1
OPTION SURRENDER AGREEMENT, RELEASE AND WAIVER
IN CONNECTION WITH THE PROPOSED ACQUISITION OF
PLY GEM INDUSTRIES, INC. BY NORTEK, INC.
NOTE: SIGNATURE MUST BE PROVIDED BELOW AND ON
THE SCHEDULE OF OWNERSHIP.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
To Ply Gem Industries, Inc., a Delaware corporation (the "Company"):
The undersigned acknowledges that pursuant to Section 3.5(a)(i) of the
Agreement and Plan of Merger among Nortek, Inc., NTK Sub, Inc. ("NTK Sub") and
the Company, dated as of July 24, 1997 (the "Merger Agreement"), the Company
will be canceling all Options and Unvested Stock (each as defined below) in
return for cash consideration effective at the time the proposed merger of NTK
Sub with and into the Company (the "Merger") becomes effective (the "Effective
Time"). Receipt of such consideration by the undersigned will be subject to the
receipt by the Company of this Option Surrender Agreement, Release and Waiver
(the "Surrender Agreement") surrendering Options and Unvested Stock for such
cancellation and the consummation of the tender offer for the common stock of
the Company commenced by NTK Sub on July 29, 1997 (the "Offer").
Subject to, and effective upon, acceptance by the Company of the surrender
of the Options and Unvested Stock surrendered herewith, the undersigned hereby
surrenders for cancellation to the Company all of his rights, title and interest
in and to all shares of not yet vested restricted stock (to the extent not
tendered in the Offer) and all options (whether vested or unvested) to purchase
shares of common stock, $.25 par value per share (the "Shares"), of the Company
previously granted pursuant to the Company's Executive Incentive Stock Option
Plan, 1989 Employee Incentive Stock Plan, 1989 Senior Executive Stock Option
Plan and 1994 Employee Incentive Stock Plan or as otherwise specified in the
Merger Agreement (such restricted stock, the "Unvested Stock," such options, the
"Options" and such plans, the "Option Plans") and listed on the attached
Schedule of Ownership (the "Ownership Schedule"), for (i) with respect to
Unvested Stock, a per Share amount equal to the Merger Consideration (as defined
in the Merger Agreement), multiplied by the number of shares of Unvested Stock,
and (ii) with respect to Options, a per Share amount equal to the Merger
Consideration, minus the exercise price per Share, multiplied by the number of
Shares subject to such Options, in each case, upon the terms and subject to the
conditions set forth in this Surrender Agreement.
The undersigned hereby represents and warrants that the undersigned holds
the Options and Unvested Stock surrendered hereby free and clear of all claims,
liens, restrictions, charges,
2
encumbrances, security interests, voting agreements and commitments of any kind
and has full power and authority to surrender for cancellation such Options and
Unvested Stock, subject to other agreements involving the Offer and the Merger
which may have been executed by the undersigned.
This surrender is irrevocable by the undersigned but will not be
effective if the Offer is not consummated on or before October 31, 1997. The
undersigned acknowledges that the Company will not accept any surrenders prior
to the consummation of the Offer.
The undersigned, on behalf of himself, and on behalf of all spouses,
heirs, predecessors, successors, assigns, representatives or agents of the
undersigned (including without limitation any trust of which the undersigned is
the trustee or which is for the benefit of the undersigned or a member of his
family), to the greatest extent permitted by law, hereby acknowledges that the
payments made pursuant to the Surrender Agreement are in full satisfaction of
any and all rights the undersigned may have under the Option Plans with respect
to Options and Unvested Stock being surrendered hereby.
The undersigned hereby acknowledges that the Ownership Schedule
enclosed herewith correctly and completely sets forth the Options and Unvested
Stock held by the undersigned being surrendered hereunder, and that except as
set forth therein the undersigned does not have the right to acquire any stock
in the Company or any options, warrants or other rights to acquire shares of
capital stock of or equity interests in the Company, or similar securities or
contractual obligations the value of which is derived from the value of an
equity interest in the Company, or securities convertible into or exchangeable
for capital stock of or equity interests in, or similar securities or
contractual obligations of, the Company.
Assuming that a duly executed Surrender Agreement and Ownership
Schedule have been delivered to the Company prior to the consummation of the
Offer, the undersigned acknowledges that all payments to be made pursuant to
such Surrender Agreement are expected to be paid by check on the first business
day following consummation of the Offer in accordance with Section 2(d) of the
First Amended and Restated Stockholders Agreement, dated as of July 24, 1997,
among Atrium Acquisition Holdings Corp., Atrium/PG Acquisition Corp. Xxxxxxx X.
Xxxxxxxxx, Xxxx X. Xxxxxx, Xxxxxxx X. Xxxxxxx, the Company, Nortek, Inc. and
NTK Sub (the "Stockholders Agreement") and that the Company is not required to
make any payments to the undersigned pursuant to the Surrender Agreement unless
his Options and Unvested Stock are outstanding at the time the Offer is
consummated.
The undersigned also acknowledges that, if a duly executed Surrender
Agreement and Ownership Schedule are not delivered to the Company on or prior
to the consummation of the Offer, the undersigned will receive payments
pursuant to the Surrender Agreement and in accordance with the Stockholders
Agreement as soon as reasonably practicable after the subsequent delivery of a
duly executed Surrender Agreement and Ownership Schedule to the
2
3
Company with respect to the Options and Unvested Stock outstanding at the time
of such delivery or at the Effective Time, whichever is earlier.
The undersigned also acknowledges that all payments to be made pursuant
to the Surrender Agreement may be subject to applicable withholding taxes.
The undersigned, upon request, will execute and deliver any additional
documents deemed by the Company to be reasonably necessary or desirable to
complete the surrender of the Options and Unvested Stock surrendered hereby.
The undersigned recognizes that the consummation of the Offer is
subject to various conditions and the Company may not be required to accept the
surrender of any of the Options or Unvested Stock surrendered hereby.
It is understood that the Surrender Agreement only shall apply to
Options that are outstanding at the time the Offer is consummated and that,
even if the Surrender Agreement is delivered to the Company, Options, to the
extent otherwise exercisable pursuant to the terms of the Option Plans or the
Merger Agreement, may be exercised any time prior to the consummation of the
Offer.
INSTRUCTIONS
1. EXECUTION OF THE SURRENDER AGREEMENT AND THE OWNERSHIP SCHEDULE.
This Surrender Agreement is to be completed by the optionholder. In order to
validly surrender such Options and Unvested Stock and receive payments, an
optionholder must complete and sign this Surrender Agreement and the Ownership
Schedule in accordance with the instructions herein and mail or deliver them in
the enclosed envelope to the Company. In order to receive payments at the
earliest possible time, optionholders should complete and return this Surrender
Agreement and the Ownership Schedule prior to August 22, 1997.
THE OWNERSHIP SCHEDULE MUST BE SIGNED BY THE OPTIONHOLDER AS EVIDENCE
OF SUCH ACKNOWLEDGEMENT AND RETURNED TOGETHER WITH THIS SURRENDER AGREEMENT. A
second copy of the Ownership Schedule for the optionholder's records has also
been included herewith.
2. DELIVERY. This Surrender Agreement and the enclosed Ownership
Schedule, when executed, should be mailed or delivered to: J. Xxxx Xxxxxxx,
Vice President, Ply Gem Industries, Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000.
THE METHOD OF DELIVERY OF THE SURRENDER AGREEMENT AND THE OWNERSHIP
SCHEDULE IS AT THE OPTION AND RISK OF THE SURRENDERING OPTIONHOLDER. DELIVERY
BY EXPEDITED MAIL, COURIER OR OTHER SIMILAR SERVICE IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE
3
4
ALLOWED TO ENSURE TIMELY DELIVERY. OPTIONHOLDERS ARE ALSO ADVISED TO RETAIN A
COPY OF ALL DOCUMENTS DELIVERED.
3. SIGNATURE ON THE SURRENDER AGREEMENT. The signature on this
Surrender Agreement and Ownership Schedule must correspond exactly with the
optionholder's name in the records of the Company.
4. REQUESTS FOR ASSISTANCE. If you have questions or need assistance
please call J. Xxxx Xxxxxxx at (000) 000-0000.
4
5
IMPORTANT:
OPTIONHOLDER: (1) SIGN HERE; AND (2) CONFIRM AND SIGN THE ENCLOSED
OWNERSHIP SCHEDULE.
--------------------------------------------------------------------------------
(Signature of Optionholder)
Dated:
------------------------
Name:
--------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Type or Print)
Address:
-----------------------------------------------------------------------
--------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
------------------------------------------------
(Home)
------------------------------------------------
(Business)
Taxpayer Identification or Social Security No.:
--------------------------------
--------------------------------------------------------------------------------
August 20, 1997
5
