Document:

exv4w268

Exhibit 4.268

 

THE DETROIT EDISON COMPANY

AND

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

TRUSTEE

 

THIRTIETH SUPPLEMENTAL INDENTURE

DATED AS OF NOVEMBER 1, 2009

 

SUPPLEMENTING THE COLLATERAL TRUST INDENTURE

DATED AS OF JUNE 30, 1993

PROVIDING FOR

2009 SERIES CT VARIABLE RATE SENIOR NOTES DUE 2024

 

 

 

     SUPPLEMENTAL INDENTURE, dated as of the 1st day of November, 2009, between THE DETROIT EDISON
COMPANY, a corporation organized and existing under the laws of the State of Michigan (the
“Company”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association
organized under the laws of the United States of America, having a corporate trust office in the
City of Detroit, Michigan, as successor trustee (the “Trustee”);

     WHEREAS, the Company has heretofore executed and delivered to the Trustee a Collateral Trust
Indenture dated as of June 30, 1993 (the “Original Indenture”), as supplemented, providing for the
issuance by the Company from time to time of its debt securities; and

     WHEREAS. the Company now desires to provide for the issuance of an additional series of its
senior debt securities pursuant to the Original Indenture in connection with its obligations to the
Michigan Strategic Fund (the “MSF”) under the Loan Agreement dated as of November 1, 2009 (the
“Loan Agreement”) relating to the Michigan Strategic Fund Variable Rate Limited Obligation
Refunding Revenue Bonds (The Detroit Edison Company Exempt Facilities Project), Collateralized
Series 2009CT (the “2009CT Bonds”); and

     WHEREAS, the Company intends hereby to designate a series of debt securities which shall have
the benefit of the provisions of Article Four of the Original Indenture and the other related
provisions of the Original Indenture relating to the grant of security, subject to the release
provisions provided for herein, and which shall have the terms and variations from the provisions
of the Original Indenture as set forth herein; and

     WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved
to it under the provisions of the Original Indenture, including Section 1001 thereof, and pursuant
to appropriate resolutions of the Board of Directors, has duly determined to make, execute and
deliver to the Trustee this Thirtieth Supplemental Indenture to the Original Indenture as permitted
by Sections 201 and 301 of the Original Indenture in order to establish the form or terms of, and
to provide for the creation and issue of, a series of its debt securities under the Original
Indenture, which shall be known as the 2009 Series CT Variable Rate Senior Notes due 2024; and

     WHEREAS, all things necessary to make such debt securities, when executed by the Company and
authenticated and delivered by the Trustee or any Authenticating Agent and issued upon the terms
and subject to the conditions hereinafter and in the Original Indenture set forth against payment
therefor, the valid, binding and legal obligations of the Company and to make this Thirtieth
Supplemental Indenture a valid, binding and legal agreement of the Company, have been done;

     NOW, THEREFORE, THIS THIRTIETH SUPPLEMENTAL INDENTURE WITNESSETH that, in order to establish
the terms of a series of debt securities, and for and in consideration of the premises and of the
covenants contained in the Original Indenture and in this Thirtieth Supplemental Indenture and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is mutually covenanted and agreed as follows:

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ARTICLE ONE

DEFINITIONS AND OTHER

PROVISIONS OF GENERAL APPLICATION

     SECTION 1.01. Definitions. Each capitalized term that is used herein and is defined in the
Original Indenture shall have the meaning specified in the Original Indenture unless such term is
otherwise defined herein. The following terms shall have the respective meanings set forth below:

     “2009CT Bonds” means the $65,000,000 Michigan Strategic Fund Variable Rate Limited Obligation
Refunding Revenue Bonds (The Detroit Edison Company Exempt Facilities Project), Collateralized
Series 2009CT.

     “Bond Indenture” means the Trust Indenture, dated as of November 1, 2009 between the Michigan
Strategic Fund and the Bond Trustee providing for the issuance of the 2009CT Bonds.

     “Bond Trustee” means The Bank of New York Mellon Trust Company, N.A., as trustee under the
Bond Indenture, or any successor thereto.

     “Business Day” means any day except a Saturday, Sunday or other day on which banking
institutions in the State of New York or the State of Michigan are authorized or obligated pursuant
to law or executive order to close.

     “Capitalization” means the total of all the following items appearing on, or included in, the
consolidated balance sheet of the Company: (i) liabilities for indebtedness maturing more than 12
months from the date of determination; and (ii) common stock, common stock expense, accumulated
other comprehensive income or loss, preferred stock, preference stock, premium on capital stock and
retained earnings (however the foregoing may be designated), less, to the extent not otherwise
deducted, the cost of shares of capital stock of the Company held in its treasury, if any. Subject
to the foregoing, Capitalization shall be determined in accordance with generally accepted
accounting principles and practices applicable to the type of business in which the Company is
engaged and may be determined as of a date not more than 60 days prior to the happening of the
event for which the determination is being made. In connection with such determination, the
Company shall certify to the Trustee that it has, prior to making its final determination,
consulted with the independent accountants regularly retained by the Company.

     “Debt” means any outstanding debt for money borrowed evidenced by notes, debentures, bonds or
other securities, or guarantees of any debt.

     “Net Tangible Assets” means the amount shown as total assets on the consolidated balance sheet
of the Company, less (i) intangible assets including, but without limitation, such items as
goodwill, trademarks, trade names, patents, unamortized debt discount and expense and other
regulatory assets carried as an asset on the Company’s consolidated balance sheet, and (ii)
appropriate adjustments, if any, on account of minority interests. Net Tangible Assets shall be
determined in accordance with generally accepted accounting principles and practices applicable to
the type of business in which the Company is engaged and may be determined as of a date not more
than 60 days prior to the happening of the event for which such determination is being

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made. In connection with such determination, the Company shall certify to the Trustee that it
has, prior to making its final determination, consulted with the independent accountants regularly
retained by the Company.

     “Pledged Bonds” means the related series of Bonds (as hereafter defined) and any other
Mortgage Bonds issued to secure Securities subject to the release provisions provided herein or in
any other supplemental indenture to the Original Indenture.

     “Release Date” means the date as of which all Mortgage Bonds, (i) other than the Pledged
Bonds, including the related series of Bonds, and (ii) other than outstanding Mortgage Bonds
(exclusive of Pledged Bonds) which do not in aggregate principal amount exceed the greater of 5% of
the Net Tangible Assets of the Company or 5% of the Capitalization of the Company, have been
retired through payment, redemption or otherwise, provided that no default or Event of Default has
occurred and, at such time, is continuing under the Original Indenture.

     “Substitute Mortgage” means a mortgage indenture of the Company, other than the Mortgage,
designated by the Company to the Trustee as a Substitute Mortgage pursuant to Section 4.03 hereof.
The lien of the Substitute Mortgage shall have such priority, and be with respect to such property,
as shall be specified by the Company in its sole discretion.

     “Substitute Mortgage Bonds” means any mortgage bonds issued by the Company under a Substitute
Mortgage and delivered to the Trustee pursuant to Section 4.03 hereof or pursuant to the comparable
provision of any other supplemental indenture relating to Securities subject to the release
provisions.

     SECTION 1.02. Section References. Each reference to a particular section set forth in this
Thirtieth Supplemental Indenture shall, unless the context otherwise requires, refer to this
Thirtieth Supplemental Indenture.

ARTICLE TWO

TITLE AND TERMS OF THE SECURITIES

     SECTION 2.01. Title of the Securities; Stated Maturity. This Thirtieth Supplemental Indenture
hereby establishes a series of Securities, which shall be known as the Company’s “2009 Series CT
Variable Rate Senior Notes due 2024” (the “Notes”). For purposes of the Original Indenture, the
Notes shall constitute a single series of Securities. The Stated Maturity on which the principal
of the Notes shall be due and payable will be August 1, 2024. The Notes are being issued to secure
the Company’s obligations to the MSF under the Loan Agreement.

     SECTION 2.02. Certain Variations from the Original Indenture.

     (a) The Notes shall have the benefit of the provisions of Article Four of the Original
Indenture and shall have the benefit of, or be subject to, the other related provisions of the
Original Indenture relating to the grant of security, including (for avoidance of doubt and not for
purposes of limitation) the Granting Clause, the definitions of “Deliverable Mortgage Bonds,”
“Deliverable Securities,” “Designated Mortgage Bonds,” “Grant,” “Mortgage,” “Mortgage Bonds,”
“Mortgage Trustee,” “Previously Delivered Mortgage Bonds,” and “Trust Estate,” Section 301(20),
Sections

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301(a)(v), (ix), (x) and (xi), Sections 301(b)(ii) and (iii), Section 301(d), and Sections
601(4) and (8), subject, in each case, to the release provisions provided for in Section 4.02
herein. In addition, on and after the Release Date, unless Substitute Mortgage Bonds are issued to
secure the Notes, the Notes shall have the benefit of the additional covenants set forth in Article
Three hereof.

     (b) In the event the Company desires to provide for the payment of the Notes, in lieu of
defeasing the Notes in accordance with Section 503 of the Original Indenture, it shall either
redeem an equal principal amount of the 2009CT Bonds or take such action as shall be required by
Article VIII of the Bond Indenture to defease an equal principal amount of the 2009CT Bonds.
Pursuant to Section 2.03(c) hereof, such redemption or defeasance shall result in the discharge of
the Company’s obligation with respect to the Notes and the cancellation of the Notes.

     (c) Any amount payable by the Company in respect of principal of the Notes, whether at
maturity or prior to maturity by redemption or upon redemption or acceleration or otherwise, in a
circumstance where there has not been a corresponding payment of principal of 2009CT Bonds, shall
be applied simultaneously to the redemption or defeasance of an equal principal amount of 2009CT
Bonds in accordance with the Bond Indenture. In the event the amount so paid is insufficient to
provide for such redemption or defeasance, the Company shall pay such additional amounts as shall
be necessary to make up the deficiency.

     SECTION 2.03. Amount, Assignability and Redemption.

     (a) The aggregate principal amount of Notes that may be issued under this Thirtieth
Supplemental Indenture is limited to $65,000,000 (except as provided in Section 301(2) of the
Original Indenture). The Notes shall be issuable only as Registered Securities without coupons
and, as permitted by Section 301 and Section 302 of the Original Indenture, in denominations of
$5,000 and integral multiples thereof to the Bond Trustee as assignee of the MSF, pursuant to the
Loan Agreement. The Notes shall not be further assignable or transferable except as may be
required to effect a transfer to any successor Bond Trustee.

     (b) The Notes may bear such legends as may be necessary to refer to the Loan Agreement or to
comply with any law or with any rules or regulations made pursuant thereto or to evidence the
limited assignability.

     (c) Upon payment of the principal, premium, if any, or interest on the 2009CT Bonds, whether
at maturity or prior to maturity by redemption or otherwise, or upon provision for the payment
thereof having been made in accordance with Article IV or VIII of the Bond Indenture, Notes in a
principal amount equal to the principal amount of the 2009CT Bonds shall, to the extent of such
payment of principal, premium or interest, be deemed fully paid and the obligation of the Company
thereunder to make such payment shall forthwith cease and be discharged, and, in the case of the
payment of principal and premium, if any, such Notes shall be surrendered for cancellation or
presented for appropriate notation to the Trustee.

     (d) The Notes shall be redeemed on the date and in the principal amount which corresponds to
the redemption date for, and the principal amount to be redeemed of, the 2009CT Bonds.

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     (e) In the event of an Event of Default under the Bond Indenture and the acceleration of the
2009CT Bonds, the Notes shall be redeemable in whole upon receipt by the Trustee of a written
demand (Redemption Demand) from the Bond Trustee indicating that it has accelerated the 2009CT
Bonds.

     SECTION 2.04. Certain Terms of the Notes.

     (a) The Notes shall bear interest at the rate of interest established for the 2009CT Bonds
from time to time in accordance with the Bond Indenture on the principal amount thereof from the
date of original issue, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, until the principal of the Notes becomes due and payable, and on any
overdue principal and premium and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per annum during such
overdue period. Interest on the Notes will be payable on such dates as interest shall be payable
on the 2009CT Bonds (each such date, an “Interest Payment Date”). Payment of interest on the
2009CT Bonds shall be deemed to constitute payment of interest on the Notes. The amount of
interest payable for any period shall be computed on the same basis as interest on the 2009CT Bonds
pursuant to the Bond Indenture.

     (b) In the event that any Interest Payment Date, redemption date or other date of Maturity of
the Notes is not a Business Day, then payment of the amount payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or other payment in
respect of any such delay), in each case with the same force and effect as if made on such date.
The interest installment so payable, and punctually paid or duly provided for, on any Interest
Payment Date with respect to any Note will, as provided in the Original Indenture, be paid to the
person in whose name the Note (or one or more Predecessor Securities, as defined in the Original
Indenture) is registered at the close of business on the relevant record date for such interest
installment, which shall be the same as the record date for the 2009CT Bonds with respect to the
relevant Interest Payment Date (the “Regular Record Date”). Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the registered Holders
on such Regular Record Date, and may either be paid to the person in whose name the Note (or one or
more Predecessor Securities) is registered at the close of business on a Special Record Date to be
fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to
the registered Holders of the Notes not less than ten days prior to such Special Record Date, or
may be paid at any time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Original Indenture. The principal of, and
premium, if any, and the interest on the Notes shall be payable at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, the City of New York, in any coin
or currency of the United States of America that at the time of payment is legal tender for payment
of public and private debts; provided, however, that payment of interest may be made at the option
of the Company by check mailed to the registered Holder at the close of business on the Regular
Record Date at such address as shall appear in the Security Register. Any waiver or rescission of
a declaration of acceleration of principal of the 2009CT Bonds shall constitute a waiver or
rescission with respect to the Notes.

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     (c) The Notes are not subject to repayment at the option of the Holders thereof and are not
subject to any sinking fund, except to the extent that the Bond Trustee, or its successor in
interest, may have exercised its rights pursuant to Section 2.03 hereof. As provided in the form
of the Note attached hereto as Exhibit A, the Notes are subject to Optional Redemption and
Extraordinary Optional Redemption, as a whole or in part, and Special Optional Redemption, in
whole, by the Company prior to Stated Maturity of the principal thereof upon the same terms as the
2009CT Bonds. Except as modified in the form of Note, redemptions shall be effected in accordance
with Article Twelve of the Original Indenture.

     (d) The Notes shall have such other terms and provisions as are set forth in the form of Note
attached hereto as Exhibit A (which is incorporated by reference in and made a part of this
Thirtieth Supplemental Indenture as if set forth in full at this place).

     SECTION 2.06. Form of Note. Attached hereto as Exhibit A is the form of the definitive Note.
On and after the Release Date, the terms of the Notes shall be amended to make appropriate
reference to the Substitute Mortgage and the Substitute Mortgage Bonds; provided, that the consent
of Holders shall not be required in connection with such amendment.

ARTICLE THREE

RESERVED

ARTICLE FOUR

SECURITY AND RELEASE PROVISIONS

     SECTION 4.01. Security. Subject to Section 4.02 below, as provided in and pursuant to Article
Four of the Original Indenture, the Notes will be secured as to payments of principal, interest and
premium, if any, by a series of Mortgage Bonds (the “General and Refunding Mortgage Bonds, 2009
Series CT,” the “Bonds,” the “Bonds of the related series” or the “related series of Bonds”) of the
Company to be issued concurrently with the issuance of the Notes under and secured by a Mortgage
and Deed of Trust, dated as of October 1, 1924, between the Company and The Bank of New York Mellon
Trust Company, N.A., as successor trustee (the “Mortgage Trustee”), as amended and supplemented by
various supplemental indentures, including the supplemental indenture, dated as of November 1,
2009, creating the Bonds (collectively, the “Mortgage”), pledged by the Company for the benefit of
the Holders of the Notes to the Trustee under this Thirtieth Supplemental Indenture. The Bonds
shall be issued in an aggregate principal amount equal to the aggregate principal amount of the
Notes.

     SECTION 4.02. Release. Until the Release Date and subject to Article Four of the Original
Indenture, the Bonds of the related series issued and delivered to the Trustee shall serve as
security for any and all obligations of the Company under all Notes from time to time Outstanding,
including, but not limited to (1) the full and prompt payment of the principal and premium, if any,
on the Notes when and as the same shall become due and payable in accordance with the terms and
provisions of the Indenture or the Notes, either at the Stated Maturity thereof, upon acceleration
of the maturity thereof, upon redemption, or otherwise, and (2) the full and prompt payment of any
interest on the Notes when and as the same shall become due and payable in accordance with the
terms and provisions of this Indenture or the Notes including, if and to the

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extent provided for in the Notes, interest on overdue installments of principal and (to the
extent permitted by law) interest on overdue installments of interest.

     Each supplemental indenture to the Mortgage pursuant to which any Bonds are issued shall
contain a provision to the effect that any payment by the Company hereunder of principal of or
premium or interest on Notes which shall have been authenticated and delivered in connection with
the issuance and delivery to the Trustee of such Bonds (other than by the application of the
proceeds of a payment in respect of such Bonds) shall to the extent thereof, be deemed to satisfy
and discharge the obligation of the Company, if any, to make a payment of principal, premium or
interest, as the case may be, in respect of such Bonds which is then due.

     Notwithstanding anything in the Original Indenture to the contrary, from and after the Release
Date, the obligation of the Company to make payment with respect to the principal of and premium,
if any, and interest on the Bonds shall be deemed satisfied and discharged as provided in the
supplemental indenture or indentures to the Mortgage creating such Bonds and the Bonds shall cease
to secure in any manner Notes theretofore or subsequently issued; the Trustee shall thereupon
surrender the Bonds to the Mortgage Trustee for cancellation and execute and deliver such proper
instruments of release as may be required. From and after the Release Date, all Notes, whether
theretofore or subsequently issued, shall be secured by Substitute Mortgage Bonds pursuant to
Section 4.03 below, and any conditions to the issuance of Notes that refer or relate to Bonds or
the Mortgage shall be inapplicable (except as such conditions shall be deemed to refer to
Substitute Mortgage Bonds or a Substitute Mortgage pursuant to Section 4.03 below). From and after
the Release Date, the Company shall not issue any additional Mortgage Bonds, including Pledged
Bonds, under the Mortgage. Notice of the occurrence of the Release Date shall be given by the
Trustee to the Holders of the Notes in the manner provided for in the Original Indenture not later
than 30 days after the Company notifies the Trustee of the occurrence of the Release Date.

     In connection with the establishment of the occurrence of the Release Date, the Trustee shall
be entitled to receive, may presume the correctness of, and shall be fully protected in relying
upon, an Officers’ Certificate designating the Release Date and stating that the conditions to the
occurrence of the Release Date have been satisfied.

     When the obligation of the Company to make payments with respect to the principal of, and
premium, if any, and interest on all or any part of the Bonds shall be satisfied or deemed
satisfied pursuant to the Original Indenture or pursuant to this Thirtieth Supplemental Indenture,
the Trustee shall, upon written request of the Company, deliver to the Company without charge
therefor all of the Bonds so satisfied or deemed satisfied, together with such appropriate
instruments of transfer or release as may be reasonably requested by the Company. All Bonds
delivered to the Company in accordance with this Section shall be delivered by the Company to the
Mortgage Trustee for cancellation.

     SECTION 4.03. Substitute Mortgage Bonds.

     (a) The Company shall notify the Trustee not less than 90 days prior to the Release Date (or
such shorter period as the Company and the Trustee may agree) that the Company will deliver to the
Trustee on the Release Date Substitute Mortgage Bonds in an aggregate principal amount equal to the
aggregate principal amount of Notes and any other Securities subject to the release

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provisions Outstanding on the Release Date, in trust for the benefit of the Holders from time
to time of the Notes and any other Securities subject to the release provisions issued under the
Original Indenture, as supplemented, as security for any and all obligations of the Company under
the Notes and any other Securities subject to the release provisions, including but not limited to,
(1) the full and prompt payment of the principal of and premium, if any, on the Notes and any other
Securities subject to the release provisions when and as the same shall become due and payable in
accordance with the terms and provisions of the Original Indenture, as supplemented, or the Notes
or such other Securities subject to the release provisions, either at the stated maturity thereof,
upon acceleration of the maturity thereof or upon redemption, and (2) the full and prompt payment
of any interest on the Notes and any other Securities subject to the release provisions when and as
the same shall become due and payable in accordance with the terms and provisions of the Original
Indenture, as supplemented, or the Notes or such other Securities subject to the release
provisions.

     (b) The Company shall deliver such Substitute Mortgage Bonds described in Section 4.03(a) in
separate series and issues corresponding to the series and issues of Notes and other Securities
subject to the release provisions Outstanding on or prior to the Release Date, each series or issue
of Substitute Mortgage Bonds having the same stated rate or rates of interest (or interest
calculated in the same manner), Interest Payment Dates, stated maturity date and redemption
provisions, and in the same aggregate principal amount, as the related series or issue of Notes or
other Securities subject to the release provisions outstanding on the Release Date; it being
expressly understood that each such series of Substitute Mortgage Bonds shall be held by the
Trustee for the benefit of the Holders of the corresponding series of Securities from time to time
Outstanding subject to such terms and conditions relating to surrender to the Company, transfer
restrictions, voting, application of payments of principal and interest and other matters as shall
be set forth in an indenture supplemental hereto specifically providing for the delivery to the
Trustee of such Substitute Mortgage Bonds. Such Substitute Mortgage Bonds shall be issued under
and secured by a Substitute Mortgage (A) on which the Company shall be the obligor; and (B) which
shall be qualified, or shall meet the requirements for qualification, under the Trust Indenture Act
for the issuance of Substitute Mortgage Bonds.

     (c) On or prior to the Release Date the Company shall have delivered to the Trustee:

(A) a supplemental indenture to the Original Indenture that provides among other things,
that on the delivery of the Substitute Mortgage Bonds described in Section 4.03(b), the
Company shall deliver to the Trustee in trust for the benefit of the Holders as described
in Section 4.03(a) hereof, and the Trustee shall accept therefor, related series of
Substitute Mortgage Bonds registered in the name of the Trustee and conforming to the
requirements herein and therein specified;

(B) an Officer’s Certificate (1) stating that, to the knowledge of the signer, (a) no Event
of Default has occurred and is continuing and (b) no event has occurred and is continuing
which entitles the secured party under the Substitute Mortgage to accelerate the maturity
of the indebtedness outstanding thereunder and (2) stating the aggregate principal amount
of indebtedness issuable, and then proposed to be issued, under and secured by the lien of
the Substitute Mortgage; and

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(C) an Opinion of Counsel to the effect that such Substitute Mortgage Bonds have been duly
issued under such Substitute Mortgage and constitute valid obligations, entitled to the
benefit of the lien of the Substitute Mortgage equally and ratably with all other
indebtedness then outstanding secured by such lien.

     (d) On or prior to the Release Date the Company shall provide an Officer’s Certificate stating
that the Company has been advised in writing, within not more than 30 days prior to such
substitution of the Substitute Mortgage Bonds for the Mortgage Bonds, by at least two credit rating
agencies qualifying as “nationally recognized statistical rating organizations” (as defined by the
Securities Exchange Act of 1934, as amended) then maintaining a securities rating on the 2009CT
Bonds that the substitution of such Substitute Mortgage Bonds for the Mortgage Bonds will not
result in a reduction of the securities rating assigned to the 2009CT Bonds by that credit rating
agency immediately prior to the substitution or the suspension or withdrawal of its rating and the
Company shall have provided the Trustee with written evidence of such advice.

     (e) In the event that the Company cannot obtain assurance of at least two credit rating
agencies as described in Section 4.03(d) above, the Company will take such actions as are necessary
to cause the Release Date not to occur.

     (f) Article Four and related provisions of the Original Indenture (except for any provisions
relating to discharge of Bonds or amounts owing on Bonds on or after the Release Date) shall apply
to Substitute Mortgage Bonds pledged to the Trustee hereunder and the provisions thereof shall be
deemed to refer to the Substitute Mortgage and the Substitute Mortgage Bonds. Article Four and
related provisions may be amended by the Company to have the Notes secured by Substitute Mortgage
Bonds on and after the Release Date and make appropriate reference to the Substitute Mortgage and
the Substitute Mortgage Bonds; provided, that the consent of Holders shall not be required in
connection with such amendment.

     SECTION 4.04. Events of Default.

     (a) On and after the Release Date, Section 601(8) of the Original Indenture shall no longer
apply to the Notes.

     For purposes of the Notes, Section 601(8) of the Original Indenture shall read, “the
occurrence of an “event of default” as such term is defined in the Mortgage; or”.

     (b) On and after the Release Date, the occurrence of a “default” (as defined in the Substitute
Mortgage) shall constitute an Event of Default under Section 601 of the Original Indenture with
respect to the Notes and the references in Section 601(4) of the Original Indenture and related
provisions to “Mortgage Bonds” shall be deemed to refer to “Substitute Mortgage Bonds.”

     (c) In addition, failure by the Company to deliver Substitute Mortgage Bonds in accordance
with the provisions of Section 4.03 of this Supplemental Indenture on or prior to the Release Date
shall be an “Event of Default” with respect to the Notes as contemplated by Section 601(9) of the
Original Indenture.

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ARTICLE FIVE

MISCELLANEOUS PROVISIONS

     The Trustee makes no undertaking or representations in respect of, and shall not be
responsible in any manner whatsoever for and in respect of, the validity or sufficiency of this
Thirtieth Supplemental Indenture or the proper authorization or the due execution hereof by the
Company or for or in respect of the recitals and statements contained herein, all of which recitals
and statements are made solely by the Company.

     Except as expressly amended hereby and by the supplemental indenture appointing the Trustee as
successor trustee, the Original Indenture shall continue in full force and effect in accordance
with the provisions thereof and the Original Indenture is in all respects hereby ratified and
confirmed. This Thirtieth Supplemental Indenture and all its provisions shall be deemed a part of
the Original Indenture in the manner and to the extent herein and therein provided.

     This Thirtieth Supplemental Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York.

     This Thirtieth Supplemental Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.

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     IN WITNESS WHEREOF, the parties hereto have caused this Thirtieth Supplemental Indenture to be
duly executed and attested, all as of the day and year first above written.

	 	 	 	 	 
	 	THE DETROIT EDISON COMPANY

 	 
	 	By:  	/s/ Edward Solomon
 	 
	 	Name:  	Edward Solomon 	 
	 	Title:  	Assistant Treasurer 	 
	 

ATTEST:

	 	 	 	 
	 	 
	By:  	  /s/ Sandra Kay Ennis
 	 
	Name:  	Sandra Kay Ennis 	 
	Title:  	Corporate Secretary 	 

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	 	THE BANK OF NEW YORK MELLON TRUST

COMPANY, N.A., as Trustee

 	 
	 	By:  	/s/ Alexis M. Johnson
 	 
	 	Name:  	Alexis M. Johnson 	 
	 	Title:  	Authorized Officer 	 
	 

ATTEST:

	 	 	 	 
	 	 
	By:  	  /s/ J. Michael Banas
 	 
	Name:  	J. Michael Banas 	 
	   Title:  	Vice President 	 
				

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     EXHIBIT A

			
	 	 	 
	No. R-___
	 	$                    

THE DETROIT EDISON COMPANY

2009 SERIES CT VARIABLE RATE SENIOR NOTES DUE 2024

Principal Amount: $                    

Authorized Denomination: $5,000

Regular Record Date: Same as the record date for the 2009CT Bonds with respect to the relevant
Interest Payment Date

Original Issue Date: November 24, 2009

Stated Maturity: August 1, 2024

Interest Payment Dates: Such dates as interest shall be payable on the 2009CT Bonds

Interest Rate: Such rate as is established for the 2009CT Bonds from time to time

          THE DETROIT EDISON COMPANY, a corporation duly organized and existing under the laws of the
State of Michigan (the “Company,” which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay The Bank of New York Mellon
Trust Company, N.A., as Bond Trustee, or registered assigns, at the office or agency of the Company
in the City of New York, New York, the principal sum of                                          dollars ($                    ) on
August 1, 2024 (the “Stated Maturity”), in the coin or currency of the United States, and to pay
interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, in arrears on each Interest Payment Date
as specified above, commencing on the first date on which interest is payable on the 2009CT Bonds,
and on the Stated Maturity at the rate per annum shown above (the “Interest Rate”) until the
principal hereof is paid or made available for payment, and on any overdue principal and premium
and on any overdue installment of interest. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is registered on the Regular
Record Date as specified above next preceding such Interest Payment Date. This Note is being
issued to the Bond Trustee, as assignee of the Michigan Strategic Fund (the “MSF”), pursuant to the
Company’s obligations under the Loan Agreement dated as of November 1, 2009 (the “Loan Agreement”)
between the MSF and the Company relating to the Michigan Strategic Fund Variable Rate Limited
Obligation Refunding Revenue Bonds (The Detroit Edison Company Exempt Facilities Project),
Collateralized Series 2009CT (the “2009CT Bonds”), which are issued under the Trust Indenture dated
as of November 1, 2009 (the “Bond Indenture”) between the MSF and The Bank of New York Mellon Trust
Company, N.A., as trustee (the “Bond Trustee”). Except as otherwise provided in the Indenture, any
such interest not so punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or
one or more Predecessor Securities) is registered at the close of business on a Special Record Date
to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be
given to Holders of Notes of this series not less than

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ten days prior to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange, if any, on which the
Notes of this series shall be listed, and upon such notice as may be required by any such exchange,
all as more fully provided in the Indenture.

          Payments of interest on this Note will include interest accrued to but excluding the
respective Interest Payment Dates. Interest payments for this Note shall be computed and paid on
the same basis as interest on the 2009CT Bonds pursuant to the Bond Indenture. The Company shall
pay interest on overdue principal and premium, if any, and, to the extent lawful, on overdue
installments of interest at the rate per annum borne by this Note. In the event that any Interest
Payment Date, Redemption Date or Maturity Date is not a Business Day, then the required payment of
principal, premium, if any, and interest will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay), in each case with the
same force and effect as if made on such date. “Business Day” means any day except a Saturday,
Sunday or other day on which banking institutions in the State of New York or the State of Michigan
are authorized or obligated pursuant to law or executive order to close.

          Payment of principal of, premium, if any, and interest on the Notes shall be made in such coin
or currency of the United States of America as at the time of payment is legal tender for payment
of public and private debts. Payments of principal, premium, if any, and interest due at the
Stated Maturity or earlier redemption of such Securities shall be made at the office of the Paying
Agent upon surrender of such Securities to the Trustee. Payments of interest shall be made, at the
option of the Company, subject to such surrender where applicable, by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security Register.

          UNTIL THE RELEASE DATE (AS DEFINED BELOW), THIS NOTE SHALL BE SECURED BY GENERAL AND REFUNDING
MORTGAGE BONDS, 2009 SERIES CT (THE “MORTGAGE BONDS”) ISSUED AND DELIVERED BY THE COMPANY TO THE
TRUSTEE (AS DEFINED BELOW) UNDER THE COMPANY’S SUPPLEMENTAL INDENTURE DATED AS OF NOVEMBER 1, 2009,
SUPPLEMENTING THE MORTGAGE AND DEED OF TRUST DATED AS OF OCTOBER 1, 1924 BETWEEN THE COMPANY AND
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (THE “MORTGAGE TRUSTEE”), PLEDGED BY THE COMPANY
FOR THE BENEFIT OF THE HOLDERS OF THE NOTES TO THE TRUSTEE UNDER THE INDENTURE (THE “MORTGAGE”).
ON THE RELEASE DATE, THE NOTES SHALL CEASE TO BE SECURED BY SUCH MORTGAGE BONDS AND, SHALL BE
SECURED BY SUBSTITUTE MORTGAGE BONDS UNDER A SUBSTITUTE MORTGAGE.

          Unless the Certificate of Authentication hereon has been executed by the Trustee or a duly
appointed Authentication Agent referred to herein, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

          This Note is one of a duly authorized series of Securities of the Company (herein sometimes
referred to as the “Notes”), specified in the Indenture, all issued or to be issued in one or more
series under and pursuant to a Collateral Trust Indenture dated as of June 30, 1993 (the “Original
Indenture”) duly executed and delivered between the Company and The Bank of New York Mellon Trust
Company, N.A., as successor Trustee (herein referred to as the “Trustee”), as supplemented through
and including a Thirtieth Supplemental Indenture dated as of November 1, 2009 (together with the
Original Indenture, the “Indenture”) between the Company and the

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Trustee, to which Indenture and all indentures supplemental thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the registered Holders of the Notes and of
the terms upon which the Notes are, and are to be, authenticated and delivered.

          The Notes are not subject to repayment at the option of the Holders thereof and are not
subject to any sinking fund, except to the extent that the Bond Trustee, or its successor in
interest, may have exercised its rights pursuant to Section 2.03 of the aforesaid Thirtieth
Supplemental Indenture. The Notes are subject to Optional Redemption and Extraordinary Optional
Redemption, as a whole or in part, and Special Mandatory Redemption, in whole, by the Company prior
to Stated Maturity of the principal thereof upon the same terms as the 2009CT Bonds are subject to
redemption. Upon payment of the principal or premium, if any, on the 2009CT Bonds, whether at
maturity or prior to maturity by redemption or otherwise, or upon provision for the payment thereof
having been made in accordance with Article IV or VIII of the Bond Indenture, or upon payment of
interest on the 2009CT Bonds, Notes in a principal amount equal to the principal amount of the
2009CT Bonds so paid, or interest on Notes in an amount equal to the interest on the 2009CT Bonds
so paid, as the case may be, shall, to the extent of such payment, be deemed fully paid and the
obligation of the Company thereunder to make such payment shall forthwith cease and be discharged,
and, in the case of the payment of principal and premium, if any, such Notes shall be surrendered
for cancellation or presented for appropriate notation to the Trustee.

          Notwithstanding the foregoing, installments of interest on this Note that are due and payable
on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest
Payment Date to the registered Holders as of the close of business on the relevant Record Date.

          Notice of any Optional, Extraordinary Optional or Special Optional Redemption will be mailed
at least 30 days but not more than 60 days before the Optional, Extraordinary Optional or Special
Optional Redemption Date, as the case may be, to the Holder hereof at its registered address.

          Unless the Company defaults in payment of the applicable Redemption Price, on and after the
applicable Redemption Date interest will cease to accrue on the principal amount of this Note
called for redemption.

          If money sufficient to pay the applicable Redemption Price with respect to the principal
amount of and accrued interest on the principal amount of this Note to be redeemed on the
applicable Redemption Date is deposited with the Trustee or Paying Agent on or before the related
Redemption Date and certain other conditions are satisfied, then on or after such date, interest
will cease to accrue on the principal amount of this Note called for redemption.

          If the Company elects to redeem all or a portion of the Notes, the redemption will be
conditional upon receipt by the Paying Agent or the Trustee of monies sufficient to pay the
Redemption Price. If the Notes are only partially redeemed by the Company, the Trustee shall
select which Notes are to be redeemed in a manner it deems fair and appropriate in accordance with
the terms of the Indenture.

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          In the event of redemption of this Note in part only, a new Note or Notes of this series for
the unredeemed portion hereof will be issued in the name of the registered Holder hereof upon the
cancellation hereof.

          In case an Event of Default, as defined in the Indenture, shall have occurred and be
continuing, the principal of all of the Notes may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and subject to the conditions provided in
the Indenture.

          The Indenture contains provisions for defeasance at any time of the entire indebtedness of
this Note upon compliance by the Company with certain conditions set forth therein. In the event
the Company desires to provide for the payment of Notes, in lieu of defeasing the Notes in
accordance with the Indenture, the Company shall either redeem an equal principal amount of 2009CT
Bonds or take such action as shall be required by the Bond Indenture to defease an equal principal
amount of 2009CT Bonds.

          Any amount payable by the Company in respect of principal of the Notes, whether at maturity or
prior to maturity by redemption or otherwise, in a circumstance where there has not been a
corresponding payment of principal of 2009CT Bonds, shall be applied simultaneously to the
redemption or defeasance of any equal principal amount of 2009CT Bonds in accordance with the Bond
Indenture.

          The Indenture contains provisions permitting the Company and the Trustee, with the consent of
the registered Holders of not less than a majority in aggregate principal amount of the outstanding
Securities of each series affected at the time, as defined in the Indenture, to execute
supplemental indentures for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying
in any manner the rights of the registered Holders of the Securities; provided, however, that no
such supplemental indenture shall (i) extend the fixed maturity of any Securities of any series, or
reduce the principal amount thereof, or reduce the rate of or extend the time of payment of
interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of
the registered Holder of each Security so affected or (ii) reduce the aforesaid percentage of
Securities, the registered Holders of which are required to consent to any such supplemental
indenture, without the consent of the registered Holders of each Security then outstanding and
affected thereby. The Indenture also contains provisions permitting (i) the registered Holders of
at least 66 2/3% in aggregate principal amount of the Securities of all series at the time
outstanding affected thereby, on behalf of the registered Holders of the Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and (ii) the registered
Holders of a majority in aggregate principal amount of the Securities of all series at the time
outstanding affected thereby, on behalf of the registered Holders of the Securities of such series,
to waive certain past defaults under the Indenture and their consequences. Any such consent or
waiver by the registered Holder of this Note (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such registered Holder and upon all future registered Holders and
owners of this Note and of any Note issued in exchange hereof or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any notation of such consent
or waiver is made upon this Note.

          No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay

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the principal of and interest on this Note at the time and place and at the rate and in the
coin or currency herein prescribed.

          Prior to the Release Date, the Notes of this series shall be secured by a series of Mortgage
Bonds (the “Related Series of Bonds”), delivered by the Company to the Trustee for the benefit of
the Holders of the Notes. Reference is made to the Mortgage and the Indenture for a description of
the rights of the Trustee as Holder of the Related Series of Bonds, the property mortgaged and
pledged under the Mortgage and the rights of the Company and of the Mortgage Trustee in respect
thereof, the duties and immunities of the Mortgage Trustee and the terms and conditions upon which
the Related Series of Bonds are secured and the circumstances under which additional Mortgage Bonds
may be issued.

          FROM AND AFTER SUCH TIME AS ALL BONDS, OTHER THAN (1) PLEDGED BONDS, INCLUDING THE RELATED
SERIES OF BONDS, AND (2) MORTGAGE BONDS (EXCLUSIVE OF PLEDGED BONDS) WHICH DO NOT IN AGGREGATE
PRINCIPAL AMOUNT EXCEED THE GREATER OF FIVE PERCENT (5%) OF NET TANGIBLE ASSETS OR FIVE PERCENT
(5%) OF CAPITALIZATION, HAVE BEEN RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE
MORTGAGE BONDS THE PAYMENT FOR WHICH HAS BEEN PROVIDED FOR IN ACCORDANCE WITH THE MORTGAGE) AT,
BEFORE OR AFTER THE MATURITY THEREOF, PROVIDED THAT NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND
IS CONTINUING (THE “RELEASE DATE”), THE RELATED SERIES OF BONDS SHALL CEASE TO SECURE THE NOTES IN
ANY MANNER AND SHALL INSTEAD BE SECURED BY SUBSTITUTE MORTGAGE BONDS PURSUANT TO SECTION 4.03 OF
THE THIRTIETH SUPPLEMENTAL INDENTURE DATED AS OF NOVEMBER 1, 2009 TO THE INDENTURE DESCRIBED ABOVE.

          As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Note is registrable in the Security Register of the Company, upon surrender of
this Note for registration of transfer at the office or agency of the Company in any place where
the principal of and any interest on this Note are payable or at such other offices or agencies as
the Company may designate, duly endorsed by or accompanied by a written instrument or instruments
of transfer in form satisfactory to the Company and the Security Registrar or any transfer agent
duly executed by the registered Holder hereof or his or her attorney duly authorized in writing,
and thereupon one or more new Notes of this series and of like tenor, of authorized denominations
and for the same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge payable in relation
thereto.

          Prior to due presentment for registration of transfer of this Note, the Company, the Trustee,
any Paying Agent and any Note Registrar may deem and treat the registered Holder hereof as the
absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the Note Registrar) for the purpose of
receiving payment of or on account of the principal hereof and interest due hereon and for all
other purposes, and neither the Company nor the Trustee nor any Paying Agent nor any Security
Registrar shall be affected by any notice to the contrary.

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          As set forth in, and subject to the provisions of, the Indenture, no Holder of any Note will
have any right to institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless (i) such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Notes of this series, (ii) the Holders of not less
than 25% in principal amount of the outstanding Notes of this series shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee,
(iii) the Trustee shall have failed to institute such proceeding within 60 days and (iv) the
Trustee shall not have received from the Holders of a majority in principal amount of the
outstanding Notes of this series a direction inconsistent with such request within such 60-day
period; provided, however, that such limitations do not apply to a suit instituted by the Holder
hereof for the enforcement of payment of the principal of or any interest on this Note on or after
the respective due dates expressed herein.

          All terms used in this Note which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

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          IN WITNESS WHEREOF, the parties hereto have caused this Note to be duly executed and attested,
all as of the day and year first above written.

	 	 	 	 	 
	 	THE DETROIT EDISON COMPANY

	[Corporate Seal]
 	 
	 	By:  	 	 
	 	Name:  
	 	Title:  
	 

	 	 	 	 	 
	ATTEST:

 	 
	By:  	 	 
	Name:  	 
	Title:  	 

A-7

 

CERTIFICATE OF AUTHENTICATION

          This is one of the Notes of the series of Notes described in the within mentioned Indenture.

	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

Date:                                        

A-8

 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

(Please insert Social Security or Other Identifying Number of Assignee)

 

(Please print or type name and address, including zip code of assignee)

the within Note and all rights thereunder, hereby irrevocably constituting and appointing such
person attorneys to transfer the within Note on the books of the Issuer, with full power of
substitution in the premises.

Dated:                                         

          NOTICE: The signature of this assignment must correspond with the name as written upon the
face of the within Note in every particular, without alteration or enlargement or any change
whatever and NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of
the Securities Transfer Agents Medallion Program (“STAMP”), the Stock Exchange, Inc. Medallion
Signature Program (“MSP”). When assignment is made by a guardian, trustee, executor or
administrator, an officer of a corporation, or anyone in a representative capacity, proof of his or
her authority to act must accompany this Note.

A-9Exhibit 10.1

Exhibit 10.1

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this “Agreement”), originally dated as of August 21, 2006,
amended and restated in its entirety, as of April 1, 2008, and further amended and restated in its
entirety as of February 17, 2010 (the “Restatement Date”), 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 THOMAS CHIEFFE,
an individual residing in the State of Ohio (the “Executive”).

WITNESSETH:

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 such employment with the
Company, upon the terms and conditions hereinafter set forth; and

WHEREAS, pursuant to Section 12(g) of this Agreement, this Agreement may be amended in writing
by the parties hereto; and

WHEREAS, the Company and the Executive mutually desire to amend and restate this Agreement as
set forth herein.

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 President and Chief Executive 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 President and Chief Executive Officer
of the Company and shall report solely to the Board of Directors of AMH II (the “Board”),
performing such duties as shall be reasonably required of a president and chief executive officer,
and shall have such other powers and perform such other duties as may from time to time be assigned
to him by the Board. Promptly following the commencement of the Employment Term, AMH II shall take
all action necessary to appoint the Executive as a director of AMH II, and, thereafter, for so long
as the Executive remains the President and Chief Executive Officer of the Company, AMH II shall use
reasonable efforts to cause the Executive to be a director of AMH II, and the Executive agrees to
serve as such a director. To the extent requested by the Board, the Executive shall also serve on
any committees 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. The Company and the Executive understand and agree that the Executive is
obliged under the terms of a consulting agreement between the Executive and another company to
devote, and that the Executive may so devote, from time to time prior to October 5, 2007, a portion
of his business time and attention to such other company and its affiliates pursuant to such
consulting agreement, but only to the extent the Executive’s business time and attention to such
other company and its affiliates does not interfere with the performance of his duties hereunder.

3. Employment Term. Subject to earlier termination pursuant to Section 6, the
Executive’s term of employment hereunder shall begin on April 1, 2008 (hereinafter referred to as
the “Commencement Date”) and continue through the date which is two (2) years following the
Commencement Date; provided, however, that beginning on the second anniversary of the Commencement
Date, and on each subsequent anniversary of the Commencement Date, such term shall be automatically
extended by an additional one (1) year beyond the end of the then-current term, unless, at least
thirty (30) days before such second anniversary of the Commencement Date, or thirty (30) days
before any such subsequent anniversary of the Commencement Date, the Company gives written notice
to the Executive that the Company does not desire to extend the term of this Agreement, in which
case, the term of employment hereunder shall terminate as of the second anniversary of the
Commencement Date or the end of the then-current term, as applicable (the term of employment
hereunder, including any extensions, in accordance with this Section 3, shall be referred to herein
as the “Employment Term”).

4. Compensation and Benefits.

(a) Salary. As compensation for his services hereunder and in consideration of the
Executive’s other agreements hereunder, during the Employment Term, the Company shall pay the
Executive a base salary, payable in equal installments in accordance with the Company’s payroll
procedures, at an annual rate of Five Hundred Fifty Thousand Dollars ($550,000), 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 Option Plan and Special Retention Incentive Bonus.
(1) Commencing with calendar year 2006, 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.

(2) The Executive shall also be entitled to participate in the stock option plan
established by AMH II.

 

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(3) The Executive shall also be entitled to receive a Special Retention Incentive Bonus
payable in three equal installments of $500,000 each on (or within thirty (30) days after)
October 1, 2008, October 1, 2009, and October 1, 2010, so long as the Executive is
continuously actively employed by the Company through each such date, or such continuous
active employment is terminated by the Company without Cause (as defined in Section 6) or by
the Executive for Good Reason (as defined in Section 7(b)) or due to disability (as
determined in the good faith discretion of the Board) or death; provided, however, that, if
a Liquidity Event that does not constitute a Qualified Change in Control (as defined below)
occurs during calendar year 2008, all unpaid installments will be payable no later than
March 15, 2009, so long as the Executive is continuously actively employed by the Company
through such date, or such continuous active employment is terminated by the Company without
Cause or by the Executive for Good Reason or due to disability (as determined in the good
faith discretion of the Board) or death; and provided further that, if a Liquidity Event
that does not constitute a Qualified Change in Control occurs during calendar year 2009, the
third installment will be payable no later than March 15, 2010, so long as the Executive is
continuously actively employed by the Company through such date, or such continuous active
employment is terminated by the Company without Cause or by the Executive for Good Reason or
due to disability (as determined in the good faith discretion of the Board) or death.
“Qualified Change in Control” means a “change in the ownership or effective control”
of AMH II, or “change in the ownership of a substantial portion of the assets” of AMH II, as
such terms are used in Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as
amended (the “Code”).

(4) For purposes of this Agreement, “Liquidity Event” shall mean the occurrence
of either of the following events: (A) a transaction or series of transactions (whether
structured as a stock sale, merger, consolidation, reorganization, asset sale or otherwise)
which results in the sale or transfer of more than a majority of the assets of AMH II and
its subsidiaries (determined based on value) or of a majority of the capital stock of AMH II
to a person other than the Investors or their affiliates; or (B) a widely distributed sale
of the common stock of AMH II in an underwritten public offering pursuant to an effective
registration statement filed with the Securities and Exchange Commission which yields at
least $150,000,000 of net proceeds to AMH II. For purposes of the immediately preceding
sentence, “Investors” shall mean all of the following persons collectively: Harvest
Partners III, L.P., Harvest Partners III Beteiligungsgesellschaft Bürgerlichen Rechts (mit
Haftungsbeschränkung), Harvest Partners IV, L.P., Harvest Partners IV GmbH & Co. KG, AM
Holdings Limited, AM Equity Limited, AM Investments Limited, Associated Equity Limited and
Associated Investments Limited.

(5) The Executive shall not be entitled to participate in any bonus plan, program or
arrangement of the Company or an Affiliate, other than as specifically provided in this
Section 4(b).

(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.

 

-3-

 

(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.

(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; (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 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.

 

-4-

 

(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 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.

 

-5-

 

(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 Section 5; (iii) any
breach by the Executive of any other provision of this Agreement which breach is not cured, to the
extent susceptible to cure, within fourteen (14) days after the Company has given written notice to
the Executive describing such breach; (iv) failure or refusal by the Executive to perform any
directive of the Board or the duties of his employment hereunder which continues for a period of
fourteen (14) days following notice thereof by the Company to the Executive; (v) any act by the
Executive constituting a felony or otherwise involving theft, fraud, dishonesty, misrepresentation
or moral turpitude; (vi) conviction of, or plea of nolo contendere (or a similar plea) to, any
criminal offense; (vii) 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;
(viii) the Executive’s breach of his fiduciary obligations, or disloyalty, to the Company or an
Affiliate; (ix) any act or omission to act of the Executive intended to harm or damage the
business, property, operations, financial condition or reputation of the Company or any Affiliate;
(x) any chemical dependence of the Executive which adversely affects the performance of his duties
and responsibilities to the Company or an Affiliate; or (xi) 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, including but not limited to, the Company’s Code of Ethics for the Chief
Executive Officer and the Senior Financial Officers. 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. (a) Except as otherwise provided in Section 8, if the Executive’s
employment hereunder is terminated during the Employment Term (1) by the Company other than for
Cause and not due to disability (as determined in the good faith discretion of the Board), death or
expiration of the Employment Term following notice by the Company not to extend the Employment Term
in accordance with Section 3, or (2) by the Executive for Good Reason, 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 the period of twenty-four (24) 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 twenty-four (24) month period following the date

 

-6-

 

of the Executive’s termination (such twenty-four (24) 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 annual incentive bonus otherwise payable in accordance with Section 4(b)(1) for
the year of termination of the Executive’s employment, payable no earlier than the date on which
such bonus, if any, would have been paid under the applicable plan or policy of the Company absent
such termination of employment, 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 Section 4980B of the Code shall be
deemed to commence on the date of the Executive’s termination of employment.

(b) For purposes of this Agreement, except as otherwise provided in Section 8, “Good
Reason” shall mean the occurrence, without the Executive’s consent, of any of the following
events: (i) an action by the Company resulting in a material adverse change in the Executive’s
reporting responsibilities or a material diminution in the Executive’s duties or direct reports; or
(ii) a material breach of any material provision of this Agreement by the Company (which is not in
connection with the termination of the Executive’s employment for Cause or due to the Executive’s
Disability); provided, however, that the occurrence of any event described in clause (i) or (ii) of
this Section 7(b) may only constitute Good Reason if the relevant circumstances or conditions are
not remedied by the Company within thirty (30) days after receipt by the Company of written notice
thereof from the Executive.

8. Change in Control. This Section 8 will be binding upon the Restatement Date, 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

 

-7-

 

	 	(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 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.

 

-8-

 

(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(a)(i) had a Change in Control not occurred shall be paid in installments during the twenty-four
(24) 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.

	 
	 	(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),

 

-9-

 

	 	 	 	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 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

 

-10-

 

	 	 	 	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. 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, or any payment under Section 4(b)(3), 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,

 

-11-

 

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 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. The Company and the Executive shall cooperate to submit
for approval by the shareholders of the Company, AMH II or another applicable Affiliate, in
accordance with Section 280G(b)(5) of the Code, payments and benefits that may be made or provided
to the Executive that may otherwise be considered “parachute payments,” as defined in Section
280G(b)(2) of the Code. 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 ten (10) business days after 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:

 

-12-

 

	 	 	 
	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: Lars Haegg
	 
	 	 
	and
	 	Gibson, Dunn, & Crutcher, LLP
	 

	 	200 Park Avenue
	 

	 	New York, New York 10166
	 
	 	 
	If to the Executive:

	 	Thomas Chieffe
	 

	 	9315 Nighthawk Way
	 

	 	Chagrin Falls, Ohio 44023
	 
	 	 
	With a copy to:

	 	McSherry, Patton and Toumert
	 

	 	178 East Washington Street
	 

	 	Chagrin Falls, Ohio 44022
	 

	 	Attention: Mary Jo Paulett-Toumert, Esq.

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

12. General.

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

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

 

-13-

 

(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, and the Executive shall indemnify and hold
harmless the Company and the Affiliates from and against any and all liabilities, losses, claims,
obligations or the like arising from or in connection with any breach of, or inaccuracy in, the
Executive’s representations and warranties contained in this sentence.

(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.

(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.

 

-14-

 

(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: February 17, 2010        	By:  	/s/ Stephen E. Graham	 
	 	 	Name:  	Stephen E. Graham 	 
	 	 	Title:  	Vice President - Chief Financial Officer, Treasurer and Secretary 	 
	 
	 	THOMAS CHIEFFE

 	 
	Date: February 17, 2010         	
/s/ Thomas Chieffe 	 
	 	 	 
	 	 	 

 

-15-

 

EXHIBIT A

Annual Incentive Bonus

The Executive’s annual incentive bonus for each calendar year during the Employment Term,
commencing with calendar year 2006, shall be a percentage of the Executive’s base salary based upon
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
	 	100.00%
	 
	 	 
	Maximum
	 	150.00%

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 150% of base salary.

Notwithstanding the foregoing to the contrary:

(a) the Executive’s annual incentive bonus for calendar year 2006 shall be $250,000, and

(b) the Executive’s annual incentive bonus for calendar year 2007 shall be not less than 50%
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
December 31 of the calendar year to which the bonus relates.

	 
	2.	 	“EBITDA Hurdle” shall mean 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.

 

 

 

EXHIBIT A

Page 2

	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 bonuses under this Agreement), 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 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 Exhibit A of 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’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.

 

-2-

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