Exhibit 10.18
FORM OF
JLL WINDOW HOLDINGS, INC.
ROLLOVER STOCK OPTION AGREEMENT
ROLLOVER STOCK OPTION AGREEMENT (this "Agreement"), dated as of
January 29, 2004, between JLL Window Holdings, Inc., a Delaware corporation (the
"Company"), and [NAME] (the "Optionee").
WHEREAS, pursuant to the terms of a Rollover Agreement, dated as of
the date hereof, by and between the Optionee and the Company (the "Rollover
Agreement"), the Optionee intends to exchange options exercisable for a number
of Class A Common Shares, par value $0.01 per share, of PGT Holding Company, a
Delaware corporation, for an option (the "Option"), exercisable for shares of
common stock of the Company, par value $0.01 per share (the "Stock"), subject to
the terms and conditions hereof.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties hereto have
agreed and do hereby agree as follows:
1. Number of Shares; Adjustment.
(a) Number of Shares. The Company hereby grants to the Optionee an Option
to purchase an aggregate of [XXXXX] shares of Stock, subject to adjustment as
provided in Section 1(b) below, on the terms and conditions herein set forth.
The Option granted hereby shall not be treated as an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
(b) Adjustment. If, after the Date of Grant (as hereinafter defined), the
outstanding shares of Stock are, as a result of a stock split, stock dividend,
combination or exchange of shares, exchange for other securities,
reclassification, reorganization, redesignation, merger, consolidation,
recapitalization, spin-off, split-off, split-up or other such change, or a
special dividend or other distribution to the Company's stockholders, increased
or decreased or changed into or exchanged for a different number of kind of
shares of capital stock or other securities of the Company, then, as applicable,
(a) there shall automatically be substituted for each share of Stock subject to
the Option the number and kind of shares of capital stock or other securities
into which each outstanding share of Stock shall be exchanged, (b) the exercise
price per share of Stock or unit of securities shall be increased or decreased
proportionately so that the aggregate purchase price for the securities subject
to the Option shall remain the same as immediately prior to such event and (c)
the Board shall make such other appropriate adjustments to the securities
subject to the Option as may be appropriate and equitable, and any such
adjustment shall be final, binding and conclusive as to the Optionee.
(c) Treatment of Options Upon Sale of Company. Upon the sale of the Company
(as determined by the Board in its good faith discretion, a "Sale"), the Board
may, in its sole discretion: (i) cancel any outstanding Options, and, in the
event of such cancellation, the holders of vested and exercisable Options shall
be entitled to a payment equal to (x) the excess, if any, of the consideration
received by the Company's shareholders pursuant to such Sale on a per Share
basis, minus (y) the exercise price, as determined in Section 2 hereof,
multiplied by (z) the number of shares of Stock subject to the Option; or (ii)
provide that such Option shall be converted into a comparable option, as
determined by the Board in its reasonable discretion, to purchase securities of
a corporation or other entity acquiring direct or indirect control of the
Company in such Sale.
2. Exercise Price. The purchase price of the Stock subject to the Option
shall be $[XXX] per share, subject to adjustment as provided in Section 1(b)
hereof.
3. Term and Exercisability of Option.
(a) Term. The term of the Option and of this Agreement shall commence on
the date hereof (the "Date of Grant") and shall terminate on the tenth
anniversary of the Date of Grant (the "Date of Termination"). On the Date of
Termination, all rights of the Optionee hereunder shall cease.
(b) Exercisability of Option. The Option shall be fully vested and fully
exercisable as of the Date of Grant.
(c) Partial Exercise. The right of the Optionee to purchase shares of Stock
as herein provided may be exercised in whole or in part at any time or from time
to time, prior to the Date of Termination.
4. Payment. Prior to the initial public offering of Stock by the Company
(the "IPO") the exercise price for Stock subject to an Option shall be paid in
cash or by certified check. Following the IPO, the exercise price for Stock
subject to an Option may be paid either (i) in cash or by certified check, (ii)
by delivery of Stock owned by the Optionee or (iii) by cashless exercise as
provided below by giving notice of such exercise to the Company. Upon receipt of
a notice of cashless exercise, the Company shall deliver to the Optionee
(without payment by the holder of any exercise price) that number of shares of
Stock that is equal to the quotient obtained by dividing (i) the value of the
Option or portion thereof on the exercise date (determined by subtracting the
aggregate exercise price for the shares of Stock in effect on the exercise date
from the aggregate fair market value of the shares of Stock) by (ii) the fair
market value of one share of Stock. A notice of "cashless exercise" shall state
the number of shares of Stock as to which the Option is being exercised.
5. Termination of Employment.
(a) The Option may be exercised at any time prior to the Date of
Termination, whether or not for any reason, including death, Optionee has ceased
to be a director, officer, employee or consultant of the Company or any of its
subsidiaries.
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(b) Notwithstanding anything to the contrary in this Section 5, the Option
shall not be exercisable on or after the Date of Termination.
6. Rights of Optionee.
(a) The Optionee shall have none of the rights of a stockholder with
respect to the Stock covered by the Option until the Stock is issued to such
Optionee upon exercise of the Option.
(b) Neither the granting of the Option, this Agreement nor any other action
taken pursuant to this Agreement shall constitute or be evidence of any
agreement or understanding, express or implied, that the Optionee has a right to
continue to provide services as an officer, director, employee, consultant or
advisor of the Company or any parent, subsidiary or affiliate thereof for any
period of time or at any specific rate of compensation.
7. Nontransferability of Option. The Option shall not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution and shall be exercisable only by the
Optionee or his or her legal representative or to a trust established for estate
planning purposes of which the Optionee is the sole trustee.
8. Notification.
(a) The Option shall be exercised by written notification of exercise
substantially in the form of Exhibit A hereto and delivered to the Secretary of
the Company in accordance with subsection (b) of this Section 8. Such
notification shall specify the number of shares of Stock to be purchased.
(b) Any notification required or permitted hereunder shall be in writing
and shall be deemed to have been given when personally delivered, or when sent
if sent via facsimile (with receipt confirmed) or on the first business day
after sent by reputable overnight courier or on the third business day after
sent registered or certified first-class mail (with receipt confirmed). Such
notice shall be addressed to the Company at:
JLL Window Holdings, Inc.
c/o JLL Partners Fund IV, L.P.
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
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Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
or to the Optionee at the address set forth below, as the case may be; provided,
however, that a notification of exercise pursuant to subsection (a) of this
Section 8 shall be effective only upon receipt by the Secretary of the Company
of such notification and all necessary documentation, including full payment for
the Option. Either party may, by notification to the other given in the manner
aforesaid, change the address for future notices.
9. Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require the Optionee to remit to the Company, an amount
sufficient to satisfy any Federal, state, and local taxes (including the
Optionee's FICA obligation) required by law to be withheld as a result of any
taxable event arising in connection with the Option.
10. Conditions to Issuance; Restrictions on Transferability.
(a) Shares of Stock sold pursuant to this Agreement are "restricted
securities," as such term is defined in Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), and any resale of
such Stock must be in compliance with the registration requirements of the
Securities Act or an exemption therefrom. All certificates for shares of Stock
delivered upon exercise of this Option shall be subject to such stock-transfer
orders and other restrictions as the Board may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Stock may then be listed, and any applicable
federal or state securities law, and the Board may cause a legend or legends to
be placed on any such certificates to make appropriate reference to such
restrictions. The Board may require, as a condition of the issuance and delivery
of certificates evidencing shares of Stock pursuant to the terms hereof, that
the Optionee make such agreements and representations as the Board, in its
reasonable discretion, deems necessary or desirable.
(b) The obligation of the Company to issue shares of Stock pursuant to the
Option shall be subject to all applicable laws, rules and regulations (domestic
or foreign), including all applicable federal and state securities laws, and the
obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Board. The Company shall use its reasonable best
efforts to issue shares of Stock under the Option; provided, however, that in
the event that it is determined that issuance of stock under the Option fails to
qualify for exemption from registration requirements under the Securities Act,
the Company may delay the issuance of shares of Stock under the Option until
such time as the issuance of shares of Stock either complies with an applicable
exemption from registration under the Securities Act or is registered under the
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Securities Act pursuant to an effective registration statement on any form which
the Company then qualifies and is available.
(c) The Optionee shall have become a party to and be subject to the terms
and conditions of the Company's Security Holders' Agreement, dated as of January
29, 2004, as such agreement may be amended from time to time (the "Security
Holders' Agreement").
11. Governing Law; Interpretation.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to the choice-of-laws or
conflicts-of-laws provisions thereof.
(b) The Board shall have final and discretionary authority to interpret and
construe this Agreement and to make any and all determinations under such
Agreement, and its determination and decisions shall be final, conclusive and
binding upon the Optionee and his legal representative in respect of any
questions arising under this Agreement.
12. Miscellaneous.
(a) This Agreement shall bind and inure to the benefit of the Company, its
successors and assigns, and the Optionee and his personal representatives.
(b) The failure of the Company to enforce at any time any provision of this
Agreement shall in no way be construed to be a waiver of such provision or of
any other provision hereof.
(c) The Company shall be under no obligation to register the Stock subject
hereto pursuant to the Securities Act or any other federal or state securities
laws.
(d) The Optionee hereby represents and warrants to the Company that the
Optionee, by reason of the Optionee's business or financial experience (or the
business or financial experience of the Optionee's professional advisors who are
unaffiliated with and who are not compensated by the Company or any affiliate or
selling agent of the Company, directly or indirectly), has the capacity to
protect the Optionee's own interests in connection with the transactions
contemplated under this Agreement.
(e) Subject to Section 7 hereof, no purported sale, assignment, mortgage,
hypothecation, transfer, pledge, encumbrance, gift, transfer in trust (voting or
other) or other disposition of, or creation of a security interest in or lien
on, any of the Stock subject hereto by any holder thereof in violation of the
provisions of this Agreement or the Security Holders' Agreement will be valid,
and the Company will not transfer any of said shares of Stock on its books nor
will any of said shares of Stock be entitled to vote,
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nor will any dividends be paid thereon, unless and until there has been full
compliance with said provisions to the satisfaction of the Company.
(f) The terms and provisions of this Agreement may be modified or amended
only pursuant to an instrument executed by the Company and Optionee.
(g) This Agreement may be executed in any number of counterparts (including
by facsimile), and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunder duly authorized and the Optionee has hereunto
set his hand, all as of the day and year first set forth above.
JLL WINDOW HOLDINGS, INC.
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Name:
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Title:
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ACCEPTED:
[NAME]
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Address
Facsimile
Date:
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EXHIBIT A
JLL Window Holdings, Inc.
c/o JLL Partners Fund IV, L.P.
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Attention: Secretary
To Whom It May Concern:
I hereby elect to exercise the stock option (the "Option") granted to
me on ____________, with respect to ________ shares of Common Stock of JLL
Window Holdings, Inc., par value [$0.01] per share ("Shares"), at the exercise
price of $[XXX] per share for a total purchase price of $_________.
Enclosed is my certified check in the amount of $_________ in payment
in full of (i) the aggregate exercise price of the Shares and (ii) the tax
withholding amount applicable to my exercise of the Option. I am also enclosing
the option agreement that relates to the Option; I understand that, to the
extent I am not exercising the Option for all the Shares subject thereto, such
option agreement will be appropriately endorsed by you and returned to me.
Signature:
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Printed Name:
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Address:
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Dated:
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368291-Wilmington Server 1A - MSW
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