Form of PGT, INC.
Exhibit
10.17
Form
of
2006
EQUITY INCENTIVE PLAN
This
REPLACEMENT NON-QUALIFIED STOCK OPTION AGREEMENT (the “Agreement”), dated as
of [date], is made by and between PGT, Inc., a Delaware corporation (the
“Company”), and [Name] (the “Optionee”).
WHEREAS, the Company has
adopted the PGT, Inc. 2006 Equity Incentive Plan (as amended, supplemented, or
otherwise modified, the “Plan”), pursuant to
which options may be granted to purchase Stock; and
WHEREAS, the Company granted
to Optionee on the dates and in the amounts set forth on Schedule A attached
hereto an Option or Options to purchase shares of Stock pursuant to one or more
agreements entered into by Optionee and the Company (each such agreement or
agreements being referred to hereafter collectively as the “Original Agreement”);
and
WHEREAS, as a result of
economic conditions that have adversely affected the Company and the industry in
which the Company competes, the Option or Options granted to Optionee pursuant
to the Original Agreement have exercise prices that are significantly above the
current market price of the Stock; and
WHEREAS, the Compensation
Committee of the Board of Directors of the Company (the “Board”) has
recommended to the Board, and the Board has approved, the cancellation and
termination of the Original Agreement and replacement of such Original Agreement
with this Agreement, subject to the terms and upon the conditions of this
Agreement, in order retain employees who received grants of options under the
PGT, Inc. 2004 Stock Incentive Plan and 2006 Plan and to align the interests of
such employees with those of the stockholders of the Company; and
WHEREAS, the Company desires
to grant to the Optionee a non-qualified stock option (or “NQSO”) to purchase
the number of shares of Stock provided for herein, and Optionee wishes to have
the Original Agreement cancelled and terminated and replaced with this
Agreement, as set forth herein.
NOW, THEREFORE, in
consideration of the recitals and the mutual agreements herein contained, the
parties hereto agree as follows:
Section
1. Grant of Option
(a) Grant of
Option. The Company hereby grants to the Optionee an Option to
purchase [number of shares] shares of Stock on the terms and conditions set
forth in this Agreement and as otherwise provided in the Plan. The
Option is not intended
to be treated, and shall not be construed, as an ISO.
(b) Incorporation of
Plan. The provisions of the Plan are hereby incorporated
herein by reference. Except as otherwise expressly set forth herein,
this Agreement shall be construed in accordance with the provisions of the Plan
and any capitalized terms not otherwise defined in this Agreement shall have the
definitions set forth in the Plan. The Board shall have final
authority to interpret and construe the Plan and this Agreement and to make any
and all determinations under them, and its decision shall be binding and
conclusive upon the Optionee and his legal representative in respect of any
questions arising under the Plan or this Agreement.
(c) The
Option granted by the Company pursuant to this Agreement replaces the Original
Agreement in its entirety. The Original Agreement is cancelled and
terminated, and the Optionee forfeits all rights and benefits under such
Original Agreement.
Section
2. Terms and Conditions of
Option
(a) Exercise
Price. The price at which the Optionee shall be entitled to
purchase shares of Stock upon the exercise of all or any portion of the Option
shall be $[amount] per share.
(b) Expiration Date. The Option
shall expire at the close of business on the tenth anniversary of the date of
this Agreement.
(c) Exercisability of
Option. Subject to the other terms of this Agreement regarding
the exercisability of the Option, the Option shall become exercisable with
respect to one fifth of the shares (rounded to the nearest whole share) of Stock
subject hereto on each of the first, second, third, fourth, and fifth
anniversaries of the date of this Agreement, provided the Optionee is employed
by the Company or an Affiliate as of each such date. The Board may,
but shall not be required to, provide at any time for the acceleration of the
schedule set forth above.
(d) Method of
Exercise. The Option may be exercised only by written notice
in such form as the Company may adopt from time to time, delivered in person or
by mail in accordance with Section 3(a) and accompanied by payment therefor or
pursuant to such other procedure as the Company may adopt from time to
time The purchase price of the shares of Stock shall be paid to the
Company (i) in cash or its equivalent, (ii) by tendering to the Company shares
of Stock already owned by the Optionee, which, in the case of shares of Stock
purchased by the Optionee pursuant to the exercise of an option granted by the
Company, have been held by the Optionee for no less than six months following
the date of such purchase, in any case having a total Fair Market Value less
than or equal to the aggregate purchase price, (iii) to the extent permitted by
law, by a “broker cashless exercise” procedure approved by the Board (to the
extent permitted by law), or (iv) by a combination of the foregoing
methods. If requested by the Board, the Optionee shall deliver this
Agreement evidencing the Option to the Secretary of the Company, who shall
endorse thereon a notation of such exercise and return such Agreement to the
Optionee. A minimum of 100 shares of Stock must be purchased upon the
exercise of the Option unless a lesser number of shares of Stock so purchased
constitutes the total number of shares of Stock then purchasable under the
Option.
(e) Exercise Following Termination of
Employment. Subject to Section 2(g), in the event that
the Optionee ceases to be employed by the Company or an Affiliate, that portion
of the Option that is not then exercisable shall immediately terminate and that
portion of the Option that is exercisable at the time of the Optionee’s
termination of employment shall terminate as follows:
(i) If
the Optionee’s termination of employment is due to his death or disability, as
determined by the Board, the Option (to the extent exercisable at the time of
the Optionee’s termination of employment) shall be exercisable for a period of
six months following such termination of employment, and shall thereafter
terminate;
(ii) If
the Optionee’s termination of employment is by the Company or an Affiliate for
Cause (as defined below), the Option shall terminate on the date of the
Optionee’s termination of employment;
(iii) If
the Optionee voluntarily terminates his employment (other than by retirement),
the Option (to the extent exercisable at the time of the Optionee’s termination)
shall be exercisable for a period of 60 days following such termination of
employment, and shall thereafter terminate; and
(iv) If
the Optionee’s termination of employment is for any other reason, the Option (to
the extent exercisable at the time of the Optionee’s termination of employment)
shall be exercisable for a period of 60 days following such termination of
employment, and shall thereafter terminate.
For
purposes of this Agreement, “Cause” means (i) any act of fraud, gross
negligence, or dishonesty in the performance of the Optionee’s duties or the
willful failure by the Optionee to perform Optionee’s duties; (ii) engaging in
any action with the intention of causing harm or damage to any of the Company’s
operations; (iii) conviction of a felony; or (iv) obtaining personal gain from a
transaction in which the Optionee has a conflict of interest with the Company;
provided, however, that, if the
Optionee is party to an employment agreement with the Company (or any Subsidiary
of the Company) that is in effect as of the date of the termination of such
Optionee’s employment, then “Cause” has the meaning ascribed to that term in
such employment agreement.
Notwithstanding
the foregoing, no provision in this Section 2(e) shall extend the exercise
period of an Option beyond its original term set forth in Section
2(b).
(f) Nontransferability. The
Option shall not be transferable by the Optionee other than by will or the laws
of descent and distribution.
(g) Rights as a
Stockholder. The Optionee shall not be deemed for any purpose
to be the owner of any shares of Stock subject to the Option unless, until and
to the extent that (i) the Option shall have been exercised pursuant to its
terms, (ii) the Company shall have issued and delivered to the Optionee the
shares of Stock for which the Option shall have been exercised, and (iii) the
Optionee’s name shall have been entered as a stockholder of record with respect
to such shares of Stock on the books of the Company.
(i) Income Taxes. The
Company may, in its discretion, require that the Optionee pay to the Company at
or after (as determined by the Board) the time of exercise of any portion of the
Option any such additional amount as the Company deems necessary to satisfy its
liability to withhold federal, state, or local income tax or any other taxes
incurred by reason of the exercise or the transfer of shares of Stock
thereupon.
Section
3. Miscellaneous
(a) Notices. Unless otherwise
determined by the Board, any and all notices, designations, consents, offers,
acceptances, and any other communications provided for herein shall be given in
writing and shall be delivered either personally or by registered or certified
mail, postage prepaid, which shall be addressed, in the case of the Company to
the General Counsel of the Company at the principal office of the Company and,
in the case of the Optionee, to Optionee’s address appearing on the books of the
Company or to Optionee’s residence or to such other address as may be designated
in writing by the Optionee.
(b) No Right to Continued Employment.
Nothing in the Plan or in this Agreement shall confer upon the Optionee
any right to continue in the employ of the Company or any Affiliate or shall
interfere with or restrict in any way the right of the Company and its
Affiliates, which are hereby expressly reserved, to remove, terminate, or
discharge the Optionee at any time for any reason whatsoever, with or without
Cause.
(c) Bound by Plan. By
signing this Agreement, the Optionee acknowledges that he has received a copy of
the Plan and has had an opportunity to review the Plan and agrees to be bound by
all the terms and provisions of the Plan.
(d) Successors. The terms of this
Agreement shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and of the Optionee and the beneficiaries, executors,
administrators, heirs and successors of the Optionee.
(e) Validity/Invalidity. The
invalidity or unenforceability of any particular provision hereof shall not
affect the other provisions hereof, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision had been
omitted.
(f) Modifications. No
change, modification, or waiver of any provision of this Agreement shall be
valid unless the same be in writing and signed by the parties
hereto.
(g) Entire Agreement. This
Agreement and the Plan contain the entire agreement and understanding of the
parties hereto with respect to the subject matter contained herein and therein
and supersede all prior communications, representations, and negotiations in
respect thereto.
(h) Governing
Law. This Agreement and the rights of the Optionee hereunder
shall be construed and determined in accordance with the laws of the State of
Delaware without regard to the principles of conflicts of laws
thereof.
(i) Headings. The
headings of the Sections hereof are provided for convenience only and are not to
serve as a basis for interpretation or construction, and shall not constitute a
part, of this Agreement.
(j) Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, this
Agreement has been executed and delivered by the parties hereto on the [day] day
of [month], [year].
By: _____________________________
Name: Xxxxx
Xxxxxxxx III
Title: Vice
President, General Counsel
and
Secretary
_________________________________
[Name of Optionee]
Schedule
A
|
Grant Date
|
Equity
Incentive Plan pursuant to which Grant was
made
|
Number
of Shares Issuable upon Exercise of
Option
|
Exercise
Price of Option
|
|
|
[Optionee]
|
||||
