stock-Based Awards
	
 
	 
	
    9
	 

	

    6.6.

	
 
	
    Cash Awards
	
 
	 
	
    9
	 

	

    6.7.

	
 
	
    Performance-Based Awards
	
 
	 
	
    10
	 

	

    ARTICLE 7. ADJUSTMENTS

	
 
	 
	
    12
	 

	

    7.1.

	
 
	
    Changes in Capitalization
	
 
	 
	
    12
	 

	

    7.2.

	
 
	
    Change in Control
	
 
	 
	
    12
	 

	

    ARTICLE 8. GENERAL PROVISIONS APPLICABLE TO ALL AWARDS

	
 
	 
	
    14
	 

	

    8.1.

	
 
	
    Transferability of Awards
	
 
	 
	
    14
	 

	

    8.2.

	
 
	
    Termination of Status
	
 
	 
	
    14
	 

	

    8.3.

	
 
	
    Withholding
	
 
	 
	
    14
	 

	

    8.4.

	
 
	
    Conditions on Delivery of Stock
	
 
	 
	
    14
	 

	

    8.5.

	
 
	
    Acceleration
	
 
	 
	
    14
	 

	

    ARTICLE 9. MISCELLANEOUS

	
 
	 
	
    15
	 

	

    9.1.

	
 
	
    No Right to Employment or Other Status
	
 
	 
	
    15
	 

	

    9.2.

	
 
	
    No Rights as Stockholder
	
 
	 
	
    15
	 

	

    9.3.

	
 
	
    Amendment
	
 
	 
	
    15
	 

	

    9.4.

	
 
	
    Compliance with Code Section 409A
	
 
	 
	
    15
	 

	

    9.5.

	
 
	
    Governing Law
	
 
	 
	
    15
	 

 

		
	    SandRidge
    2009 Incentive Plan
    	     Table of
    Contents
    

 

    ARTICLE 1.
    INTRODUCTION

 

		
	
    1.1. 
	
    Purpose
    of the Plan.

 

    The Plan is intended to enhance the Company’s ability to
    attract, retain and motivate employees, officers, directors,
    consultants, and advisors of the Company, and to provide them
    with equity ownership opportunities and performance-based
    incentives that are intended to align their interests with those
    of the Company’s stockholders.

 

		
	
    1.2. 
	
    Nature of
    Awards.

 

    The Plan is intended to permit the grant of Stock Options, Stock
    Appreciation Rights, shares of Restricted Stock, Restricted
    Stock Units, and any other form of award based on the value (or
    the increase in value) of shares of the common stock of the
    Company. The Plan is also intended to permit cash incentive
    awards. Subject to Section 8.5, Participants shall vest in
    their Awards granted under the Plan to the extent certain
    conditions set forth in their Award Certificate are met. Vesting
    criteria shall include the passage of time or the attainment of
    individual
    and/or
    Company performance objectives, or a combination of both. Except
    as otherwise provided by the Plan, each Award may be made alone
    or in addition or in relation to any other Award. The terms of
    each Award need not be identical, and the Compensation Committee
    need not treat Participants uniformly.

 

		
	
    1.3. 
	
    Effective
    Date and Term of Plan.

 

    The Plan is effective as of June 5, 2009. No Awards shall
    be granted under the Plan after June 4, 2019 (or such
    earlier date as may apply under section 422 of the Code),
    but Awards previously granted may extend beyond that date.

 

		
	    SandRidge
    2009 Incentive Plan
    	     Page 1
    

 

 

    ARTICLE 2.
    DEFINITIONS AND CONSTRUCTION

 

		
	
    2.1. 
	
    Definitions.

 

    When used in this 2009 Incentive Plan, the following terms shall
    have the meanings set forth below, unless the context clearly
    requires a different meaning:

 

			
	 	    (a) 
	
    “Article” means an article of the Plan.

 

			
	 	    (b) 
	
    “Award” means an award issued under the
    Plan.

 

			
	 	    (c) 
	
    “Award Certificate” means the agreement,
    certificate or other document evidencing an Award, which shall
    be in such form (written, electronic or otherwise) as the
    Compensation Committee shall determine.

 

			
	 	    (d) 
	
    “Board” means the Board of Directors of
    the Company.

 

			
	 	    (e) 
	
    “Change in Control” shall mean:

 

			
	 	    (1) 
	
    the acquisition by any individual, entity or group (within the
    meaning of section 13(d)(3) or 14(d)(2) of the Securities
    Exchange Act of 1934, as amended (the “Exchange Act”))
    (a “Person”), other than Tom L. Ward or his affiliates
    (the “Exempt Persons”), of beneficial ownership
    (within the meaning of
    Rule 13d-3
    promulgated under the Exchange Act) of 40% or more of either
    (A) the then-outstanding shares of the Company’s
    common stock (the “Outstanding Company Common Stock”)
    or (B) the combined voting power of the then-outstanding
    voting securities of the Company entitled to vote generally in
    the election of directors (the “Outstanding Company Voting
    Securities”). For purposes of this paragraph (1), the
    following acquisitions by a Person will not constitute a Change
    in Control: (i) any acquisition directly from the Company;
    (ii) any acquisition by the Company; or (iii) any
    acquisition by any employee benefit plan (or related trust)
    sponsored or maintained by the Company or any entity controlled
    by the Company;

	 
	 	    (2) 
	
    the individuals who, as of the Effective Date, constitute the
    Board (the “Incumbent Board”) cease for any reason to
    constitute at least a majority of the Board. Any individual
    becoming a director subsequent to the Effective Date whose
    election, or nomination for election by the Company’s
    stockholders, is approved by a vote of at least a majority of
    the directors then comprising the Incumbent Board will be
    considered a member of the Incumbent Board as of the Effective
    Date, but any such individual whose initial assumption of office
    occurs as a result of an actual or threatened election contest
    with respect to the election or removal of directors or other
    actual or threatened solicitation of proxies or consents by or
    on behalf of a person other than the Incumbent Board will not be
    deemed a member of the Incumbent Board as of the Effective Date;

	 
	 	    (3) 
	
    the consummation of a reorganization, merger, consolidation or
    sale or other disposition of all or substantially all of the
    assets of the Company (a “Business Combination”),
    unless following such Business Combination: (A) the
    individuals and entities who were the beneficial owners,
    respectively, of the Outstanding Company Common Stock and
    Outstanding Company Voting Securities immediately prior to such
    Business Combination beneficially own, directly or indirectly,
    more than 60% of, respectively, the then-outstanding shares of
    common stock and the combined voting power of the
    then-outstanding voting securities entitled to vote generally in
    the election of directors, as the case may be, of the entity
    resulting from such Business Combination (including, without
    limitation, a corporation that as a result of such transaction
    owns the Company or all or substantially all of the
    Company’s assets either directly or through one or more
    subsidiaries) in substantially the same proportions to one
    another as their ownership, immediately prior to such Business
    Combination of the Outstanding Company Common

 

		
	    SandRidge
    2009 Incentive Plan
    	     Page 2
    

 

			
	 	
	
    Stock and Outstanding Company Voting Securities, as the case may
    be, (B) no Person (excluding any entity resulting from such
    Business Combination or any employee benefit plan (or related
    trust) of the Company or such entity resulting from such
    Business Combination) other than one or more of the Exempt
    Persons beneficially owns, directly or indirectly, 40% or more
    of, respectively, the then-outstanding shares of common stock of
    the entity resulting from such Business Combination or the
    combined voting power of the then-outstanding voting securities
    of such entity except to the extent that such ownership existed
    prior to the Business Combination and (C) at least a
    majority of the members of the Board of Directors of the
    corporation resulting from such Business Combination were
    members of the Incumbent Board at the time of the execution of
    the initial agreement, or of the action of the Board, providing
    for such Business Combination; or

 

			
	 	    (4) 
	
    the approval by our stockholders of a complete liquidation or
    dissolution of the Company.

 

			
	 	    (f) 
	
    “Code” means the Internal Revenue Code
    of 1986, as amended.

 

			
	 	    (g) 
	
    “Company” means SandRidge Energy, Inc.

	 
	 	    (h) 
	
    “Compensation Committee” shall mean the
    Compensation Committee of the Board.

 

			
	 	    (i) 
	
    “Disability” shall mean a disability
    within the meaning of the federal Social Security Act.

	 
	 	    (j) 
	
    “Effective Date” means the first date
    set forth in Section 1.3.

 

			
	 	    (k) 
	
    “Employee Benefits Committee” means the
    Company’s Employee Benefits and Compensation Committee or
    any successor to such committee.

 

			
	 	    (l) 
	
    “Fair Market Value” means the closing
    sales price (for the primary trading session) of a Share on the
    relevant date. For any date that is not a trading day, the Fair
    Market Value of a Share for such date will be determined by
    using the closing sale price for the immediately preceding
    trading day. The Compensation Committee can substitute a
    particular time of day or other measure of “closing sale
    price” if appropriate because of unusual circumstances or
    can use weighted averages either on a daily basis or such longer
    period as complies with section 409A of the Code.

 

			
	 	    (m) 
	
    “Plan” means this 2009 Incentive Plan.

 

			
	 	    (n) 
	
    “Restricted Stock” means an Award
    granted pursuant to Section 6.3.

	 
	 	    (o) 
	
    “Restricted Stock Unit” means an Award
    granted pursuant to Section 6.4.

	 
	 	    (p) 
	
    “Section” means a section of the Plan.

	 
	 	    (q) 
	
    “Share” means a share of common stock of
    the Company, $0.001 per share par value.

 

			
	 	    (r) 
	
    “Stock Appreciation Right” means an
    Award granted pursuant to Section 6.2.

	 
	 	    (s) 
	
    “Stock Option” means an Award granted
    pursuant to Section 6.1; a Stock Option can be either an
    “Incentive Stock Option” (if it complies with the
    requirements of Section 6.1(b)) or a “Nonqualified
    Stock Option” or “Nonstatutory Stock Option” (if
    it does not comply with the requirements of Section 6.1(b)).

 

			
	 	    (t) 
	
    “Ten Percent Stockholder” means a
    Participant who on the date of grant is treated under
    section 424(d) of the Code as owning stock (not including
    stock purchasable under outstanding options) possessing more
    than 10% of the total combined voting power of all classes of
    the stock of the Company or any parent or subsidiary of the
    Company as defined in section 424(e) or (f) of the
    Code.

 

		
	
    2.2. 
	
    Construction.

 

    When used in the Plan, (a) the terms “include”
    and “including” shall be deemed to include the phrase
    “but not limited to” and (b) masculine pronouns
    shall include the feminine.

 

		
	    SandRidge
    2009 Incentive Plan
    	     Page 3
    

 

    ARTICLE 3.
    ELIGIBILITY

 

		
	
    3.1. 
	
    In
    General.

 

    Any natural person is eligible to be granted an Award if such
    individual is a current employee, officer, director, consultant,
    or advisor of the Company or any of the Company’s present
    or future parent or subsidiary corporations as defined in
    sections 424(e) or (f) of the Code or any other
    business venture (including, without limitation, a joint venture
    or limited liability company) in which the Company has a
    controlling interest, as determined by the Compensation
    Committee.

 

		
	    SandRidge
    2009 Incentive Plan
    	     Page 4
    

 

    ARTICLE 4.
    ADMINISTRATION OF THE PLAN

 

		
	
    4.1. 
	
    In
    General.

 

			
	 	    (a) 
	
    The Plan will be administered by the Compensation Committee. The
    Compensation Committee shall have authority to grant Awards and
    determine recipients and terms of any Awards, and to adopt,
    amend and repeal such administrative rules, guidelines and
    practices relating to the Plan as it shall deem advisable.

 

			
	 	    (b) 
	
    The Compensation Committee shall have full discretionary
    authority to construe and interpret the terms of the Plan and
    any Award Certificate, and to determine all facts necessary to
    administer the Plan and any Award Certificate. The Compensation
    Committee may correct any defect, supply any omission or
    reconcile any inconsistency in the Plan or any Award Certificate
    in the manner and to the extent it shall deem necessary or
    advisable.

 

			
	 	    (c) 
	
    All decisions by the Compensation Committee shall be made in its
    sole discretion and shall be final and binding on all persons
    having or claiming any interest in the Plan or in any Award. No
    director or person acting pursuant to the authority delegated by
    the Compensation Committee shall be liable for any action or
    determination relating to or under the Plan made in good faith.

 

			
	 	    (d) 
	
    With respect to Awards made to directors, the Board shall also
    have the authority described in this Section 4.1 and
    Section 8.5.

 

		
	
    4.2. 
	
    Delegation
    to Committees and Officers.

 

			
	 	    (a) 
	
    To the extent permitted by applicable law, the Compensation
    Committee may delegate any or all of its powers under the Plan
    to one or more committees or subcommittees of the Company’s
    management, including the Employee Benefits Committee.

 

			
	 	    (b) 
	
    To the extent permitted by applicable law and subject to any
    limitations under the Plan, the Compensation Committee may
    delegate to one or more officers of the Company the power
    (1) to grant Awards to any individual eligible under
    Section 3.1 other than a director or executive officer and
    (2) to exercise such other powers under the Plan as the
    Compensation Committee may determine; provided further, however,
    that no officer shall be authorized to grant Awards to himself
    or herself. For purposes of this Section 4.2(b), the phrase
    “executive officer” shall mean the Chief Executive
    Officer, President, and any Executive Vice President or Senior
    Vice President.

 

			
	 	    (c) 
	
    All references in the Plan to the “Compensation
    Committee” shall mean the Compensation Committee or a
    committee of the Board (or the Company’s management) or the
    officers referred to in Section 4.2(b) to the extent that the
    Compensation Committee’s powers or authority under the Plan
    have been delegated to such committee or officers.

 

		
	    SandRidge
    2009 Incentive Plan
    	     Page 5
    

 

    ARTICLE 5.
    STOCK SUBJECT TO THE PLAN

 

		
	
    5.1. 
	
    Number of
    Shares.

 

			
	 	    (a) 
	
    Subject to adjustment under ARTICLE 7, Awards may be made
    under the Plan for up to 12,000,000 Shares, of which
    12,000,000 shares can be issued as Incentive Stock Options.

 

			
	 	    (b) 
	
    If any Award expires or is terminated, surrendered or canceled
    without having been fully exercised, is forfeited in whole or in
    part, or results in any Shares not being issued, the unused
    Shares covered by such Award shall again be available for the
    grant of Awards under the Plan. Further, Shares tendered to the
    Company by a Participant to exercise an Award shall be added to
    the number of Shares available for the grant of Awards under the
    Plan. However, in the case of Incentive Stock Options, the
    foregoing provisions shall be subject to any limitations under
    the Code. Shares issued under the Plan may consist in whole or
    in part of authorized but unissued shares or treasury shares.

 

		
	
    5.2. 
	
    Substitute
    Awards.

 

			
	 	    (a) 
	
    In connection with a merger or consolidation of an entity with
    the Company or the acquisition by the Company of property or
    stock of an entity, the Compensation Committee may grant Awards
    in substitution for any options or other stock or stock-based
    awards granted by such entity or an affiliate thereof.
    Substitute Awards may be granted on such terms as the
    Compensation Committee deems appropriate in the circumstances.

 

			
	 	    (b) 
	
    Substitute Awards shall not count against the overall share
    limit set forth in Section 5.1, except as may be required
    by reason of section 422 and related provisions of the Code.

 

		
	    SandRidge
    2009 Incentive Plan
    	     Page 6
    

 

    ARTICLE 6.
    TYPES OF AWARDS

 

		
	
    6.1. 
	
    Stock
    Options.

 

			
	 	    (a) 
	
    In General.  The Compensation Committee may
    grant options to purchase Shares and determine the number of
    Shares to be covered by each option, the exercise price of each
    option and the conditions and limitations applicable to the
    exercise of each option, including conditions relating to
    applicable federal or state securities laws, as it considers
    necessary or advisable. A Stock Option that is not intended to
    be an Incentive Stock Option shall be designated as a
    “Nonstatutory Stock Option” or a “Nonqualified
    Stock Option.”

 

			
	 	    (b) 
	
    Incentive Stock Options.

 

			
	 	    (1) 
	
    A Stock Option that the Compensation Committee intends to be an
    Incentive Stock Option shall only be granted to employees of the
    Company or any of the Company’s present or future parent or
    subsidiary corporations as defined in sections 424(e) or
    (f) of the Code, and any other entities the employees of
    which are eligible to receive Incentive Stock Options under the
    Code, and shall be subject to and construed consistently with
    the requirements of section 422 of the Code.

	 
	 	    (2) 
	
    A Stock Option that is intended to be an Incentive Stock Option
    shall be treated as a Nonqualified Stock Option to the extent
    that, in the calendar year in which the Award is first
    exercisable, the aggregate Fair Market Value of the Shares
    subject to the Award (when added to other awards granted to the
    same individual that are intended to be Incentive Stock Options
    under the Plan or any other plan maintained by the Company and
    certain related corporations) exceeds $100,000 or such other
    limitation as might apply under section 422 of the Code.

	 
	 	    (3) 
	
    The Company shall have no liability to a Participant, or any
    other party, if a Stock Option (or any part thereof) that is
    intended to be an Incentive Stock Option is not an Incentive
    Stock Option, or for any action taken by the Compensation
    Committee, including without limitation the conversion of an
    Incentive Stock Option to a Nonstatutory Stock Option.

 

			
	 	    (c) 
	
    Exercise Price.

 

			
	 	    (1) 
	
    The Compensation Committee shall establish the exercise price of
    each Stock Option and specify the exercise price in the
    applicable Award Certificate.

	 
	 	    (2) 
	
    The exercise price of a Stock Option intended to be an Incentive
    Stock Option shall not be less than 100% of the Fair Market
    Value on the date the Stock Option is granted, except that, if
    any Incentive Stock Option is granted to a Ten
    Percent Stockholder, the exercise price shall not be less
    than 110% of the Fair Market Value of the Shares on the date
    such Incentive Stock Option is granted. The 100% and 110%
    limitation in this Section 6.1(c)(2) shall automatically
    adjust to the extent required by section 422 of the Code.

 

			
	 	    (d) 
	
    Term of Stock Options.

 

			
	 	    (1) 
	
    Each Stock Option shall be exercisable at such times and subject
    to such terms and conditions as the Compensation Committee may
    specify in the applicable Award Certificate; except that no
    Stock Option shall be granted for a term of more than
    10 years. Incentive Stock Options issued to a Ten
    Percent Stockholder shall not have a term of more than
    5 years.

	 
	 	    (2) 
	
    No Stock Option shall permit the Participant to defer receipt of
    compensation on the Stock Option beyond the date of exercise,
    unless the Compensation Committee expressly determines that such
    Stock Option shall be subject to section 409A of the Code.

 

		
	    SandRidge
    2009 Incentive Plan
    	     Page 7
    

 

 

			
	 	    (e) 
	
    Exercise of Stock Option.

 

    Stock Options may be exercised by delivery to the Company of a
    written notice of exercise in the form attached to, or the
    manner described in, the Award Certificate or by any other form
    of notice (including electronic notice) or such other manner
    approved by the Compensation Committee, together with payment in
    full for the number of shares for which the Stock Option is
    exercised. Shares subject to the Stock Option will be delivered
    by the Company as soon as practicable following exercise.

 

			
	 	    (f) 
	
    Payment Upon Exercise.

 

    Shares purchased upon the exercise of a Stock Option granted
    under the Plan shall be paid for as follows:

 

			
	 	    (1) 
	
    in cash or by check, payable to the order of the Company;

	 
	 	    (2) 
	
    if provided in the applicable Award Certificate, by
    (1) delivery of an irrevocable and unconditional
    undertaking by a creditworthy broker to deliver promptly to the
    Company sufficient funds to pay the exercise price and any
    required tax withholding or (2) delivery by the Participant
    to the Company of a copy of irrevocable and unconditional
    instructions to a creditworthy broker to deliver promptly to the
    Company cash or a check sufficient to pay the exercise price and
    any required tax withholding;

	 
	 	    (3) 
	
    to the extent provided for in the applicable Award Certificate
    or approved by the Compensation Committee, by delivery (either
    by actual delivery or attestation) of Shares owned by the
    Participant valued at their Fair Market Value, provided
    (1) such method of payment is then permitted under
    applicable law, (2) such Shares, if acquired directly from
    the Company, were owned by the Participant for such minimum
    period of time, if any, as may be established by the
    Compensation Committee, and (3) such Shares are not subject
    to any repurchase, forfeiture, unfulfilled vesting or other
    similar requirements;

	 
	 	    (4) 
	
    to the extent permitted by applicable law and provided for in
    the applicable Award Certificate, by (1) delivery of a
    promissory note of the Participant to the Company on terms
    determined by the Compensation Committee, or (2) payment of
    such other lawful consideration as the Compensation Committee
    may determine; or

	 
	 	    (5) 
	
    by any combination of the above permitted forms of payment.

 

		
	
    6.2. 
	
    Stock
    Appreciation Rights.

 

			
	 	    (a) 
	
    In General.  A Stock Appreciation Right is an
    Award in the form of a right to receive cash or a Share, upon
    surrender of the Stock Appreciation Right, in an amount equal to
    the appreciation in the value of the Share over a base price
    established in the Award. The Committee may grant Stock
    Appreciation Rights either independently of Stock Options, or in
    tandem with Stock Options such that the exercise of the Stock
    Option or Stock Appreciation Right cancels the tandem Stock
    Appreciation Right or Stock Option.

 

			
	 	    (b) 
	
    Exercise Price.  The minimum base price of a
    Stock Appreciation Right granted under the Plan shall be the
    price set forth in the applicable Award Certificate, or, in the
    case of a Stock Appreciation Right related to a Stock Option
    (whether already outstanding or concurrently granted), the
    exercise price of the related Stock Option.

 

			
	 	    (c) 
	
    Term, Exercise, and Payment.  The provisions of
    Sections 6.1(d), (e), and (f) shall generally apply to
    Stock Appreciation Rights, as applicable.

 

		
	    SandRidge
    2009 Incentive Plan
    	     Page 8
    

 

 

		
	
    6.3. 
	
    Restricted
    Stock.

 

			
	 	    (a) 
	
    In General.  The Compensation Committee may
    grant Awards of Restricted Stock. The Compensation Committee
    shall determine the terms and conditions of a Restricted Stock
    Award, including the conditions for vesting and repurchase (or
    forfeiture), the issue price (if any) and whether the Shares
    shall be entitled to exercise voting or other rights associated
    with ownership of a Share.

 

			
	 	    (b) 
	
    Dividends.  Unless otherwise provided by the
    Compensation Committee, Participants holding Restricted Stock
    will be eligible to receive all dividends paid with respect to
    such Shares. If any dividends or distributions are paid in
    shares, or consist of a dividend or distribution to holders of
    Shares other than an ordinary cash dividend, the shares or other
    property will be subject to the same restrictions on
    transferability and forfeitability as the Restricted Stock with
    respect to which they were paid. Each dividend payment will be
    made no later than the end of the calendar year in which the
    Restricted Stock on which such dividends are paid vests or, if
    later, the 15th day of the third month following the date
    on which the Restricted Stock on which such dividends are paid
    vests.

 

			
	 	    (c) 
	
    Stock Certificates.  The Company may require
    that any stock certificates issued for shares of Restricted
    Stock be deposited in escrow by the Participant, together with a
    stock power endorsed in blank, with the Company (or its
    designee). At the expiration of the applicable restriction
    periods, the Company (or such designee) shall deliver the
    certificates no longer subject to such restrictions to the
    Participant. If the Participant has died before the certificates
    are delivered, the certificates shall be delivered to the
    beneficiary designated by the Participant under the Plan and on
    file with the Company (or its designee) before the
    Participant’s death. If there is no such valid beneficiary
    designation, the Participant’s estate shall be the
    beneficiary.

 

		
	
    6.4. 
	
    Restricted
    Stock Units.

 

    The Compensation Committee may grant Restricted Stock Units to
    any participant subject to the same conditions and restrictions
    as the Compensation Committee would have imposed in connection
    with any Award of Restricted Stock. Each Restricted Stock Unit
    shall have a value equal to the Fair Market Value of one Share.
    Restricted Stock Units may be paid at such time as the
    Compensation Committee may determine and payments may be made in
    a lump sum or in installments, in cash, Shares, or any
    combination thereof, as determined by the Compensation Committee.

 

		
	
    6.5. 
	
    Other
    Stock-Based Awards

 

    Other Awards that are valued in whole or in part by reference
    to, or are otherwise based on, Shares or other property, may be
    granted under the Plan to Participants. To the extent permitted
    by law, such other Share Awards shall also be available as a
    form of payment in the settlement of other Awards granted under
    the Plan or as payment in lieu of compensation to which a
    Participant is otherwise entitled. Other Share Awards may be
    paid in Shares or cash, as the Compensation Committee shall
    determine. Subject to the provisions of the Plan, the
    Compensation Committee shall determine the terms and conditions
    of each other Share Award.

 

		
	
    6.6. 
	
    Cash
    Awards.

 

    Cash Awards are Awards that provide participants with the
    opportunity to earn a cash payment based upon the achievement of
    one or more performance goals for a performance period
    determined by the Compensation Committee. For each performance
    period, the Compensation Committee shall determine the relevant
    performance criteria, the performance goal for each performance
    criterion, the level or levels of achievement necessary for
    Awards to be paid, the weighting of the performance goals if
    more than one performance goal is applicable, and the size of
    the Awards.

 

		
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    2009 Incentive Plan
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    6.7. 
	
    Performance-Based
    Awards.

 

			
	 	    (a) 
	
    In General.  Any of the Awards listed in
    ARTICLE 6 may be granted as Awards that satisfy the
    requirements for “performance-based compensation”
    within the meaning of section 162(m) of the Code. The
    performance goals must be established by the Compensation
    Committee and may be for the Company, or a Company subsidiary,
    affiliate or other Company operating unit or department, or a
    combination of such units or departments. The performance goal
    shall be based on one or more performance criteria selected by
    the Compensation Committee. With the exception of any Stock
    Option or Stock Appreciation Right, an Award that is intended to
    satisfy the requirements of a performance-based Award shall be
    so designated at the time of grant.

 

			
	 	    (b) 
	
    Limits.  The maximum aggregate number of shares
    of Stock for which performance-based Awards may be issued under
    this Section 6.7 in any calendar year to an individual
    Participant shall not exceed 1,000,000, the maximum amount that
    may be earned as a Cash Award for a performance period for a
    single calendar year by any individual Participant is
    $2,000,000, and the maximum amount that may be earned as a Cash
    Award for a performance period of greater than a single calendar
    year by any individual Participant is $6,000,000.

 

			
	 	    (c) 
	
    Performance Criteria.  In the case of Awards
    intended to qualify as performance-based Awards, the performance
    criteria shall be selected only from among the following:
    production growth; reserve growth; reserve replacement; lease
    operating expense; revenue growth; finding/development costs;
    net sales; operating income; pre- or after-tax income; operating
    profit minus capital charges; cash flow, including operating
    cash flow, free cash flow, cash flow return on equity and cash
    flow return on investment; net income; earnings per share;
    earnings before interest and taxes; earnings before interest,
    taxes, depreciation
    and/or
    amortization; return on equity; return on invested capital;
    return on assets; economic value added (or an equivalent
    measure); share price performance; total stockholder return;
    improvement in or achievement of expense levels; improvement in
    or achievement of working capital levels; innovation as measured
    by a percentage of sales of new products; market share;
    productivity ratios; completion
    and/or
    integration of acquisitions of businesses or companies;
    completion of divestitures and asset sales; and any combination
    of any of the foregoing business criteria. Any of the
    performance criteria may be used to measure the performance of
    the Company, a subsidiary,
    and/or
    affiliate as a whole or any business unit of the Company, a
    subsidiary,
    and/or
    affiliate or any combination thereof, as the Compensation
    Committee may deem appropriate, or any of the above performance
    criteria as compared to the performance of a group of comparator
    companies, or published or special index that the Compensation
    Committee deems appropriate. The Compensation Committee also has
    the authority to provide for accelerated vesting of any Award
    based on the achievement of the performance criteria specified
    in this Section 6.7.

 

			
	 	    (d) 
	
    Application to Stock Options and Stock Appreciation
    Rights. Notwithstanding anything contained in this
    Section 6.7 to the contrary, Stock Options and Stock
    Appreciation Rights need not satisfy the specific performance
    criteria described in this Section 6.7 in order to qualify as
    performance-based Awards under this section 162(m) of the
    Code.

 

			
	 	    (e) 
	
    Time for Establishing Performance Goals.  The
    specific performance goal(s) and the applicable performance
    criteria must be established by the Compensation Committee in
    advance of the deadlines applicable under section 162(m) of
    the Code and while the achievement of the performance goal(s)
    remains substantially uncertain.

 

			
	 	    (f) 
	
    Committee Certification and Payment of
    Awards.  Before any performance-based Award (other
    than Stock Options and Stock Appreciation Rights) is paid, the
    Compensation Committee must certify in writing (by resolution or
    otherwise) that the applicable performance goal(s) and any other
    material terms of the Award have been satisfied. Unless
    otherwise provided by the Compensation Committee,
    performance-based Awards shall be paid as soon as practicable
    after the Compensation Committee has certified that the
    applicable goals and terms of such awards

 

		
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    2009 Incentive Plan
    	     Page 10
    

 

			
	 	
	
    have been satisfied, but in no event later than the fifteenth
    (15th) day of the third month following the end of the
    performance period to which the award relates (absent a timely
    election to defer such Award under a deferred compensation plan,
    if any, maintained by the Company). Notwithstanding the
    foregoing, to the extent an amount was intended to be paid so as
    to qualify as a short-term deferral under section 409A of the
    Code and the applicable regulations, then such payment may be
    delayed if the requirements of Treas. Reg. 1.409A-1(b)(4)(ii)
    are met. In such case, payment of such deferred amounts must be
    made as soon as reasonably practicable following the first date
    on which the Company anticipates or reasonably should anticipate
    that, if the payments were made on such date, the Company’s
    deduction with respect to such payment would no longer be
    restricted due to the applicability of section 162(m) of
    the Code.

 

			
	 	    (g) 
	
    Terms and Conditions of Awards; Committee Discretion to
    Reduce Performance Awards.  The Compensation
    Committee shall have discretion to determine the conditions,
    restrictions or other limitations, in accordance with, and
    subject to, the terms of the Plan and section 162(m) of the
    Code, on the payment of individual Awards under this
    Section 6.7. To the extent set forth in an Award
    Certificate, the Compensation Committee may reserve the right to
    adjust the amount payable in accordance with any standards or on
    any other basis (including the Compensation Committee’s
    discretion), as the Compensation Committee may determine;
    provided, however, that, in the case of Awards intended to
    qualify as performance-based Awards, such adjustments shall be
    prescribed in a form that meets the requirements of
    section 162(m) of the Code.

	 
	 	    (h) 
	
    Adjustments for Material Changes.  To the
    extent the Compensation Committee makes adjustments in
    accordance with ARTICLE 7 that affect Awards intended to be
    performance-based Awards under this Section 6.7, such
    adjustments shall be prescribed in a form that meets the
    requirements of section 162(m) of the Code.

 

		
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    2009 Incentive Plan
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    ARTICLE 7.
    ADJUSTMENTS

 

		
	
    7.1. 
	
    Changes
    in Capitalization.

 

    In the event of any stock split, reverse stock split, stock
    dividend, recapitalization, combination of shares,
    reclassification of shares, spin-off or other similar change in
    capitalization or event, or any dividend or distribution to
    holders of Shares other than an ordinary cash dividend,
    (1) the number and class of securities available under this
    Plan, (2) the number and class of securities and exercise
    price per Share of each outstanding Stock Option, (3) the
    number of Shares subject to each outstanding Restricted Stock
    Award, and (4) the terms of each other outstanding Award
    shall be equitably adjusted by the Company (or substituted
    Awards may be made, if applicable) in the manner determined by
    the Compensation Committee. Without limiting the generality of
    the foregoing, if the Company effects a split of the Shares by
    means of a stock dividend and the exercise price of and the
    number of Shares subject to an outstanding Stock Option are
    adjusted as of the date of the distribution of the dividend
    (rather than as of the record date for such dividend), then an
    optionee who exercises a Stock Option between the record date
    and the distribution date for such stock dividend shall be
    entitled to receive, on the distribution date, the stock
    dividend with respect to the Shares acquired upon such Stock
    Option exercise, notwithstanding the fact that such Shares were
    not outstanding as of the close of business on the record date
    for such stock dividend.

 

		
	
    7.2. 
	
    Change in
    Control.

 

			
	 	    (a) 
	
    Consequences of a Change in Control on Awards Other than
    Restricted Stock Awards.  In connection with a
    Change in Control, the Compensation Committee shall take any one
    or more of the following actions as to all or any (or any
    portion of) outstanding Awards other than Restricted Stock
    Awards on such terms as the Compensation Committee determines:
    (1) provide that Awards shall be assumed, or substantially
    equivalent Awards shall be substituted, by the acquiring or
    succeeding entity (or an affiliate thereof), (2) upon
    written notice to a Participant, provide that the
    Participant’s unexercised Awards will terminate immediately
    prior to the consummation of the Change in Control unless
    exercised by the Participant within a specified, reasonable
    period following the date of such notice, (3) provide that
    outstanding Awards shall become exercisable, realizable, or
    deliverable, or restrictions applicable to an Award shall lapse,
    in whole or in part before or upon the Change in Control,
    (4) if holders of Shares will receive upon consummation of
    the Change in Control a cash payment for each Share surrendered
    in the Change in Control, make or provide for a cash payment to
    a Participant equal to the excess, if any, of (A) the
    consideration received by stockholders generally with respect to
    the Change in Control (the “Change in Control Price”)
    times the number of Shares subject to the Participant’s
    Awards (to the extent the exercise price does not exceed the
    Change in Control Price) over (B) the aggregate exercise
    price of all such outstanding Awards and any applicable tax
    withholdings, in exchange for the termination of such Awards,
    (5) provide that, in connection with a liquidation or
    dissolution of the Company, Awards shall convert into the right
    to receive liquidation proceeds (if applicable, net of the
    exercise price thereof and any applicable tax withholdings) and
    (6) any combination of the foregoing. In taking any of the
    actions permitted under this Section 7.2(a), the
    Compensation Committee shall not be obligated by the Plan to
    treat all Awards, all Awards held by a Participant, or all
    Awards of the same type, identically.

 

    For purposes of clause (1) above, a Stock Option shall be
    considered assumed if, following consummation of the Change in
    Control, the Stock Option confers the right to purchase, for
    each Share subject to the Stock Option immediately prior to the
    consummation of the Change in Control, the consideration
    (whether cash, securities or other property) received as a
    result of the Change in Control by holders of Shares for each
    Share held immediately prior to the consummation of the Change
    in Control (and if holders were offered a choice of
    consideration, the type of consideration chosen by the holders
    of a majority of the outstanding Shares);

 

		
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    2009 Incentive Plan
    	     Page 12
    

 

    provided, however, that if the consideration received as a
    result of the Change in Control is not solely common stock of
    the acquiring or succeeding entity(or an affiliate thereof), the
    Company may, with the consent of the acquiring or succeeding
    entity, provide for the consideration to be received upon the
    exercise of Stock Options to consist solely of common stock of
    the acquiring or succeeding corporation (or an affiliate
    thereof) equivalent in value (as determined by the Compensation
    Committee) to the per share consideration received by holders of
    outstanding Shares as a result of the Change in Control.

 

			
	 	    (b) 
	
    Consequences of a Change in Control on Restricted Stock
    Awards. Upon the occurrence of a Change in Control, except
    to the extent specifically provided to the contrary in the
    applicable Award Certificate or any other agreement between a
    Participant and the Company, all restrictions and conditions on
    all Restricted Stock Awards then outstanding shall automatically
    lapse and be deemed terminated or satisfied, as applicable.

 

		
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    2009 Incentive Plan
    	     Page 13
    

 

    ARTICLE 8.
    GENERAL PROVISIONS APPLICABLE TO ALL AWARDS.

 

		
	
    8.1. 
	
    Transferability
    of Awards.

 

    Except as the Compensation Committee may otherwise determine or
    provide in an Award Certificate, Awards shall not be sold,
    assigned, transferred, pledged or otherwise encumbered by the
    person to whom they are granted, either voluntarily or by
    operation of law, except by will or the laws of descent and
    distribution or, other than in the case of an Incentive Stock
    Option, pursuant to a qualified domestic relations order, and,
    during the life of the Participant, shall be exercisable only by
    the Participant. References to a Participant, to the extent
    relevant in the context, shall include references to authorized
    transferees.

 

		
	
    8.2. 
	
    Termination
    of Status.

 

    Except to the extent provided in an Award Certificate, the
    Compensation Committee shall determine the effect on an Award of
    the disability, death, termination or other cessation of
    employment, authorized leave of absence or other change in the
    employment or other status of a Participant and the extent to
    which, and the period during which, the Participant, or the
    Participant’s legal representative, conservator, guardian
    or Beneficiary, may exercise rights under the Award.

 

		
	
    8.3. 
	
    Withholding.

 

    The Participant must satisfy all applicable federal, state, and
    local or other income and employment tax withholding obligations
    before the Company will deliver stock certificates or otherwise
    recognize ownership of Shares under an Award. The Company may
    decide to satisfy the withholding obligations through additional
    withholding on salary or wages. If the Company elects not to or
    cannot withhold from other compensation, the Participant must
    pay the Company the full amount, if any, required for
    withholding. Payment of withholding obligations is due before
    the Company will issue any Shares on exercise or release from
    forfeiture of an Award or, if the Company so requires, at the
    same time as is payment of the exercise price unless the Company
    determines otherwise. To the extent not otherwise provided for
    in an Award Certificate or approved by the Compensation
    Committee, a Participant shall satisfy such tax obligations in
    whole or in part by delivery of a portion of the Award creating
    the tax obligation, valued at Fair Market Value; provided,
    however, except as otherwise provided by the Compensation
    Committee, that the total tax withholding where stock is being
    used to satisfy such tax obligations cannot exceed the
    Company’s minimum statutory withholding obligations (based
    on minimum statutory withholding rates for federal and state tax
    purposes, including payroll taxes, that are applicable to such
    supplemental taxable income). Shares surrendered to satisfy tax
    withholding requirements cannot be subject to any repurchase,
    forfeiture, unfulfilled vesting or other similar requirements.

 

		
	
    8.4. 
	
    Conditions
    on Delivery of Stock.

 

    The Company will not be obligated to deliver any Shares pursuant
    to the Plan or to remove restrictions from Shares previously
    delivered under the Plan until (a) all conditions of the
    Award have been met or removed to the satisfaction of the
    Company, (b) in the opinion of the Company’s counsel,
    all other legal matters in connection with the issuance and
    delivery of such Shares have been satisfied, including any
    applicable securities laws and any applicable stock exchange or
    stock market rules and regulations, and (c) the Participant
    has executed and delivered to the Company such representations
    or agreements as the Company may consider appropriate to satisfy
    the requirements of any applicable laws, rules or regulations.

 

		
	
    8.5. 
	
    Acceleration.

 

    The Compensation Committee or its delegee may at any time
    provide that any Award shall become immediately exercisable in
    full or in part, free of some or all restrictions or conditions,
    or otherwise realizable in full or in part, as the case may be.

 

		
	    SandRidge
    2009 Incentive Plan
    	     Page 14
    

 

 

    ARTICLE 9.
    MISCELLANEOUS

 

		
	
    9.1. 
	
    No Right
    to Employment or Other Status.

 

    No person shall have any claim or right to be granted an Award,
    and the grant of an Award shall not be construed as giving a
    Participant the right to continued employment or any other
    relationship with the Company. The Company expressly reserves
    the right at any time to dismiss or otherwise terminate its
    relationship with a Participant free from any liability or claim
    under the Plan, except as expressly provided in the applicable
    Award Certificate.

 

		
	
    9.2. 
	
    No Rights
    as Stockholder.

 

    Subject to the provisions of the applicable Award Certificate
    and except as provided in Section 6.3, no Participant or
    beneficiary shall have any rights as a stockholder with respect
    to any Shares to be distributed with respect to an Award until
    becoming the record holder of such shares.

 

		
	
    9.3. 
	
    Amendment.

 

			
	 	    (a) 
	
    Amendment of the Plan.  The Compensation
    Committee may amend, suspend or terminate the Plan or any
    portion of the Plan at any time; provided that if at any time
    the approval of the Company’s stockholders is required as
    to any modification or amendment under section 422 of the
    Code or any successor provision with respect to Incentive Stock
    Options, the Compensation Committee may not effect such
    modification or amendment without such approval. Unless
    otherwise specified in the amendment, any amendment to the Plan
    adopted in accordance with this Section 9.3 shall apply to,
    and be binding on the holders of, all Awards outstanding under
    the Plan at the time the amendment is adopted, provided the
    Compensation Committee determines that such amendment, taking
    into account any related action, does not materially and
    adversely affect the rights of Participants under the Plan.

 

			
	 	    (b) 
	
    Amendment of Award.  The Compensation Committee
    may amend, modify or terminate any outstanding Award, including
    but not limited to, substituting another Award of the same or a
    different type, changing the date of exercise or realization,
    and converting an Incentive Stock Option to a Nonstatutory Stock
    Option; provided, however, that no outstanding Award may be
    amended to reduce the exercise price of a Stock Option, Stock
    Appreciation Right or other similar Award. The
    Participant’s consent to such action shall be required
    unless the Compensation Committee determines that the action,
    taking into account any related action, would not materially and
    adversely affect the Participant’s rights under the Plan.

 

		
	
    9.4. 
	
    Compliance
    with Code Section 409A.

 

    No Award shall provide for a deferral of compensation within the
    meaning of section 409A of the Code, unless the
    Compensation Committee, at the time of grant, specifically
    provides that the Award is intended to be subject to
    section 409A of the Code. If an Award is intended to be
    subject to section 409A, the following provisions shall
    apply except to the extent that a contrary provision is included
    in the Award Certificate: (a) such Award shall be payable
    on the earlier of a “change in control” or the
    Participant’s “separation from service” with the
    Company and (2) any payment made to a Participant who is a
    “specified employee” of the Company shall not be made
    before such date as is six months after the Participant’s
    “separation from service” to the extent required to
    avoid the adverse consequences of Section 409A of the Code.
    For purposes of this Section 9.4, the terms “change in
    control,” “separation from service” and
    “specified employee” shall have the meanings set forth
    in section 409A and the applicable Treasury regulations.
    The Company shall have no liability to a Participant, or any
    other party, if an Award that is intended to be exempt from, or
    compliant with, section 409A is not so exempt or compliant
    or for any action taken by the Compensation Committee.

 

		
	
    9.5. 
	
    Governing
    Law.

 

    The provisions of the Plan and all Awards made hereunder shall
    be governed by and interpreted in accordance with the laws of
    the State of Delaware, excluding choice-of-law principles of the
    law of such state that would require the application of the laws
    of a jurisdiction other than such state.

 

		
	    SandRidge
    2009 Incentive Plan
    	     Page 15Exhibit 10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this
“Agreement”), dated as of June 22, 2009, by and between ASSOCIATED MATERIALS LLC, a Delaware
limited liability company (as successor to Associated Materials Incorporated, a Delaware corporation) (the
“Company”), and a wholly owned indirect subsidiary of AMH Holdings II, Inc., a Delaware corporation
(“AMH II”), and STEPHEN GRAHAM, an individual residing in the State of Ohio (the
“Executive”).

W I T N E S S E T H :

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

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

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

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

1

 

3. Employment Term. Unless earlier terminated
pursuant to Section 6, the Executive’s term of employment hereunder shall begin on June 22, 2009
(hereinafter referred to as the “Commencement Date”), and continue through the date which is one
(1) year following the Commencement Date (the “Initial Term”); provided that such term
shall be automatically extended for additional one (1) year periods commencing on the first day immediately
following the expiration date of the Initial Term and successively thereafter on the first day immediately following
the expiration of each such one-year period (each such period an “Additional Term”) unless the
Company shall have given notice to the Executive that the Company does not desire to extend the term of this Agreement,
such notice to be given at least thirty (30) days prior to the end of the Initial Term or the applicable
Additional Term (the Initial Term and any Additional Terms, if applicable, collectively, the “Employment
Term”).

4. Compensation and Benefits.

(a) Salary. As compensation for his services
hereunder and in consideration of the Executive’s other agreements hereunder, during the Employment Term, the
Company shall pay the Executive a base salary, payable in equal installments in accordance with the Company’s
payroll procedures, at an annual rate of Three Hundred Thousand Dollars ($300,000), subject to annual review by the
Board or its Compensation Committee, which may increase, but not decrease, the Executive’s base salary.

(b) Annual Incentive Bonus; Stock Options. The
Executive shall be entitled to participate in an annual incentive bonus arrangement established by the Company on terms
and conditions substantially as set forth in Exhibit A hereto. The Executive shall not be entitled to
participate in any other annual cash bonus plan, program or arrangement with respect to any period to which the annual
incentive bonus arrangement described in the immediately preceding sentence applies. The Executive shall also be
entitled to participate in the stock option plan established by AMH II.

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

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

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

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

-2-

2

 

(a) Noncompetition. During the Employment Term
and for the two (2)-year period (the “Restricted Period”) following termination of the Employment
Term, the Executive shall not, within any jurisdiction or marketing area in which the Company or any Affiliate is doing
or is qualified to do business, directly or indirectly, own, manage, operate, control, be employed by or participate in
the ownership, management, operation or control of, or be connected in any manner with, any Business (as hereinafter
defined), provided that the Executive’s ownership of securities of two percent (2%) or less of any class
of securities of a public company shall not, by itself, be considered to be competition with the Company or any
Affiliate. For purposes of this Agreement, “Business” shall mean the manufacturing, production,
distribution or sale of exterior residential building products, including, without limitation, vinyl siding, windows,
fencing, decking, railings and garage doors, or any other business of a type and character engaged in by the Company or
an Affiliate during the Employment Term.

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

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

-3-

3

 

Company and the Affiliates shall be and become the sole property of the
Company, unless released in writing by the Board, and the Executive hereby assigns any and all rights therein or
thereto to the Company.

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

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

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

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

6. Termination. The employment of the Executive
hereunder shall automatically terminate at the end of the Employment Term. The employment of the Executive hereunder
and the Employment Term may also be terminated at any time by the Company with or without Cause. For purposes of this
Agreement, except as otherwise provided in Section 8, “Cause” shall mean:
(i) embezzlement, theft or misappropriation by the Executive of any property of the Company or an Affiliate;
(ii) any breach by the Executive of the Executive’s covenants under

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

7. Severance. Except as otherwise provided in
Section 8, if the Executive’s employment hereunder is terminated during the Employment Term, following the
Executive’s initial twelve (12) months of employment, by the Company or is terminated due to expiration of
the Employment Term following notice by the Company not to extend the Employment Term in accordance with
Section 3, in each case other than for Cause or due to disability (as determined in the good faith
discretion of the Board) or death, the Executive shall be entitled to receive as severance (subject to Section 9):
(i) an amount equal to the Executive’s base salary as in effect immediately prior to the date of the
Executive’s termination of employment for twelve (12) months, payable, commencing no later than sixty
(60) days following such termination, in equal installments in accordance with the Company’s payroll
procedures during the twelve (12) months following the date of the Executive’s termination (such
twelve-month period, the “Severance Period”); (ii) continued medical and dental benefits
described in Section 4(c) for the Severance Period, at the same rate of employee and Company shared costs 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 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 of termination of the Executive’s
employment, payable no earlier than the date on which such bonus, if any, would have been paid under the applicable
plan or policy of the Company absent such termination of employment, but no later than March 15 of the calendar
year immediately following the calendar year of such termination. With respect to any such continued medical and dental
benefits described in clause (ii) of the first sentence of this Section 7 for which the Executive is
eligible, (I) if the Company cannot continue such benefits, the Company shall pay the Executive for the cost of
such benefits; (II) such benefits shall be discontinued in the event the Executive becomes eligible for similar
benefits from a successor employer (and the Executive’s eligibility for any such benefits shall be reported by
the Executive to the Company); and (III) the Executive’s period of “continuation coverage” for
purposes of

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Section 4980B of the Internal Revenue Code of 1986, as amended (the
“Code”), shall be deemed to commence on the date of the Executive’s termination of employment.

8. Change in Control. This Section 8 will
be binding upon the date of this Agreement, but notwithstanding anything in this Agreement to the contrary, this
Section 8 will not be operative unless and until a Change in Control occurs. Upon the occurrence of a Change in
Control at any time during the Employment Term, this Section 8 shall become immediately operative without further
action; provided, however, that if, prior to a Change in Control, the Executive ceases for any reason to be an
employee of the Company and any Affiliate, the effectiveness of this Section 8 will immediately terminate without
further action and be of no further effect. Certain capitalized terms used in this Section 8 are defined for
purposes of this Section 8 in Section 8(e).

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

	 	(i)	 	
The Executive’s death;

	 	(ii)	 	
If the Executive becomes permanently disabled within the meaning of, and begins
actually to receive disability benefits under, the long-term disability plan applicable to the Executive immediately
prior to the Change in Control; or

	 	(iii)	 	
Cause (as defined in Section 8(e)(i)).

If, during the Post-Change Period, the Executive’s
employment is terminated by the Company or an Affiliate as described in clause (i), (ii) or (iii) of this
Section 8(a), the Executive will not be entitled to the benefits provided by Section 8(c).

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

	 	(i)	 	
the failure to maintain the Executive in the position, or a substantially equivalent
or superior position, with the Company and/or with a direct or indirect parent company of the Company that the
Executive held immediately prior to the Change in Control, which is not remedied by the Company within 10 calendar days
after receipt by the Company of notice from the Executive of such failure;

	 	(ii)	 	
(A) a reduction in the Executive’s base salary pursuant to Section 4(a)
hereof or (B) the termination or significant reduction in the aggregate of the Executive’s right to
participate in employee benefit plans or programs

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of the Company as in effect prior to the Change in Control
(other than Incentive Pay (as hereinafter defined) or any other bonus, incentive or stock or equity-based compensation
or benefits), in either case which is not remedied by the Company within 10 calendar days after receipt by the Company
of notice from the Executive of such reduction or termination;

	 	(iii)	 	
a reduction or elimination of the Executive’s opportunity to earn Incentive Pay
pursuant to any plan or program in effect immediately prior to the Change in Control which is not remedied by the
Company within 10 calendar days after receipt by the Company of notice from the Executive of such reduction or
elimination (for the avoidance of doubt, changes in the value or performance of the Company or an Affiliate or
successor of either following the Change in Control shall not be considered a reduction or elimination of the
Executive’s opportunity to earn Incentive Pay); or

	 	(iv)	 	
the Company requires the Executive to have his principal place of work changed to any
location that is more than 35 miles from the location thereof immediately prior to the Change in Control, without his
prior written consent.

(c) Change in Control Severance. If, following
the occurrence of a Change in Control, the Company or an Affiliate terminates the Executive’s employment during
the Post-Change Period other than as described in clause (i), (ii) or (iii) of Section 8(a), or if the
Executive terminates his employment pursuant to Section 8(b), the Executive shall not be entitled to the severance
compensation described in Section 7, and, subject to Section 9, the Company will (i) pay or cause to be
paid to the Executive the amounts described in Sections 8(c)(1), 8(c)(2), 8(c)(3), and 8(c)(6) in a lump-sum no
later than sixty (60) days after the Termination Date; (ii) pay or cause to be paid to the Executive the
amount described in Section 8(c)(4), such amount to be payable no earlier than the date on which such Incentive
Pay, if any, would have been paid under the applicable plan or policy of the Company absent such termination of
employment, but no later than March 15 of the calendar year immediately following the calendar year of the
Termination Date; and (iii) provide the Executive the benefits described in Section 8(c)(5) for the period
described therein. The foregoing to the contrary notwithstanding, if the Executive is entitled to payments under this
Section 8(c) following a Change in Control that does not constitute a “change in the ownership or effective
control” of the relevant company or a “change in the ownership of a substantial portion of the
assets” of the relevant company, as such terms are used in Code Section 409A(a)(2)(A)(v), then an amount
equal to the amount that would have been paid under Section 7(i) had a Change in Control not occurred shall be paid in
installments during the twelve (12) month period following the Termination Date, and the remaining amounts
described in clause (i) of this Section 8(c) above (reduced by the amount so paid in installments) shall be paid
in a lump-sum.

	 	(1)	 	
A lump sum payment in an amount equal to all Base Pay and Incentive Pay (other than
for the calendar year of such termination of employment) owed to the Executive for periods on or prior to the
Termination Date.

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7

 

	 	(2)	 	
A lump sum payment in an amount equal to two times the Executive’s base salary
pursuant to Section 4(a) (at the rate in effect immediately prior to the Termination Date).

	 	(3)	 	
A lump sum payment equal to two times Incentive Pay (in an amount equal to the highest
amount of Incentive Pay earned by the Executive in any calendar year during the three calendar years immediately
preceding the calendar year in which the Change in Control occurred).

	 	(4)	 	
In the event that the Termination Date occurs after June 30 in any calendar year,
a lump sum payment equal to one times Incentive Pay for such calendar year, multiplied by a fraction, the numerator of
which is the number of days between (and including) January 1 of the calendar year in which the Termination Date occurs
and the Termination Date, and the denominator of which is 365.

	 	(5)	 	
For a period of 24 months following the Termination Date (the
“Continuation Period”), the Company will provide the Executive with medical, dental and life
insurance benefits consistent with the terms in effect for such benefits for active employees of the Company during the
Continuation Period. If and to the extent that any benefit described in this Section 8(c)(5) is not or cannot be
paid or provided under any Company plan or program, then the Company will pay or provide for the payment to the
Executive, his dependants and beneficiaries, of such employee benefits. Without otherwise limiting the purposes of
Section 8(d), employee benefits otherwise receivable by the Executive pursuant to this Section 8(c)(5) will be
reduced to the extent comparable welfare benefits are actually received by the Executive from another employer during
the Continuation Period following the Executive’s Termination Date, and any such benefits actually received by
the Executive shall be reported by the Executive to the Company. The foregoing to the contrary notwithstanding, to the
extent required in order to comply with Section 409A of the Code, in no event shall any such benefits be provided
beyond the end of the second calendar year that begins after the Executive’s “separation from
service” within the meaning of Section 409A of the Code.

	 	(6)	 	
The Company will pay to the Executive the cost of employee outplacement services for
the Executive in the amount of $30,000.

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

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agreement, plan or policy of the Company or a subsidiary thereof providing
employee benefits, which rights shall be governed by the terms thereof.

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

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

	 	(1)	 	
been convicted of a criminal violation involving fraud, embezzlement or theft;

	 	(2)	 	
committed intentional wrongful damage to property of the Company or any Affiliate;
or

	 	(3)	 	
committed intentional wrongful disclosure of confidential information of the Company
or any Affiliate.

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

	 	(ii)	 	
“Change in Control” means (A) a stock sale, merger,
consolidation, combination, reorganization or other transaction involving the Company resulting in less than fifty
percent (50%) of the combined voting power of the surviving or resulting entity being owned by the owner or owners of
the Company immediately prior to such transaction; (B) a stock sale, merger, consolidation, combination,
reorganization or other transaction involving AMH II, AMH Holdings, Inc. (“AMH”) or Associated
Materials Holdings, LLC (“Parent”) resulting in less than fifty percent (50%) of the combined voting
power of the surviving or resulting entity being owned by the shareholders or owners of AMH II, AMH or Parent, as
applicable, immediately prior to such transaction or (C) the liquidation or dissolution of the Company, AMH II,
AMH or Parent or the sale or other disposition of all or substantially all of the assets or business of the Company,
AMH II, 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 an Affiliate).

	 	(iii)	 	
“Incentive Pay” means an annual cash bonus or annual cash incentive
compensation, in addition to base salary, made or to be made in regard to services rendered in any year or other period
pursuant to any bonus, incentive, profit-sharing, performance, discretionary pay or similar agreement, policy, plan,
program or arrangement (whether or not funded) of the Company or an Affiliate, or any successor thereto;
provided that the Incentive Pay shall not include any stock options or other stock-based compensation or any
special management bonuses paid in connection with any debt offering or recapitalization of AMH II and/or another
Affiliate.

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For the avoidance of doubt, as of the date hereof,
Incentive Pay shall mean the annual incentive bonus arrangement described in Section 4(b).

	 	(iv)	 	
“Post-Change Period” means the period of time commencing on the
date of the first occurrence of a Change in Control and continuing until the second anniversary of the occurrence of
such Change in Control.

	 	(v)	 	
“Termination Date” means the date on which the Executive’s
employment with the Company or an Affiliate is terminated.

9. Termination of Compensation and Benefits;
Execution of Release; Coordination of Provisions. If the Executive’s employment terminates otherwise than in
a termination entitling him to severance pay and benefits pursuant to Section 7 or Section 8, the Executive
shall not be entitled to any severance, termination pay or similar compensation or benefits, provided that the
Executive shall be entitled to any benefits then due or accrued in accordance with the applicable employee benefit
plans of the Company or applicable law, including “continuation coverage” under the Company’s group
health plans for purposes of Section 4980B of the Code. As a condition of receiving any severance compensation for
which the Executive otherwise qualifies under Section 7 or Section 8, the Executive agrees to execute within
sixty (60) days following the date of the Executive’s termination of employment a general release of the
Company and the Affiliates and their respective officers, directors and employees from any and all claims, obligations
and liabilities of any kind whatsoever, including, without limitation, those arising from or in connection with the
Executive’s employment or termination of employment with the Company or this Agreement (including, without
limitation, civil rights claims), in such form as is requested by the Company, such release to be delivered, and to
have become fully irrevocable, on or before the end of such sixty (60)-day period. It is expressly agreed and
understood that if such a release has not been executed and delivered and become fully irrevocable by the end of such
sixty (60)-day period, no amounts or benefits under Section 7 or 8 shall be or become payable (except that any
continued medical, dental or life insurance benefits may be provided during such sixty (60)-day period pursuant to
Section 7 or 8, as the case may be, but will cease to be provided on the last day of such period). Any severance
compensation and benefits to which the Executive may be entitled under Section 8 shall be in lieu of any severance
compensation or benefits to which the Executive may be entitled under Section 7. The Executive acknowledges and
agrees that, except as specifically described in Section 7 and Section 8, all of the Executive’s rights
to any compensation, benefits (other than base salary earned through the date of termination of employment and any
benefits due or accrued prior to termination of employment in accordance with the applicable employee benefit plans of
the Company or applicable law), bonuses or severance from the Company or any Affiliate after termination of the
Employment Term shall cease upon such termination.

10. Limitation on Payments and Benefits.
Notwithstanding any provision of this Agreement to the contrary, no amount or benefit shall be paid or provided under
this Agreement to an extent or in a manner that would result in payments or benefits (or other compensation) not being
fully deductible by the Company or an Affiliate for federal income tax purposes because of Section 280G of the
Code, or any successor provision thereto (or that would result in the Executive being subject to the excise tax imposed
by Section 4999 of the Code, or any successor provision thereto). The determination of whether any such payments
or benefits to be provided

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under this Agreement or otherwise would not be so deductible (or whether the
Executive would be subject to such excise tax) shall be made at the expense of the Company, if requested by either the
Executive or the Company, by a firm of independent accountants or a law firm selected by the Company and reasonably
acceptable to the Executive. In the event that any payment or benefit intended to be provided under this Agreement or
otherwise would constitute a “parachute payment,” as defined in Section 280G of the Code, the
Executive shall be entitled to designate the payments and/or benefits (beginning with cash payments) to be reduced or
modified so that the Company or an Affiliate is not denied any federal income tax deductions for any such parachute
payment because of Section 280G of the Code (or so that the Executive is not subject to the excise tax imposed by
Section 4999 of the Code). The Company shall provide the Executive with all information reasonably requested by
the Executive to permit the Executive to make such designation. In the event that the Executive fails to make such
designation within 10 business days of the date his employment with the Company or an Affiliate terminates, the Company
may effect such reduction in any manner it deems appropriate (beginning with cash payments).

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

	 	 	 
	 	If to the Company:
	Associated Materials LLC

3773 State Road

Cuyahoga Falls, Ohio 44223
	 	 	 
	 	With copies to:
	Harvest Partners LLC

280 Park Avenue, 33rd Floor

New York, New York 10017

Attention: Ira D. Kleinman
	 	 	 
	 	and
	Investcorp International Inc.

280 Park Avenue, 36th Floor

New York, New York 10017

Attention: Thomas Sullivan
	 	 	 
	 	and
	White & Case LLP

1155 Avenue of the Americas

New York, New York 10036

Attention: Oliver C. Brahmst, Esq.
	 	 	 
	 	If to the Executive:
	Stephen Graham
AMI Corporate Offices

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

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11

 

12. General.

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

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

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

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

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

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

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

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

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12

 

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

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

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

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

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

ASSOCIATED MATERIALS LLC

Date: 6/3/09 

By: /s/ Thomas
Chieffe                                       

Name: Thomas Chieffe 

Title: President and CEO

STEPHEN GRAHAM

Date: 6/3/09

/s/ Stephen
Graham                                             

 

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13

 

Exhibit A

Annual Incentive Bonus

The Executive’s annual incentive bonus for each
calendar year during the Employment Term shall be a percentage of the Executive’s base salary based upon the
achievement by AMH II of annual EBITDA Hurdles, or such other financial measures as may be established by the Board or
its Compensation Committee, with respect to the applicable calendar year, as follows:

	 	 	 
	Achievement of EBITDA Hurdles	 	Percentage of Base Salary
	Less than threshold	 	Zero
	Threshold	 	20.00%
	Target	 	60.00%
	Maximum	 	100.00%

If the actual EBITDA for a particular calendar year is
between two EBITDA Hurdles, the applicable percentage of base salary shall be determined by linear interpolation based
on the difference between such EBITDA Hurdles. For the avoidance of doubt, in no event shall the annual incentive bonus
exceed 100% of base salary. For purposes of the Executive’s annual incentive bonus and the computation thereof:

	1.	 	
Base salary shall mean the annual rate of base salary in effect under this Agreement
as of April 1 of the calendar year to which the bonus relates.

	2.	 	
“EBITDA Hurdle” means threshold, target and maximum amounts of EBITDA with
respect to a calendar year, as determined in good faith by the Board or its Compensation Committee. EBITDA Hurdles
shall be adjusted consistent with the definition of EBITDA, in the discretion of the Board or its Compensation
Committee.

	3.	 	
EBITDA shall mean the consolidated net income of AMH II, adjusted to exclude deduction
of interest expense (net of interest income), income taxes, depreciation and amortization and the Harvest Fee pursuant
to the Management Agreement, dated as of April 19, 2002, between Harvest Partners, Inc. and Associated Materials
Incorporated, as amended from time to time, and to exclude gain or loss from sale of capital assets, and including
deduction of all bonuses paid or accrued with respect to the Executive and all other officers and employees of AMH II
and its subsidiaries (including, without limitation, the Executive’s bonus hereunder), for the relevant calendar
year, calculated otherwise in accordance with generally accepted accounting principles, subject to any adjustments made
in good faith by the Board or its Compensation Committee. EBITDA shall be determined by the Company’s management,
subject to audit or review by AMH II’s external accountants and approval, in good faith, by the Board or its
Compensation Committee. EBITDA shall exclude, without duplication, any transaction- or merger-related costs which are
expensed rather than capitalized; any revenue, expense, gain or

 

14

 

Exhibit A

loss from operations divested during the relevant calendar
year; the effect of inventory write-ups made due to purchase accounting; and any other non-recurring, extraordinary
items subject to approval, in good faith, by the Board or its Compensation Committee. EBITDA shall be adjusted to
reflect acquisitions, divestitures and other similar transactions involving AMH II or its subsidiaries, in the
discretion of the Board or its Compensation Committee.

	4.	 	
Any annual incentive bonus to which the Executive is entitled under this Agreement for
any calendar year shall be paid in a cash lump-sum within thirty days following the close of AMH II’s books and
completion of AMH II’s annual audit by its external accountants for such calendar year but in any event shall not
be paid later than March 15 of the calendar year immediately following the calendar year to which the bonus
relates.

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

 

15

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