EXHIBIT 10.10
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NORTEK
RICHARD L. BREADY
CHAIRMAN AND CEO
October 31, 2003
Mark Watson
President
Thermal-Gard, Inc.
400 Walnut Street
Punxsutawney, PA 15767-1368
Dear Mark,
This letter describes the terms and conditions of the key employee
incentive program for the possible sale of Ply Gem Industries, Inc., including
its wholly-owned subsidiaries Variform, Inc., Napco, Inc., Great Lakes Window,
Inc., Kroy Buildings Products, Inc. and Thermal-Gard, Inc., and the business of
the CWD Windows and Doors Division of Broan-NuTone Canada Inc. (collectively
"WDS").
1. Upon the closing of the sale of WDS, you will be paid by
Nortek, Inc. a cash incentive bonus of $300,000, payable on or
before the 10th day after Nortek receives payment from the
sale.
2. Upon the closing of the sale of WDS: (a) the Class A Options
previously granted to you pursuant to the Nortek Holdings,
Inc. 2002 Stock Option Plan shall become fully vested; and (b)
the Class A and Class B Options previously granted to you
shall remain exercisable by you (subject to all other
conditions of the Plan, including the requirements that a
minimum Exit Value per share in excess of $92 is achieved and
that the Kelso entities achieve the 17% Investor Return)
regardless of your continued employment with WDS after the
sale. A copy of the resolution of the Compensation Committee
of the Nortek Holdings Board of Directors is enclosed together
with a copy of the Stock Option Plan.
3. No payments or arrangements pursuant to paragraphs 1 and 2
above shall be made if you are not employed by WDS (for any
reason) on the sale date or you have not committed the
necessary time and effort toward the sale of WDS which shall
include preparing due diligence materials, preparing
presentation material, meeting with potential buyers and
otherwise acting in the best interests of the shareholders of
WDS.
4. You have also been named by the Ply Gem Industries, Inc. Board
of Directors as a participant in the Ply Gem Industries, Inc.
Change in Control Severance Benefit Plan for Key Employees, a
copy of which is enclosed. The Plan
NORTEK, INC., 50 KENNEDY PLAZA, PROVIDENCE, RHODE ISLAND 02903-2360 401-751-1600
FAX 401-751-4610
2
provides generally that if you are terminated other than for
Cause or there is a material adverse change in your employment
during a period of 24 months following the sale of WDS, you
shall be paid, for the 24 months following such termination,
an annual amount equal to your 2003 base salary plus your 2003
annual performance bonus. (Please refer to the specific
language of the plan.)
5. In the event the sale of WDS is not completed on or before
March 31, 2004, this letter shall be null, void and have no
further effect and any obligation or agreement set forth
herein shall immediately terminate even if WDS is sold at some
later date.
6. This letter should in no way be viewed as any guarantee of
continued employment with WDS.
7. All payments shall be subject to any applicable withholdings
and any tax on such amounts shall be your responsibility. It
is understood that payments made pursuant to this letter do
not create any employment arrangement between any individual
and Ply Gem, Nortek or any Nortek subsidiary. Any payments
made pursuant to this agreement are not counted toward any
pension, 401(k) or other benefit plan of WDS or Nortek.
8. This letter sets forth the entire understanding regarding what
payment, if any, shall be made to you upon the sale of WDS
except as may be set forth in a written agreement between the
parties or contained in written benefit plans available to
employees or executives generally.
Very truly yours,
/s/ Richard L. Bready
Richard L. Bready
NORTEK, INC., 50 KENNEDY PLAZA, PROVIDENCE, RHODE ISLAND 02903-2360 401-751-1600
FAX 401-751-4610