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Exhibit 11
FIRST AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
THIS FIRST AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, dated as of July
24, 1997 (the "Agreement"), is made and entered into by Atrium Acquisition
Holdings Corp., a Delaware corporation ("Parent"), Atrium/PG Acquisition Corp.,
a Delaware corporation and a wholly-owned subsidiary of Parent ("Sub"), Xxxxxxx
X. Xxxxxxxxx, Xxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxx (collectively, the
"Stockholders" and individually a "Stockholder"), Ply Gem Industries, Inc., a
Delaware corporation (the "Company"), Nortek, Inc., a Delaware corporation
("Nortek") and NTK Sub, Inc., a Delaware corporation and a wholly-owned
subsidiary of Nortek ("NTK").
WITNESSETH:
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WHEREAS, prior to the date hereof Parent, Sub, the Company and, for limited
purposes, Atrium Corporation, entered into that certain Agreement and Plan of
Merger dated as of June 24, 1997 (the "Merger Agreement");
WHEREAS, on July 24, 1997 the Merger Agreement was terminated in accordance
with its terms;
WHEREAS, on July 24, 1997 Nortek, NTK and the Company entered into an
Agreement and Plan of Merger (as such agreement may hereafter be amended,
restated or renewed from time to time, the "Nortek Agreement"), pursuant to
which NTK will commence a tender offer for Shares (as defined below) of the
Company and NTK will be merged with and into the Company;
WHEREAS, as a result of the termination of the Merger Agreement and Nortek,
NTK and the Company entering into the Nortek Agreement, the parties desire to
amend and restate that certain Stockholders Agreement between certain of the
parties hereto dated as of June 24, 1997 in accordance with the terms and
provisions of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
(a) "Acquisition Proposal" shall mean any proposal or offer (other
than the transactions among the Company, Parent and Sub previously contemplated
in the Merger Agreement) involving the Company or any of its subsidiaries for,
or an inquiry or indication of interest that reasonably could be expected to
lead to: (i) any merger, consolidation, share exchange, recapitalization,
business combination, or other similar transaction, (ii) any sale, lease,
exchange,
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mortgage, pledge, transfer or other disposition of a material portion of the
assets of the Company and its subsidiaries, taken as a whole, in a single
transaction or series of transactions, or (iii) any tender offer or exchange
offer for all or any portion of the outstanding shares of capital stock of the
Company or any of its subsidiaries or the filing of a registration statement
under the Securities Act of 1933 in connection therewith. The term "Acquisition
Proposal" shall include the Offer and the Merger.
(b) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including pursuant to any agreement, arrangement
or understanding, whether or not in writing. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a Person
shall include securities Beneficially Owned by all other Persons with whom such
Person would constitute a "group" within the meanings of Section 13(d)(3) of
the Exchange Act.
(c) "Merger" shall mean the merger contemplated by the Nortek
Agreement.
(d) "Offer" shall mean the cash tender offer contemplated by the
Nortek Agreement for all of the outstanding Shares.
(e) "Offer Price" shall mean the greater of $19.50 or the highest per
share price paid in the Offer.
(f) "Options" shall mean all outstanding options or warrants
(including stock purchase rights and stock awards) to purchase or acquire Shares
and shall include the right under the Options to acquire additional Shares upon
a "change of control" with respect to the Company.
(g) "Person" shall mean an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity.
(h) "Purchase Price" shall mean a per share purchase price equal to
$18.75.
(i) "Shares" shall mean shares of common stock, par value $0.25 per
share, of the Company. The term "Shares" shall include, without limitation,
shares of Unvested Stock and any restricted Shares.
(j) "Termination Event" shall mean the first to occur of (i) the
termination of the Nortek Agreement by any party thereto, (ii) the termination,
withdrawal, abandonment or expiration of the Offer without the Shares of each
Stockholder as set forth on Schedule I hereto being accepted for purchase
thereunder (collectively an "Offer Termination Event") or (iii) the material
breach on the part of any party of any of their respective obligations under
Section 2.
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In addition to the terms otherwise defined herein, the following terms
shall have the meaning set forth in Nortek Agreement:
"Company Stockholder Approval";
"Offer Documents";
"Proxy Statement";
"SEC"; and
"Unvested Stock".
2. THE NORTEK OFFER.
(a) Each Stockholder hereby severally and not jointly and severally,
agrees to validly tender (and not to withdraw) pursuant to and in accordance
with the terms of the Offer, not later than one business day prior to the
expiration date of the Offer pursuant to the Nortek Agreement and Rule 14d-2
under the Exchange Act, the number of Shares set forth opposite such
Stockholder's name on Schedule I hereto. Each party hereto acknowledges and
agrees that NTK's obligation to accept for payment Shares purchased pursuant to
the Offer, including the Shares tendered pursuant to the Agreement by the
Stockholders, is subject to the terms and conditions of the Offer. The
obligations of the Stockholders under this Section 2(a) shall terminate upon a
Termination Event (except a Termination Event resulting from a breach by a
Stockholder).
(b) Each Stockholder hereby agrees to permit Nortek and NTK to publish
and disclose in the Offer Documents and, if Company Stockholder Approval is
required under applicable law, the Proxy Statement (including all documents and
schedules filed with the SEC) such Stockholder's identity and ownership of
Shares and the nature of such Stockholder's commitments, arrangements and
understandings under this Agreement.
(c) Immediately after the acceptance of any Shares for payment
pursuant to the Offer, Nortek and NTK shall take such actions as may be
necessary (including, without limitation, the giving to the "Depositary " such
instructions as may be necessary) to cause payment of the aggregate Offer Price
due in respect of the Shares properly tendered hereunder by each Stockholder to
be paid, no later than on the first business day following the date that any
Shares have been accepted for purchase pursuant to the Offer (the "Purchase
Date"), as follows:
(i) The Sub, or its permitted assign, in respect of the Shares
that have been so tendered by each Stockholder and not withdrawn,
shall receive an amount equal to 75% of the excess of (A) the
aggregate Offer Price payable in respect of such Stockholder's Shares
so tendered over (B) the product of (1) the number of Shares so
tendered, multiplied by (2) the Purchase Price; and
(ii) Each Stockholder (or his designee), in respect of the
Shares that have been so tendered by such Stockholder, shall receive
the amount of the aggregate Offer Price payable in respect of the
Shares so tendered after deducting therefrom the amount payable
pursuant to clause (i) above.
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(d) On the Purchase Date, the Company, Nortek, NTK and each of the
Stockholders, severally and not jointly severally, shall take such actions as
may be necessary for each of the Options set forth next to each Stockholder's
name on Schedule II hereto to be cancelled in consideration of an amount in cash
(subject to any applicable withholding tax), in respect of each of the Shares
subject to each of such Options (including any additional Shares subject thereto
by the reason of the occurrence of a "change of control" in the Company, and
Unvested Stock to the extent not tendered in the Offer) equal to the difference
between the per share Offer Price and the per Share exercise price of each such
Option to the extent such difference is a positive number (such amount as to the
Options of each Stockholder being collectively referred to herein as the "Option
Consideration"). On the Purchase Date, Nortek, NTK and the Company shall pay or
shall cause to be paid the Option Consideration due in respect of each
Stockholder's Options as follows:
(i) The Sub, or its permitted assign, in respect of the Options
of each Stockholder, shall receive from the Option Consideration (A) in
respect of Options having a per Share exercise price equal to or less than
the Purchase Price, an amount equal to 75% of the excess of (x) the product
of (1) the Offer Price, multiplied by (2) the number of Shares subject to
such Options, including any "change of control" Shares, over (y) the
product of (1) the number of Shares subject to such Options, including any
"change of control" Shares, multiplied by (2) the Purchase Price and (B) in
respect of Options having a per Share exercise price greater than the
Purchase Price (as set forth on Schedule II hereto) an amount equal to 100%
of the excess of (x) the product of (1) the Offer Price, multiplied by (2)
the number of Shares subject to such Options, including any "change of
control" Shares, over (y) the product of (1) the number of Shares subject
to such Options, including any "change of control" Shares multiplied by (2)
the applicable per Share exercise price of such Options; and
(ii) Each Stockholder (or his designee), in respect of the
Options of such Stockholder, shall receive the amount of the Option
Consideration payable in respect of the Options of such Stockholder after
deducting therefrom the amount payable pursuant to clause (i) above,
provided, that as to any Stockholder (excluding Xx. Xxxxxx) subject to
Section 16(a) of the Exchange Act, payment to such Stockholder of any
portion of the Option Consideration payable under this clause (ii) will be
deferred (if necessary to avoid Section 16(b) liability) until the first
date such payment can be made without liability to such Stockholder under
Section 16(b) of the Exchange Act, but shall be paid as soon as practicable
thereafter.
The Company, Nortek and NTK hereby agree to extend to each holder of
Options who is not a party to this Agreement the opportunity to cash out such
Options on the Purchase Date in the manner contemplated in this Section 2(d).
3. OPTIONS.
(a) Each of the Stockholders hereby grants to Sub an irrevocable
option (each, a "Purchase Option" and collectively, the "Purchase Options") to
purchase the number of Shares set forth opposite such Stockholder's name on
Schedule I hereto together with all of the Shares (including any additional
Shares that may be issuable as a result of a "change of control") Beneficially
Owned by such Stockholder as a result of the Stockholder's exercise of the
Options set forth opposite such Stockholder's name on Schedule II hereto
(collectively, with the Shares described on Schedule I, the "Option Shares") at
a purchase price per share equal to the Purchase Price. Subject to the last
sentence of this Section 3(a), each Purchase Option is currently exercisable in
whole but not in part, and shall remain exercisable in whole but not in part
until 5:00 p.m. (Dallas, Texas time) on the date which is 120 days after a
Termination Event (the "Option Period"), so long as: (i) all waiting periods
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), required for the purchase by Sub of the Option Shares upon such
exercise shall have expired or been waived, and (ii) there shall not be in
effect any preliminary or final injunction or other order issued by any court
or governmental, administrative or regulatory agency or authority prohibiting
the exercise of the
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Purchase Options pursuant to this Agreement. The Option Period shall be extended
for the time period that any such preliminary injunction or order shall be in
effect that otherwise prohibits the exercise of a Purchase Option. To exercise
the Purchase Options, Sub shall send a written notice (the "Notice") to the
Stockholders identifying the place and date (not less than one nor more than 20
business days from the date of the Notice) for the closing of such purchase. The
Sub shall not exercise the Purchase Options prior to the occurrence of a
Termination Event.
(b) Upon receipt of the Notice to the extent not previously exercised,
contemporaneously with the closing of the purchase of the Option Shares, each
Stockholder shall exercise in full the Options set forth opposite such
Stockholder's name on Schedule II hereto. Subject to Section 2(d), for
convenience purposes, in connection with such exercise of the Options, each
Stockholder hereby gives the Company irrevocable notice of the exercise of his
Options effective contemporaneously with the closing of the purchase of the
Option Shares pursuant to the Purchase Option and the Company hereby
acknowledges the effectiveness of such exercise. Each Stockholder also hereby
irrevocably instructs the Company to issue (and the Company hereby agrees to
issue) the Shares issuable upon such exercise in the name of Sub or its
permitted assignee (and Sub or its permitted assignee shall be deemed the record
owner thereof as of the date of such exercise so long as Sub or its permitted
assignee timely tenders payment of the Purchase Price as provided herein) and
Sub hereby agrees, on behalf of each Stockholder, to pay directly to the Company
(by means of wire transfer or official bank check) such amount as may be
necessary to fund the payment of the exercise price (without regard to any
applicable withholding taxes) due and payable to the Company as a result of such
exercise (with the aggregate amount of the Purchase Price due and payable to
each Stockholder (or his designee) being reduced by the amount of any such
payment made by Sub on behalf of such Stockholder and with the remaining amount
of the Purchase Price otherwise due and payable to each Stockholder being paid
directly to such Stockholder, as may be requested by the Company, net of any
applicable withholding taxes required to be paid to the Company, by means of
wire transfer or official bank check). Such payments to the Company (including
such requested withholding taxes) and the Stockholders shall be made
contemporaneously with the exercise of the Purchase Options and the delivery of
the Option Shares thereunder, provided, that as to any Stockholder subject to
Section 16(a) of the Exchange Act, payment to such Stockholder of any portion of
the Purchase Price will be deferred (if necessary to avoid Section 16(b)
liability) until the first date such payment can be made without liability to
such Stockholder under Section 16(b) of the Exchange Act, but shall be paid as
soon as practicable thereafter.
(c) In the event that Sub has purchased the Option Shares pursuant to
the Purchase Options, and, within one year after the date of such purchase, the
Sub or any affiliate thereof sells, transfers, exchanges or disposes of any of
the Option Shares in a transaction with a non-affiliate of Sub (a
"Disposition") then, within two business days after the closing of such
Disposition, Sub shall tender and pay to each Stockholder, in immediately
available funds, their respective pro-rata share (calculated based on the
respective amount of the Option Shares purchased from each Stockholder pursuant
to the Purchase Options) of 25% of the Net Profit realized by Sub in connection
with such Disposition. As used in this Section 3(c), Net Profit shall mean an
amount equal to (i) the excess, if any, of the gross amount realized by Sub
from a Disposition over (ii) the aggregate Purchase Price paid with respect to
the Option Shares subject to such Disposition, with such excess being reduced
by the sum of (A) all reasonable out-of-pocket fees, costs and expenses
incurred by Sub and its affiliates in connection
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with such Disposition, (including, without limitation, all fees, costs and
expenses of counsel) which in no event shall exceed 1% of such Net Profit, and
(B) all customary brokerage fees and commissions, if any, incurred in connection
with such Disposition.
(d) In the event that within the Option Period a Stockholder sells,
transfers, exchanges, cancels or disposes of any of his Option Shares or Options
in connection with or as a result of an Acquisition Proposal (an "Alternative
Disposition") other than pursuant to Section 2 then, within two business days
after the closing of such Alternative Disposition, such Stockholder shall tender
and pay to Sub, in immediately available funds, its pro-rata share of 75% of the
Net Profit realized by such Stockholder in connection with such Alternative
Disposition. As used in this Section 3(d), Net Profit shall mean (i) in the case
of outstanding Option Shares, an amount equal to the excess, if any, of (A) the
gross amount realized by such Stockholder from an Alternative Disposition of
outstanding Option Shares, over (B) the product of (x) the number of such Option
Shares subject to such Alternative Disposition, multiplied by (y) the Purchase
Price and (ii) in the case of Options, an amount equal to the excess, if any, of
(A) the product of (x) the gross underlying per Share price otherwise paid in
the Alternative Disposition and used in calculating the amount so realized by
such Stockholder with respect to such Options in connection with such
Alternative Disposition, multiplied by (y) the number of Option Shares subject
to such Options, over (B) the product of (x) the number of Option Shares subject
to such Options, multiplied by (y) the Purchase Price, with the aggregate of
such excesses being reduced by the sum of (1) all reasonable out-of-pocket fees,
costs and expenses incurred by such Stockholder in connection with such
Alternative Disposition, (including, without limitation, all fees, costs and
expenses of counsel, but excluding any withholding taxes) which in no event
shall exceed 1% of such Net Profit, and (2) all customary brokerage fees and
commissions, if any, incurred in connection with such Alternative Disposition.
(e) As may be requested by Sub subsequent to a Termination Event but
prior to the expiration of the Option Period each Stockholder shall tender his
Shares as set forth on Schedule I hereto pursuant to any tender offer being made
(at a per Share price greater than the Purchase Price) in connection with an
Acquisition Proposal.
(f) The Purchase Options shall terminate in full upon the consummation
of the transactions (including, the tendering of all payments to be made
thereunder) contemplated by Section 2.
4. COVENANTS, REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER.
(a) Each Stockholder hereby, severally and not jointly and severally,
represents and warrants to the other parties hereto as follows:
(i) OWNERSHIP BY SHARES. Such Stockholder is either (A) the
record and Beneficial Owner of, or (B) the Beneficial Owner but not
the record holder of, the number of Shares and Options respectively
set forth opposite the Stockholder's name on Schedule I and II hereto.
As of June 24, 1997, the Shares and Options respectively set forth
opposite such Stockholder's name on Schedules I and II hereto
constitute all of the Shares and Options owned of record or
Beneficially Owned by such Stockholder. Such Stockholder has sole
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power to issue instructions with respect to the matters set forth in
Sections 2 and 3 hereof, sole power of disposition, sole power of
conversion, sole power to demand appraisal rights and sole power to
agree to all of the matters set forth in this Agreement, in each case
with respect to all of the Shares set forth opposite such
Stockholder's name on Schedule I hereto and all of the Options set
forth opposite such Stockholder's name on Schedule II hereto, with no
material limitations, qualifications or restrictions on such rights,
subject to applicable securities laws and the terms of this Agreement.
(ii) POWER; BINDING AGREEMENT. Such Stockholder has the legal
capacity, power and authority to enter into and perform all of such
Stockholder's obligations under this Agreement. This Agreement has
been duly and validly executed and delivered by such Stockholder and
constitutes a valid and binding agreement of such Stockholder,
enforceable against such Stockholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or
other interest of any trust of which such Stockholder is trustee whose
consent is required for the execution and delivery of this Agreement
or the consummation by such Stockholder of the transactions
contemplated hereby. If such Stockholder is married and such
Stockholder's Shares or Options constitute community property, this
Agreement has been duly authorized, executed and delivered by, and
constitutes a valid and binding agreement of, such Stockholder's
spouse, enforceable against such person in accordance with its terms.
(iii) NO CONFLICTS. Except for filings under the Exchange Act or
if applicable the HSR Act (as to which, to the extent necessary, each
Stockholder shall promptly make all such filings and use all
reasonable efforts to respond to any requests for additional
information) (A) no filing with, and no permit, authorization, consent
or approval of, any state or federal public body or authority is
necessary for the execution of this Agreement by such Stockholder and
the consummation by such Stockholder of the transactions contemplated
hereby, except where the failure to obtain such consent, permit,
authorization, approval or filing would not interfere with such
Stockholder's ability to perform its obligations hereunder, and (B)
none of the execution and delivery of this Agreement by such
Stockholder, the consummation by such Stockholder of the transactions
contemplated hereby or compliance by such Stockholder with any of the
provisions hereof shall (1) conflict with or result in any breach of
any applicable organizational documents applicable to such
Stockholder, (2) result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which such Stockholder is a party or by
which such Stockholder or any of such Stockholder's properties or
assets may be bound, or (3) violate any order, writ, injunction,
decree, judgment, order, statute, rule or regulation applicable to
such Stockholder or any of such Stockholder's properties or assets, in
each such case except to the extent that any conflict, breach, default
or violation would not interfere with the ability of such Stockholder
to perform its obligations hereunder.
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(iv) NO ENCUMBRANCES. Except as required by Sections 2 and 3 and
liens or security interests that will be released at the closing, if
any, of a purchase under the Purchase Options or a closing under
Section 2 as may be applicable, such Stockholder's Shares and the
certificates representing such Shares are now, and at all times
during the term hereof will be, held by such Stockholder, or by a
nominee or custodian for the benefit of such Stockholder, free and
clear of all liens, claims, security interests, proxies, voting
trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever.
(v) NO FINDER'S FEES. No broker, investment banker, financial
adviser or other person is entitled to any broker's, finder's,
financial adviser's or other similar fee or commission in connection
with the transactions contemplated hereby based upon arrangements made
by or on behalf of such Stockholder.
(vi) NO SOLICITATION. Each Stockholder shall, in its capacity as
such, comply with the terms of Section 5.1(e) of the Nortek Agreement.
(vii) RESTRICTION ON TRANSFER, PROXIES AND NON-INTERFERENCE.
During the Option Period, except as required by this Agreement, such
Stockholder shall not, directly or indirectly without the
consent of Sub: (A) offer for sale, sell, transfer, tender, pledge,
encumber, assign or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to or
consent to the offer for sale, sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of, any or all of such
Stockholder's Shares, Options or any interest therein, (B) grant any
proxies of powers of attorney, deposit any Shares into a voting trust
or enter into a voting agreement with respect to any Shares, or (C)
exercise any of his Options (except to prevent the impending
expiration thereof), or (D) take any action that could reasonably be
expected to have the effect of preventing or disabling such
Stockholder from performing such Stockholder's obligations under this
Agreement, except in the case of clause (A) or (D) any transfer of
Shares that occurs by operation of law.
(viii) WAIVER OF APPRAISAL RIGHTS. Such Stockholder hereby waives
any rights of appraisal or rights to dissent from the Merger that the
Stockholder may have.
(ix) FURTHER ASSURANCES. From time to time, at the other party's
request and without further consideration, each party hereto shall
execute and deliver such additional documents as may be necessary or
desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
(b) Parent and Sub hereby represents and warrants to each of the other
parties hereto as follows:
(i) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Parent
and Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with adequate
corporate power and authority to own its properties and carry on its
business as presently conducted. Each of Parent and Sub has the
corporate power
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and authority to enter into and perform all of its obligations under
this Agreement and to consummate the transactions contemplated hereby.
(ii) NO CONFLICTS. Except, if applicable, for filings under the
HSR Act, (A) no filing with, and no permit, authorization, consent or
approval of, any state or federal pubic body or authority is necessary
for the execution of this Agreement by either Parent or Sub and the
consummation by Parent and Sub of the transactions contemplated
hereby, except where the failure to obtain such consent, permit,
authorization, approval or filing would not interfere with its ability
to perform its obligations hereunder, and (B) none of the execution
and delivery of this Agreement by Parent or Sub, the consummation by
Parent or Sub of the transactions contemplated hereby or compliance by
Parent and Sub with any of the provisions hereof shall (1) conflict
with or result in any breach of any applicable organizational
documents applicable to Parent or Sub, (2) result in a violation or
breach of, or constitute (with or without notice or lapse of time or
both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind to which
Parent or Sub is a party or by which Parent or Sub or any of Parent's
or Sub's properties or assets may be bound, or (3) violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to Parent or Sub or any of Parent's or Sub's properties or
assets, in each such case except to the extent that any conflict,
breach, default or violation would not interfere with the ability of
Parent or Sub to perform its obligations hereunder.
(iii) EXECUTION, DELIVERY AND PERFORMANCE BY PARENT AND SUB. The
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Parent and Sub, and each of
Parent and Sub has taken all other actions required by law, its
Certificate of Incorporation and its Bylaws in order to consummate the
transactions contemplated by this Agreement. This Agreement
constitutes the valid and binding obligations of Parent and Sub and is
enforceable in accordance with its terms, except as enforceability may
be subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights
generally.
(c) Nortek and NTK hereby represents and warrants to each of the other
parties hereto as follows:
(i) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Nortek
and NTK is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with adequate
corporate power and authority to own its properties and carry on its
business as presently conducted. Each of Nortek and NTK has the
corporate power and authority to enter into and perform all of its
obligations under this Agreement and to consummate the transactions
contemplated hereby.
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(ii) NO CONFLICTS. Except, if applicable, for filings under the
Exchange Act and the HSR Act, (A) no filing with, and no permit,
authorization, consent or approval of, any state or federal pubic body
or authority is necessary for the execution of this Agreement by
either Nortek or NTK and the consummation by Nortek and NTK of the
transactions contemplated hereby, except where the failure to obtain
such consent, permit, authorization, approval or filing would not
interfere with its ability to perform its obligations hereunder, and
(B) none of the execution and delivery of this Agreement by Nortek or
NTK, the consummation by Nortek or NTK of the transactions
contemplated hereby or compliance by Nortek and NTK with any of the
provisions hereof shall (1) conflict with or result in any breach of
any applicable organizational documents applicable to Nortek or NTK,
(2) result in a violation or breach of, or constitute (with or without
notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or
obligation of any kind to which Nortek or NTK is a party or by which
Nortek or NTK or any of Nortek's or NTK's properties or assets may be
bound, or (3) violate any order, writ, injunction, decree, judgment,
order, statute, rule or regulation applicable to Nortek or NTK or any
of Nortek's or NTK's properties or assets, in each such case except to
the extent that any conflict, breach, default or violation would not
interfere with the ability of Nortek or NTK to perform its obligations
hereunder.
(iii) EXECUTION, DELIVERY AND PERFORMANCE BY NORTEK AND NTK. The
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Nortek and NTK, and each of
Nortek and NTK has taken all other actions required by law, its
Certificate of Incorporation and its Bylaws in order to consummate the
transactions contemplated by this Agreement. This Agreement
constitutes the valid and binding obligations of Nortek and NTK and is
enforceable in accordance with its terms, except as enforceability may
be subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights
generally.
(d) The Company hereby represents and warrants to each of the other
parties hereto as follows:
(i) ORGANIZATION, STANDING AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, with adequate corporate power
and authority to own its properties and carry on its business as
presently conducted. The Company has the corporate power and authority
to enter into and perform all of its obligations under this Agreement
and to consummate the transactions contemplated hereby.
(ii) NO CONFLICTS. Except, if applicable, for filings under the
HSR Act, (A) no filing with, and no permit, authorization, consent or
approval of, any state or federal pubic body or authority is necessary
for the execution of this Agreement by the Company
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and the consummation by the Company of the transactions contemplated
hereby, except where the failure to obtain such consent, permit,
authorization, approval or filing would not interfere with its ability
to perform its obligations hereunder, and (B) none of the execution
and delivery of this Agreement by the Company, the consummation by the
Company of the transactions contemplated hereby or compliance by the
Company with any of the provisions hereof shall (1) conflict with or
result in any breach of any applicable organizational documents
applicable to the Company, (2) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default
(or give rise to any third party right of termination, cancellation,
material modification or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation of any kind to which the Company is
a party or by which the Company or any of the Company's properties or
assets may be bound, or (3) violate any order, writ, injunction,
decree, judgment, order, statute, rule or regulation applicable to the
Company or any of the Company's properties or assets, in each such
case except to the extent that any conflict, breach, default or
violation would not interfere with the ability of the Company to
perform its obligations hereunder.
(iii) EXECUTION, DELIVERY AND PERFORMANCE BY THE COMPANY. The
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of the Company, and the Company
has taken all other actions required by law, its Certificate of
Incorporation and its Bylaws in order to consummate the transactions
contemplated by this Agreement. This Agreement constitutes the valid
and binding obligations of the Company and is enforceable in
accordance with its terms, except as enforceability may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally.
5. STOP TRANSFER. Each Stockholder agrees with, and covenants to, Sub that
during the Option Period such Stockholder shall not request that the Company
register (and the Company agrees not to register) the transfer (book-entry or
otherwise) of any certificate or uncertificated interest representing any of
such Stockholder's Shares, unless such transfer is made in compliance with
this Agreement.
6. RECAPITALIZATION. In the event of a stock dividend or distribution, or
any change in the Shares by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term "Shares"
shall be deemed to refer to and include the Shares as well as all such stock
dividends and distributions and any shares into which or for which any or all of
the Shares may be changed or exchanged and the Purchase Price shall be amended
as may be appropriate to reflect such event.
7. MERGER AGREEMENT. Parent, Sub and the Company hereby agree that the
provisions of Section 6.11 (insofar as it relates to the transactions
contemplated by this Agreement) and Section 9.2 of the Merger Agreement remain
in full force and effect notwithstanding the termination of the Merger Agreement
and that such Sections of the Merger Agreement are by reference
11
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incorporated herein and made a part hereof. In addition, the Company hereby
acknowledges that the transactions contemplated herein have been previously
approved by its Board of Directors for purposes of Section 203 of the Delaware
General Corporation Law, as amended. Atrium Corporation, Parent and Sub
hereby acknowledge that the Merger Agreement has been properly terminated by the
Company in accordance with its terms.
8. STOCKHOLDER CAPACITY. No person executing this Agreement who is or
becomes during the term hereof a director or officer of the Company makes any
agreement or understanding herein in his or her capacity as such director or
officer and nothing herein shall limit or affect any action taken by such person
in his or her capacity as a director or officer. Each Stockholder signs solely
in his or her capacity as the record and beneficial owner of, or the trustee of
a trust whose beneficiaries are the beneficial owners of, such Stockholder's
Shares or Options.
9. OTHER ACTIONS. Except as contemplated by Section 2 or by operation of
law, during the Option Period no Stockholder may take any action (including,
without limitation, any cashless exercise of any Option except with respect to
an Option that would otherwise expire unless so exercised) or enter into any
agreement or waiver, which would adversely affect Sub's rights under the
Purchase Options or the benefits to be derived by Sub from an exercise of the
Purchase Options.
10. RELEASE. Effective as of an Acquisition Event, each of the Company,
Nortek and NTK hereby releases and discharges Parent, Sub and Atrium
Corporation, together with their respective officers, directors, employees,
representatives and agents (collectively the "Released Parties") from any and
all liabilities, claims, causes of actions or demands of any nature whatsoever
(including, without limitation, arising under the Merger Agreement) that any of
them may have or claim to have (including, without limitation, the reservation
made in that certain letter of July 24, 1997 from the Company to Parent, Sub
and Atrium Corporation giving notice of the Company's termination of the Merger
Agreement) which are directly or indirectly attributable to or otherwise
related to the payment of $12,000,000 made by the Company on July 24, 1997
pursuant to that certain letter of July 24, 1997 from the Parent to the
Company, regardless of whether any such liabilities, claim, cause of action or
demand is known or unknown, matured or contingent or liquidated or
unliquidated. Prior to the occurrence of an Offer Termination Event, the
Company agrees not to initiate any proceedings against any of the Released
Parties with respect to any of the liabilities, claims, causes of actions or
demands described in the foregoing release. Notwithstanding any provision
contained herein to the contrary, the provisions of this Section 10 shall
remain in full force and effect and shall survive any termination or expiration
of this Agreement and the consummation of any of the transactions contemplated
herein. As used in this Section 10, an "Acquisition Event" shall mean the first
to occur of (i) the acceptance of any Shares for payment pursuant to the Offer,
(ii) the consummation of the Merger or (iii) the consummation of any
Acquisition Proposal with Nortek or any of its affiliates.
11. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof.
(b) CERTAIN EVENTS. Each Stockholder agrees that this Agreement and
the obligations hereunder shall attach to such Stockholder's Shares and Options
and shall be binding upon any person or entity to which legal or beneficial
ownership of such Shares or Options shall pass, whether by operation of law or
otherwise, including, without limitation, such Stockholder's heirs, guardians,
administrators or successors. Notwithstanding any transfer of Shares or Options,
the transferor shall remain liable for the performance of all obligations under
this Agreement of the transferor.
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(c) ASSIGNMENT. This Agreement shall not be assigned by operation of
law or otherwise without the prior written consent of the other parties,
provided that Parent may assign, in its sole discretion, its rights and
obligations hereunder to any affiliate of Parent or, after a Termination Event,
to any person making an Acquisition Proposal, but no such assignment shall
relieve Parent of its obligations hereunder if such assignee does not perform
such obligations.
(d) AMENDMENTS, WAIVERS, ETC. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties
hereto; provided that either Schedule I or II hereto may be supplemented by
Parent by adding the name and other relevant information concerning any
stockholder of the Company who agrees to be bound by the terms of this Agreement
without the agreement of any other party hereto, and thereafter such added
stockholder shall be treated as a "Stockholder" for all purposes of this
Agreement; provided further that after a Termination Event, this Agreement may
be amended, changed, supplemented, waived or otherwise modified or terminated
without the consent of, or the execution of any written agreement on the part
of, Nortek and NTK, so long as such amendment, change, supplement, waiver or
modification does not increase the obligations of either Nortek or NTK
hereunder.
(e) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses or the addresses set forth on the
signature pages hereto:
If to Xx. Xxxxxxxxx: Xxxxxxx X. Xxxxxxxxx
At his home address as supplementally provided
to the parties hereto.
copy to: Squadron Ellenoff Plesent & Xxxxxxxxx
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
If to Xx. Xxxxxxx: Xxxxxxx X. Xxxxxxx
At his home address as supplementally provided
to the parties hereto.
copy to: Squadron Ellenoff Plesent & Xxxxxxxxx
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attn: Xxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
If to Xx. Xxxxxx: Xxxx X. Xxxxxx
At his home address as supplementally provided
to the parties hereto.
copy to: Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxx
Telecopy: (000) 000-0000
If to Parent or Sub: Atrium Acquisition Holdings Corp.
and
Atrium/PG Acquisition Corp.
0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxx 0000 Xxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
copies to: Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxxxx
Telecopy: (000) 000-0000
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx, Xx.
Telecopy: (000) 000-0000
Xxxxxx & Xxxxxx L.L.P.
3700 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attn: A. Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
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If to the Company: Ply Gem Industries, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx
Telecopy: (000) 000-0000
copy to: Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxx
Telecopy: (000) 000-0000
If to Nortek or NTK: Nortek, Inc. and NTK Sub, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
copy to: Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) SEVERABILITY. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(g) SPECIFIC PERFORMANCE. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
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(h) REMEDIES CUMULATIVE. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any thereof
by any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
(i) NO WAIVER. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
(j) NO THIRD PARTY BENEFICIARIES. This Agreement is not intended to be
for the benefit of, and shall not be enforceable by, any person or entity who or
which is not a party hereto; provided that, in the event of a Stockholder's
death, the benefits to be received by the Stockholder hereunder shall inure to
his successors and heirs.
(k) GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(l) JURISDICTION. Each party hereby irrevocably submits to the
exclusive jurisdiction of the Court of Chancery in the State of Delaware in any
action, suit or proceeding arising in connection with this Agreement, and agrees
that any such action, suit or proceeding shall be brought only in such court
(and waives any objection based on forum non conveniens or any other objection
to venue therein); provided, however, that such consent to jurisdiction is
solely for the purpose referred to in this paragraph (l) and shall not be deemed
to be a general submission to the jurisdiction of said Court or in the State of
Delaware other than for such purposes. Each party hereto hereby waives any right
to a trial by jury in connection with any such action, suit or proceeding.
(m) DESCRIPTIVE HEADINGS. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
(n) COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which, taken together,
shall constitute one and the same Agreement. This Agreement shall not be
effective as to any party hereto until such time as this Agreement or a
counterpart thereof has been executed and delivered by each party hereto.
(o) PRIOR AGREEMENT. This agreement is executed and delivered as an
Amendment and Restatement of that certain Stockholders Agreement dated as of
June 24, 1997, between the parties hereto and this Agreement shall supersede
such prior agreement in its entirety.
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(p) TRUST FUNDS. In the event that any party hereto should
receive any funds that are to be paid to another party pursuant to the terms of
this Agreement, then the receiving party shall hold such funds in trust for the
benefit of the party entitled to receive such funds and shall promptly pay such
funds to the party entitled to receive such funds in accordance with this
Agreement.
12. ACKNOWLEDGMENT BY COMPANY. The parties hereby acknowledge and
agree that the acceptance of any Shares for payment pursuant to the Offer or
other tender offer for a majority of the outstanding Shares will constitute a
"change of control" under the terms of the various agreements governing the
Options set forth on Schedule II hereto and that for purposes of the
transactions contemplated by this Agreement all restrictions on transferability
and vesting applicable to any of the Unvested Stock or restricted Shares on
Schedule I hereto shall be terminated.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on this 24th day of July, 1997.
/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx
Atrium Acquisition Holdings Corp.
By: /s/ Xxxxxxx Xxxxxxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxxxxxx
------------------------------
Title: Executive Vice President
-----------------------------
Atrium/PG Acquisition Corp.
By: /s/ Xxxxxxx Xxxxxxxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxxxxxxx
--------------------------------
Title: Executive Vice President
-------------------------------
Ply Gem Industries, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
--------------------------------
Title: Chairman
-------------------------------
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Nortek, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
------------------------------------
Title: Vice President and General Counsel
-----------------------------------
NTK Sub, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
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SCHEDULE I TO
STOCKHOLDERS AGREEMENT
NAME OF STOCKHOLDER NUMBER OF SHARES OWNED
------------------- ----------------------
Xxxxxxx X. Xxxxxxx 1,337
Xxxx X. Xxxxxx 3,747
Xxxxxxx X. Xxxxxxxxx 1,130,177
Xxxxxxx X. Xxxxxxxxx, Restricted Stock 100,000
Excludes shares owned by pension/profit share/401(K)/TRA Plans.
21
SCHEDULE II TO
STOCKHOLDERS AGREEMENT
OPTION NUMBER OF OPTION
NAME DATE SHARES PRICE TYPE
------------------------------------ -------- --------- -------- --------
Xxxxxxx X. Xxxxxxx 01/28/88 8,000 $10.750 ISO
01/28/88 75,000 10.750 NQSO
01/28/88 75,000 10.750 Note 1
01/26/89 75,000 12.250 NQSO
01/26/89 75,000 12.250 Note 1
01/26/89 8,000 12.250 ISO
01/23/92 10,000 9.750 ISO
11/24/92 75,000 10.250 NQSO
01/29/93 75,000 12.000 NQSO
05/20/93 9,000 10.375 ISO
11/07/94 50,000 19.125 NQSO
Xxxxxxx X. Xxxxxxxxx 01/28/88 300,000 10.750 NQSO
01/28/88 300,000 10.750 Note 1
01/26/89 300,000 12.250 NQSO
01/26/89 300,000 12.250 Note 1
11/24/92 325,000 10.250 NQSO
01/29/93 513,500 12.000 NQSO
05/20/93 9,000 10.375 ISO
11/07/94 750,000 19.125 NQSO
08/20/96 750,000 12.500 NQSO
Note 1. Options on Change of Control
Xxxx X. Xxxxxx 06/02/95 6,250 16.000 ISO
06/02/95 293,750 16.000 NQSO
10/27/95 250,000 16.000 NQSO
01/02/96 6,060 16.500 ISO
01/02/96 210,782 16.500 NQSO
08/20/96 33,158 12.500 NQSO
08/20/96 116,842 12.500 NQSO
