<PAGE> 1
As filed with the Securities and Exchange Commission on February 23, 1994
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------------
PLY GEM INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
-------------------
Delaware 11-1727150
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
--------------------
777 Third Avenue, New York, New York 10017 (212) 832-1550
(Address, including Zip Code, and Telephone Number, including Area Code, of
Registrant's Principal Executive Offices)
--------------------
JEFFREY S. SILVERMAN
Ply Gem Industries, Inc.
777 Third Avenue, New York, New York 10017 (212) 832-1550
(Name, Address, including Zip Code, and Telephone Number, including Area Code,
of Agent for Service)
Copies to:
ELIHU H. MODLIN, ESQ. PETER S. KOLEVZON, ESQ.
EAB Plaza, Uniondale, New York 11556 Kramer, Levin, Naftalis,
(516) 794-4600 Nessen, Kamin & Frankel
919 Third Avenue
New York,New York 10022
(212) 715-9100
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.
--------------------
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 other than securities offered only in connection with
dividend or interest reimbursement plans, check the following box.
[ X ]
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Proposed maximum
Title of each maximum aggregate Amount of
class of securities Amount to be offering price offering registration
to be registered registered per share(1) price(1) fee
------------------- ---------- ------------ -------- ------------
<S> <C> <C> <C> <C>
Common Stock, $.25 par value 2,753,500 Shares (2) $25.625 $70,558,437.50 $24,331.67
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
in accordance with Rule 457(c) under the Securities Act of 1933, as
amended, based on the average of the high and low prices for the
shares reported on the American Stock Exchange on February 22, 1994.
(2) Represents the maximum number of shares of common stock issuable upon
conversion of $50 million aggregate principal amount of the
Registrant's Convertible Senior Subordinated Discount Debentures due
2008 outstanding at the close of business on February 22, 1994.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE> 2
2,753,500 SHARES
PLY GEM INDUSTRIES, INC.
COMMON STOCK
-----------------------
On February 23, 1994, Ply Gem Industries, Inc. ("Ply Gem" or the
"Company") called for redemption on March 25, 1994 (the "Redemption Date") all
of its Convertible Senior Subordinated Discount Debentures Due 2008 (the
"Debentures"), at a redemption price of $1,000 for each $1,000 principal amount
of Debentures, plus accrued interest of $48.33 per $1,000 principal amount of
Debentures from October 1, 1993 to the Redemption Date, for a total amount
payable of $1,048.33 for each $1,000 principal amount of Debentures (the
"Redemption Price").
The Debentures are convertible into shares of the Company's
common stock, par value $0.25 per share (the "Common Stock"), at a conversion
price of $18.16 per share, or 55.070 shares for each $1,000 principal amount of
Debentures. Cash will be paid for fractional shares of Common Stock, and no
payment or adjustment will be made for interest accrued on Debentures
surrendered for conversion or for dividends or distributions paid to holders of
Common Stock as of a record date prior to the Conversion Expiration Date (as
defined below). The conversion right expires at 5:00 p.m., New York Time, on
March 23, 1994 (the "Conversion Expiration Date"), which is the second business
day prior to the Redemption Date. From and after the Redemption Date, holders
of the Debentures ("Holders") shall be entitled only to the Redemption Price
and interest shall cease to accrue.
The Common Stock is listed on the American Stock Exchange. On
February 22, 1994, the closing price of the Company's Common Stock on the
American Stock Exchange was $25.50 per share.
The Company has made arrangements with PaineWebber Incorporated
(the "Purchaser") pursuant to which the Purchaser has agreed, subject to
certain conditions, to acquire from the Company all of the shares of Common
Stock that otherwise would have been issuable upon conversion of those
Debentures that are either (i) duly surrendered for redemption or (ii) not duly
surrendered for conversion by the Conversion Expiration Date or for redemption
by the Redemption Date. The purchase price for such shares will be an amount
equal to the aggregate Redemption Price of such Debentures. The proceeds from
the sale will be used by the Company to pay the aggregate Redemption Price of
such Debentures. In addition, the Purchaser may purchase Debentures in the
open market or otherwise on or prior to the Conversion Expiration Date and has
agreed to convert into Common Stock all the Debentures which it owns on or
prior to the Conversion Expiration Date. See "Standby Arrangements" for a
description of the Purchaser's compensation arrangements with the Company. The
Purchaser has not been retained with respect to the redemption of the
Debentures or the issuance of Common Stock to Holders who elect to surrender
their Debentures for conversion and will receive no remuneration in connection
therewith. The Purchaser is an underwriter only with respect to the Common
Stock acquired by it.
Prior to and after the Redemption Date, the Purchaser may offer
to the public shares of Common Stock, including shares acquired through
conversion of Debentures purchased by the Purchaser as described above, at
prices set by it from time to time and to dealers at such prices less a selling
concession to be determined by the Purchaser. Prior to the Redemption Date, it
is intended that such prices will not be increased more frequently than once in
any day and will not exceed the greater of the last sale or current asked price
of the Common Stock on the American Stock Exchange, plus applicable dealers'
commissions. Sales of Common Stock by the Purchaser may be made on the
American Stock Exchange, in block trades, in
<PAGE> 3
the over-the-counter market, in privately negotiated transactions or
otherwise, from time to time. In effecting such sales, the Purchaser may
realize profits or incur losses independent of the compensation referred to
under "Standby Arrangements." Any Common Stock so offered by the Purchaser
will be subject to prior sale, to receipt and acceptance by it and to the
approval of certain legal matters by legal counsel. The Purchaser reserves
the right to reject any order in whole or in part and to withdraw, cancel or
modify the offer without notice. The Company has agreed to indemnify the
Purchaser against, and to provide contribution with respect to, certain
liabilities, including liabilities arising under the Securities Act of 1933,
as amended. See "Standby Arrangements." The Purchaser has agreed to remit to
the Company 50% of any net profits realized by the Purchaser on sales of Common
Stock purchased from the Company or acquired upon conversion of Debentures
pursuant to the standby arrangements described under "Standby Arrangements."
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
PAINEWEBBER INCORPORATED
---------------
THE DATE OF THIS PROSPECTUS IS FEBRUARY 23, 1994
<PAGE> 4
IN CONNECTION WITH THIS OFFERING, THE PURCHASER MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
DEBENTURES OR THE COMMON STOCK OR BOTH AT LEVELS ABOVE THOSE WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE
AMERICAN STOCK EXCHANGE, THE OVER-THE-COUNTER MARKET, OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
Ply Gem is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act") and, in accordance
therewith, files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy and information statements and other information filed by
the Company can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at Seven
World Trade Center, 13th Floor, New York, New York 10048, and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60621-2511.
Copies of such material can also be obtained at prescribed rates from the
Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. Reports, proxy statements and other
information concerning the Company may also be inspected at the offices of the
American Stock Exchange, 86 Trinity Place, New York, New York 10006.
The Company has filed with the Commission, in Washington, D.C., a
Registration Statement on Form S-3 (herein, together with all amendments and
exhibits, the "Registration Statement") under the Securities Act of 1933, as
amended, with respect to the securities offered hereby. This Prospectus does
not contain all of the information included in the Registration Statement,
certain items of which are omitted in accordance with the rules and regulations
of the Commission. For further information about the Company and the
securities offered hereby, reference is made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission are incorporated in and made a part of this Prospectus:
1. Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, as amended by Form 8, dated April 27,
1993;
2. Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1993, June 30, 1993 and September 30, 1993; and
3. Current Report on Form 8-K, dated December 15, 1993.
All documents subsequently filed by the Company pursuant to
Section 13, 14 or 15(d) of the 1934 Act subsequent to the date of this
Prospectus and prior to the termination of the offering covered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
2.
<PAGE> 5
The Company will provide without charge to each person to whom a
copy of this Prospectus is delivered, upon the written or oral request of any
such person, a copy of any or all of the documents which have been or may be
incorporated by reference (other than exhibits to those documents which are not
specifically incorporated by reference) in the Registration Statement of which
this Prospectus is a part. Requests for such copies may be directed to Ms.
Diane Cady, Vice President-Investor Relations, Ply Gem Industries, Inc., 777
Third Avenue, New York, New York 10017. The telephone number is (212)
832-1550.
THE COMPANY
Ply Gem is a national manufacturer and distributor of a wide
range of specialty products for the home improvement industry. The Company
believes that it is among the nation's largest manufacturers of wood windows,
vinyl siding and accessories, and vinyl windows, and one of the major suppliers
of specialty wood and other related products. Each of the Company's ten wholly
owned operating subsidiaries and its one division have achieved a leading
market position within their respective niches of the home improvement
industry.
The home improvement industry includes products designed for all
remodeling, repair and alteration of residential structures whether the work is
performed by the homeowner (the "do-it-yourselfer" or "D-I-Y"), or by a
professional contractor. Home improvement products, which in some cases are
also used in new construction applications, are sold either through retailers
or specialty wholesale distributors that in turn sell to retailers, contractors
and builders. The success of the recently introduced warehouse home center
format, such as that utilized by The Home Depot, Inc., continues to change the
traditional way in which home improvement products are sold.
The Company's primary objective is to become the supplier of
choice to the home improvement industry for high margin specialty products.
The Company believes that it is uniquely positioned to provide products and
services to the major home center retailers, which the Company believes is the
fastest growing segment of the home improvement industry.
The Company operates in four primary business groups: Windows,
Doors and Siding; Specialty Wood Products; Distribution; and Home Products.
Set forth below is a description of the Company's ten wholly owned operating
subsidiaries and Ply*Gem Manufacturing, its one division.
WINDOWS, DOORS AND SIDING
SNE Enterprises, Inc. is a major manufacturer of wood windows in
the United States, competing with companies such as Andersen Corporation,
Marvin Lumber & Cedar Company, Inc. and Pella Windows and Doors Division of
Rolscreen Co. It offers a wide range of custom and standard wood windows,
patio doors, skylights and bi-fold and interior doors.
Variform, Inc. is a producer of vinyl siding and a leading
supplier to major home center retailers. Its vinyl siding, soffits and
accessories are produced in a variety of patterns and colors, including
woodgrains.
Great Lakes Window, Inc. is a manufacturer of high quality,
energy efficient, maintenance-free vinyl replacement windows. Its products
include double hung, casement, sliding and awning windows, as well as hinged
and sliding patio doors.
Richwood Building Products, Inc. is a manufacturer of siding
accessories to the remodeling and new construction markets. Siding accessories
include blocks, which allow for the flush mounting of items like light fixtures
to the exterior of a home, and gable vents.
3.
<PAGE> 6
SPECIALTY WOOD PRODUCTS
Hoover Treated Wood Products, Inc. is a producer of
fire-retardant and pressure treated lumber and plywood for protection against
moisture and insect infestation.
Sagebrush Sales, Inc. is a manufacturer and distributor of
specialty lumber and building products serving the home improvement and new
construction markets in the Southwest.
Goldenberg Group, Inc. is a West Coast manufacturer and
distributor of furniture components, laminates and board products to furniture
manufacturers and other original equipment manufacturers, building material
retailers and wholesalers.
Ply*Gem Manufacturing is a manufacturer and distributor of
decorative wall coverings. Its products include decorator paneling, planking,
tileboard and ceramic tile for the home improvement market.
Continental Wood Preservers, Inc. is a Midwestern manufacturer of
a full line of treated wood products for home improvement retailers and
lumberyards in the Midwest.
DISTRIBUTION
Allied Plywood Corporation is a national distributor of a broad
range of high end specialty wood and wood related products, including hardwood
plywood, melamine and other laminated board products, hardwood lumber, solid
surface materials and cabinet hardware. It is also the nation's leading
importer of Russian wood products.
HOME PRODUCTS
Studley Products, Inc. is a manufacturer of disposable and cloth
vacuum cleaner bags. In addition, it sells related floor care products, grass
catcher bags for the lawn care market and filtration products for use in
pollution control applications.
The Company, a Delaware corporation, has its principal executive
offices at 777 Third Avenue, New York, New York 10017. Its telephone number
is (212) 832-1550. Unless the context requires otherwise, all references to
the Company or Ply Gem include Ply Gem and its subsidiaries on a consolidated
basis.
RECENT DEVELOPMENTS
On February 17, 1994, the Company reported unaudited operating
results for the year ended December 31, 1993. These results, together with
audited operating results for the year ended December 31, 1992, are summarized
below.
<TABLE>
<CAPTION>
Year Ended
December 31,
--------------------
1993 1992
---- ----
(In thousands, except per share data)
<S> <C> <C>
Net sales $722,660 $623,182
Income from operations 31,577 27,351
Net income 9,650 6,306
Earnings per share 0.75 0.56
</TABLE>
4.
<PAGE> 7
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented in the
following table for, and as of the end of, each of the years ended December 31,
w1988 through 1992 is derived from and should be read in conjunction with the
Company's Consolidated Financial Statements and Notes thereto incorporated by
reference herein. The data as of and for the nine month periods ended
September 30, 1992 and 1993 have been derived from unaudited financial
information included in the Company's quarterly report on Form 10-Q for the
quarter ended September 30, 1993 incorporated herein by reference which has
been prepared on the same basis as the audited financial statements and, in the
opinion of management, reflect all adjustments, which are of a normal and
recurring nature and which are necessary for a fair presentation of the results
for the unaudited interim periods. Results of interim periods are not
necessarily indicative of results to be expected for the full year.
<TABLE>
<CAPTION>
Nine Months
Ended September 30, Year Ended December 31,
----------------------------- ----------------------------------------------------
1993 1992 1992 1991 1990 1989 1988
------------- ------------- -------- -------- -------- -------- --------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME
STATEMENT
Net sales $ 539,735 $ 471,383 $623,182 $561,550 $545,511 $506,845 $383,699
Income from operations 23,766 19,757 27,351 25,779 25,955 35,985 27,485
Income before income
taxes 12,154 8,344 11,374 7,759 5,522 16,882 21,152
Net income 6,661 4,506 6,306 4,039 3,175 10,100 15,850
------------- ------------- -------- -------- -------- -------- --------
------------- ------------- -------- -------- -------- -------- --------
Average fully diluted
shares outstanding 14,967 14,116 14,554 13,448 13,132 14,014 11,991
Per share data:
Net income $.55 $.40 $.56 $.39 $.31 $.90 $1.36
Dividends .09 .09 .12 .12 .12 .12 .12
Book value 11.53 10.94 11.05 10.59 10.56 10.26 9.36
</TABLE>
<TABLE>
<CAPTION>
As of September 30, As of December 31,
----------------------------- ----------------------------------------------------
1993 1992 1992 1991 1990 1989 1988
------------- ------------- -------- -------- -------- -------- --------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET
Working capital $ 124,358 $ 111,182 $ 93,701 $ 93,715 $113,816 $120,792 $113,503
Total assets 355,304 326,378 313,997 281,124 329,975 303,349 224,517
Long-term debt 84,080 72,437 62,451 57,996 106,186 101,931 43,766
Capital leases 7,179 7,078 7,215 105 236 397 535
Convertible subordinated
debentures 50,000 50,000 50,000 50,000 46,489 42,167 38,243
Capital expenditures 16,040 7,863 17,138 9,719 27,347 12,124 7,359
Depreciation and
amortization 9,494 8,888 11,830 12,166 12,139 10,970 7,392
Stockholders' equity 124,934 115,502 118,439 111,349 107,620 107,868 100,183
</TABLE>
5.
<PAGE> 8
CAPITALIZATION
The following table sets forth the unaudited short-term debt and
consolidated capitalization of the Company at December 31, 1993, and as
adjusted to give effect to the assumed conversion of all the outstanding
Debentures into shares of Common Stock and the expenses payable by the Company
in connection therewith. The following table should be read in conjunction
with the financial information set forth elsewhere in this Prospectus and the
Consolidated Financial Statements of the Company contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 1992 and the
Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1993,
June 30, 1993 and September 30, 1993 which are incorporated herein by
reference. See "Selected Consolidated Financial Data" and "Incorporation of
Certain Documents by Reference."
<TABLE>
<CAPTION>
December 31, 1993
----------------------------
Actual As Adjusted
------- -----------
(in thousands)
<S> <C> <C>
Short-term debt (including
current maturities of
long-term debt) $ 17,611 $ 17,611
Long-term debt (less current maturities):
Bank loans 72,061 72,061
Capital leases 7,166 7,166
Industrial development revenue bonds 8,374 8,374
Convertible Senior Subordinated
Discount Debentures due 2008 50,000 --
Other 57 57
----------- -----------
Total long-term debt 137,658 87,658
----------- -----------
Stockholders' equity:
Preferred Stock, $.01 par value:
5,000,000 shares authorized; none issued -- --
Common Stock, $.25 par value:
30,000,000 shares authorized;
11,872,509 issued; 14,626,009,
as adjusted 2,968 3,656
Additional paid-in capital (1) 64,008 111,863
Retained earnings 72,602 72,602
Less:
Unamortized restricted stock 1,271 1,271
Treasury stock-at cost
(910,073 shares) 9,362 9,362
-------- --------
Total stockholders' equity 128,945 177,488
-------- --------
Total capitalization $266,603 $265,146
======== ========
</TABLE>
- -----------------
(1) Additional paid-in capital, as adjusted, includes the estimated expenses
of this transaction, net of interest saved.
6.
<PAGE> 9
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Company's Common Stock is listed on the American Stock
Exchange and is traded under the symbol PGI. The following table sets forth
for the periods indicated, the low and high sales prices of the Common Stock as
reported on the American Stock Exchange:
<TABLE>
<CAPTION>
Sales Price
-----------
Low High
--- ----
<S> <C> <C>
1992
First Quarter . . . . . . . . . $ 8.75 $12.00
Second Quarter . . . . . . . . 9.75 14.75
Third Quarter . . . . . . . . 9.75 11.625
Fourth Quarter . . . . . . . . 9.375 13.125
1993
First Quarter . . . . . . . . . $11.125 $13.625
Second Quarter . . . . . . . . 9.875 12.00
Third Quarter . . . . . . . . 10.125 13.50
Fourth Quarter . . . . . . . . 13.375 18.375
1994
First Quarter . . . . . . . . $17.25 $25.875
(through February 22, 1994).
</TABLE>
The last reported sales price of the Common Stock on the American
Stock Exchange on February 22, 1994 was $25.50. As of February 22, 1994, the
Company had 11,163,946 outstanding shares of Common Stock held by approximately
2,530 stockholders of record.
The Company has paid cash dividends on its Common Stock since
1976 and presently pays quarterly dividends at the annual rate of $.12 per
share.
USE OF PROCEEDS
The proceeds, if any, received by the Company from the sale of
Common Stock to the Purchaser pursuant to the standby arrangements described
herein under "Standby Arrangements" will be used to pay the Redemption Price of
Debentures not duly tendered for conversion. Any other amounts received by the
Company from the Purchaser pursuant to the profit-sharing arrangement described
herein will be used for general corporate purposes. The amount of the
proceeds, if any, to be received by the Company from the Purchaser is not
determinable at this time, as neither the number of shares, if any, that will
be sold to the Purchaser nor the amount of profit, if any, that the Purchaser
will realize upon resale of such shares can be determined at this time. The
Company will not receive any proceeds from the issuance of Common Stock upon
conversion of Debentures.
7.
<PAGE> 10
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of
30,000,000 shares of Common Stock, $.25 par value per share, and 5,000,000
shares of preferred stock, $.01 par value per share (the Preferred Stock").
COMMON STOCK
At February 22, 1994, there were 11,163,946 outstanding shares of
Common Stock held by approximately 2,530 holders of record. All issued and
outstanding shares of Common Stock are validly issued, fully paid and
non-assessable and the shares of Common Stock that may be purchased by the
Purchaser pursuant to the standby arrangements described herein, or that may be
issued upon conversion of Debentures purchased by the Purchaser, will be, when
issued in accordance with such arrangements or upon such conversion, validly
issued, fully paid and non-assessable. Each holder of Common Stock on the
applicable record date is entitled to share ratably in such dividends, if any,
as may be declared from time to time by the Board of Directors out of funds
legally available therefor. Each holder of shares of Common Stock is entitled
to one vote per share on all matters to be voted upon by such holders and is
not entitled to cumulative voting for the election of directors. Thus, the
holders of a majority of the shares of Common Stock outstanding may elect all
of the directors. The holders of Common Stock do not have pre-emptive rights
and, upon liquidation, dissolution or winding up of the Company, are entitled
to share ratably in all assets of the Company legally available for
distribution to the holders of its Common Stock, after payment of all debts and
other liabilities and subject to the prior rights of any holders of Preferred
Stock then outstanding. The rights, preferences and privileges of holders of
Common Stock are subject to the rights of the holders of shares of any series
of Preferred Stock which the Company may issue in the future.
PREFERRED STOCK
The Certificate of Incorporation authorizes the Board of
Directors, without stockholder approval, to issue Preferred Stock, from time to
time, in one or more series, with such voting powers, designations,
preferences, and relative, participating, optional, conversion or other special
rights, including, without limitation, liquidation preferences and redemption
rights and such qualifications, limitations and restrictions, as the Board of
Directors may, in its sole discretion, determine.
The issuance of Preferred Stock, while providing flexibility in
connection with possible acquisitions and other corporate purposes, could,
among other things, adversely affect the voting power of holders of Common
Stock and, under certain circumstances, make it more difficult for a third
party to gain control of the Company.
LIMITATION ON LIABILITY OF DIRECTORS AND OFFICERS; INDEMNIFICATION MATTERS
The Company's Certificate of Incorporation provides that a
director of the Company will not be personally liable to the Company or its
stockholders for monetary damages for breach of such director's fiduciary duty,
except for liability (i) for any breach of the director's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law (the "DGCL"), or (iv)
for any transaction from which the director derived an improper personal
benefit. The provision has no effect on any non-monetary remedies that may be
available to the Company or its stockholders, nor does it relieve the Company
or its directors from compliance with federal or state securities laws. The
Certificate of Incorporation further provides that the Company shall indemnify
and hold harmless, to the fullest extent authorized by the DGCL, any person who
was or is a party or is threatened to be made a party to any action, suit, or
proceeding, whether civil, criminal, administrative or investigative (each, a
"Proceeding"), by reason of the fact that he or she or a person for whom he or
she is the legal representative, is or was a director or officer of the
Company, or is or was serving at the request of the Company as a director or
officer of another corporation, partnership, joint venture, trust or other
entity, against all expenses, liability and loss (including
8.
<PAGE> 11
attorney's fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such
persons in connection therewith; provided, however, that the Company shall
indemnify any such person seeking indemnity in connection with a Proceeding (or
part thereof) initiated by such person only if such Proceeding (or part
thereof) was authorized by the Board of Directors.
DELAWARE LAW AND LIMITATIONS ON CHANGES IN CONTROL
Generally, Section 203 of the DGCL prohibits a publicly-held
Delaware corporation from engaging in a "business combination" (as defined in
Section 203) with an "interested stockholder" (defined in Section 203
generally, as a person owning 15% or more of a corporation's outstanding voting
stock) for three years following the date such person became an interested
stockholder unless (i) before such person became an interested stockholder, the
board of directors of the corporation approved either the transaction resulting
in such person becoming an interested stockholder or the business combination;
(ii) upon consummation of the transaction that resulted in the person becoming
an interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (excluding stock owned by directors who are also officers of the
corporation and by employee stock plans that do not provide employees with the
right to determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer); or (iii) following the date on
which such person became an interested stockholder the business combination is
approved by the board of directors of the corporation and authorized at an
annual or special meeting of stockholders, and not by written consent, by the
affirmative vote of the holders of at least 66 2/3% of the outstanding voting
stock of the corporation not owned by the interested stockholder.
REGISTRAR AND TRANSFER AGENT
The Registrar and Transfer Agent for the Common Stock is Harris
Trust Company of New York.
STANDBY ARRANGEMENTS
The Company and the Purchaser have entered into a standby
purchase agreement (the "Standby Agreement"), pursuant to which the Purchaser
has agreed to purchase from the Company, subject to certain conditions, all of
the shares of Common Stock that otherwise would have been issuable upon
conversion of those Debentures that are either (i) duly surrendered for
redemption or (ii) not duly surrendered for conversion by the Conversion
Expiration Date or for redemption by the Redemption Date. The purchase price
for such shares will be an amount equal to the aggregate Redemption Price for
such Debentures.
The Purchaser may also acquire Debentures for its own account in
the open market or otherwise on or prior to the Conversion Expiration Date in
such amounts and at such prices as the Purchaser deems advisable. The
Purchaser has agreed to surrender for conversion into Common Stock any
Debentures beneficially owned by it on or before the Conversion Expiration
Date.
Prior to and after the Redemption Date, the Purchaser may offer
to the public shares of Common Stock, including shares acquired through
conversion of Debentures purchased by the Purchaser as described above, at
prices set by it from time to time and to dealers at such prices less a selling
concession to be determined by the Purchaser. Prior to the Redemption Date, it
is intended that such prices will not be increased more frequently than once in
any day and will not exceed the greater of the last sale or current asked price
of the Common Stock on the American Stock Exchange, plus applicable dealers'
commissions. Sales of Common Stock by the Purchaser may be made on the
American Stock Exchange, in block trades, in the over-the-counter market, in
privately negotiated transactions or otherwise, from time to time. In
effecting
9.
<PAGE> 12
such sales, the Purchaser may realize profits or incur losses independent of
the compensation discribed below. Any Common Stock so offered by the Purchaser
will be subject to prior sale, to receipt and acceptance by it and to the
approval of certain legal matters by legal counsel. The Purchaser reserves the
right to reject any order in whole or in part and to withdraw, cancel or modify
the offer without notice.
Up to 2,753,500 shares of Common Stock are subject to purchase
under the Standby Agreement, which amount represents the maximum number of
shares of Common Stock issuable on conversion of the $50,000,000 principal
amount of Debentures outstanding as of February 22, 1994.
Pursuant to the terms of the Standby Agreement and in
consideration of the Purchaser's obligations thereunder, the Company has agreed
to pay to the Purchaser the sum of $375,000 plus an additional (i) $.90 per
share for each share in excess of 137,675 shares up to 523,165 shares, and (ii)
$.95 per share for each share in excess of 523,165 shares, purchased by the
Purchaser pursuant to the Standby Agreement or acquired by the Purchaser upon
conversion of Debentures purchased by the Purchaser subsequent to the date
hereof. The Purchaser has agreed to remit to the Company 50% of the excess of
the aggregate proceeds received upon the resale by the Purchaser of such shares
of Common Stock (net of selling concessions, commissions, transfer taxes and
other direct, out-of-pocket selling expenses), if any, over the aggregate
purchase price paid by the Purchaser for such shares. The Company has agreed
to reimburse the Purchaser for its out-of-pocket expenses not in excess of
$75,000 in connection with the transaction contemplated by the Standby
Agreement and to indemnify the Purchaser against, and to provide contribution
with respect to, certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
Pursuant to the Standby Agreement, the Company has agreed, with
certain exceptions, that, for a period of 90 days from the date hereof, without
the prior written consent of the Purchaser, it will not issue or sell, or enter
into any agreement, arrangement or understanding of any kind, or take any
action, for the issuance or sale of, or otherwise dispose of any capital stock
of the Company (or securities convertible into, exercisable or exchangeable for
capital stock). In addition, the Company has agreed to cause its directors to
agree not to take any of the actions described in the immediately preceding
sentence.
LEGAL MATTERS
The validity of the shares of Common Stock being offered hereby
will be passed upon for the Company by Messrs. Elihu H. Modlin and Charles M.
Modlin, Uniondale, New York. Elihu H. Modlin is a director of the Company.
Certain legal matters in connection with this offering will be passed upon for
the Purchaser by Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, New York,
New York.
EXPERTS
The consolidated financial statements of the Company and related
financial statement schedules included or incorporated in this Prospectus and
the Registration Statement by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1992, as amended on April 27, 1993,
have been audited by Grant Thornton, independent certified public accountants,
as stated in their reports, which are incorporated herein by reference, and
have been so incorporated in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.
10.
<PAGE> 13
No person has been authorized to give any
information or make any representations other
than those contained in this Prospectus and, if
given or made, such other information or
representations must not be relied upon as having
been authorized by the Company or the Purchaser.
Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any
circumstances, create any implication that there
has been no change in the affairs of the Company
since the date hereof or that the information
contained herein is correct as of any time
subsequent to its date. This Prospectus does not
constitute an offer to sell or a solicitation of
an offer to buy any securities other than the
securities to which it relates, or an offer to
sell or solicitation of an offer to buy such
securities in any circumstances in which such
offer or a solicitation is unlawful.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information 2
Incorporation of Certain
Documents by Reference 2
The Company 3
Recent Developments 4
Selected Consolidated
Financial Data 5
Capitalization 6
Price Range of Common Stock
and Dividend Policy 7
Use of Proceeds 7
Description of Capital Stock 8
Standby Arrangements 9
Legal Matters 10
Experts 10
</TABLE>
2,753,500 Shares
PLY GEM INDUSTRIES, INC.
Common Stock
-----------------
PROSPECTUS
----------
PaineWebber Incorporated
------------------
February 23, 1994
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a statement of expenses payable in connection
with the distribution of the securities being registered (other than
underwriting discounts and commissions), substantially all of which will be
borne by the Company. All amounts are estimated except for the SEC
registration fee.
<TABLE>
<S> <C>
SEC registration fee $24,332
Fees and expenses of Trustee 10,000
Blue sky fees and expenses 7,500
Accounting fees and expenses 50,000
Legal fees and expenses 150,000
Printing and engraving expenses 50,000
Transfer Agent and Registrar fees 50,000
Miscellaneous expenses 8,168
-------
Total 350,000
</TABLE>
Item 15. Indemnification of Directors and Officers.
Except as herein set forth, there is no charter provision, by-law,
contract, arrangement or statute under which any director or officer of the
Registrant is insured or indemnified in any manner against any liability which
he may incur in his capacity as such.
Section 145 of the Delaware General Corporation Law provides as
follows:
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
INSURANCE. (a) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys'
II-1
<PAGE> 15
fees) actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in subsections (a) and
(b) of this section. Such determination shall be made (1) by the board of
directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with respect to
the resulting or
II-2
<PAGE> 16
surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the corporation"
shall include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to in
this section.
(j) The indemnification and advancement of expenses provided by,
or granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
ARTlCLES VII and VIII of the Certificate of Incorporation of the
Company provide as follows:
ARTICLE VII:
(a) Each person who was or is made a party or is threatened to be
made a party to or is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative ("proceeding"), by reason of
the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of this corporation or is or
was serving at the request of the corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director or officer or in any other capacity while serving as a director or
officer, shall be indemnified and held harmless by the corporation to the
fullest extent authorized by the General Corporation Law of the State of
Delaware, as the same exists or may hereafter be amended, (but, in the case of
any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the corporation to provide prior to such amendment) against all expenses,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such persons in connection therewith; provided,
however, that the corporation shall indemnify any such person seeking indemnity
in connection with a proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) was authorized by the board of directors
of the corporation. Such right shall be a contract right and shall include the
right to be paid by the corporation for expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however, that the
payment of such expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of such proceeding, shall be made only upon delivery
to the corporation of an undertaking, by or on behalf of such director or
officer, to repay all amounts so advanced if it should be determined ultimately
that such director or officer is not entitled to be indemnified under this
Article VII or otherwise. The corporation may, by action of the board of
directors, provide indemnification to employees and agents of the corporation
with a lesser or the same scope and effect as the foregoing indemnification of
directors and officers.
(b) If a claim under Paragraph (a) of this Article VII is not paid
in full by the corporation within ninety days after a written claim has been
received by the corporation, the claimant may at any time thereafter bring suit
against the corporation to recover the unpaid amount of the claim and, if
successful in whole or in
II-3
<PAGE> 17
part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for expenses incurred
in defending any proceeding in advance of its final disposition where the
required undertaking has been tendered to the corporation) that the claimant
has not met the standards of conduct which make it permissible under the
General Corporation Law of the State of Delaware for the corporation to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the corporation. Neither the failure of the corporation
(including its board of directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in said
law, nor an actual determination by the corporation (including its board of
directors, independent legal counsel, or its stockholders) that the claimant
had not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant had not met the applicable
standard of conduct.
(c) The rights conferred on any person by Paragraphs (a) and (b)
of this Article shall not be exclusive of any other right which such person may
have or hereafter acquire under any statute, provision of this Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
(d) The corporation may maintain insurance, at its expense, to
protect itself and any such director or officer of the corporation or of
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the corporation
would have the power to indemnify such person against such expense, liability
or loss under the General Corporation Law of the State of Delaware.
ARTICLE VIII:
A director of this corporation shall not be personally liable to
the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the General Corporation
Law of the State of Delaware, or (iv) for any transaction from which the
director derived an improper personal benefit. If the Delaware General
Corporation Law is amended after approval by the stockholders of this Article
VIII to authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended from time to time.
Any appeal or modification of this Article VIII shall not increase
the personal liability of any director of this corporation for any act or
occurence taking place prior to such repeal or modification, or otherwise
adversely affect any right or protection of a director of the corporation
existing at the time of such repeal or modification.
The provisions of this Article VIII shall not be deemed to limit
or preclude indemnification of a director by the corporation for any liability
of a director which has not been eliminated by the provisions of this Article
VIII."
ARTICLE VIII of the Amended and Restated By-Laws of the Company
provides as follows:
SECTION 1. Right to Indemnification. The Corporation shall to
the fullest extent permitted by applicable law as then in effect indemnify any
person (the "Indemnitee") who was or is involved in any manner (including,
without limitation, as a party or a witness), or is threatened to be made so
involved, in any threatened, pending or completed investigation, claim, action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including. without limitation, any action, suit or proceeding by or in the
right of
II-4
<PAGE> 18
the corporation to procure a judgment in its favor) (a "Proceeding")
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such Proceeding. Such indemnification shall
be a contract right and shall include the right to receive payment in advance
of any expenses incurred by the Indemnitee in connection with such Proceeding,
consistent with the provisions of applicable law as then in effect.
SECTION 2. Contracts and Funding. The Corporation may enter into
contracts with any director, officer, employee or agent of the Corporation in
futherance of the provisions of this Article VIII and may create a trust fund,
grant a security interest or use other means (including, without limitation, a
letter of credit) to ensure the payment of such amounts as may be necessary to
effect indemnification as provided in this Article VIII.
SECTION 3. Employee Benefit Plans. For purposes of this Article
VIII, references to "other enterprises" shall include employee benefits plans;
references to "fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the request
of the Corporation" shall include any service as a director, officer, employee,
or agent, of the Corporation which imposes duties on, or involves services by,
such director, officer, employee, or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and a person who acted in good faith
and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner not opposed to the best interests of a corporation.
SECTION 4. Indemnification Not Exclusive Right. The right of
indemnification and advancement of expenses provided in this Article VIII shall
not be exclusive of any other rights to which a person seeking indemnification
may otherwise be entitled, under any statute, by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. The provisions of this Article VIII shall inure to the benefit of the
heirs and legal representatives of any person entitled to indemnity under this
Article VIII and shall be applicable to Proceedings commenced or continuing
after the adoption of this Article VIII, whether arising from acts or omissions
occurring before or after such adoption.
SECTION 5. Advancement of Expenses; Procedures. In futherance,
but not in limitation, of the foregoing provisions, the following procedures
and remedies shall apply with respect to advancement of expenses and the right
to indemnification under this Article VIII:
(a) Advancement of Expenses. All reasonable expenses incurred by
or on behalf of the Indemnitee in connection with any Proceeding shall be
advanced to the Indemnitee by the Corporation within 20 days after the receipt
by the Corporation of a statement or statements from the Indemnitee requesting
such advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall reasonably
evidence the expenses incurred by the Indemnitee and, if required by law at the
time of such advance, shall include or be accompanied by an undertaking by or
on behalf of the Indemnitee to repay the amounts advanced if it should
ultimately be determined that the Indemnitee is not entitled to be indemnified
against such expenses.
(b) Written Request for lndemnification. To obtain
indemnification under this Article VIII, an Indemnitee shall submit to the
Secretary of the Corporation a written request, including such documentation
and information as is reasonably available to the Indemnitee and reasonably
necessary to determine whether and to what extent the Indemnitee is entitled to
indemnification (the "Supporting Documentation"). The determination of the
Indemnitee's entitlement to indemnification shall be made within a reasonable
time after
II-5
<PAGE> 19
receipt by the Corporation of the written request for
indemnification together with the Supporting Documentation. The Secretary of
the Corporation shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that the Indemnitee
has requested indemnification.
(c) Procedure for Determination. The Indemnitee's entitlement to
indemnification under this Article VIII shall be determined (i) by the Board of
Directors by a majority vote of a quorum (as defined in Article II of these
By-Laws) consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or (iii) by the stockholders, but only if a majority of the
disinterested directors, if they constitute a quorum of the Board of Directors,
presents the issue of entitlement to indemnification to the stockholders for
their determination."
The Company has purchased Directors' and Officers' Liability
Insurance. Subject to the policy conditions, the insurance provides coverage
for amounts payable by the Company to its directors and officers pursuant to
the Registrant's Certificate of Incorporation and By- Laws.
Pursuant to Sections 6 and 7 of the Standby Agreement, a form of
which is filed as Exhibit 1.1 hereto, the Purchaser has agreed to indemnify the
Company, its directors and certain of its officers against, and to provide
contribution with respect to, certain civil liabilities under the Securities
Act of 1933.
Item 16. Exhibits.
1.1 Form of Standby Agreement between the Company and the
Purchaser.
4.1 Form of stock certificate evidencing Common Stock of the
Company.
5.1 Opinion and consent of Messrs. Elihu H. Modlin and Charles
M. Modlin.
23.1 Consent of Grant Thornton.
23.2 Consent of Messrs. Elihu H. Modlin and Charles M. Modlin
(included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-8 hereof).
Item 17. Undertakings.
The undersigned Registrant hereby undertakes that, for purpose of
determining any liability under the Securities Act of 1933, as amended (the
"Act") each filing of the Registrant's annual report pursuant to section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (and, where applicable each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The Registrant hereby further undertakes:
(i) To file, during any period in which offers or
sales are being made, a post-effective amendment to this registration statement
(other than as provided in the proviso and instructions of Item 512(a) of
Regulation S-K) (a) to include any prospectus required by Section 10(a)(3) of
the Act; (b) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;
and (c) to include any material information with respect to the plan of
distribution set previously disclosed in the registration statement or any
material change to such information in the registration statement;
II-6
<PAGE> 20
(ii) That, for the purpose of determining any
liability under the Act, each post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(iii) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, described under Item 15 above
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-7
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of New York, State of New York, on February 23,
1994
PLY GEM INDUSTRIES, INC.
By: /s/ JEFFREY S. SILVERMAN
------------------------
Jeffrey S. Silverman
Chairman, Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Jeffrey S. Silverman and Herbert P.
Dooskin or any one of them with full authority to act without the other, his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, as each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, their or his
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/JEFFREY S. SILVERMAN
- ---------------------------- Chairman, Chief Executive February 23, 1994
Jeffrey S. Silverman Officer (Principal Executive
Officer) and Director
/s/HERBERT P. DOOSKIN
- --------------------------- Executive Vice President February 23, 1994
Herbert P. Dooskin and Director
/s/STANFORD ZEISEL
- --------------------------- Secretary and Treasurer February 23, 1994
Stanford Zeisel (Principal Financial Officer)
</TABLE>
II-8
<PAGE> 22
<TABLE>
<S> <C> <C>
/s/JEROME BAUM
- --------------------------- Controller February 23, 1994
Jerome Baum
/s/DAVID GOTTERER
- --------------------------- Director February 23, 1994
David Gotterer
/s/ELIHU H. MODLIN
- -------------------------- Director February 23, 1994
Elihu H. Modlin
</TABLE>
II-9
<PAGE> 23
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
------- -----------
1.1 Form of Standby Agreement between the Company and the
Purchaser.
4.1 Form of stock certificate evidencing Common Stock of the
Company.
5.1 Opinion and consent of Messrs. Elihu H. Modlin and Charles
M. Modlin.
23.1 Consent of Grant Thornton.
23.2 Consent of Messrs. Elihu H. Modlin and Charles M. Modlin
(included in Exhibit 5.1).
24.1 Power of Attorney (included on page II-8 hereof).
<PAGE> 1
PLY GEM INDUSTRIES, INC.
Convertible Senior Subordinated Discount Debentures
Due 2008
STANDBY AGREEMENT
February 23, 1994
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Ply Gem Industries, Inc. (the "Company") proposes to redeem on March 25, 1994
(the "Redemption Date"), all outstanding Convertible Senior Subordinated
Discount Debentures Due 2008 (the "Debentures"), at the redemption price of
$1,000.00, plus accrued interest to the Redemption Date of $48.33 per $1,000
principal amount of Debentures (such redemption price, including accrued
interest, is hereinafter referred as the "Redemption Price"). The Debentures
are convertible into shares of the Company's Common Stock, par value $.25 per
share (the "Common Stock"). The right to convert the Debentures into Common
Stock will terminate at the close of business on the date which is two business
days prior to the Redemption Date, March 23, 1994 (the "Conversion Expiration
Date").
In order to assure the availability of funds to redeem the Debentures, the
Company desires to make arrangements pursuant to which the shares (the "Standby
Shares") of its Common Stock otherwise issuable on the Redemption Date on
conversion of Debentures not surrendered for conversion by the close of
business on the Conversion Expiration Date will be, subject to the terms and
conditions hereof, purchased from the Company by PaineWebber Incorporated (the
"Purchaser") for resale to the public.
1. Sale and Purchase of the Standby Shares. Subject to the terms and
conditions hereof, the Company will sell to the Purchaser, and the Purchaser
will purchase from the Company, the Standby Shares for an aggregate price equal
to the aggregate Redemption Price of the Debentures not surrendered for
conversion by the close of business on the Conversion Expiration Date.
2. Payment and Delivery; Fees, etc.
(a) Payment and Delivery. Immediately after 5:00 p.m. New York City
time on the Conversion Expiration Date, the Company shall give or shall cause
Harris Trust Company of New York (the "Depositary Agent"), to give to the
Purchaser written notice of the aggregate
<PAGE> 2
principal amount of Debentures not theretofore duly surrendered for conversion
as described above and of the aggregate Redemption Price with
respect to such Debentures. At the opening of business on the date that is one
business day prior to the Redemption Date (that date and time being called the
"Delivery Date"), the Purchaser will deliver to the Company an amount
representing the purchase price payable under Section 1 for all Standby Shares
by certified or official bank check payable to the order of the Company in New
York Clearing House (next day) funds, and the Company will deliver to the
Purchaser a certificate registered in the Purchaser's name in marketable form
representing the Standby Shares.
At 10:00 a.m., New York City time, on the fifth business day following the
Delivery Date, or at such other time on such other date as may be agreed on by
the Company and the Purchaser (the "Exchange Date"), the Company will deliver
to the Purchaser, in exchange for the certificate referred to above,
certificates for the Standby Shares in definitive form, registered in such
names and in such denominations as the Purchaser requests at least two full
business days before the Exchange Date. Such certificates will be made
available to the Purchaser for checking and packaging, at a place in New York,
New York, as is designated by the Purchaser, at least one full business day
before the Exchange Date.
All deliveries of funds and stock certificates will take place at the
Purchaser's office at 1285 Avenue of the Americas, New York, New York.
(b) Resale Profits. The Company understands that the Purchaser intends to
resell the Standby Shares, as well as shares of Common Stock issued to the
Purchaser upon conversion of Debentures purchased by the Purchaser subsequent
to the date hereof (the "Conversion Shares"), from time to time at prices
prevailing in the open market and confirms that the Purchaser and dealers
selected by the Purchaser have been authorized by the Company to distribute the
Prospectus in connection with such resales. The Purchaser will remit to the
Company 50% of the excess of the total proceeds received on the sale of the
Standby Shares and the Conversion Shares over the total purchase price paid by
the Purchaser for such shares, after deducting from such proceeds of sale any
selling concessions, commissions, transfer taxes and other direct, out-of
pocket selling expenses. The Purchaser will provide the Company on each
trading day until the 10th business day after the Redemption Date a schedule of
data of sales on such day. On completion of the sale of such shares, the
Purchaser will furnish the Company a statement setting forth the total proceeds
received on the sale and the applicable selling concessions, commissions,
transfer taxes and other direct, out-of-pocket selling expenses. For purposes
of the foregoing determination, any shares not sold by or for the account of
the Purchaser before the close of business on the 10th business day after the
Redemption Date will be deemed to
-2-
<PAGE> 3
have been sold on such tenth business day for an amount equal to the last sale
price of the Common Stock on such day as reported on the American Stock
Exchange (or if no sales shall have occurred on such date, the average of the
closing bid and asked prices on such date). Payment of any amount due under
this paragraph will be made by the 12th business day after the Redemption Date
in same day funds. Otherwise, the Purchaser, in its discretion, may determine
the price or prices at which, and the time or times when, any Standby Shares
will be sold and in what manner.
(c) Commitment Fee. As compensation for the commitment of the Purchaser
under this Agreement, the Company will pay the Purchaser (i) on the date
hereof, $ 375,000 (the "Commitment Fee") and (ii) on the Delivery Date, an
additional amount (the "Take-up Fee") as follows: (A) $.90 per share for each
Standby Share and Conversion Share issued or issuable to the Purchaser in
excess of 137,675 shares, up to 523,165 shares, and (B) $.95 per share for each
Standby Share and Conversion Share issued or issuable to the Purchaser in
excess of 523,165 shares. The Commitment Fee shall be payable in same day
funds and the Take-up Fee shall be payable in next day funds.
(d) Open Market Transactions; Solicitations.
(1) The Company acknowledges that it is aware that the Purchaser may (but
will not be obligated to) purchase Debentures, in the open market or
otherwise, in such amounts and at such prices as the Purchaser deems
advisable. All Debentures so purchased will be converted into Common Stock.
Such Conversion Shares, when so acquired by the Purchaser may be sold at any
time or from time to time by the Purchaser pursuant to the Registration
Statement (as defined below). The Company further acknowledges that it is
aware that the Purchaser may purchase or sell shares of Common Stock for long
or short account on the American Stock Exchange or otherwise, at such times
and prices and on such terms as the Purchaser may deem advisable, and that
such purchases or sales, if commenced, may be discontinued at any time.
Nothing contained herein shall limit the Purchaser's right, in its
discretion, to determine the price or prices at which, or the time or times
when, any Debentures or shares of Common Stock may be purchased or sold by
the Purchaser, whether prior to or after the Redemption Date and whether for
long or short account.
(2) The Purchaser will surrender for conversion into Common Stock any
Debentures beneficially owned by it on or before the Conversion Expiration
Date.
(3) The Purchaser will not solicit conversions of Debentures into Common
Stock. The Company has not paid or given, and will not pay or give, directly
or indirectly, any
-3-
<PAGE> 4
commission or other remuneration for soliciting conversions of Debentures into
Common Stock.
3. Representations and Warranties of the Company. The Company represents and
warrants to the Purchaser as follows:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission"), pursuant to the Act and
the rules and regulations adopted by the Commission under the Act (the
"Rules"), a registration statement on such Form, including a form of final
prospectus, relating to the Standby Shares. Such registration statement,
including exhibits and financial schedules thereto, when it becomes effective
(the "Effective Date"), is called the "Registration Statement," and the
prospectus, as first filed with the Commission pursuant to Rule 424(b) or, if
no such filing is required, then the form of final prospectus included in the
Registration Statement, is called the "Prospectus." Any reference to the
Registration Statement or the Prospectus includes the documents incorporated by
reference pursuant to Item 12 of Form S-3 and filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or the Act on or before
the Effective Date of the Registration Statement or the date of the Prospectus,
as the case may be; and the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement or the Prospectus includes the filing of
any document under the Exchange Act after the Effective Date of the
Registration Statement or the date of the Prospectus and incorporated therein
by reference. For purposes of any representation made as of the date of this
Agreement, the terms "Registration Statement" or "Prospectus" shall be deemed
to refer to the registration statement or prospectus, as the case may be, as
first filed with the Commission. The Company understands that the Purchaser
proposes to resell the Standby Shares, as set forth in the Prospectus, as soon
as practicable after the Redemption Date. The Company confirms that the
Purchaser and dealers are authorized to distribute the Prospectus, as well as
any amendment or supplement thereto.
(b) On the date of this Agreement, on the Effective Date and when the
Prospectus is first filed with the Commission pursuant to Rule 424(b), if so
required, when any post-effective amendment to the Registration Statement
becomes effective, when any supplement to the Prospectus is filed with the
Commission and on the Delivery Date, the Registration Statement, the
Prospectus, as amended or supplemented, together with any such amendment or
supplement, will comply in all material respects with the requirements of the
Act and the Rules, and no part of the Registration Statement or the Prospectus,
as amended or supplemented, or any such amendment or supplement, will contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in light
-4-
<PAGE> 5
of the circumstances under which they were made) not misleading, except that
this representation does not apply to statements or omissions made in reliance
on and in conformity with written information furnished in writing to the
Company by the Purchaser expressly for inclusion in the Registration Statement,
Prospectus, amendment or supplement.
(c) At the close of business on February 22, 1994, there were $50 million
principal amount of Debentures outstanding. The redemption of the Debentures
on the Redemption Date has been duly authorized by all required action by the
Company. The Debentures will have been duly called for redemption on the
Redemption Date in accordance with the terms of the Indenture, dated as of
October 1, 1988, between the Company and Bank of Montreal Trust Company, as
trustee, as amended (the "Indenture"). The right to convert the Debentures
into Common Stock expires on the close of business on the Conversion Expiration
Date.
(d) The holders of outstanding shares of capital stock of the Company are
not entitled to any preemptive rights to subscribe for the Standby Shares. No
holder of securities of the Company has any right to the registration of shares
of Common Stock, or other securities, because of the filing of the Registration
Statement by the Company.
(e) The documents incorporated by reference in the Registration Statement
and the Prospectus, when they were filed with the Commission, conformed in all
material respects to the requirements of the Act or the Exchange Act, as
applicable, and the published rules and regulations of the Commission
thereunder, and at such time none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Registration Statement
and the Prospectus, when such documents are filed with the Commission, and on
the Delivery Date, will conform in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder and will not at any such time contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(f) This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except to the extent (i) enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally, (ii) rights to
indemnity or contribution hereunder may
-5-
<PAGE> 6
be limited by federal or state securities laws, and (iii) enforceability may be
limited by general principles of equity.
(g) The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware, with full
corporate power and authority to own its properties and conduct its business as
described in the Prospectus.
(h) Each subsidiary of the Company (collectively, the
"Subsidiaries") has been duly incorporated, and is a validly existing
corporation in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to own its properties
and conduct its business. Except as disclosed in the Prospectus, the Company
owns directly or indirectly all the outstanding shares of capital stock of each
Subsidiary, free and clear of all liens, charges, claims and encumbrances of
any kind, and all such shares are validly issued, fully paid and nonassessable.
Except as disclosed in the Prospectus, there is no commitment, plan,
arrangement or understanding on the part of any Subsidiary to issue, and there
is outstanding no option, warrant, right or convertible security upon the
exercise of which any Subsidiary may be obligated to issue, any shares of its
capital stock.
(i) Each of the Company and its Subsidiaries is duly qualified to do
business as a foreign corporation in each jurisdiction where such qualification
is required except where the absence of such qualification would not have a
material adverse effect on the business, operations, properties, prospects,
stockholders' equity, profits or condition (financial or otherwise) of the
Company and its Subsidiaries considered as a single enterprise (referred to
hereinafter as a "Material Adverse Effect").
(j) There is no pending or known threatened action, suit or proceeding
before any court, governmental body or arbitrator involving the Company or any
of its Subsidiaries (i) of a character required to be disclosed in the
Registration Statement that is not adequately disclosed therein, or, in the
case of any known threatened action, would be required to be so disclosed if
such action were pending, (ii) that might have a Material Adverse Effect, or
(iii) that might affect the consummation of the transactions contemplated
hereby.
(k) The Company and its Subsidiaries have duly filed all federal, state,
local and other tax returns which are required to have been filed and have paid
all taxes and assessments which have become due as shown on such returns or
pursuant to any assessment received by the Company or its Subsidiaries, except
for such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with generally accepted
accounting principles and except for such taxes the non-payment of which
-6-
<PAGE> 7
would not, individually or in the aggregate, have a Material Adverse Effect.
All federal, state, local and other taxes required to be accrued under
generally accepted accounting principles as consistently applied by the Company
or its Subsidiaries since the filing of such returns have been accrued on the
books of the Company or its Subsidiaries. The Internal Revenue Service has
raised no pending claims, assessments or deficiencies in connection with the
federal income tax returns of the Company and its Subsidiaries and no grounds
exist for the assertion of such claims, assessments or deficiencies.
(l) The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectus; the shares of issued and outstanding Common
Stock have been duly authorized and validly issued and are fully paid and
nonassessable; the Standby Shares have been duly authorized for issuance and
sale to the Purchaser pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the consideration
set forth herein, will be validly issued and fully paid and nonassessable and
have been listed on the American Stock Exchange, subject to official notice of
issuance; and the Common stock conforms in all material respects to all
statements relating thereto contained in, and incorporated by reference into,
the Prospectus. Except as disclosed in the Prospectus, there is no commitment,
plan, arrangement or understanding on the part of the Company to issue, and
there is outstanding no option, warrant, right or convertible security upon the
exercise of which the Company may be obligated to issue, any shares of its
capital stock.
(m) The shares of Common Stock issuable upon conversion of the Debentures
have been duly authorized. Such shares will, when so issued upon surrender of
the Debentures in accordance with the terms of the Indenture, be validly
issued, fully paid and nonassessable, will conform to the description of the
Common Stock contained in the Prospectus and have been listed on the American
Stock Exchange, subject to official notice of issuance.
(n) Except as described in the Prospectus, on and after the date hereof
and prior to the close of business on the Delivery Date, there will be no
change in the outstanding capital stock of the Company and the Company will not
issue or sell, or enter into any agreement, arrangement or understanding of any
kind (except this Agreement), or take any action, for the issuance or sale of
any capital stock of the Company (or any securities convertible into,
exercisable for or exchangeable for capital stock) or otherwise dispose of any
shares of Common Stock or any securities convertible into, exercisable for or
exchangeable for capital stock, other than (i) the issuance of the Standby
Shares pursuant to this Agreement, (ii) the granting of employee stock options
only pursuant to the terms of employee stock option plans as in effect on the
date of this Agreement and as described in the Prospectus and the Registration
Statement , except that the Company may amend its employee stock option plan to
increase by 2,500,000 the number of options that may be granted thereunder and
may grant options for up to 600,000 shares thereunder, subject to stockholder
approval, and
-7-
<PAGE> 8
(iii) the issuance of shares of Common Stock upon the exercise or conversion of
currently outstanding stock options, warrants or convertible securities and
will obtain and deliver to the Purchaser on the date of this Agreement a
written undertaking from each of its directors not to engage in any of the
aforementioned transactions on his or her own behalf.
(o) Neither the Company nor any of its Subsidiaries is in violation of its
charter or by-laws. Neither the Company nor any of its Subsidiaries is in
default in the performance or observance of any material obligation, agreement,
covenant or condition that is contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or any of
its Subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any of its Subsidiaries
is subject which default could have a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated herein, including, without limitation, the call
of the Debentures for redemption on the Redemption Date and the issuance and
sale of the Standby Shares pursuant will not conflict with or constitute a
breach of, or default (or an event which with notice or lapse of time, or both,
would constitute a default) or require consent under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its Subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or any
of its Subsidiaries is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any of its
Subsidiaries or any applicable law, rule, administrative regulation or
administrative or court order or decree applicable to the Company, except for
such conflicts, breachs, defaults or violations that could not, individually or
in the aggregate, have a Material Adverse Effect.
(p) No material labor dispute with the employees of the Company or any of
its Subsidiaries exists or, to the best knowledge of the Company, is imminent;
and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its principal suppliers, manufacturers or contractors
which might reasonably be expected to result in a material adverse change in
the business, operations, properties, stockholders' equity, profits or
condition (financial or otherwise) of the Company and its Subsidiaries
considered as a single enterprise.
(q) The Company and its Subsidiaries own or possess the patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
(collectively, the "Intangibles") which are presently employed by
-8-
<PAGE> 9
them in connection with the business now operated by them and to be operated on
the Delivery Date and as contemplated by the Prospectus and the Registration
Statement and the absence of which could have a Material Adverse Effect and all
of such Intangibles are valid and enforceable. Neither the Company nor any of
its Subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect and no grounds exist for the assertion by
any third party of a claim that any Intangible infringes or conflicts with
asserted rights of such third party.
(r) No authorization, approval, registration, qualification, order or
consent of any court or governmental authority or agency is necessary in
connection with the issue and sale of the Standby Shares or the consummation by
the Company of the other transactions contemplated by this Agreement, except
such as may be required under the Act or state securities laws.
(s) The Company and its Subsidiaries possess such valid certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to own, lease and operate its
properties and to conduct the business now operated by them and as to be
conducted on the Delivery Date and as contemplated by the Prospectus and the
Registration Statement, except for such Certificates, authorities or permits,
the failure of which to possess, individually or in the aggregate, would not
have a Material Adverse Effect, and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authority or permit. Neither the
Company nor any Subsidiary is in violation of any law, statute, ordinance,
rule, regulation, order or decree of any court, governmental body or regulatory
authority or administrative agency having jurisdiction over the Company or such
Subsidiary or any of the property or assets of the Company or such Subsidiary
(including, without limitation, any such law, statute, ordinance, rule,
regulation, order or decree with respect to environmental protection or the
release, handling, treatment, storage or disposal of hazardous substances or
toxic wastes), which violation could have a Material Adverse Effect.
(t) The Company and its Subsidiaries have good and marketable title to, or
valid and enforceable leasehold estates in, all items of real and personal
property, both tangible and intangible, which are stated in the Prospectus to
be owned or leased by any of them, free and clear of all liens, encumbrances,
claims, security interests and defects, other than as referred to in the
Registration Statement and Prospectus. No real property owned, leased, licensed
or used by the Company or any Subsidiary lies in an area which is, or to the
best knowledge of the Company or such Subsidiary will be, subject to zoning,
use or building code restrictions that would prohibit, and no state of facts
relating to the actions or inaction of another person or entity or his or its
ownership, leasing, licensing or use of any real or
-9-
<PAGE> 10
personal property exists which would prevent, the continued ownership, leasing,
licensing or use of such real property in the business of the Company or such
Subsidiary as presently conducted or as the Prospectus may indicate it
contemplates conducting (except as may be disclosed in the Prospectus or such
as individually or in the aggregate do not now have and will not in the future
have a Material Adverse Effect).
(u) There is no document or contract of a character required to be
described in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement which is not so described, filed or
incorporated by reference as required. All such contracts to which the Company
or any Subsidiary is a party have been duly authorized, executed and delivered
by the Company or such Subsidiary, constitute valid and binding agreements of
the Company or such Subsidiary and are enforceable against the Company or such
Subsidiary in accordance with the terms thereof, except to that extent (i)
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws nor or hereafter in effect relating to creditors'
rights generally; and (ii) enforceability may be limited by general principles
of equity.
(v) The Debentures are convertible into Common Stock at a conversion rate
of 55.070 shares of Common Stock per $1,000 principal amount of Debentures, or
$18.16 per share.
(w) The Commission has not issued and, to the best knowledge of the
Company is not threatening to issue, any order preventing or suspending the use
of any Prospectus (as amended or supplemented, if the Company shall have filed
with the Commission any amendment thereof or supplement thereto).
(x) The accountants whose reports with respect to the financial statements
of the Company are filed with the Commission and incorporated by reference in
the Registration Statement and the Prospectus are independent public
accountants with regard to the Company and the Subsidiaries as required by the
Act and the Rules. The consolidated financial statements of the Company and
its consolidated Subsidiaries (including the related notes) and the selected
financial information (including the financial information as of, and for the
period ending, December 31, 1993 (the "1993 Year End Information")) included or
incorporated by reference in the Registration Statement present fairly or, in
the case of information incorporated by reference from documents filed with the
Commission after the date hereof, will present fairly, the consolidated
financial position and results of operations of the Company and its
consolidated Subsidiaries at the respective dates thereof and for the
respective periods covered thereby. Such financial statements and the 1993
Year End Information have been or will be prepared in accordance with United
States generally accepted accounting principles consistently applied throughout
the periods involved except as otherwise stated therein. The 1993 Year End
Information included
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<PAGE> 11
in the Prospectus will conform in all respects with the information set forth
in the Company's audited financial statements for the year ended December 31,
1993, as such information appears in the Company's Annual Report on Form 10-K
for the year ended December 31, 1993. The supporting schedules of the Company
incorporated by reference in the Registration Statement or the Prospectus
present fairly the information required to be presented therein in relation to
the financial statements taken as a whole.
(y) The Company has not taken and shall not take, directly or indirectly,
any action designed to cause or result in, or which has constituted or which
would constitute, the stabilization or manipulation of the price of shares of
Common Stock to facilitate the sale of the Standby Shares.
(z) Subsequent to the respective dates as of which information is given in
the Registration Statement, except as set forth in the Registration Statement,
there has not been any material adverse change in the business, operations,
properties, prospects, stockholders' equity, profits or condition (financial or
otherwise) of the Company and its Subsidiaries considered as a single
enterprise, whether or not arising from transactions in the ordinary course of
business, and since September 30, 1993, neither the Company nor any of its
Subsidiaries has incurred or undertaken any liabilities or obligations, direct
or contingent, which are material to the Company and its Subsidiaries
considered as a single enterprise, except for liabilities or obligations which
were incurred or undertaken in the ordinary course of business and consistent
with past practice or are disclosed in the Registration Statement.
(aa) Neither the Company, nor any Subsidiary thereof, nor any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any Subsidiary has, directly or indirectly, (i) used any
corporate funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity, (ii) made any unlawful
payment to any foreign or domestic political parties or campaigns from
corporate funds, (iii) violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended, or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(bb) Neither the Company, nor any Subsidiary thereof is, or is conducting
its business in a manner that would cause it to become, an "investment company"
or a company "controlled by an investment company" as defined in the Investment
Company Act of 1940, as amended.
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<PAGE> 12
4. Agreements of the Company. The Company hereby covenants and agrees that:
(a) The Company will not file any amendment or supplement to the
Registration Statement or Prospectus as filed with the Commission unless a copy
is first submitted to the Purchaser in advance of its filing and the Purchaser
has not reasonably objected to it. Subject to the foregoing sentence, the
Company will file, in a timely manner, with the Commission any document
required to be filed with the Commission pursuant to Section 13, 14 or 15(d) of
the Exchange Act and incorporated by reference in the Registration Statement or
Prospectus. The Company will file with the Commission its annual report on
Form 10-K for the year ended December 31, 1993 no later than March 21, 1994.
(b) As soon as the Company is so advised, the Company will advise the
Purchaser of (1) the initiation or threatening by the Commission of any
proceedings for the issuance of any order suspending the effectiveness of the
Registration Statement, (2) receipt of the Company or any representative or
attorney of the Company of any other communication from the Commission relating
to the Company, the Registration Statement or the Prospectus, (3) any
notification with respect to the suspension of the qualification of the Common
Stock issuable upon conversion of the Debentures or of the Standby Shares for
sale in any jurisdiction or the initiation or threat of any proceeding for that
purpose, and (4) the happening of any event that makes untrue any statement of
a material fact made in the Registration Statement or the Prospectus or that
requires the making of a change in the Registration Statement or the Prospectus
in order to make any statement therein not misleading. The Company will make
every reasonable effort to cause the Registration Statement to be declared
effective and to prevent the issuance of an order suspending the effectiveness
of the Registration Statement and, if any such order is issued, to obtain its
lifting as soon as possible.
(c) The Company will deliver to the Purchaser, without charge, (1) two
signed copies of the Registration Statement and any amendments thereto
(including all exhibits filed with, or incorporated by reference in, any such
document) and (2) as many conformed copies of the Registration Statement and
any amendments thereto (excluding exhibits) as the Purchaser reasonably
requests. The Company will deliver to the Purchaser, on or before March 2,
1994, a certificate of an appropriate executive officer satisfactory to the
Purchaser of each subsidiary of the Company in form and substance the same as
the certificate delivered by the Secretary of the Company to the Purchaser on
the date hereof.
(d) During such period as a prospectus is required by law to be delivered
by the Purchaser or dealers, the Company will deliver, without charge, to the
Purchaser and to dealers, at such office or offices as the Purchaser
designates, as many copies of the Prospectus (not including any incorporated
documents) as the Purchaser reasonably requests, and, if any event occurs as a
result of which it is necessary in the opinion of counsel for the Company or
Purchaser to amend or supplement the Prospectus in
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<PAGE> 13
order to make the statements in it, in light of the circumstances existing when
the Prospectus is delivered to a purchaser, not misleading in any material
respect, or if during such period it is necessary in the opinion of counsel for
the Company or Purchaser to amend or supplement the Prospectus to comply with
the Act or Rules or with a request by the Commission, the Company will promptly
prepare, submit to the Purchaser, file with the Commission and deliver, without
charge, to the Purchaser and to dealers (whose names and addresses the
Purchaser will furnish the Company) to whom Standby Shares may have been sold
by the Purchaser, and to other dealers upon request, amendments or supplements
to the Prospectus so that the statements in the Prospectus, as amended or
supplemented, will not, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, be misleading in any material respect
and will comply with the Act and the Rules. Delivery by the Purchaser of any
such amendments or supplements to the Prospectus will not constitute a waiver
of any of the conditions in Section 5.
(e) The Company will make generally available to the Company's security
holders, as soon as practicable but in no event later than the end of the 15th
full calendar month following the end of the Company's fiscal quarter in which
the Effective Date occurs, an earnings statement that satisfies the provisions
of Section 11(a) of the Act and Rule 158 of the Rules.
(f) The Company will take such action as the Purchaser may request in
order to qualify the Standby Shares and the Conversion Shares for offer and
sale under the securities or "blue sky" laws of such jurisdictions as the
Purchaser may reasonably request; provided that the Company will not be
obligated to qualify to do business in any jurisdiction where it is not now
required to be so qualified.
(g) The Company will cause the Depositary Agent to deliver notice to the
Purchaser immediately after 5:00 p.m., New York City time on the Conversion
Expiration Date stating the aggregate principal amount of Debentures
surrendered for redemption, the amount surrendered for conversion, and the
amount not received.
(h) The Company will (x) pay, or reimburse if paid by the Purchaser, all
expenses of the Purchaser incurred in connection with the transactions
contemplated by the Agreement, including, without limitation, reasonable fees
of counsel for the Purchaser in connection with the preparation of this
Agreement and the transactions contemplated hereby, up to a maximum aggregate
amount of $75,000, unless the Purchaser terminates this Agreement pursuant to
the second sentence of Section 8(a) hereof or unless the Purchaser willfully
defaults in its obligation to purchase the Standby Shares hereunder, and (y)
pay all costs and expenses incident to the performance of the obligations of
the Company under this Agreement, including those relating to (1) the
preparation, printing and filing of the Registration Statement and exhibits to
it, the Prospectus and all amendments and supplements to the Registration
Statement and the Prospectus, (2) the issuance of the Standby Shares and the
preparation and delivery of certificates evidencing the Standby Shares, (3)
the registration or qualification of the Standby Shares for offer and sale
under
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<PAGE> 14
securities or "blue sky" laws of the various jurisdictions referred to in
paragraph (f) above, including the fees and disbursements of counsel for the
Purchaser in connection therewith and the preparation and printing of a "blue
sky" memorandum, (4) the furnishing to the Purchaser of copies of the
Prospectus, all amendments or supplements to the Prospectus, and all other
documents required by this Section to be so furnished, including costs of
shipping and mailing, (5) the filing requirements, if any, of the National
Association of Securities Dealers, Inc. in connection with its review of
corporate financings, (6) the furnishing to the Purchaser and dealers of copies
of all information required by paragraph (g) above, including costs of shipping
and mailing, (7) all transfer taxes, if any, with respect to the sale and
delivery of the Standby Shares by the Company to the Purchaser, (8) any listing
of the Standby Shares on the American Stock Exchange, (9) preparing, printing,
filing and distributing the Notice of Redemption and other documents to the
holders of the Debentures, (10) the Trustee and Depositary Agent for the
Debentures and (11) all other costs and expenses (including fees and
disbursements of counsel) incident to the performance of the obligations of
the Company under the Agreement.
(i) For a period of five years from the effective date of the Registration
Statement, the Company will furnish to the Purchaser copies of all public
reports and all other public information, documents, reports and financial
statements furnished by the Company (i) to stockholders, (ii) to the Exchange
or (iii) to the Commission pursuant to the Exchange Act or any rule or
regulation of the Commission thereunder.
(j) The Company will list the Standby Shares and the Conversion Shares on
the American Stock Exchange.
(k) The Company will mail or cause to be mailed not later than the close
of business on the Effective Date of the Registration Statement a notice of
redemption of all the outstanding Debentures (the "Notice of Redemption") by
first class mail to each registered holder thereof, together with a letter of
transmittal, the delivery and content of which Notice of Redemption and the
redemption of the Debentures thereby shall conform to all the requirements of
the Indenture.
(l) The Company will direct the Depositary Agent to advise the Company and
the Purchaser weekly, until the last week prior to the Redemption Date and then
daily, of the aggregate principal amount of Debentures surrendered for
conversion into Common Stock on the preceding day.
(m) The Company will take no action the effect of which is or will be to
require an adjustment in the conversion rate of the Debentures from the present
rate set forth above.
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<PAGE> 15
(n) The Company will not withdraw or apply for withdrawal of the
Registration Statement prior to such time as the Purchaser shall have advised
the Company that the offering and sale of the Common Stock by the Purchaser
contemplated by this Agreement shall have been completed.
(o) For a period of 90 days after the effective date of the Registration
Statement, without the Purchaser's prior written consent, the Company will not
issue or sell, or enter into any agreement, arrangement or understanding of any
kind, or take any action, for the issuance or sale of, or otherwise dispose of
any capital stock of the Company (or any securities convertible into,
exercisable for or exchangeable for capital stock), other than (i) the issuance
of the Standby Shares pursuant to this Agreement, (ii) the granting of employee
stock options pursuant to the terms of employee stock option plans as in effect
on the date of this Agreement and as described in the Prospectus and the
Registration Statement; (iii) the issuance of shares of Common Stock upon the
exercise or conversion of currently outstanding stock options, warrants or
convertible securities and (iv) the surrender of shares of Common Stock in
payment of the exercise price of employee stock options granted pursuant to the
terms of employee stock option plans as in effect on the date hereof, and will
obtain and deliver to the Purchaser on the date of this Agreement a written
undertaking from each of its directors not to engage in any of the
aforementioned transactions on his or her own behalf; provided, however, that
the Company shall not be bound by the terms of this Section 4(o) in the event
that the Purchaser does not purchase Standby Shares pursuant to the terms of
this Agreement.
(p) The Company will apply the proceeds from the sale of the Standby
Shares as set forth under "Use of Proceeds" in the Prospectus.
(q) The Company will (i) give the Purchaser as soon as reasonably
practicable under the circumstances, prior written notice of the contents of
any press release or other public announcement it intends to issue on or prior
to the Redemption Date and (ii) consider in good faith any comments the
Purchaser may have concerning the timing and content of such press release or
public announcement.
5. Conditions of the Purchasers Obligation. The obligation of the Purchaser
to purchase the Standby Shares is subject to the accuracy, on the date of this
Agreement and on the Delivery Date, of the representations and warranties of
the Company in this Agreement, to the accuracy and completeness of all
statements made by the Company or any of its officers in any certificate
delivered to the Purchaser or its counsel pursuant to this Agreement, to
performance by the Company of its covenants, agreements and obligations under
this Agreement and to each of the following additional conditions:
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<PAGE> 16
(a) The Registration Statement must have become effective not later than
the first full business day next following the date of this Agreement or such
later date as shall be consented to in writing by the Purchaser.
(b) No order suspending the effectiveness of the Registration Statement
may be in effect and no proceedings for such purpose may be pending before or
threatened by the Commission, and any requests for additional information on
the part of the Commission (to be included in the Registration Statement or the
Prospectus or otherwise) must have been complied with to the reasonable
satisfaction of the Purchaser.
(c) The Purchaser must receive on the date of this Agreement and on the
Delivery Date a certificate, dated such dates, of the appropriate executive
officer of the Company satisfactory to the Purchaser certifying that the
signers have carefully examined the Registration Statement, the Prospectus and
this Agreement, (1) the conditions set forth in Sections 5(a) and (b) hereof
have been satisfied, (2) as of the effective date of the Registration
Statement, the statements made in the Registration Statement and the Prospectus
are true and correct, and neither the Registration Statement nor the Prospectus
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading (in the case of the
Prospectus, in light of the circumstances under which they were made), (3) the
representations and warranties of the Company in this Agreement are true and
correct on and as of the date of the certificate, (4) since September 30, 1993,
there has not been a material adverse change in the business, operations,
properties, stockholders' equity, profits or condition (financial or
otherwise) of the Company and its Subsidiaries considered as a single
enterprise, whether or not arising from transactions in the ordinary course of
business, except as set forth in the Prospectus, and (5) to the best knowledge
of such officers, no actions to prohibit the sale of the Standby Shares have
been taken or threatened by the Commission. The Purchaser must receive on the
Delivery Date a certificate, dated the Delivery Date, of such officers
certifying to the effect set forth in (1), (2), (3), (4) and (5) above and (d)
below and that the Company has performed all agreements that this Agreement
requires it to perform by such Delivery Date.
(d) Since the date of this Agreement (1) there must not have been any
material change in the capital stock or long-term debt of the Company or its
Subsidiaries considered as a single enterprise, (2) there must not have been a
material adverse change in the business, operations, properties, stockholders'
equity, profits or condition (financial or otherwise) of the Company and its
Subsidiaries considered as a single enterprise, or any development that could
reasonably be expected to result in such change, whether or not arising from
transactions in the ordinary course of business, and (3) neither the Company
nor any of its Subsidiaries shall have sustained any
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<PAGE> 17
material loss or interference with their business from fire, explosion,
earth-quake, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental
action, order or decree.
(e) The Purchaser must receive by 9:00 a.m. New York City time on the date
of this Agreement a signed letter from Grant Thornton, dated the date of this
Agreement, covering the matters to be discussed by such accounting firm as set
forth in Annex A hereto.
(f) The Purchaser shall have received on the Delivery Date a signed letter
from Grant Thornton, dated such date, confirming, on the basis of a review in
accordance with the procedures set forth in the letter signed by such firm
and dated and delivered to the Purchaser on the date of this Agreement pursuant
to Section 5(e), that (i) nothing has come to their attention during the period
from a date not more than five business days before the date of this Agreement,
specified in the letter, to a date not more than five days before the date of
such letter that would require any change in their letter dated and delivered
pursuant to Section 5(e) on the date of this Agreement and (ii) that it has
read the unaudited amounts for sales, net income and earning per share for the
twelve months ended December 31, 1993 as set forth under the option "Recent
Developments" in the Registration Statement and compared such amounts with
corresponding amounts appearing in the Company's audited financial statements
for the year ended December 31, 1993 and found them to be in agreement.
(g) The legality and sufficiency of the call for redemption and the
redemption of the Debentures, the conversion of the Debentures into Common
Stock, the issue and sale to the Purchaser of the Standby Shares, the validity
and form of the certificate representing the Common Stock deliverable to the
Purchaser hereunder, all corporate proceedings and other legal matters incident
to the foregoing and to the authorization, form and validity of this Agreement,
the Registration Statement and the Prospectus and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to Kramer, Levin, Naftalis,
Nessen, Kamin & Frankel, counsel for the Purchaser. The Purchaser shall have
received on the date of this Agreement and on the Delivery Date from Modlin &
Modlin, counsel for the Company, favorable opinions dated such dates, covering
the matters set forth in Annex B hereto.
(h) The Purchaser shall have received on the Delivery Date from Kramer,
Levin, Naftalis, Nessen, Kamin & Frankel, its counsel, a favorable opinion
dated the Delivery Date, with respect to the incorporation of the Company, the
validity of the Standby Shares, the Registration Statement, the Prospectus, and
the sufficiency of all proceedings taken in connection with the sale and
delivery of the Standby Shares. Such opinion and proceedings shall be
reasonably satisfactory in all respects to the Purchaser. The Company must
furnish to counsel for the Purchaser such documents as they may reasonably
request for the purpose of enabling them to render such opinion.
(i) The Standby Shares and the Conversion Shares have been listed on the
American Stock Exchange, subject to official notice of issuance.
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<PAGE> 18
All opinions, letters, evidence and certificates mentioned above or elsewhere
in this Agreement will comply with this Agreement only if they are in form and
scope reasonably satisfactory to counsel for the Purchaser.
(j) Prior to the Delivery Date, the Company shall have furnished to you
such further information, certificates and documents as you may reasonably
request. If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to the
Purchaser or its counsel pursuant to this Section 5 shall not be in all
material respects reasonably satisfactory in form and substance to the
Purchaser and its counsel, all of the Purchaser's obligations hereunder may be
cancelled by the Purchaser at, or at any time prior to, the Delivery Date.
Notice of such cancellation shall be given to the Company in writing, or by
telephone, telecopy, telegraph or telex, confirmed in writing.
(k) The Company shall have delivered to the Purchaser a written
undertaking from each of its directors to the effect specified in Section 4(o)
hereof.
6. Indemnification.
(a) The Company shall indemnify and hold harmless the Purchaser and each
person, if any, who controls the Purchaser within the meaning of Section 15 of
the Act and Section 20 of the Exchange Act from and against any and all losses,
claims, damages, liabilities and expenses (including, but not limited to
reasonable attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several to which they, or any of them,
may become subject under the Act, the Exchange Act, or any other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or the Prospectus, or any amendment or
supplement, or the omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and shall reimburse the Purchaser and each such controlling person
for any legal and other expenses (incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted),
as incurred, by the Purchaser or such controlling person in investigating or
defending or preparing to defend against or appearing as a third-party witness
in connection with any such loss, claim, damage, liability or action, provided,
however, that the Company will not be liable to the extent that such loss,
claim, damage, liability or expense arises out of or is based on an untrue
statement or omission or alleged untrue statement or omission made in the
Registration Statement or Prospectus or any amendment or supplement thereto in
reliance
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<PAGE> 19
upon and in conformity with information furnished in writing to the Company by
the Purchaser expressly for inclusion therein; and provided, further, that the
foregoing indemnity with respect to the Prospectus will not inure to the
benefit of the Purchaser if (i) the person asserting such loss, claim, damage,
liability or expense purchased Standby Shares or Conversion Shares from the
Purchaser and a copy of the Prospectus (as then amended or supplemented) was
not sent or given by or on behalf of the Purchaser to such person, if required
by law so to have been given, at or prior to the written confirmation of the
sale of the Standby Shares or the Conversion Shares to such person; provided,
that the Company has delivered the Prospectus (or the Prospectus as amended and
supplemented) to the Purchaser in requisite quantity on a timely basis to
permit the delivery thereof, if required by law, at or prior to the
confirmation of such sale to such person, and (ii) the Prospectus (as so
amended or supplemented, if applicable) would have cured the defect giving rise
to such loss, claim, damage, liability or expense. The foregoing indemnity
agreement is in addition to any liability that the Company may otherwise have
to the Purchaser or any controlling person of the Purchaser.
(b) The Purchaser shall indemnify and hold harmless the Company, each
person, if any, who controls the Company within the meaning of Section 15 of
the Act and Section 20 of the Exchange Act, each director of the Company and
each officer of the Company who signs the Registration Statement to the same
extent as the foregoing indemnity from the Company to the Purchaser, but only
insofar as losses, claims, damages, liabilities or expenses arise out of or are
based on any untrue statement or omission or alleged untrue statement or
omission which was made in the Registration Statement or the Prospectus, or any
amendment or supplement thereto, in reliance on and in conformity with
information furnished in writing to the Company by the Purchaser expressly for
inclusion therein. The Company acknowledges that the statement with respect to
stabilization on the second page of, and the statements contained in the second
and third paragraphs under the caption "Standby Arrangements" in, the
Prospectus constitute the only information furnished in writing to the Company
by the Purchaser expressly for use in any such document and shall reimburse the
Company or any such director, officer or controlling person for any legal and
other expenses reasonably incurred by the Company or any such director, officer
or controlling person in investigating or defending or preparing to defend
against or appearing as a third party witness in connection with such loss,
claim, damage, liability or action. The foregoing indemnity agreement is in
addition to any liability that the Purchaser may otherwise have to the Company
or any of its directors, officers or controlling persons.
(c) Any party that proposes to assert the right to be indemnified under
this Section 6 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying
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<PAGE> 20
party or parties under this Section, notify each such indemnifying party of the
commencement of such action, enclosing a copy of all papers served, but the
omission so to notify such indemnifying party will not relieve it from any
liability that it may have to any indemnified party under this Section. If any
such action is brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party will be entitled
to participate in, and, to the extent that it elects by delivering written
notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action,
with counsel satisfactory to the indemnified party, and, after notice from the
indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified
party in connection with the defense. The indemnified party will have the
right to employ its counsel in any such action, but the fees and expenses of
such counsel will be at the expense of such indemnified party unless (1) the
employment of counsel by the indemnified party has been authorized in writing
by the indemnifying party, (2) the indemnified party has reasonably concluded
that there may be legal defenses available to it which are different from or in
addition to those available to the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (3) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in any of which
cases the fees and expenses of counsel will be at the expense of the
indemnifying party or parties and all such fees and expenses will be reimbursed
promptly as they are incurred. An indemnifying party will not be liable for
any settlement of any action or claim affected without its written consent,
provided that such consent was not unreasonably withheld or, in connection with
any proceeding or related proceeding in the same jurisdiction, for the fees and
expenses of more than one separate counsel for all indemnified parties;
provided, however, that the indemnifying party shall be liable for separate
counsel for any indemnified party in a jurisdiction if counsel to the
indemnified party shall have reasonably concluded that there may be legal
defenses available to such indemnified party that are different from or in
addition to those available to one or more of the other indemnified parties.
An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim or action in respect
of which indemnification or contribution may be sought hereunder (whether or
not the indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an unconditional
release of each
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<PAGE> 21
indemnified party from all liability arising out of such claim or action.
7. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
section is applicable in accordance with its terms but for any reason is held
to be unavailable from the Company or the Purchaser or is insufficient to hold
harmless any indemnified party thereunder, the Company and the Purchaser will
contribute to the total losses, claims, damages, liabilities and expenses
(including any investigation, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action or any claims
asserted, but after deducting any contribution received by the Company from
persons other than the Purchaser, who may also be liable for contribution) to
which the Company and the Purchaser may be subject in such proportion as shall
be appropriate to reflect the relative benefits received by the Company on the
one hand and the Purchaser on the other from the purchase by the Purchaser and
the subsequent offering of the Standby Shares or, if such allocation is not
permitted under applicable law, in such proportion as shall be appropriate to
reflect not only the relative benefits referred to above but also the relative
fault of the Company on the one hand and the Purchaser on the other hand with
respect to the statements or omissions that resulted in such loss, claim,
damage, liability or expense, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Purchaser on the other shall be deemed to be in the same proportion as
the aggregate Redemption Price of the Debentures bears to the compensation
received by the Purchaser pursuant to Section 2(c). The relative fault of the
Company on the one hand and the Purchaser on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the Purchaser
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Purchaser agree that it would not be just and equitable if contributions
pursuant to this Section 7 were to be determined by pro rata allocation or by
any other method of allocation that does not take into account the equitable
considerations referred to above in this Section 7. The amount paid or payable
by an indemnified party as a result of any loss, claim, damage or liability or
action in respect thereof referred to above in this Section 7 shall be deemed
to include, for purposes of this Section 7, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7, (i) the Purchaser shall not be required to contribute any amount in
excess of the amount by which the compensation received by the Purchaser
pursuant to Section 2(c) hereof exceeds the amount of any damages that the
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<PAGE> 22
Purchaser has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 7, any
person who controls a party to this Agreement within the meaning of the Act
will have the same rights to contribution as that party, and each officer of
the Company who signed the Registration Statement and each director of the
Company will have the same rights to contribution as the Company, subject in
each case to clauses (i) and (ii) of this Section. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim for contribution may be
made under this Section, notify such party or parties from whom contribution
may be sought, but the omission so to notify will not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have otherwise than under this Section 7. No party will be liable for
contribution with respect to any action or claim settled without its written
consent; provided, however, that such written consent was not unreasonably
withheld.
8. Effective Date and Termination. (a) This Agreement shall become effective
when the Purchaser and the Company shall have received notification of the
effectiveness of the Registration Statement; provided, however, that the
provisions of Sections 4, 6, 7 and this Section 8 shall at all times be
effective. Until this Agreement becomes effective as aforesaid, it may be
terminated by the Company by notifying the Purchaser or by the Purchaser
notifying the Company.
(b) This Agreement may be terminated by the Purchaser by notice to the
Company, without liability, on or before the Delivery Date if any of the
conditions specified in Section 5 have not been fulfilled when and as required
by this Agreement.
The obligations of the Purchaser to purchase the Standby Shares may also be
terminated at any time prior to the Delivery Date by notice to the Company from
the Purchaser, in its absolute discretion, without liability on the part of
Purchaser to the Company if, on or prior to the Delivery Date (i) any change in
political, financial or economic conditions in the United States or any
outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall have
occurred, the effect of which is to make it, in the sole judgment of the
Purchaser, impracticable or inadvisable to market the Standby Shares on the
terms and in the manner contemplated by the Prospectus, (ii) trading in the
Common Stock shall have been suspended by the Commission or by the American
Stock Exchange or if trading generally on the New York Stock Exchange, the
American Stock Exchange or the over the counter market shall have been
suspended or limited, or minimum or maximum prices for trading shall have been
fixed or maximum ranges for prices for securities have been required which are
not in place on the date of this
-22-
<PAGE> 23
Agreement, by such Exchanges or by order of the Commission or any other
governmental authority, (iii) a general banking moratorium shall have been
declared by federal or New York State authorities or (iv) in the Purchaser's
opinion, any material adverse change shall have occurred since the respective
dates as of which information is given in the Registration Statement or
Prospectus in the business, operations, prospects, properties, stockholders'
equity, profits or condition (financial or otherwise) of the Company and its
Subsidiaries considered as a single enterprise, whether or not arising in the
ordinary course of business other than as set forth in the Prospectus.
If notice shall have been given by the Company pursuant to the second
sentence of Section 8(a) preventing this Agreement from becoming effective, or
if the Company shall fail to deliver the Standby Shares to the Purchaser for
any reason permitted under this Agreement or if the Purchaser shall decline to
purchase the Standby Shares for any reason permitted under this Agreement, the
Company shall reimburse the Purchaser for the Purchaser's expenses that the
Company has agreed to pay pursuant to Section 4(h), and upon demand the Company
shall pay the full amount thereof to the Purchaser. In such event, the Company
shall also pay its own expenses in accordance with Section 4(h).
9. Miscellaneous. The reimbursement, indemnification and contribution
agreements in Sections 4, 6, 7 and 8 and the representations, warranties and
agreements of the Company and the Purchaser in this Agreement will remain in
full force and effect regardless of whether the remainder of this Agreement
becomes effective or any termination of this Agreement, any investigation made
by or on behalf of the Purchaser, the Company or controlling person and
delivery of and payment for the Standby Shares. On the first anniversary of
the date hereof, the Company's reimbursement obligations set forth in Section
4(h) hereof shall terminate only with respect to expenses of which the Company
is not aware on such anniversary.
This Agreement is for the benefit of the Purchaser and the Company and their
successors and assigns, and, to the extent expressed in this Agreement, for the
benefit of persons controlling the Purchaser or the Company, and directors and
officers of the Company, and directors, officers, employees and agents of the
Purchaser and their respective successors and assigns, and no other person,
partnership, association or corporation shall acquire or have any right under
or by virtue of this Agreement. The term "successors and assigns" does not
include any Purchaser of Standby Shares from the Purchaser merely because of
such purchase.
For the purposes of this Agreement, "business day" means any day on which the
American Stock Exchange is open for trading and "close of business" means 5:00
P.M., New York City time.
All notices and communications under this Agreement will be in writing,
effective only on receipt and mailed or delivered, by messenger, facsimile
transmission or otherwise, to the Purchaser, PaineWebber Incorporated, at 1285
Avenue of the Americas, New York, New York 10019, and to the Company, to its
agent for
-23-
<PAGE> 24
service at such agent's address on the cover of the Registration Statement.
This Agreement may be signed in multiple counterparts that taken as a whole
constitute one agreement.
This Agreement will be governed by and construed in accordance with the laws
of the State of New York without regard to the principles of conflicts of laws.
-24-
<PAGE> 25
SIGNATURE PAGE FOR STANDBY AGREEMENT
Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
PLY GEM INDUSTRIES, INC.
By:___________________________
Name:
Title:
Confirmed:
PAINEWEBBER INCORPORATED
By:_______________________
Name:
Title:
<PAGE> 26
ANNEX A
The signed letter from Grant Thornton to the Purchaser dated the date hereof
shall be in form and substance reasonably satisfactory to the Purchaser and it's
counsel
A-1
<PAGE> 27
ANNEX B
1. The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware, with full
corporate power and authority to own its properties and conduct its business as
described in the Prospectus.
2. Each subsidiary of the Company (collectively, the "Subsidiaries") has
been duly incorporated, and is a validly existing corporation in good standing
under the laws of its jurisdiction of incorporation, with full corporate power
and authority to own its properties and conduct its business. Except as
disclosed in the Prospectus and except with respect to [insert names of 2 50/50
owned entities], the Company or its Subsidiaries owns directly or indirectly
all the outstanding shares of capital stock of each Subsidiary, free and clear
of all liens, charges, claims and encumbrances of any kind, and all such shares
are validly issued, fully paid and nonassessable. Except as disclosed in the
Prospectus, to the best of such counsel's knowledge, there is no commitment,
plan, arrangement or understanding on the part of any Subsidiary to issue, and
there is outstanding no option, warrant, right or convertible security upon the
exercise of which any Subsidiary may be obligated to issue, any shares of its
capital stock, except in accordance with the Company's employee stock option
plans.
3. Each of the Company and its Subsidiaries is duly qualified to do
business as a foreign corporation in each jurisdiction where such qualification
is required except where the absence of such qualification would not have a
material adverse effect on the business of the Company and its Subsidiaries
considered as a single enterprise.
4. The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectus; the shares of issued and outstanding Common
Stock have been duly authorized and validly issued and are fully paid and
nonassessable; the Standby Shares have been duly authorized for issuance and
sale to the Purchaser pursuant to the Standby Agreement and, when issued and
delivered by the Company pursuant to the Standby Agreement against payment of
the consideration set forth therein, will be validly issued and fully paid and
nonassessable and have been listed on the American Stock Exchange, subject to
official notice of issuance; and the Common stock conforms in all material
respects to all statements relating thereto contained in, and incorporated by
reference into, the Prospectus. Except as disclosed in the Prospectus, to the
best of such counsel's knowledge, there is no commitment, plan, arrangement or
understanding on the part of the Company to issue, and there is outstanding no
option, warrant, right or convertible security upon the exercise of which the
Company may be obligated to issue, any shares of its capital stock.
B-1
<PAGE> 28
5. The redemption of the Debentures on the Redemption Date has been duly
authorized by all required action by the Company. The Debentures will have
been duly called for redemption on the Redemption Date in accordance with the
terms of the Indenture, dated as of October 1, 1988, between the Company and
the Trustee, as amended (the "Indenture").
6. The shares of Common Stock issuable upon conversion of the Debentures
have been duly authorized. Such shares will, when so issued upon surrender of
the Debentures in accordance with the terms of the Indenture, be validly
issued, fully paid and non-assessable, will conform to the description of the
Common Stock contained in the Prospectus and have been listed on the American
Stock Exchange, subject to official notice of issuance.
7. The holders of outstanding shares of capital stock of the Company are
not entitled to any preemptive rights to subscribe for the Standby Shares. No
holder of securities of the Company has any right to the registration of shares
of Common Stock, or other securities, because of the filing of the Registration
Statement by the Company.
8. The Company meets the requirements for use of Form S-3 under the Act.
The Registration Statement, the Prospectus, as amended or supplemented,
together with any such amendment or supplement, conform as to form in all
material respects with the requirements of the Act and and the rules and
regulations adopted by the Securities and Exchange Commission (the
"Commission") under the Act (the "Rules"). The documents incorporated by
reference in the Registration Statement and the Prospectus, when they were
filed with the Commission, conformed as to form in all material respects with
the requirements of the Act or the Exchange Act, as applicable, and the
published rules and regulations of the Commission thereunder.
9. The Standby Agreement has been duly and validly authorized, executed and
delivered on behalf of the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except to the extent (i) enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally, (ii) rights to
indemnity or contribution hereunder may be limited by federal or state
securities laws, and (iii) enforceability may be limited by general principles
of equity.
10. There is no action, suit or proceeding pending or, to the best
knowledge of such counsel, threatened, before any court, governmental body or
arbitrator involving the Company or
B-2
<PAGE> 29
any of its Subsidiaries (i) of a character required to be disclosed in the
Registration Statement that is not adequately disclosed there, or, in the case
of any threatened action of which such counsel has knowledge, would be required
to be so disclosed if such action were pending, (ii) that might have a Material
Adverse Effect, or (iii) that might affect the consummation of the transactions
contemplated by the Standby Agreement.
11. Neither the Company nor any of its Subsidiaries is in violation of its
charter or by-laws. Neither the execution, delivery or performance of the
Standby Agreement nor the consummation of the transactions contemplated
therein, including, without limitation, the call of the Debentures for
redemption on the Redemption Date and the issuance and sale of the Standby
Shares pursuant thereto will conflict with or constitute a breach of, or
default (or an event which with notice or lapse of time, or both, would
constitute a default) or require consent under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its Subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or any
of its Subsidiaries is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any of its
Subsidiaries or any applicable law, rule, administrative regulation or
administrative or court order or decree applicable to the Company.
12. No authorization, approval, registration, qualification, order or
consent of any court or governmental authority or agency is necessary in
connection with the issue and sale of the Standby Shares or the consummation by
the Company of the other transactions contemplated by the Standby Agreement,
except such as may be required under the Act or state securities laws.
13. There is no document or contract of a character required to be
described in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement which is not so described, filed or
incorporated by reference as required.
14. The Commission has not issued and, to the best knowledge of such
counsel is not threatening to issue, any order preventing or suspending the use
of any Prospectus (as amended or supplemented, if the Company shall have filed
with the Commission any amendment thereof or supplement thereto).
15. Neither the Company, nor any Subsidiary thereof is, or is conducting
its business in a manner that would cause it
B-3
<PAGE> 30
to become, an "investment company" or a company "controlled by an investment
company" as defined in the Investment Company Act of 1940, as amended.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company and
representatives of the independent public accountants for the Company at which
the contents of the Registration Statement and Prospectus were discussed and
that nothing has come to such counsel's attention that leads them to believe
that either the Registration Statement (other than the financial statements,
notes, financial statement schedules and other financial and statistical data
included or incorporated by reference therein as to which such counsel need not
express an opinion), or the documents incorporated by reference therein,
contains an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or the Prospectus (other than the financial statements, notes,
financial statement schedules and other financial and statistical data included
or incorporated by reference therein as to which such counsel need not express
an opinion) as of its date contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
B-4
<PAGE> 1
Exhibit 4.1
(FACE OF CERTIFICATE)
(LOGO)
NUMBER INCORPORATED UNDER THE LAWS OF THE SHARES
STATE OF DELAWARE
CU
COMMON STOCK
SEE REVERSE FOR
PLY-GEM INDUSTRIES, INC. CERTAIN DEFINITIONS
THIS CERTIFIES THAT CUSIP 729416 10 7
is the owner of
fully paid and non-assessable shares of the Common Stock ($.25 par value) of
PLY-GEM INDUSTRIES, INC.
transferable only on the books of the Corporation by the holder hereof in
person or by duly authorized Attorney upon surrender of this Certificate
properly endorsed. This Certificate and the shares represented hereby are
issued and shall be held subject to all of the provisions of the Certificate of
Incorporation of the Corporation and the amendments thereto (copies of which
are on file with the Transfer Agent), to all of which the holder by acceptance
hereof assents and agrees to be bound. This Certificate is not valid until
countersigned by the Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated (SEAL)
/s/ Stanford Zeisel /s/ Jeffrey S. Silverman
Secretary Chairman
Countersigned and Registered
HARRIS TRUST COMPANY OF NEW YORK
Transfer Agent and Registrar
By
Authorized Signature
<PAGE> 2
(REVERSE OF CERTIFICATE)
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -as tenants in common UNIF GIFT MIN ACT-.......Custodian.....
TEN ENT -as tenants by the entireties (Cust) (Minor)
JT TEN -as joint tenants with right of under Uniform Gifts
survivorship and not as tenants to Minors Act .......
in common (State)
Additional abbreviations may also be used though not in the above list.
PLY-GEM INDUSTRIES, INC.
The Corporation will furnish without charge to each stockholder who so
requests, a full statement of the designations, preferences and relative,
participating, optional or other special rights of each class of stock or
series thereof of the Corporation, and the qualifications, limitations or
restrictions of such preferences and/or rights. Such request may be made to
the Corporation or to the Transfer Agent.
For Value Received, ______________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
_____________________________
______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
______________________________________________________________________________
______________________________________________________________________________
_______________________________________________________________________ Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
_____________________________________________________________________ Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated_____________________________________
____________________________________
NOTICE: THE SIGNATURE TO THIS
ASSIGNMENT MUST CORRESPOND
WITH THE NAME AS WRITTEN UPON
THE FACE OF THE CERTIFICATE
IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATEVER.
<PAGE> 1
Exhibit 5.1
LAW OFFICES
ELIHU H. MODLIN
CHARLES M. MODLIN
EAB PLAZA
UNIONDALE, N.Y. 11556
----
(516) 794-4600
Facsimile: (516) 794-4604
February 23, 1994
Ply Gem Industries, Inc.
777 Third Avenue
New York, New York 10017
Re: Ply Gem Industries, Inc.
Registration Statement on
Form S-3 filed on February 23, 1994.
------------------------------------
Dear Sirs:
Reference is made to a Registration Statement on Form S-3 filed with
the Securities and Exchange Commission, under the Securities Act of 1933, as
amended, on February 23, 1994 (the "Registration Statement"). We have acted as
counsel to Ply Gem Industries, Inc. (the "Company"), with respect to the
preparation of the Registration Statement. Such Registration Statement relates
to the proposed sale by the Company of a maximum of 2,753,500 shares of Common
Stock $.25 par value per share, of Ply Gem Industries, Inc. (the "Shares") to
PaineWebber Incorporated (the "Purchaser") in connection with the redemption of
the Company's outstanding Convertible Senior Subordinated Discount Debentures
due 2008 (the "Debentures").
As such counsel, we have examined originals or copies, certified to our
satisfaction, of such corporate records, documents and instruments, and such
questions of law as we consider necessary for the purposes of this opinion.
It is our opinion that:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
2. The Shares have been validly authorized and, when issued and
sold in accordance with the terms described in the prospectus forming a part of
the Registration Statement (the "Prospectus"), will be validly issued, fully
paid and non-assessable shares of Common Stock of the Company .
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references made with respect to us in the
Registration Statement and under the caption "Legal Matters" in the Prospectus
forming a part of the Registration Statement.
Sincerely yours,
/s/ Charles M. Modlin
Charles M. Modlin
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our reports dated February 12, 1993 accompanying the
consolidated financial statements of Ply Gem Industries, Inc. and Subsidiaries
appearing in the 1992 Annual Report of the Company to its stockholders and
accompanying the schedules included in the Annual Report on Form 10-K, as
amended April 27, 1993, for the year ended December 31, 1992 which are
incorporated by reference in this Registration Statement. We consent to the
incorporation by reference in the Registration Statement of the aforementioned
reports and to the use of our name as it appears under the caption "Experts."
GRANT THORNTON
New York, New York
February 18, 1994
