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EXHIBIT 10.6
[INCENTIVE]
as of 12/14/00
NCI BUILDING SYSTEMS, INC.
INCENTIVE STOCK OPTION AGREEMENT
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NCI Building Systems, Inc. (the "Company") hereby grants an Incentive
Option (the "Option") to purchase shares of its Common Stock, $0.01 par value,
to:
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Optionee
The Option is granted on the following terms and conditions:
1. NUMBER OF SHARES AND PRICE. The number of shares subject to this
Option, and the exercise price, are:
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Number of Shares Exercise Price Per Share
2. OPTION PERIOD. The term of this Option (the "Option Period") will
commence on the date of grant noted below, and will expire at 5:00 o'clock p.m.
Houston time on the earlier of (i) the 30th day after termination of Optionee's
continuing employment with the Company and its Subsidiaries for any reason other
than death, permanent disability (within the meaning of Section 22(e)(3) of the
Code) or retirement at or after Normal Retirement Age; (ii) one year after the
death or permanent disability of Optionee or the retirement of Optionee at or
after Normal Retirement Age; or (iii) the expiration date noted below. After the
expiration date, no further shares may be purchased under this Option.
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Date of Grant Expiration Date
3. VESTING. Effective on each anniversary of the date of grant of this
Option, 25% of the Option shares shall become vested and will be available
thereafter for purchase by Optionee during the remaining term of the Option
Period, provided that, on each such vesting date, Optionee has been in a
continuing employment with the Company and its Subsidiaries since the date of
grant of this Option. If Optionee dies or becomes permanently disabled (within
the meaning of Section 22(e)(3) of the Code) or retires from such
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employment at or after Normal Retirement Age, 100% of the shares subject to his
Options will become vested and immediately available for purchase by Optionee,
or in the case of death of Optionee, by the person(s) specified in Section 6(b)
of this Agreement.
4. VESTING UPON CHANGE OF CONTROL. If the Company proposes to sell
substantially all of its assets or to be a party to any merger, consolidation or
corporate reorganization, or if any other person or entity makes a tender or
exchange offer for stock of the Company, and as a result of any such transaction
the stockholders of the Company immediately prior to the consummation thereof
would own 50.1% or less of the equity or voting power of the surviving,
resulting or purchasing corporation that is outstanding immediately following
the consummation thereof, then 100% of the Option shares will become vested and
immediately available for purchase by Optionee, and Optionee will be entitled to
receive, for the aggregate exercise price payable upon exercise of this Option,
in lieu of the Common Stock otherwise issuable to him upon exercise of this
Option, the same kind and amount of securities or assets as may be distributable
upon such sale, merger, consolidation or corporate reorganization, to a holder
of the number of shares of Common Stock of the company into which this Option is
convertible immediately prior to the date of such transactions.
5. EXERCISE OF OPTION. Subject to Section 6 below, this Option shall be
exercisable at any time and from time to time after the date of grant and on or
prior to its expiration date, in whole or in part with respect to any portion of
the Option shares that has become vested at the time of exercise. No fractional
shares will be issued. If an exercise covers a fractional share, the number of
shares to be issued on exercise will be rounded to the next lowest share and the
exercise price for the fraction will be returned to Optionee.
6. RIGHT TO EXERCISE; RESTRICTIONS. This Option shall be exercisable
during its term only by Optionee and only if, at the time of exercise, Optionee
has been in a continuing employment relationship with the Company since the date
of grant of this Option, except that:
(a) Optionee may exercise this Option, with respect only to
shares that were vested on the date of termination of his continuing
employment with the Company and its Subsidiaries, for a period of
thirty days after such termination;
(b) If Optionee should die while in a continuing employment
with the Company and its Subsidiaries, this Option may be exercised by
the estate of Optionee or by a person who acquired the right to
exercise this Option by bequest or inheritance or by reason of the
death of Optionee for a period of one year after the death of Optionee;
and
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(c) If Optionee should become permanently disabled (as
determined in the sole discretion of the Board) or retire at or after
Normal Retirement Age while in a continuing employment with the Company
and its Subsidiaries, Optionee may exercise this Option for a period of
one year after such event.
For purposes of this Option, the term "continuing employment" means the
absence of any interruption or termination of Optionee's employment by the
Company or any Subsidiary which now exists or hereafter is organized or acquired
by the Company or one of its Subsidiaries. A continuing employment shall not be
considered interrupted in the case of sick leave, military leave or any other
leave of absence approved by the Board. In the event of Optionee's change in
status from Employee to any other status of Non-Employee Director or consultant,
this Option shall remain in effect and, except to the extent otherwise
determined by the Board, continue to vest; provided, however, that this Option
shall cease to be treated as an Incentive Option and shall be treated as a
Nonqualified Option on the day that is three months and one day following such
change in status. Optionee shall not be deemed to have retired until termination
of or retirement from his employment or consulting relationship and his
membership on the Board.
This Option may not be exercised, or if exercised no shares need be
issued by the Company, unless and until the Company has obtained all necessary
approvals and consents of government authorities and other persons such as
lenders to the Company.
7. MANNER OF EXERCISE. This Option shall be exercisable by a written
notice which:
(a) States the election to exercise this Option and the number
of shares with respect to which it is being exercised;
(b) Contains an undertaking to provide such information as is
required, in the discretion of counsel for the Company, to determine
whether an exemption from registration of such shares is available
under federal and applicable state securities laws and to make such
representations and warranties regarding Optionee's investment intent
as such counsel may require; and
(c) Is signed by Optionee or other person or persons
authorized to exercise this Option and, if signed by a person other
than Optionee, is accompanied by appropriate evidence or proof of the
authority or right of such person to exercise this Option.
The written notice shall be accompanied by cash or a check in the amount of the
exercise price for the total number of shares being purchased. The Company may
permit Optionee to exercise this Option by delivering to the Company a properly
executed exercise notice
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together with irrevocable instructions to a securities broker to promptly
deliver to the Company cash or a check payable and acceptable to the Company to
pay the Option price; provided that Optionee and the broker shall comply with
such procedures, and enter into such agreements of indemnity and other
agreements, as the Company shall prescribe as a condition of such payment
procedure.
8. NON-TRANSFERABILITY. This Option may not be transferred or assigned
in any manner by Optionee otherwise than by will or the laws of descent and
distribution, and may be exercised only by Optionee during his lifetime.
9. RIGHTS AS STOCKHOLDER. Optionee shall have no rights as a
stockholder with respect to any shares covered by this Option, until such time
as a certificate is issued to him for the shares. Except as provided in Section
10, no adjustment will be made for dividends or other rights of stockholders for
which the record date is prior to the issuance of a certificate for the shares.
10. CAPITAL ADJUSTMENTS. If all or any portion of this Option is
exercised subsequent to any stock dividend, stock split, combination or exchange
of shares, recapitalization, merger, consolidation, separation, reorganization
or other similar transaction of or by the Company, as a result of which shares
of any class are issued with respect to outstanding shares of Common Stock or
the shares of Common Stock are changed into the same or a different number of
shares of the same or another class or classes of shares, Optionee will be
entitled to receive, for the aggregate exercise price payable upon exercise of
this Option, the aggregate number and class of shares equal to the number and
class of shares Optionee would have had on the date of exercise had the shares
been purchased for the same aggregate purchase price at the date this Option was
granted and had not been disposed of, taking into consideration such stock
dividend, stock split, combination or exchange of shares, recapitalization,
merger, consolidation, separation, reorganization or other similar transaction;
provided that no fractional share will be issued upon any such exercise and the
aggregate price paid will be appropriately reduced on account of any fractional
share not issued.
11. RESERVATION OF SHARES. The Company will reserve, out of its
treasury shares or out of authorized but previously unissued shares, such number
of the shares of its Common Stock or other class of shares as are from time to
time issuable hereunder.
12. NOTICES. Each notice relating to this Option will be in writing and
delivered in person or by certified mail to the proper address. Each notice will
be deemed to have been given on the date it is received. Notices to the Company
will be mailed or delivered to it at its principal office, 00000 Xxxxx Xxx
Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxx, 00000, Attention: Secretary. Notices to
Optionee will be addressed to Optionee at his home address as
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reflected on the personnel records of the Company. Any party may change its
address for notices under this Option by giving a notice to that effect in
accordance with this Section 12.
13. BENEFITS OF AGREEMENT. Subject to the restrictions against transfer
or assignment set forth herein, the provisions of this Agreement shall inure to
the benefit of, and shall be binding upon, the assignee, successors in interest,
personal representatives, guardians, estates, heirs, and legatees of the parties
hereto (as appropriate). Except as permitted or contemplated by this Agreement,
Optionee agrees that he will not hypothecate or otherwise create or suffer to
exist any lien, claim, or encumbrance on this Option. Except as provided herein,
this Agreement is not intended to confer any rights or benefits upon any person
or entity that is not a party hereto.
14. RESOLUTION OF DISPUTES. Any dispute or disagreement about the
interpretation, construction or application of this option agreement will be
determined by the Board. Any determination made by the Board will be final,
binding and conclusive for all purposes.
15. STOCK OPTION PLAN. This Option is granted pursuant to the NCI
Building Systems, Inc. Stock Option Plan, as amended from time to time. In the
event of any conflict or inconsistency between the terms and conditions of the
Plan and the terms and conditions of this Agreement, the terms and provisions of
the Plan shall be controlling. Capitalized terms used in this Agreement and not
otherwise deferred herein shall have the meanings set forth in the Plan. In
addition, this Option is subject to any rules and regulations promulgated
pursuant to the Plan, now or hereafter in effect.
IN WITNESS WHEREOF, the Company and Optionee have caused this Agreement
to be executed as of the date of grant noted above.
OPTIONEE NCI BUILDING SYSTEMS, INC.
BY:
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A.R. Xxxx
Optionee Chairman of the Board
S.S.N.: or
Xxxxxx Xxxxxxx
President and Chief Executive Officer
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