GREAT LAKES WINDOWS
 
SEPARATION AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS
 
This Separation Agreement and General Release of all Claims (the “Agreement”),
dated as of November 28, 2005, is entered into by and between Great Lakes
Windows, a wholly owned subsidiary of Ply Gem Holdings, Inc., a Delaware
corporation (the “Company”), Mark A. Watson (the “Executive”) and, with respect
to Section 2C only, Ply Gem Investment Holdings, Inc., a Delaware corporation
(“PIHI”).
 
WHEREAS, the Executive is currently employed by the Company as its President;
and
 
WHEREAS, the Company and the Executive have agreed that the Executive’s
employment with the Company and its subsidiaries and affiliates shall terminate
effective November 28, 2005 (the “Termination Date”), and the Executive shall
relinquish his title of President of the Company and, except as specifically
provided herein, all other positions of employment, service or responsibility
that he presently holds (whether as an officer, director, employee or otherwise)
with the Company or any of its subsidiaries or affiliates, including, without
limitation, PIHI and Ply Gem Industries, Inc. (“Ply Gem”) (collectively, the
“Company Group”); and
 
WHEREAS, the Company desires to provide the Executive with certain benefits upon
the Executive’s termination of employment with the Company, in exchange for the
Executive’s agreement to comply with certain restrictive covenants in favor of
the Company and to release certain claims against the Company and its
subsidiaries, parents, shareholders and their respective executives, officers,
directors, partners, members and agents, on the terms and subject to the
conditions more fully set forth in this Agreement.
 
NOW THEREFORE, in consideration of the promises, mutual covenants and other good
and valuable consideration set forth in this Agreement, the receipt and
sufficiency of which is hereby acknowledged, the Executive and the Company (the
“Parties”) agree as follows:
 
1.  Continuation and Termination of Employment; Performance of Mutually Agreed
Tasks.
 
A.  The Executive will continue working for the Company pursuant to the terms of
the Employment Agreement through the Termination Date. Pursuant to Section 2 of
the Employment Agreement, the Executive confirms that he and the Chairman and
Chief Executive Officer of the Company (the “CEO”) have mutually agreed that the
Executive will continue to perform the Tasks for the period commencing on the
Termination Date and ending on the earlier of January 27, 2006 or the completion
of the Tasks (the “Task Completion Date”) (with both the Executive and the
Company acknowledging that the Executive has been engaged in the performance of
the Tasks prior to the Termination Date), that the Tasks are consistent with the
Executive’s prior status as President of the Company and that the Executive will
use his best efforts to perform the Tasks and complete then as soon as
reasonably practicable. The Tasks will be to provide advice, support and
services (including attending meetings if requested) necessary to effect a
succesful transition to the new President of the Company. Notwithstanding clause
(ii) of Section 4(a) of the Employment Agreement, during the period following
the Termination Date the Company may terminate the Executive’s employment with
the Company only for “Cause,” as defined in the Employment Agreement, or upon
the reasonable determination of the Board of Directors of the Company (the
“Board”) that the Executive has failed to attempt in good faith to perform the
Tasks. The Tasks need not be performed by the Executive at the Company’s
offices, but the Executive may be required to attend specific meetings outside
of the Company’s offices at specific times as directed by the CEO (it being
understood that the Company will use its reasonable efforts to minimize the
number of such meetings following the Termination Date). The Executive will stay
on the Company’s e-mail system until January 27, 2006.
 
B.  The Executive will provide a written report to the CEO no later than five
(5) business days following the Termination Date, and no later than the fifth
(5th) day of each calendar month through the Task Completion Date, describing in
reasonable detail the status of each of the Tasks and the remaining items to be
completed for each of the Tasks.
 
C.  The Executive and the Company hereby agree that Executive’s employment and
any and all titles, positions and appointments he holds with the Company and any
of its affiliates or subsidiaries (collectively, the “Company Group”), whether
as officer, director, employee, consultant, agent or otherwise (including,
without limitation as President of the Company) shall cease as of the
Termination Date, unless earlier terminated by the Company for Cause, by the
Executive by resignation or on account of the Executive’s death or disability.
Effective as of the Termination Date, the Executive shall have no authority to
act on behalf of the Company or any other member of the Company Group, and shall
not hold himself out as having such authority, enter into any agreement or incur
any obligations on behalf of any member of the Company Group, commit any member
of the Company Group in any manner or otherwise act in an executive or other
decision-making capacity with respect to any member of the Company Group.
 
2.  Payments and Benefits.
 
In consideration for the Executive’s entering into this Agreement, specifically
including the general release in Section 6 of this Agreement and the restrictive
covenants contained in Section 5 of this Agreement, the Executive shall be
entitled to the following payments and benefits, subject to the general release
becoming effective (i.e., the Executive not exercising his right to revoke the
release as described in Section 6 of this Agreement) and the Executive’s
continued compliance with the restrictive covenants contained in Section 5 of
this Agreement:
 
A.  Payment by the Company of severance pay at an annual rate in an amount equal
to $234,875.00, which represents the Executive’s annual base salary and
performance incentive bonus in 2003 (for the avoidance of doubt this amount
shall not, and no portion of any severance paid to the Executive pursuant to
this Agreement shall include any amounts in respect of any car allowance or
payments for any other perquisites or benefits for the Executive) and which is
subject to reduction by the Company to satisfy any applicable federal, state and
local income and employment tax withholding obligations of the Company. This
payment shall be made in 24 equal monthly installments during the period from
the Termination Date until the second anniversary of the Termination Date the
(“Severance Period”). The Company shall mail the first payment on the day
following the date the general release described in Section 6 of this Agreement
becomes effective (i.e., the Executive’s not exercising his right to revoke the
release as described in Section 6 of this Agreement) and shall make each of the
following 23 payments on the 15th day of each of the months of December 2005
through October 2007 occurring during the Severance Period by direct deposit
into an account of the Executive; provided, that, if the 15th day of any such
month falls on a weekend or on a Company holiday, the Company shall make such
direct deposit payment no later than the Monday or first business day (as
applicable) following the 15th;
 
B.  Provided that the Executive, or any of his covered dependents, as
applicable, timely elects to continue medical and dental coverage in accordance
with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), payment by the Company of the COBRA premiums for the Executive and
each of his eligible covered dependents for whom continuation coverage is
elected, for the period commencing on the Termination Date and ending on the
earlier of (i) last day of the Severance Period, and (ii) the date on which the
Executive’s COBRA coverage otherwise terminates as provided by law;
 
 
 
 
C.  An amount equal to $423,000.00 (the “Stock Repurchase Amount”), shall be
paid to you by PIHI, which shall constitute a repurchase by PIHI of (A) the
28,710 shares of common stock par value $0.01 per share of PIHI (“PIHI Stock”)
held by the Executive as of the Termination Date that were purchased by the
Executive pursuant to the Ply Gem Investment Holdings, Inc. Subscription
Agreement, dated as of February 12, 2004, by and between PIHI and the Executive
(the “Subscription Agreement”) and (B) the 13,590 phantom incentive units held
by the Executive as of the Termination Date that were acquired by the Executive
pursuant to the “Ply Gem Investment Holdings, Inc. Amended and Restated Phantom
Stock Plan” (the “Amended and Restated Phantom Stock Plan”), calculated based on
a $10.00 purchase price per share of PHIC Stock. All phantom incentive units
belonging to the Executive as well as all of Executive’s rights under the
Amended and Restated Phantom Stock Plan are terminated in full as of the
Termination Date. The Stock Repurchase Amount shall be mailed to the Executive
on February 15, 2006 (the “Stock Repurchase Payment Date”), assuming that the
general release has become effective as of the Stock Repurchase Payment Date,
i.e., that the Executive has not exercised any of his rights to revoke as
described in Section 6 of this Agreement. The Executive acknowledges and agrees
that, except as provided in this Section 2C, as of the date of this Agreement,
there are no outstanding stock options or other equity awards held by the
Executive that were granted to the Executive by the Company, PIHI or any other
member of the Company Group and the Executive does not hold any other shares of
PIHI Stock, or hold or have any rights relating to PIHI Stock or any other
securities of the Company or of any member of the Company Group;
 
D.  Regardless of whether the Executive signs this Agreement, as soon as
reasonably practicable following the Termination Date or such earlier date as
may be required by applicable state statute or regulation, (i) any annual base
salary earned but unpaid through the Termination Date, (ii) payment in respect
of any vacation time that is accrued but unused through the Termination Date,
and (iii) reimbursement for all un-reimbursed business expenses properly
incurred by the Executive in accordance with Company policy prior to the
Termination Date and not yet reimbursed by the Company; provided, that, the
Executive must submit to the Company, within 21 days after the Termination Date,
any outstanding expense reports within his possession, and the Executive shall
not receive reimbursement in respect of any expense reports submitted after such
date.
 
E.  All benefits accrued up to the Termination Date, to the extent vested, under
all employee benefit plans of the Company and any member of the Company Group,
except for any plan that provides for severance, separation pay or termination
benefits, in accordance with the terms of such plans and under the Option
Agreement, Subscription Agreement, Stockholders Agreement or any other agreement
governing any securities of any member of the Company Group that are held by the
Executive as of the Termination Date.
 
The Executive acknowledges and agrees that (i) the Executive’s receipt of all
payments and benefits provided in Section 2 of this Agreement constitutes full
and final payment, accord and satisfaction of any and all potential claims to
the extent described in Section 6 of this Agreement, (ii) except for the
payments and benefits described in Sections 2A through 2C of this Agreement, to
which the Executive is only entitled if he does not exercise his rights of
revocation as provided in Section 6 of this Agreement and continues to comply
with the restrictive covenants contained in Section 5 of this Agreement, the
Executive is not entitled to any other compensation or benefits from the Company
or any member of the Company Group (including without limitation any severance
or termination compensation or benefits), and (iii) as of and after the
Termination Date, the Executive shall no longer participate in, accrue service
credit or have contributions made on his behalf under any employee benefit plan
sponsored by any member of the Company Group in respect of periods commencing on
and following the Termination Date, including without limitation, any plan which
is intended to qualify under Section 401(a) of the Internal Revenue Code of
1986, as amended (a “Qualified Plan”); provided, that, except as expressly
provided herein, nothing in this Agreement shall constitute a waiver by the
Executive of his rights to vested benefits, if any, under any Qualified Plan or
under any Company group health plan or to any other fringe benefits to which he
may be entitled under applicable law in respect of his services to the Company
prior to the Termination Date.
 
If the Executive revokes the Initial Release pursuant to Sections 6A-6F of this
Agreement during the revocation period described in such section, then this
Agreement shall be void as of and following the date of this Agreement, and the
Executive shall be deemed to have resigned from the Company as of such date and
the applicable provisions of employee benefit plans and of the Ply Gem
Investment Holdings, Inc. Stockholders Agreement, dated as of February 12, 2004,
by and between PIHI, Caxton-Iseman (Ply Gem), L.P. and certain other investors
in and management stockholders of PIHI (the “Stockholders Agreement”) shall
apply. If the Executive does not revoke the Initial Release, but fails to give
or revokes after giving the Task Completion Date Release, then the provisions of
Section 6G shall apply.
 
3.  Additional Consideration.
 
The Executive acknowledges that, except with respect to the payments described
in Section 2D of this Agreement, pursuant to this Agreement he is receiving
consideration in addition to any amounts to which he would have otherwise been
entitled but for this Agreement.
 
4.  Return of Company Property.
 
  No later than the Task Completion Date, the Executive shall return to the
Company all originals and copies of papers, notes and documents (in any medium,
including computer disks), whether property of any member of the Company Group
or not, prepared, received or obtained by the Executive during the course of,
and in connection with, his employment with or services for the Company or any
member of the Company Group, and all equipment and property of any member of the
Company Group which may be in the Executive’s possession or under his control,
whether at the Company’s offices, the Executive’s home or elsewhere, including
all such papers, work papers, notes, documents and equipment in the possession
of the Executive. The Executive agrees that he and his family shall not retain
copies of any such papers, work papers, notes and documents. Notwithstanding the
foregoing, the Executive may retain copies of any employment, compensation,
benefits or shareholders agreements between the Executive and the Company, this
Agreement and any employee benefit plan materials distributed generally to
participants in any such plan by the Company. On the Task Completion Date, all
telephone and other accounts being paid by the Company on the Executive’s
behalf, shall be terminated and all company credit cards shall be returned to
the Company and canceled. To the extent any charges are made by the Executive
using company accounts or credit cards after the Task Completion Date, such
charges will be solely the Executive’s responsibility.

5.  Restrictive Covenants
 
A.  Survival of Non-Disclosure Agreement; Employee Information Agreement; Ply
Gem Code of Ethics
 
Notwithstanding anything to the contrary in this Agreement, the covenants and
other provisions set forth in the Employee’s Non-Disclosure Agreement,
previously signed by the Executive (the “Non-Disclosure Agreement”), the Great
Lakes Windows Employee Information Agreement, (the “Employee Information
Agreement”), the Ply Gem Industries, Inc. Code of Ethics (the “Ply Gem Code of
Ethics”) and Section 6.3 of the Stockholders Agreement that expressly survive
termination of the Executive’s employment shall survive the Termination Date and
be effective for the periods described therein.
 
B.  Non-Competition/Non-Solicitation
 
The Executive acknowledges and recognizes the highly competitive nature of the
Company and accordingly agrees as follows:
 
1.  During the period commencing on the Termination Date and ending on the
second anniversary of such date (the “Restricted Period”) or such longer period
as described in the last sentence of Section 5G of this Agreement, the Executive
will not, directly or indirectly, (w) engage in any “Competitive Business”
(defined below) for the Executive’s own account, (x) enter the employ of, or
render any services to, any person engaged in any Competitive Business,
(y) acquire a financial interest in, or otherwise become actively involved with,
any person engaged in any Competitive Business, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent, trustee
or consultant, or (z) interfere with business relationships between the Company
and customers or suppliers of, or consultants to the Company.
 
2.  For purposes of this Section 5B, a “Competitive Business” means, as of any
date, including during the Restricted Period, (A) any person or entity
(including any joint venture, partnership, firm, corporation or limited
liability company) that engages in or proposes to engage in the manufacturing of
windows, doors or siding, or (B) any business or activity that relates to the
design, marketing, distribution, resale, wholesale or retailing of windows,
doors or siding, in the case of clause (A) or (B), in any geographical area in
which the Company does business.
 
3.  For purposes of this Section 5B, the Company shall be construed to include
the Company and its subsidiaries and controlled affiliates.
 
4.  Notwithstanding anything to the contrary in this Agreement, the Executive
may, directly or indirectly, own, solely as an investment, securities of any
person engaged in the business of the Company which are publicly traded on a
national or regional stock exchange or on the over-the-counter market if the
Executive (A) is not a controlling person of, or a member of a group which
controls, such person and (B) does not, directly or indirectly, own one percent
(1%) or more of any class of securities of such person.
 
5.  During the Restricted Period, the Executive will not, directly or
indirectly, without the Company’s written consent, solicit or encourage to cease
to work with the Company any employee or any consultant of the Company or any
person who was an employee of or consultant then under contract with the Company
within the 24-month period preceding such solicitation or encouragement
activity. In addition, during the Restricted Period, the Executive will not,
without the Company’s written consent, directly or indirectly hire any person
who is or who was, within the 24-month period preceding such hiring activity, an
employee of the Company.
 
6.  The Executive understands that the provisions of this Section 5B may limit
the Executive’s ability to earn a livelihood in a business similar to the
business of the Company, but the Executive nevertheless agrees and hereby
acknowledges that (A) such provisions do not impose a greater restraint than is
necessary to protect the goodwill or other business interests of the Company,
(B) such provisions contain reasonable limitations as to time and scope of
activity to be restrained, (C) such provisions are not harmful to the general
public and (D) such provisions are not unduly burdensome to the Executive. In
consideration of the foregoing and in light of the Executive’s education, skills
and abilities, the Executive agrees that he shall not assert that, and it should
not be considered that, any provisions of Section 5B otherwise are void,
voidable or unenforceable or should be voided or held unenforceable.
 
7.  It is expressly understood and agreed that, although the Executive and the
Company consider the restrictions contained in this Section 5B to be reasonable,
if a judicial determination is made by a court of competent jurisdiction that
the time or territory or any other restriction contained in this Section 5B or
elsewhere in this Agreement is an unenforceable restriction against the
Executive, the provisions of the Agreement shall not be rendered void but shall
be deemed amended to apply as to such maximum time and territory and to such
maximum extent as such court may judicially determine or indicate to be
enforceable. Alternatively, if any court of competent jurisdiction finds that
any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained herein.
 
C.  Nondisparagement
 
The Executive agrees not to issue, circulate, publish or utter any false or
disparaging statements, remarks or rumors about any member of the Company Group
or any of their respective shareholders, officers, directors or managers other
than to the extent reasonably necessary in order to (i) assert a bona fide claim
against a member of the Company Group arising out of the Executive’s employment
with the Company, or (ii) respond in a truthful and appropriate manner to any
legal process or give truthful and appropriate testimony in a legal or
regulatory proceeding.
 
D.  References
 
The Company agrees that, in response to a request from any person or entity for
a reference check on the Executive, the Company shall only provide such person
or entity with the Executive’s dates of employment and title and position held.
Nothing herein precludes employees of the Company or any employee of any member
of the Company Group from providing a reference if so requested by the
Executive, and the Company agrees not to prohibit such provision.
 
E.  Confidentiality/Company Property
 
The Executive shall not, without the prior written consent of the Company or any
applicable member of the Company Group, use, divulge, disclose or make
accessible to any other person, firm, partnership, corporation or other entity,
any “Confidential Information” or any “Personal Information” (as such terms are
defined below); provided that the Executive may disclose such information when
required to do so by a court of competent jurisdiction, by any governmental
agency having supervisory authority over the business of any member of the
Company Group, as the case may be, or by any administrative body or legislative
body (including a committee thereof) with jurisdiction to order the Executive to
divulge, disclose or make accessible such information; provided, further, that
in the event that the Executive is ordered by a court or other government agency
to disclose any Confidential Information or Personal Information, the Executive
shall (i) promptly notify the applicable member of the Company Group of such
order, (ii) at the written request of such member, diligently contest such order
at the sole expense of such member as expenses occur, and (iii) at the written
request of such member, seek to obtain, at the sole expense of the member, such
confidential treatment as may be available under applicable laws for any
information disclosed under such order. For purposes of this Section 5E,
(i) “Confidential Information” shall mean non-public information concerning the
financial data, strategic business plans, product development (or other
proprietary product data), customer lists, marketing plans and other non-public,
proprietary and confidential information relating to the business of any member
of the Company Group or customers, that, in any case, is not otherwise available
to the public (other than by the Executive’s breach of the terms hereof) and
(ii) “Personal Information” shall mean any information concerning the personal,
social or business activities of the shareholders, officers or directors of any
member of the Company Group. Upon termination of the Executive’s employment with
the Company, and except as provided in Section 4 of this Agreement, the Employee
shall return all Company property, including, without limitation, files,
records, disks and any media containing Confidential Information or Personal
Information.
 
F.  Cooperation
 
At any time after the Termination Date, the Executive agrees to cooperate (i)
with any member of the Company Group in the defense of any legal matter
involving any matter that arose during the Executive’s employment with the
Company or service to any member of the Company Group and (ii) with all
government authorities on matters pertaining to any investigation, litigation or
administrative proceeding pertaining to any member of the Company Group. The
applicable member of the Company Group will reimburse the Executive for any
reasonable travel and out of pocket expenses incurred by the Executive in
providing such cooperation. In addition, with respect to any time after the
Severance Period, the Company, or any applicable member of the Company Group, as
applicable, shall pay the Executive a fee equal to $2,000 per day, pro-rated for
any partial days, that the Executive is required to cooperate with any member of
the Company Group or any government authorities in compliance with this Section
5F.
 
 
 
G.  Enforcement
 
The Executive acknowledges and agrees that the Company Group’s remedies at law
for a breach or threatened breach of any of the provisions of Sections 5.A, 5B,
5C and 5E of this Agreement would be inadequate, and, in recognition of this
fact, the Executive agrees that, in the event of such a breach or threatened
breach, in addition to any remedies at law, the Company Group, without posting
any bond, shall be entitled to obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction or
any other equitable remedy which may then be available, and the Executive shall
reimburse any member of the Company Group for all reasonable attorneys’ fees,
expenses and costs incurred by such member in connection with such member’s
efforts to enforce such covenants. In addition, the Company shall be entitled to
immediately cease paying any amounts remaining due or providing any benefits to
the Executive pursuant to Section 2 of this Agreement and, subject to applicable
state law, to reclaim any amounts already paid to the Executive under this
Agreement upon a determination by the Company Group that the Executive has
violated any provision of Section 5 of this Agreement that is listed above,
subject to payment of all such amounts upon a final determination that the
Executive had not violated such section. If the Executive breaches any of the
covenants contained in Section 5 of this Agreement and any member of the Company
Group obtains injunctive relief with respect thereto, the period during which
the Executive is required to comply with that particular covenant shall be
extended by the same period that the Executive was in breach of such covenant
prior to the effective date of such injunctive relief.
 
6.  Acknowledgment and Release.
 
A.  Initial Release The Executive acknowledges and agrees that the payments and
benefits described in Sections 2A, 2B and 2C above shall be contingent on the
Executive’s not revoking the Agreement during the seven-day revocation period
described in Section 6B of this Agreement. If the Executive revokes this
Agreement during such revocation period, this Agreement shall be null and void
and of no further force and effect.
 
B.  The Executive shall have seven days from the date of his execution of this
Agreement to revoke this Agreement, including the release given under this
Section 6 with respect to all claims referred to herein (including, without
limitation, any and all claims arising under the ADEA). If the Executive revokes
this Agreement including, without limitation, the release given under this
Section 6, the Executive will be deemed not to have accepted the terms of this
Agreement, including any action required of the Company by any section of this
Agreement.
 
C.  In consideration of the Company’s execution of this Agreement, and except
with respect to the Company’s obligations arising under or preserved in this
Agreement, the Executive, for and on behalf of himself and his heirs and
assigns, hereby waives and releases any common law, statutory or other
complaints, claims, charges or causes of action arising out of or relating to
the Executive’s employment or termination of employment with, or his serving in
any capacity in respect of, any member of the Company Group, both known and
unknown, in law or in equity, which the Executive may now have or ever had
against any member of the Company Group or any shareholder, employee, director
or officer of any member of the Company Group (collectively, the “Releasees”),
including, without limitation, any claim for any severance benefit which but for
this Agreement might have been due the Executive under any previous agreement
executed by and between any member of the Company Group and the Executive, and
any complaint, charge or cause of action arising out of his employment with the
Company Group under the Age Discrimination in Employment Act of 1967 (“ADEA,” a
law which prohibits discrimination on the basis of age), the National Labor
Relations Act, the Civil Rights Act of 1991, the Americans With Disabilities Act
of 1990, Title VII of the Civil Rights Act of 1964, the Employee Retirement
Income Security Act of 1974, all as amended; and all other federal, state and
local laws. By signing this Agreement the Executive acknowledges that he intends
to waive and release any rights known or unknown he may have against the
Releasees under these and any other laws; provided, that the Executive does not
waive or release claims with respect to the right to enforce this Agreement.
 
D.  The Executive acknowledges that he has not filed any complaint, charge,
claim or proceeding against any of the Releasees before any local, state or
federal agency, court or other body relating to his employment or the
resignation thereof (each individually a “Proceeding”). The Executive represents
that he is not aware of any basis on which such a Proceeding could reasonably be
instituted.
 
E.  The Executive (i) acknowledges that he will not initiate or cause to be
initiated on his behalf any Proceeding and will not participate in any
Proceeding, in each case, except as required by law; and (ii) waives any right
he may have to benefit in any manner from any relief (whether monetary or
otherwise) arising out of any Proceeding, including any Proceeding conducted by
the Equal Employment Opportunity Commission (“EEOC”). Further, the Executive
understands that by entering into this Agreement, he will be limiting the
availability of certain remedies that he may have against the Company and also
limiting his ability to pursue certain claims against the Releasees.
Notwithstanding the above, nothing in this Section 12 shall prevent the
Executive from (i) initiating or causing to be initiated on his behalf any
complaint, charge, claim or proceeding against the Company before any local,
state or federal agency, court or other body challenging the validity of the
waiver of his claims under ADEA contained in this Section 12 (but no other
portion of such waiver); or (ii) initiating or participating in an investigation
or proceeding conducted by the EEOC with respect to the ADEA.
 
F.  The Executive acknowledges that he has been given 21 days from the date of
receipt of this Agreement to consider all the provisions of this Agreement and
he does hereby knowingly and voluntarily waive said given 21-day period. THE
EXECUTIVE FURTHER ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT CAREFULLY, HAS
BEEN ADVISED BY THE COMPANY TO CONSULT AN ATTORNEY, AND FULLY UNDERSTANDS THAT,
BY SIGNING BELOW, HE IS GIVING UP CERTAIN RIGHTS WHICH HE MAY HAVE TO SUE OR
ASSERT A CLAIM AGAINST ANY OF THE RELEASEES, AS DESCRIBED IN THIS SECTION 12 AND
THE OTHER PROVISIONS HEREOF. THE EXECUTIVE ACKNOWLEDGES THAT HE HAS NOT BEEN
FORCED OR PRESSURED IN ANY MANNER WHATSOEVER TO SIGN THIS AGREEMENT, AND THE
EXECUTIVE AGREES TO ALL OF ITS TERMS VOLUNTARILY.
 
G.  Task Completion Date Release Those payments and benefits described in
Sections 2A, 2B and 2C above which are due after the Termination Date shall be
contingent on the Executive’s execution on the Task Completion Date of a release
of claims substantially in the form attached to this Agreement as Exhibit A (the
“Task Completion Date Release”), and not revoking such Task Completion Date
Release during the applicable seven-day revocation period. If the Executive
revokes such Task Completion Date Release during the period described in the
immediately preceding sentence, this Agreement (other than the Release given in
Sections 6A-6F, and other than the payments and benefits due between the
Termination Date and the Task Completion Date) shall be void as of and following
the Termination Date.
 
7.  Miscellaneous.
 
A.  Entire Agreement. This Agreement is the entire agreement between the Parties
with respect to the subject matter hereof and contains all agreements, whether
written, oral, express or implied, between the Parties relating thereto and
supersedes and extinguishes any other agreement relating thereto, whether
written, oral, express or implied, between the Parties, including, without
limitation, the Subscription Agreement and the Amended and Restated Phantom
Stock Plan; provided, that the Non-Disclosure Agreement, the Employee
Information Agreement and the Executive’s obligations pursuant to the Ply Gem
Code of Ethics shall not be superseded by this Agreement and shall remain in
full force and effect, and provided, further, that no rights or obligations
established under any superseded agreement and specifically preserved by this
Agreement are extinguished. All phantom incentive units belonging to the
Executive as well as all of Executive’s rights under the Amended and Restated
Phantom Stock Plan are terminated in full as of the Termination Date. Other than
this Agreement and as otherwise explicitly stated herein, there are no
agreements of any nature whatsoever between the Executive and any member of the
Company Group that survive this Agreement. Notwithstanding the foregoing or
anything to the contrary in this Agreement, the Executive agrees that, as of the
Termination Date, the Executive shall have no further rights pursuant to the
Stockholders Agreement; provided that the provisions of Section 6.3 of the
Stockholders Agreement regarding post-employment covenants of the Executive
shall remain binding on the Executive and survive in accordance with their
terms.
 
B.  Modification. This Agreement may not be modified or amended, nor may any
rights under it be waived, except in a writing signed and agreed to by the
Parties.
 
C.  Notices. Any notice given pursuant to the Agreement to any party hereto
shall be deemed to have been duly given when mailed by registered or certified
mail, return receipt requested, or by overnight courier, or when hand delivered
as follows:

If to the Company:

Great Lakes Windows
c/o Ply Gem Holdings, Inc.                
P.O. Box 1017
Kearney, MO 64060
Attention:  Lee Meyer, Chief Executive Officer
 
 
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
Attention:  Carl Reisner, Esq.
 
                If to the Executive:
 
[Address]
 
or at such other address as either party shall from time to time designate by
written notice, in the manner provided herein, to the other party hereto.
 
D.  Successors; Death Benefit. The Agreement shall be binding upon and inure to
the benefit of the Parties, their respective heirs, successors and assigns. In
the event the Executive dies at any time before any amounts payable to him under
this Agreement are paid in full, the amounts remaining to be paid under this
Agreement at the time of his death shall be paid (at such times as such amounts
would have been paid to the Executive) to his surviving spouse, if any, and
otherwise to his estate.
 
E.  Taxes. Notwithstanding any other provision of this Agreement to the
contrary, the Company or any member of the Company Group, as applicable, may
withhold from all amounts payable under this Agreement all federal, state, local
and foreign taxes that are required to be withheld pursuant to any applicable
laws and regulations. The Executive shall be responsible for the payment of his
portion of any and all required federal, state, local and foreign taxes
incurred, or to be incurred, in connection with any amounts payable to the
Executive under this Agreement.
 
F.  Severability. In the event that any provision of the Agreement is determined
to be invalid or unenforceable, the remaining terms and conditions of the
Agreement shall be unaffected and shall remain in full force and effect. In
addition, if any provision is determined to be invalid or unenforceable due to
its duration and/or scope, the duration and/or scope of such provision, as the
case may be, shall be reduced, such reduction shall be to the smallest extent
necessary to comply with applicable law, and such provision shall be
enforceable, in its reduced form, to the fullest extent permitted by applicable
law.
 
G.  Non-Admission. Nothing contained in the Agreement shall be deemed or
construed as an admission of wrongdoing or liability on the part of the
Executive or on the part of any member of the Company Group.
 
H.  No Mitigation. The Executive shall not be required to mitigate the amount of
any payment provided for pursuant to this Agreement by seeking other employment
and, to the extent that the Executive obtains or undertakes other employment,
the payment will not be reduced by the earnings of the Executive from the other
employment.
 
I.  Venue. Any action or other legal proceeding arising under or relating to any
provision of this Agreement shall be commenced only in a court of the State of
Ohio (or, if appropriate, a federal court located within the State of Ohio), and
the Company and the Executive hereby consent to the jurisdiction of such a
court.
 
J.  Governing Law/Waiver of Jury Trial. The Agreement shall be governed by, and
construed in accordance with the internal laws of the State of Ohio, without
regard to principles of conflicts of laws of such state that may cause the laws
of another state to apply. The Company and the Executive each hereby waive any
right to a trial by jury in any action, suit or other legal proceeding arising
under or relating to any provision of this Agreement.
 
K.  Counterparts. The Agreement may be executed by one or more of the Parties
hereto on any number of separate counterparts and all such counterparts shall be
deemed to be one and the same instrument. Each party hereto confirms that any
facsimile copy of such party’s executed counterpart of the Agreement (or its
signature page thereof) shall be deemed to be an executed original thereof.
 
[Remainder of Page Intentionally Left Blank]
 

Doc #:NY7:89700.2

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IN WITNESS WHEREOF, the undersigned have executed the Agreement on the date
first written above.
 
                    GREAT LAKES WINDOWS
 
                    By:_________________________________
                    Title:

                    _________________________________
                    Mark A. Watson
                    [Address]
 

 
                    With respect to Section 2C only,
 
                    PLY GEM INVESTMENT HOLDINGS, INC.
 
                    By:_________________________________
                    Title:

Doc #:NY7:89700.2

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Exhibit A
 
RELEASE OF CLAIMS
 
[Great Lakes Windows, a wholly owned subsidiary of Ply Gem Holdings, Inc., a
Delaware corporation] (the “Company”) and Mark A. Watson (the “Executive”) are
parties to a Separation Agreement and General Release of all Claims, dated as of
November 28, 2005, under which the parties mutually agreed to terminate the
Employment Agreement by and between the Company and the Executive, (the
“Employment Agreement”), and the Executive’s employment thereunder (the
“Termination Agreement”). In consideration of the promises set forth in this
Release and the Termination Agreement, the Executive agrees as follows:
 
1.  Acknowledgment and Release
 
In consideration of the Company’s execution of the Termination Agreement, and
except with respect to the Company’s obligations arising under or preserved in
the Termination Agreement, the Executive, for and on behalf of himself and his
heirs and assigns, hereby waives and releases all common law, statutory or other
complaints, claims, charges or causes of action arising out of or relating to
the Executive’s employment or termination of employment with, or his serving in
any capacity in respect of, any member of the Company Group (as defined in the
Termination Agreement), both known and unknown, in law or in equity, which the
Executive may now have or ever had against any member of the Company Group or
any shareholder, employee, director or officer of any member of the Company
Group (collectively, the “Releasees”), including, without limitation, any claim
for any severance benefit which but for this Release and the Termination
Agreement might have been due the Executive under any previous agreement
executed by and between any member of the Company Group and the Executive, and
any complaint, charge or cause of action arising out of his employment with the
Company Group under the Age Discrimination in Employment Act of 1967 (“ADEA,” a
law which prohibits discrimination on the basis of age), the National Labor
Relations Act, the Civil Rights Act of 1991, the Americans With Disabilities Act
of 1990, Title VII of the Civil Rights Act of 1964, the Employee Retirement
Income Security Act of 1974, all as amended; and all other federal, state and
local laws. By signing this Release the Executive acknowledges that he intends
to waive and release all rights known or unknown he may have against the
Releasees under these and any other laws; provided, that the Executive does not
waive or release claims with respect to the right to enforce this Release or the
Termination Agreement.
 
The Executive acknowledges that he has not filed any complaint, charge, claim or
proceeding against any of the Releasees before any local, state or federal
agency, court or other body relating to his employment or the resignation
thereof (each individually a “Proceeding”). The Executive represents that he is
not aware of any basis on which such a Proceeding could reasonably be
instituted.
 
The Executive (i) acknowledges that he will not initiate or cause to be
initiated on his behalf any Proceeding and will not participate in any
Proceeding, in each case, except as required by law; and (ii) waives any right
he may have to benefit in any manner from any relief (whether monetary or
otherwise) arising out of any Proceeding, including any Proceeding conducted by
the Equal Employment Opportunity Commission (“EEOC”). Further, the Executive
understands that by entering into this Release, he will be limiting the
availability of certain remedies that he may have against the Company and also
limiting his ability to pursue certain claims against the Releasees.
Notwithstanding the above, nothing in this Release shall prevent the Executive
from (i) initiating or causing to be initiated on his behalf any complaint,
charge, claim or proceeding against the Company before any local, state or
federal agency, court or other body challenging the validity of the waiver of
his claims under ADEA contained in this Release (but no other portion of such
waiver); or (ii) initiating or participating in an investigation or proceeding
conducted by the EEOC with respect to ADEA.
 
The Executive acknowledges that he has been given 21 days from the date of
receipt of this Release to consider all the provisions of this Release and he
does hereby knowingly and voluntarily waive said given 21 day period. THE
EXECUTIVE FURTHER ACKNOWLEDGES THAT HE HAS READ THIS RELEASE CAREFULLY, HAS BEEN
ADVISED BY THE COMPANY TO CONSULT AN ATTORNEY, AND FULLY UNDERSTANDS THAT BY
SIGNING BELOW, HE IS GIVING UP CERTAIN RIGHTS WHICH HE MAY HAVE TO SUE OR ASSERT
A CLAIM AGAINST ANY OF THE RELEASEES, AS DESCRIBED IN THIS RELEASE AND THE OTHER
PROVISIONS HEREOF. THE EXECUTIVE ACKNOWLEDGES THAT HE HAS NOT BEEN FORCED OR
PRESSURED IN ANY MANNER WHATSOEVER TO SIGN THIS RELEASE, AND THE EXECUTIVE
AGREES TO ALL OF ITS TERMS VOLUNTARILY.
 
The Executive shall have seven days from the date of his execution of this
Release to revoke this Release. If the Executive revokes this, the Executive
will be deemed not to have accepted the terms of the Termination Agreement
(other than the Release given in Sections 6A-6F thereof from and after the Task
Completion Date), including any action required of the Company after the Task
Completion Date by any Section of the Termination Agreement.
 
The Executive acknowledges that nothing in this Release shall constitute any
admission of wrongdoing by the Company or any Releasee.
 

                    _________________________________
                    Mark A. Watson

 
Dated: January 27, 2006