<PAGE> 1
As filed with the Securities and Exchange Commission on August 11, 1994
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-8
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
(Address of Principal Executive Offices)
----------
1994 EMPLOYEE INCENTIVE STOCK PLAN
(Full Title of the Plan)
Mr. Jeffrey S. Silverman
Ply Gem Industries, Inc.
777 Third Avenue
New York, New York 10017
(Name and Address of Agent For Service)
(212) 832-1550
(Telephone Number, Including Area Code, of Agent For Service)
Copy to:
Charles M. Modlin, Esq.
EAB Plaza
Uniondale, New York 11556
----------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to be Price Per Offering Registration
to be Registered Registered(1) Share(2) Price(2) Fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 2,250,000 $19.25 $43,312,500 $14,936.00
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(Cover Page Continued on Next Page)
<PAGE> 2
(Continuation of Cover Page)
(1) The Plan provides that in the event of a stock dividend, stock split,
recapitalization, etc., the total number of shares which may be optioned or
awarded, the number of shares covered by each outstanding option, commitment or
undelivered award, and the price per share of the outstanding options shall be
equitably adjusted. Accordingly, pursuant to Rule 416, this Registration
Statement covers, in addition to the number of shares of Common Stock stated
above, an additional indeterminate number of shares which, by reason of any
such event, may become subject to the Plan.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(h) based on the average high and low prices of the
Common Stock registered on the American Stock Exchange on August 8, 1994.
<PAGE> 3
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents which have been filed by Ply Gem Industries,
Inc. (the "Registrant") with the Securities and Exchange Commission (the
"Commission") are hereby incorporated by reference:
(a) Annual Report on Form 10-K for the year ended
December 31, 1993;
(b) Quarterly Report on Form 10-Q for the quarter ended
April 2, 1994;
(c) Amendment to Annual Report on Form 10-K/A for the
year ended December 31, 1993;
(d) Current Report on Form 8-K dated February 24, 1994;
and
(e) The description of the Common Stock of the Registrant
which is contained in a registration statement filed
by the Registrant under Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange
Act"), including any amendment or report filed for
the purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act of 1934 after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and made 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 Registration Statement
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 statements. Any statement so modified or
superseded, shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
Item 6. 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:
II-1
<PAGE> 4
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' 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
II-2
<PAGE> 5
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 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.
Articles VII and VIII of the Certificate of Incorporation of the
Registrant 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
II-3
<PAGE> 6
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 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
occurrence taking place prior to such repeal or modification, or otherwise
II-4
<PAGE> 7
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 Registrant
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 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
furtherance 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 furtherance, 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:
II-5
<PAGE> 8
(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 Indemnification. 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 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.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
Item 8. EXHIBITS.
The following exhibits are filed as part of this Registration
Statement:
4.1 Ply Gem Industries, Inc. 1994 Employee Incentive Stock Plan.
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 9. Undertakings.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
II-6
<PAGE> 9
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933 (the "Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this 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 this
Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement:
provided , however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such 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 initial bona
fide offering thereof;
(3) 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; and
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 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.
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, 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> 10
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-8 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 August 11, 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 August 11, 1994
- ---------------------------------- Officer (Principal Executive
Jeffrey S. Silverman Officer) and Director
/s/ Herbert P. Dooskin Executive Vice President August 11, 1994
- ---------------------------------- (Principal Financial Officer)
Herbert P. Dooskin and Director
/s/ Jerome Baum Controller August 11, 1994
- ----------------------------------
Jerome Baum
/s/ Albert Hersh Director August 11, 1994
- ----------------------------------
Albert Hersh
/s/ Elihu H. Modlin Director August 11, 1994
- ----------------------------------
Elihu H. Modlin
</TABLE>
II-8
<PAGE> 11
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
------- -----------
4.1 Ply Gem Industries, Inc. 1994 Employee Incentive Stock Plan.
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.
1994 EMPLOYEE INCENTIVE STOCK PLAN
SECTION 1. Purpose; Definitions.
The purpose of the Ply Gem Industries, Inc. 1994 Employee Incentive
Stock Plan (the "Plan") is to better enable the Company and its Subsidiaries to
attract, retain and reward key employees and strengthen the existing mutuality
of interests between such key employees and the Company's stockholders, by
offering such key employees stock options and/or restricted stock. The Plan
also enables the Company to offer incentives to executives of companies which
are acquired by the Company from time to time as incentives and inducements for
employment. The Plan shall be effective as of the date of approval by the
stockholders of the Company.
For purposes of the Plan, the following terms shall be defined
as set forth below:
a. "Board" means the Board of Directors of the Company.
b. "Cause" means a felony conviction of a participant or
the failure of a participant to contest prosecution for a felony, or a
participant's willful misconduct or dishonesty, any of which is directly and
materially harmful to the business or reputation of the Company or any
Subsidiary.
c. "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor thereto.
d. "Committee" means the Committee referred to in
Section 2 of the Plan. If at any time no Committee shall be in office, or if
the grant of a Stock Option or Restricted Stock may, in the discretion of the
Committee or the Board, constitute a conflict of interest, then the functions
of the Committee specified in the Plan shall be exercised by the Board.
e. "Company" means Ply Gem Industries, Inc., a
corporation organized under the laws of the State of Delaware or any successor
corporation.
f. "Disability" means disability as determined under
procedures established by the Committee for purposes of this Plan.
g. "Disinterested Person" shall have the meaning set
forth in Rule 16b-3(d)(3) as promulgated by the Securities and Exchange
Commission under the Exchange Act, or any successor definition adopted by the
Commission and shall be such person as referred to as an "Outside Director"
pursuant to the provision of the Regulations promulgated under Section 162(m)
of the Code.
h. "Effective Date" of the Plan shall be the date of
approval by the Stockholders of the Company.
i. "Eligible Participant" or "Eligible Employee" means
any executive or key employee of the Company or a Subsidiary, including any
executive of a company which is acquired by the Company or a Subsidiary, who is
responsible for and contributes to the management growth and/or profitability
for the business of the Company or its Subsidiaries.
<PAGE> 2
j. "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
k. "Fair Market Value" means, as of any given date,
unless otherwise determined by the Committee in good faith, the mean between
the highest and lowest quoted selling price, regular way, of the Stock on the
American Stock Exchange (or the principal exchange upon which the Stock is
listed) or, if no such sale of Stock occurs on such date, the fair market value
of the Stock as determined by the Committee in good faith.
l. "Incentive Stock Option" means any Stock Option
intended to be and designated as an "Incentive Stock Option" within the meaning
of Section 422 of the Code.
m. "Non-Qualified Stock Option" means any Stock Option
that is not an Incentive Stock Option.
n. "Plan" means this Ply Gem Industries, Inc. 1994
Employee Incentive Stock Plan, as hereinafter amended from time to time.
o. "Restricted Stock" means an award of shares of Stock
that is subject to restrictions under Section 5 below.
p. "Retirement" means normal or early retirement in
accordance with the Company's policies as in effect from time to time.
q. "Stock" means the Common Stock, $.25 par value per
share, of the Company.
r. "Stock Option" or "Option" means any option to
purchase shares of Stock (including Incentive Stock Options and Non-Qualified
Stock Options).
s. "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if
each of the corporations (other than the last corporation in the unbroken
chain) owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.
In addition, the terms "Change in Control", "Potential Change
in Control" and "Change in Control Price" shall have meanings set forth,
respectively, in Sections 6(b), (c) and (d) below.
SECTION 2. Administration.
The Plan shall be administered by a Committee of not less than two
members of the Board who qualify as Disinterested Persons and who shall be
appointed by the Board.
The Committee shall have full authority to grant, pursuant to the
terms of the Plan, to Eligible Participants Stock Options and Restricted Stock.
The Committee shall have the authority:
(i) to select the Eligible Participants to whom Stock Options and
Restricted Stock may from time to time be granted hereunder;
2.
<PAGE> 3
(ii) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options or Restricted Stock are to be granted
hereunder to one or more Eligible Participant;
(iii) to determine the number of shares to be covered by each such
award granted hereunder;
(iv) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder;
(v) to determine whether and under what circumstances a Stock
Option may be settled in cash and/or Restricted Stock under Section 4(k)
instead of Stock; and
(vi) to determine whether, to what extent and under what
circumstances Option grants and/or Restricted Stock are to be made.
Subject to Section 7 hereof, the Committee shall have the authority to
adopt, alter and repeal such rules, guidelines and practices governing the Plan
as it shall, from time to time, deem advisable; to interpret the terms and
provisions of the Plan and any award issued under the Plan (and any agreements
relating thereto); and to otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be made in the Committee's sole discretion and shall be final and
binding on all persons, including the Company and Plan participants; provided,
however, that no decision or action taken by the Committee shall impair the
rights of any holder of a Stock Option or other award granted pursuant to the
Plan without the holder's consent.
SECTION 3. Stock Subject to Plan.
The total number of shares of Stock reserved and available for
distribution under the Plan shall be 2,250,000 shares. Such shares may be
either authorized but unissued shares or treasury shares.
If any shares of Stock that have been reserved and available for
issuance in accordance with the Plan as aforesaid, cease to be subject to a
Stock Option (as a result of forfeiture or otherwise), or if any Restricted
Stock award granted hereunder is forfeited, such shares shall again be
available for distribution in connection with future awards under the Plan.
Shares of Stock used as payment in exercising a Stock Option or for
tax withholding shall be available for future Stock Options or Restricted
Stock; provided, however, that such additional shares shall not be made
available if such action will cause the Plan not to comply with Rule 16b-3
under the Securities Exchange Act of 1934.
In the event of any merger, reorganization, consolidation,
recapitalization, Stock dividend, Stock split or other change in corporate
structure affecting the Stock, such substitution or adjustment shall be made in
the aggregate number of shares reserved for issuance under the Plan, and in the
number and option price of shares subject to outstanding Options granted under
the Plan, as may be determined to be appropriate by the Committee, in its sole
discretion, provided that the number of shares subject to any award shall
always be a whole number. In the event of an extraordinary dividend or any
other material change in the Company's capital structure, similar adjustments
shall be made if, and to the extent, deemed appropriate by the Board.
3.
<PAGE> 4
SECTION 4. Stock Options.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve. The maximum number of Stock Options
which may be granted under the Plan during any one year to any employee of the
Company shall be 250,000; provided however, that up to 750,000 options may be
granted to Jeffrey S. Silverman, Chairman of the Company, in accordance with a
formula based on increases and decreases in the Company's net income included
in his employment agreement.
Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options.
The Committee shall have the authority to grant to any optionee
Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock
Options, provided such option grants comply with the requirements of Section
162(m) of the Code.
Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(a) Option Price. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the time of grant
but shall be not less than the Fair Market Value of the Stock at grant.
(b) Option Term. The term of each Stock Option shall be fixed by
the Committee, but no Stock Option shall be exercisable more than ten years
after the date the Option is granted.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined
by the Committee at or after grant, provided, however, that except as provided
in Section 4(f) and (g) and Section 7, unless otherwise determined by the
Committee at or after grant, no Incentive Stock Option shall be exercisable
prior to the first anniversary date of the granting of the Option. If the
Committee provides, in its sole discretion, that any Stock Option is
exercisable only in installments, the Committee may waive such installment
exercise provisions at any time at or after grant in whole or in part, based on
such factors as the Committee shall determine, in its sole discretion.
(d) Method of Exercise. Subject to whatever installment exercise
provisions apply under Section 4(c), Stock Options may be exercised in whole or
in part at any time during the option period, by giving written notice of
exercise to the Company specifying the number of shares to be purchased.
Such notice shall be accompanied by payment in full of the purchase
price, either by check, note or such other instrument as the Committee may
accept. As determined by the Committee, in its sole discretion, payment in
full or in part may also be made in the form of unrestricted Stock already
owned by the optionee.
If payment of the option exercise price of a Non-Qualified Stock
Option is made in whole or in part in the form of Restricted Stock, such
Restricted Stock (and any replacement shares relating thereto) shall remain (or
be) restricted in accordance with the original terms of the Restricted Stock
award in question, and any additional Stock received upon the exercise shall be
subject to the same forfeiture restrictions, unless otherwise determined by the
Committee, in its sole discretion, at or after grant.
No shares of Stock shall be issued upon the exercise of a Stock Option
until full payment therefor has been made. An optionee shall generally have
the rights to dividends or other rights of a stockholder with
4.
<PAGE> 5
respect to shares subject to the Option when the optionee has given written
notice of exercise, has paid in full for such shares, and, if requested, has
given the representation described in Section 9(a).
(e) Non Transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee. Notwithstanding the aforesaid, the
Committtee shall have the authority to permit transferability of options to
members of the optionee's family or a family trust.
(f) Termination by Death. Subject to the provisions of the Plan,
if an optionee's employment by the Company and/or any Subsidiary terminates by
reason of death, any Stock Option held by such optionee may thereafter be
exercised, to the extent such option was exercisable at the time of death or on
such accelerated basis as the Committee may determine at or after grant (or as
may be determined in accordance with procedures established by the Committee),
by the legal representative of the estate or by the legatee of the optionee
under the will of the optionee for a period of twelve months (or such other
period as the Committee may specify at grant) from the date of such death or
the date of appointment of the legal representative of such estate, if any, or
until the expiration of the stated term of such Stock Option, whichever period
is the shorter.
(g) Termination by Reason of Disability or Retirement. Subject to
the provisions of the Plan, if an optionee's employment by the Company and any
Subsidiary terminates by reason of Disability or Retirement, any Stock Option
held by such optionee may thereafter be exercised by the optionee, to the
extent it was exercisable at the time of termination or on such accelerated
basis as the Committee may determine at or after grant (or as may be determined
in accordance with procedures established by the Committee), for a period of
one year (or such other period as the Committee may specify at grant) from the
date of such termination of employment or until the expiration of the stated
term of such Stock Option, whichever period is the shorter; provided, however,
that, if the optionee dies within such one-year period (or such other period as
the Committee shall specify at grant), any unexercised Stock Option held by
such optionee shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of twelve months from the date of
such death or six months from the appointment of the legal representative of
the estate of the deceased employee, if any, or until the end of the one-year
period specified above, whichever expires later but in no event beyond the
expiration of the stated term of such Stock Option. In the event of
termination of employment by reason of Disability or Retirement, if an
Incentive Stock Option is exercised after the expiration of the exercise
periods that apply for purposes of Section 422 of the Code, such Stock Option
will thereafter be treated as a Non-Qualified Stock Option.
(h) Other Termination. Unless otherwise determined by the
Committee (or pursuant to procedures established by the Committee) at or after
grant, if an optionee's employment by the Company and/or any Subsidiary
terminates for any reason other than death, Disability or Retirement, the Stock
Option shall thereupon terminate, except that such Stock Option may be
exercised, to the extent otherwise then exercisable, for the lesser of three
months or the balance of such Stock Option's term if the optionee is
involuntarily terminated by the Company or any Subsidiary without Cause.
(i) Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be so exercised, so as to disqualify the Plan under
Section 422 of the Code as may be in effect from time to time, or, without the
consent of the optionee(s) affected, to disqualify any Incentive Stock Option
under such Section 422. The Committee shall have the authority to amend the
Plan so that it conforms with Section 422 of the Code as in effect from time
to time.
(j) Buyout Provisions. The Committee may at any time offer to
purchase (or exchange) for Cash, Stock or Restricted Stock, an option
previously granted under the Plan based on such terms and
5.
<PAGE> 6
conditions as the Committee shall establish and communicate to the optionee at
the time that such offer is made.
(k) Settlement Provisions. If the option agreement so provides at
grant or is amended after grant and prior to exercise to so provide (with the
optionee's consent), the Committee may require that all or part of the shares
to be issued with respect to the spread value of an exercised Option take the
form of Restricted Stock, which shall be valued on the date of exercise on the
basis of the Fair Market Value (as determined by the Committee) of such
Restricted Stock determined without regard to the deferral limitations and/or
forfeiture restrictions involved.
(l) Financing. If the Committee so determines, the Company shall
make or arrange for a loan to an employee with respect to the exercise of Stock
Options. The Committee shall have full authority to decide whether such a loan
should be made and to determine the amount, term and other provisions of any
such loan, including the interest rate to be charged, if any, whether the loan
is to be with or without recourse against the borrower, the security, if any,
therefor, the terms on which the loan is to be repaid and the conditions, if
any, under which it may be forgiven. However, no loan hereunder shall have a
term (including extensions) exceeding 10 years in duration or be in an amount
exceeding 90% of the total purchase price paid by the borrower.
SECTION 5. Restricted Stock.
(a) Administration. The Committee shall determine the eligible
persons to whom, and the time or times at which, grants of Restricted Stock
will be made, the number of shares to be awarded, the price (if any) to be paid
by the recipient of Restricted Stock (subject to Section 5(b)), the time or
times within which such awards may be subject to forfeiture, and all other
terms and conditions of the awards. The maximum number of shares of Restricted
Stock which may be granted under the Plan during any one year to any one
employee shall be 250,000.
The Committee may, subject to Section 162(m) of the Code, condition
the grant of Restricted Stock upon the attainment of specified performance
measures or longevity goals or such other factors as the Committee may
determine, in its sole discretion. The performance measures that the Committee
may use consist of net income, income from operations, net sales, and return or
net assets or sales.
The provisions of Restricted Stock awards need not be the same with
respect to each recipient.
(b) Awards and Certificates. The prospective recipient of a
Restricted Stock award shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the applicable terms and conditions of such award.
(i) The purchase price for shares of Restricted Stock, if
any, shall be at least par value.
(ii) Awards of Restricted Stock must be accepted within a
period of 60 days (or such shorter period as the Committee may specify at
grant) after the award date, by executing a Restricted Stock Award Agreement
and paying whatever price (if any) is required and currently due under Section
5(b)(i).
(iii) Each participant receiving a Restricted Stock award
shall be issued a stock certificate in respect of such shares of Restricted
Stock. Such certificate shall be registered in the name of such participant,
and shall bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such award.
6.
<PAGE> 7
(iv) The Committee may require that the stock certificates
evidencing such shares be held in custody by the Company or the Company's
designee, until the restrictions thereon shall have lapsed, and that, as a
condition of any Restricted Stock award, the participant shall have delivered a
stock power, endorsed in blank, relating to the Stock covered by such award.
(c) Restrictions and Conditions. The shares of Restricted Stock
awarded pursuant to this Section 5 shall be subject to the following
restrictions and conditions:
(i) Subject to the provisions of this Plan and the award
agreement, during a period set by the Committee commencing with the date of
such award (the "Restriction Period"), the participant shall not be permitted
to sell, transfer, pledge or assign shares of Restricted Stock awarded under
the Plan. Within these limits, the Committee, in its sole discretion, may
provide for the lapse of such restrictions in installments and may accelerate
or waive such restrictions in whole or in part, based on service, performance
and/or such other factors or criteria as the Committee may determine, in its
sole discretion.
(ii) Except as provided in this paragraph (ii) and Section
5(c)(i), the participant shall have, with respect to the shares of Restricted
Stock, all of the rights of a stockholder of the Company, including the right
to vote the shares, and the right to receive any cash dividends. However, the
Committee, in its sole discretion, as determined at the time of award, may
permit or require the payment of cash dividends to be deferred and, if the
Committee so determines, reinvested, subject to Section 9(e), in additional
shares of Restricted Stock (subject to the same restrictions and other terms
and conditions that apply to the shares with respect to which such dividends
are issued) to the extent shares are available under Section 3, or otherwise
reinvested. Pursuant to Section 3 above, Stock dividends issued with respect
to Restricted Stock shall be treated as additional shares of Restricted Stock
that are subject to the same restrictions and other terms and conditions that
apply to the shares with respect to which such dividends are issued.
(iii) Subject to the applicable provisions of the award
agreement and this Section 5, upon termination of a participant's employment
with the Company and/or any Subsidiary for any reason during the Restriction
Period, all shares still subject to restriction will vest, or be forfeited, in
accordance with the terms and conditions established by the Committee.
(iv) If and when the Restriction Period expires without a
prior forfeiture of the Restricted Stock subject to such Restriction Period,
certificates for an appropriate number of unrestricted shares shall be
delivered to the participant promptly.
SECTION 6. Change in Control Provisions.
(a) Impact of Event. In the event of:
(1) a "Change in Control" as defined in Section 6(b), or
(2) a "Potential Change in Control" as defined in Section
6(c), but only if and to the extent so determined by the Committee or the Board
at or after grant (subject to any right of approval expressly reserved by the
Committee or the Board at the time of such determination), the following
acceleration and valuation provisions shall apply:
(i) The restrictions and limitations applicable to
any Restricted Stock, in each case to the extent not already vested under the
Plan, shall lapse and such shares and awards shall be deemed fully vested.
7.
<PAGE> 8
(ii) The value of all outstanding Stock Options to
the extent then exercisable, shall, unless otherwise determined by the
Committee in its sole discretion at or after grant but prior to any Change in
Control, be "cashed out" on the basis of the "Change in Control Price" as
defined in Section 6(d) as of the date such Change in Control or such Potential
Change in Control is determined to have occurred or such other date as the
Committee may determine prior to the Change in Control. As used in this
Section 6(a)(ii), the term "cashed out" shall mean the amount equal to the
difference in the Change in Control Price and the exercise price of an
outstanding Stock Option.
(b) Definition of "Change in Control". For purposes of Section
6(a), a "Change in Control" means the happening of any of the following:
(i) When any "person" as defined in Section 3(a)(9) of the
Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a
"group" as defined in Section 13(d) of the Exchange Act but excluding the
Company and any Subsidiary and any employee benefit plan sponsored or
maintained by the Company or any Subsidiary (including any trustee of such plan
acting as trustee), or any person, entity or group specifically excluded by the
Board, directly or indirectly, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act, as amended from time to time) of securities
of the Company representing 20 percent or more of the combined voting power of
the Company's then outstanding securities;
(ii) When, during any period of 24 consecutive months during
the existence of the Plan, the individuals who, at the beginning of such
period, constitute the Board (the "Incumbent Directors") cease for any reason
other than death to constitute at least a majority thereof, provided, however,
that a director who was not a director at the beginning of such 24-month period
shall be deemed to have satisfied such 24-month requirement (and be an
Incumbent Director) if such director was elected by, or on the recommendation
of or with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors either actually (because they were directors
at the beginning of such 24-month period) or by prior operation of this Section
6(b)(ii); or
(iii) The occurrence of a transaction requiring stockholder
approval for the acquisition of the Company by an entity other than the Company
or a Subsidiary or an Affiliated Company (or any person, entity or group, as
such terms are defined in Section 6(b)(i) above, specifically excluded by the
Board) through purchase of assets, or by merger, or otherwise.
(c) Definition of "Potential Change in Control". For purposes of
Section 6(a) a "Potential Change in Control" means the happening of any one of
the following:
(i) The approval by stockholders of an agreement by the
Company, the consummation of which would result in a Change in Control of the
Company as defined in Section 6(b); or
(ii) The acquisition of beneficial ownership, directly or
indirectly, by any entity, person or group, as such terms are defined in
Section 6(b)(i) above (other than the Company or a Subsidiary or any Company
employee benefit plan (including any trustee of such plan acting as such
trustee) or any person, entity or group, as such terms are defined in Section
6(b)(i) above, specifically excluded by the Board) of securities of the Company
representing five percent or more of the combined voting power of the Company's
outstanding securities and the adoption by the Board of Directors of a
resolution to the effect that a Potential Change in Control of the Company has
occurred for purposes of this Plan; or
(iii) The commencement by any person, entity or group (as
such terms are defined in Section 6(b)(i) above) of a tender offer and the
adoption by the Board of a resolution to the effect that a Potential Change in
Control has occurred for purposes of this Plan.
8.
<PAGE> 9
(d) Definition of "Change In Control Price". For purposes of this
Section 6, "Change in Control Price" means the highest price per share paid in
any transaction reported on the American Stock Exchange (or the principal
exchange upon which the Stock is listed), paid in any bona fide transaction, or
offered pursuant to a bona fide offer, including a tender offer, related to a
potential or actual Change in Control of the Company at any time during the
sixty-day period immediately preceding the occurrence of the Change in Control
(or, where applicable, the occurrence of the Potential Change in Control
event), in each case as determined by the Committee.
SECTION 7. Amendments and Termination.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of
an optionee or participant under a Stock Option and/or Restricted Stock award
theretofore granted, without the optionee's or participant's consent, or which,
without the approval of the Company's stockholders, would:
(a) except as expressly provided in this Plan, increase the total
number of shares reserved for the purpose of the Plan or increases the annual
share maximums;
(b) except as expressly provided in this Plan, decrease the option
price of any Stock Option to less than 100% of the Fair Market Value on the
date of grant;
(c) change the employees, participants, classes of employes or
classes or participants eligible to participate in the Plan; or
(d) extend the maximum option period under Section 4(b) of the Plan.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to this
Section 7, no such amendment shall impair the rights of any holder without the
holder's consent. The Committee may also substitute new Stock Options for
previously granted Stock Options (on a one for one or other basis), including
previously granted Stock Options having higher option exercise prices.
Subject to the above provisions, the Board shall have broad authority
to amend the Plan to take into account changes in applicable securities and tax
laws and accounting rules, as well as other developments.
SECTION 8. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive
and deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a
general creditor of the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Stock or payments in lieu of or with respect
to awards hereunder, provided, however, that, unless the Committee otherwise
determines with the consent of the affected participant, the existence of such
trusts or other arrangements is consistent with the "unfunded" status of the
Plan.
9.
<PAGE> 10
SECTION 9. General Provisions.
(a) The Committee may require each person purchasing shares pursuant
to a Stock Option or other award under the Plan to represent to and agree with
the Company in writing that the optionee or participant is acquiring the shares
without a view to distribution thereof. The certificates for such shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on transfer.
All certificates for shares of Stock or other securities delivered
under the Plan shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Stock is then listed, and any applicable Federal or
state securities law, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
(c) The adoption of the Plan shall not confer upon any employee of
the Company or any Subsidiary any right to continued employment with the
Company or a Subsidiary, as the case may be, nor shall it interfere in any way
with the right of the Company or a Subsidiary to terminate the employment of
any of its employees at any time.
(d) No later than the date as of which an amount first becomes
includable in the gross income of the participant for Federal income tax
purposes with respect to any award under the Plan, the participant shall pay to
the Company, or make arrangements satisfactory to the Committee regarding the
payment of, any Federal, state, or local taxes of any kind required by law to
be withheld with respect to such amount. Unless otherwise determined by the
Committee, withholding obligations may be settled with Stock, including Stock
that is part of the award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements and the Company and its Subsidiaries and its Affiliated
Companies shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the participant.
(e) The actual or deemed reinvestment of dividends or dividend
equivalents in additional Restricted Stock at the time of any dividend payment
shall only be permissible if sufficient shares of Stock are available under
Section 3 for such reinvestment (taking into account then outstanding Stock
Options.
(f) The Plan and all awards made and actions taken thereunder shall
be governed by and construed in accordance with the laws of the State of
Delaware.
SECTION 10. Term of Plan.
No Stock Option or Restricted Stock award shall be granted pursuant to
the Plan on or after the tenth anniversary of the Effective Date, but awards
granted prior to such tenth anniversary may extend beyond that date.
10.
<PAGE> 1
[LETTERHEAD]
August 11, 1994
Ply Gem Industries, Inc.
777 Third Avenue
New York, New York 10017
Re: Registration Statement on Form S-8
1994 Employee Incentive Stock Plan
-----------------------------------
Dear Sirs:
We have acted as counsel to you (the "Company") and, as such, are
familiar with the corporate proceedings taken and to be taken with respect to
the adoption of the Company's 1994 Employee Incentive Stock Plan and the sale
of shares pursuant thereto. We have acted as counsel to the Company with
respect to the preparation of a Registration Statement of Form S-8 relating to
2,250,000 shares of the Common Stock of the Company, par value $.25 per share
(the "Common Stock") issuable pursuant to the aforesaid Plan.
It is our opinion that:
(1) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware; and
(2) Shares of Common Stock issuable in accordance with
the provisions of the 1994 Employee Incentive Stock Plan shall
be, upon due issuance and payment therefor in accordance with
the provisions of said Plan validly and legally issued, fully
paid and non-assessable.
The undersigned consents to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the Registration Statement
and to all references to us in the said Registration Statement.
Very truly yours,
CHARLES M. MODLIN
<PAGE> 1
CONSENT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
We have issued our reports dated February 24, 1994 (except for Note E, as to
which the date is March 23, 1994) accompanying the consolidated financial
statements and schedules of Ply Gem Industries Inc. and subsidiaries appearing
in the 1993 Annual Report on Form 10-K, as amended on April 28, 1994, for the
year ended December 31, 1993 which are incorporated by reference in this
Registration Statement. We consent to the incorporation by reference in the
Registration Statement of the aforementioned reports.
GRANT THORNTON
New York, New York
August 11, 1994
