Exhibit 10.5


    

      Exhibit
        10.5

      PLY
        GEM PRIME HOLDINGS, INC.

      2004
        STOCK OPTION PLAN

      INCENTIVE
        STOCK OPTION AGREEMENT

       

      THIS
        AGREEMENT, dated as of _______________, is entered into by and between Ply
        Gem
        Prime Holdings, Inc., a Delaware corporation (the “Company”), 

      and
        ___________________ (the “Optionee”).

       

      W
        I T N E
        S S E T H:

       

      In
        consideration of the mutual promises and covenants made herein and the mutual
        benefits to be derived herefrom, the parties hereto agree as
        follows:

       

      1.  Grant
        of Stock Option.

       

      Subject
        to the provisions of this Agreement and to the provisions of the Ply Gem
        Prime
        Holdings, Inc. 2004 Stock Option Plan (the “Plan”), the Company hereby grants to
        the Optionee as of the date of this Agreement (the “Grant Date”), the right and
        option to purchase __________ shares of common stock of the Company, par
        value
        $.01 per share (“Common Stock”) at an exercise price per share equal to
        $________ (the “Stock Option”). Unless earlier terminated pursuant to the terms
        of this Agreement, the Stock Option shall expire on the tenth anniversary
        of the
        Grant Date. Capitalized terms not defined herein shall have the meaning set
        forth in the Plan.

       

      The
        Stock Option is intended to qualify as an Incentive Stock Option, within
        the
        meaning of Section 422 of the Internal Revenue Code, as amended (the “Code”).
        If, for any reason, this Stock Option, or any portion thereof, shall not
        qualify
        as an Incentive Stock Option within the meaning of Section 422 of the Code,
        such
        Stock Option, or such portion, shall be treated as a Nonqualified Stock Option
        granted under the Plan. 

       

      While
        the
        Plan shall be submitted to the Company’s stockholders for their approval in a
        manner and to the degree required by Section 422 of the Code, the Company
        cannot
        guarantee that the special tax treatment described in Section 421 of the
        Code
        will apply. For example, if the Optionee sells the Common Stock acquired
        pursuant to the exercise of the Stock Option either within two years after
        the
        Grant Date or within one year after the date the Stock Option (or any part
        thereof) is exercised, this special tax treatment will not apply. 

       

      2.  Exercisability
        of the Stock Option.

       

      The
        Stock
        Option shall become vested and exercisable with respect to 20% of the shares
        covered by the Stock Option on each of the first five anniversaries of the
        Grant
        Date, in each case, subject to earlier termination of the Stock Option pursuant
        to this Agreement or the Plan and to the Optionee’s continued employment with
        the Company, or any of its subsidiaries or Affiliates, through such vesting
        date. Notwithstanding the foregoing, all or a portion of the Stock Option
        may
        become vested earlier than set forth in the preceding sentence upon the
        occurrence of a “Liquidity Event” (as defined in Exhibit A hereto), to the
        extent necessary such that the vested percentage of the Stock Option following
        any such earlier vesting shall be no less than the percentage of Common Stock
        held by a stockholder of the Company who executed the Stockholder’s Agreement
        (or any predecessor stockholders agreement) as of the Grant Date (an “Original
        Stockholder”) that such stockholder may sell or otherwise dispose of in
        connection with the Liquidity Event. By way of example and without limitation,
        in the event that a Liquidity Event occurs in the second year following the
        Grant Date and in connection therewith, the Original Stockholders will each
        be
        permitted to sell 35% of their shares of Common Stock, then the Optionee
        will be
        vested as to 35% of the shares subject to the Stock Option upon the occurrence
        of such Liquidity Event and will, upon the second anniversary of the Grant
        Date,
        become vested as to an additional 5% of the shares subject to the Stock Option
        such that he will then be vested as to 40% of the shares subject to the Stock
        Option. Upon the Optionee’s termination of employment for any reason, the
        portion of the Stock Option that is not vested as of such date in accordance
        with the foregoing provisions of this Section 2 shall cease vesting and
        terminate immediately. 

       

      3.  Method
        of Exercise of the Stock Option.

       

      (a)  The
        portion of the Stock Option as to which the Optionee is vested shall be
        exercisable by delivery to the Company of a written or electronic notice
        stating
        the number of whole shares to be purchased pursuant to this Agreement and
        accompanied by payment of the full purchase price of the shares of Common
        Stock
        to be purchased. Fractional share interests shall be disregarded for this
        purpose except they may be accumulated. 

       

      (b)  The
        exercise price of the Stock Option shall be paid: (i) in cash or by certified
        check or bank draft payable to the order of the Company; (ii) by exchange
        of
        shares of unrestricted Common Stock of the Company already owned by the Optionee
        (that have been held by the Optionee for six months prior to exercise or
        which
        were acquired in the open market) and having an aggregate Fair Market Value
        equal to the aggregate purchase price, provided, that the Optionee represents
        and warrants to the Company that the Optionee has held the shares of Common
        Stock free and clear of liens and encumbrances and has held the shares for
        at
        least six months prior to exercise or that such shares were acquired in the
        open
        market; (iii) if there shall be a public market for the Common Stock, by
        delivering, along with a properly executed exercise notice to the Company,
        a
        copy of irrevocable instructions to a broker to deliver promptly to the Company
        the aggregate exercise price and, if requested by the Optionee, the minimum
        amount of any applicable federal, state, local or foreign withholding taxes
        required to be withheld by the Company, provided, however, that such exercise
        may be implemented solely under a program or arrangement established and
        approved by the Company with a brokerage firm selected by the Company; (iv)
        by
        promissory note; or (v) by any other procedure approved by the Committee,
        or by
        a combination of the foregoing. Notwithstanding the foregoing, in no event
        shall
        an Optionee be permitted to exercise an Option in the manner described in
        clause
        (iii) and (iv) of the preceding sentence if the Committee determines that
        exercising an Option in such manner would violate the Sarbanes-Oxley Act
        of
        2002. Without limiting the generality of the foregoing, the Committee may,
        in
        its discretion, permit the Optionee’s estate to satisfy the exercise price of
        the Stock Option during the exercise period following the Optionee’s death by
        relinquishing the unexercised portion of the Stock Option to the Company
        and
        receiving that number of shares of Common Stock the aggregate “spread” of which
        on the date of exercise which is equal to the excess of (A) the aggregate
        Fair
        Market Value over (B) the aggregate exercise price of the number of shares
        of
        Common Stock subject to the unexercised portion of the Stock
        Option.

       

      (c)  Prior
        to
        the effectiveness of the Optionee’s exercise of the Stock Option, he or she must
        enter into the Stockholders Agreement, dated as of February 24, 2006, by
        and
        among the Company, Ply Gem Investment Holdings, Inc., a Delaware corporation
        and
        subsidiary of the Company, Caxton-Iseman (Ply Gem), L.P. and the Other Investors
        and management stockholders, as defined therein and executing such Stockholders
        Agreement, as in effect from time to time (the “Stockholders
        Agreement”).

       

      4.  Termination
        of Employment.

       

      (a)  Except
        as
        provided in Section 4(b) below with regard to the termination of the Optionee’s
        employment for Cause, and Section 4(c) below with regard to the termination
        of
        the Optionee’s employment due to death or Disability, in the event of the
        termination of Optionee’s employment, the portion of the Stock Option, if any,
        which is exercisable at the time of such termination may be exercised prior
        to
        the earlier of (a) the expiration of the three month period which commences
        on
        the date of termination and (b) the expiration date of the Stock
        Option.

       

      (b)  In
        the
        event of the termination of the Optionee’s employment for Cause, the Optionee’s
        entire Stock Option (whether or not vested) shall be forfeited and canceled
        in
        its entirety upon such termination of employment.

       

      (c)  In
        the
        event of the termination of the Optionee’s employment due to death (or, in the
        event of the Optionee’s death following termination of employment while the
        Stock Option remains exercisable) the portion of the Stock Option, if any,
        which
        is exercisable at the time of death may be exercised by the Optionee’s estate or
        by a person who acquired the right to exercise such Stock Option by bequest
        or
        inheritance or otherwise by reason of the death of the Optionee at any time
        prior to the earlier of (a) the first anniversary of the Optionee’s death and
        (b) the expiration date of the Stock Option. In the event of the termination
        of
        the Optionee’s employment due to Disability, the portion of the Stock Option, if
        any, which is exercisable at the time of such termination may be exercised
        by
        the Optionee or the Optionee’s guardian or legal representative at any time
        prior to the earlier of (a) the first anniversary of such termination and
        (b)
        the expiration date of the Stock Option.

       

      (d)  Nothing
        in this Agreement or the Plan shall confer upon the Optionee any right to
        continue in the employ of the Company or any of its subsidiaries or Affiliates
        or interfere in any way with the right of the Company or any of its Affiliates
        to terminate the Optionee’s employment at any time.

       

      5.  Nontransferability
        of the Stock Option.

       

      The
        Stock
        Option is non-transferable by the Optionee other than by will or the laws
        of
        descent and distribution and the Stock Option may be exercised, during the
        lifetime of the Optionee, only by the Optionee or by the Optionee’s guardian or
        legal representative or any transferee described above.

       

      6.  Rights
        as a Stockholder.

       

      An
        Optionee or a transferee of the Stock Option shall have no rights as a
        stockholder with respect to any shares covered by such Stock Option until
        the
        date when his or her purchase is entered upon the records of the duly authorized
        transfer agent of the Company. No adjustment shall be made for dividends
        (ordinary or extraordinary, whether in cash, securities or other property)
        or
        distribution of other rights for which the record date is prior to the date
        a
        stock certificate is issued, except as provided in the Plan.

       

      7.  Adjustment
        in the Event of Change in Stock.

       

      In
        the
        event of any change in corporate capitalization (including, but not limited
        to,
        a change in the number of shares of Common Stock outstanding), such as a
        stock
        split, reverse stock split, stock dividend, combination or reclassification
        of
        the Common Stock, or any other increase or decrease in the number of issued
        shares of Common Stock effected without receipt of consideration by the Company,
        the number and kind of shares subject to the Stock Option and/or the exercise
        price per share shall be subject to adjustment or substitution, as determined
        by
        the Committee in its sole discretion to put the Optionee in the same relative
        position via-a-vis equity and other option holders as before the change and
        consistent with adjustments made under the Plan for other Plan participants
        who
        have an outstanding Stock Option. The determination of the Committee regarding
        any adjustment will be final and conclusive.

       

      Notwithstanding
        the above, in the event of any of the following:

       

      The
        Company is merged or consolidated with another corporation or entity and,
        in
        connection therewith, consideration is received by shareholders of the Company
        in a form other than stock or other equity interests of the surviving
        entity;

       

      All
        or
        substantially all of the stock or assets of the Company are acquired by another
        person;

       

      The
        reorganization or liquidation of the Company; or

       

      The
        Company shall enter into a written agreement to undergo an event described
        in
        clauses (a), (b), or (c) above,

       

      then
        the
        Committee may, in its sole discretion and upon at least 10 days advance notice
        to the affected persons, cancel this Stock Option and cause the Optionee
        to be
        paid, in cash or stock, or any combination thereof, the value of the portion
        of
        this Stock Option which is then exercisable based upon the price per share
        of
        Stock received or to be received by other shareholders of the Company in
        the
        event.

       

      8.  Payment
        of Transfer Taxes, Fees and Other Expenses.

       

      The
        Company agrees to pay any and all original issue taxes and stock transfer
        taxes
        that may be imposed on the issuance of shares acquired pursuant to exercise
        of
        the Stock Option, together with any and all other fees and expenses necessarily
        incurred by the Company in connection therewith. Notwithstanding the foregoing,
        the Optionee shall be solely responsible for other taxes (including, without
        limitation, federal, state, local or foreign income, social security, estate
        or
        excise taxes) that may be payable as a result of the Optionee’s participation in
        the Plan or as a result of the exercise of the Stock Option and/or the sale,
        disposition or transfer of any shares of Common Stock acquired upon the
        Optionee’s exercise of the Stock Option.

       

      9.  Other
        Restrictions.

       

      The
        exercise of the Stock Option shall be subject to the requirement that, if
        at any
        time the Committee shall determine that (i) the listing, registration or
        qualification of the shares of Common Stock subject or related thereto upon
        any
        securities exchange or under any state or federal law, or (ii) the consent
        or
        approval of any government regulatory body or (iii) an agreement by the Optionee
        with respect to the disposition of shares of Common Stock, is necessary or
        desirable as a condition of, or in connection with, such exercise or the
        delivery or purchase of shares pursuant thereto, then in any such event,
        such
        exercise shall not be effective unless such listing, registration,
        qualification, consent, or approval or agreement shall have been effected
        or
        obtained free of any conditions not acceptable to the Committee.

       

      The
        Company may, but will in no event be obligated to, register any securities
        issuable upon the exercise of all or any portion of the Stock Option pursuant
        to
        the Securities Act of 1933 (as now in effect or as hereafter amended) or
        to take
        any other affirmative action in order to cause the exercise of the Stock
        Option
        or the issuance of shares pursuant thereto to comply with any law or regulation
        of any governmental authority. The certificates representing shares issued
        to
        Optionee hereunder shall bear such legends as Company determines appropriate
        referring to restrictions on the transfer of such shares imposed by this
        Agreement and such other legends as are required or appropriate under applicable
        law.

       

      10.  Disqualifying
        Disposition.

       

      The
        Optionee agrees and covenants that if he disposes of any of the Common Stock
        in
        a “disqualifying disposition,” as described in Section 422 of the Code, he will
        immediately contact the Company to inform it of such event.

       

      11.  Taxes
        and Withholding.

       

      As
        a
        condition of the exercise of the Stock Option, the Optionee shall pay to
        the
        Company or make arrangements satisfactory to the Committee regarding payment
        of
        any federal, state or local taxes of any kind required by law to be withheld
        upon the exercise of such Stock Option and the Company shall, to the extent
        permitted or required by law, have the right to deduct from any payment of
        any
        kind otherwise due to the Optionee, federal, state and local taxes of any
        kind
        required by law to be withheld upon the exercise of such Stock
        Option.

       

      12.  Notices.

       

      All
        notices and other communications under this Agreement shall be in writing
        and
        shall be given by hand delivery to the other party or by facsimile, overnight
        courier, or registered or certified mail, return receipt requested, postage
        prepaid, addressed as follows:

       

      If
        to the
        Optionee: to the address specified in Exhibit A hereto

      


      If
        to the
        Company:

       

      Ply
        Gem
        Prime Holdings, Inc.

      c/o
        Caxton-Iseman Capital, Inc.

      500
        Park
        Avenue

      8th
        Floor

      New
        York,
        New York 10022

      Attention:
        Chairman

      Telecopy:
        (212) 832-9450

       

      ,
        or to
        such other address or facsimile number as any party shall have furnished
        to the
        other in writing in accordance with this Section 12. Notice and communications
        shall be effective when actually received by the addressee.

       

      13.  Effect
        of Agreement.

       

      Except
        as
        otherwise provided hereunder, this Agreement shall be binding upon and shall
        inure to the benefit of any successor or successors of the Company, and to
        any
        transferee or successor of the Optionee pursuant to Section 5.

       

      14.  Laws
        Applicable to Construction.

       

      The
        interpretation, performance and enforcement of this Agreement shall be governed
        by the laws of the State of Delaware without reference to principles of conflict
        of laws, as applied to contracts executed in and performed wholly within
        the
        State of Delaware.

       

      15.  Severability.

       

      The
        invalidity or enforceability of any provision of this Agreement shall not
        affect
        the validity or enforceability of any other provision of this Agreement.
        If the
        final judgment of a court of competent jurisdiction declares that any provision
        of this Agreement is invalid or unenforceable, the parties hereto agree that
        the
        court making the determination of invalidity or unenforceability shall have
        the
        power, and is hereby directed, to reduce the scope, duration or area of the
        provision, to delete specific words or phrases and to replace any invalid
        or
        unenforceable provision with a provision that is valid and enforceable and
        that
        comes closest to expressing the intention of the invalid or unenforceable
        provision and this Agreement shall be enforceable as so modified.

       

      16.  Conflicts
        and Interpretation.

       

      This
        Agreement is subject to all the terms, conditions and provisions of the Plan.
        In
        the event of any conflict between this Agreement and the Plan, the Plan shall
        control. In the event of any ambiguity in this Agreement, any term which
        is not
        defined in this Agreement, or any matters as to which this Agreement is silent,
        the Plan shall govern including, without limitation, the provisions thereof
        pursuant to which the Committee has the power, among others, to (i) interpret
        the Plan, (ii) prescribe, amend and rescind rules and regulations relating
        to
        the Plan and (iii) make all other determinations deemed necessary or advisable
        for the administration of the Plan.

       

      17.  Headings.

       

      The
        headings of Sections herein are included solely for convenience of reference
        and
        shall not affect the meaning or interpretation of any of the provisions of
        this
        Agreement.

       

      18.  Amendment.

       

      This
        Agreement may not be modified, amended or waived, to the extent it would
        impair
        the rights of the Optionee, except by an instrument in writing signed by
        both
        parties hereto. The waiver by either party of compliance with any provision
        of
        this Agreement shall not operate or be construed as a waiver of any other
        provision of this Agreement, or of any subsequent breach by such party of
        a
        provision of this Agreement.

       

      19.  Term.

       

      The
        term
        of this Agreement is ten years from the Grant Date, unless terminated prior
        to
        such date in accordance with the provisions herein.

       

      20.  Counterparts.

       

      This
        Agreement may be executed in counterparts, which together shall constitute
        one
        and the same original.

       


      
        
           

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF, as of the date first above written, the Company has caused
        this
        Agreement to be executed on its behalf by a duly authorized officer and the
        Optionee has hereunto set the Optionee’s hand.

       

                      PLY
        GEM PRIME
        HOLDINGS, INC.

      


      


      


                      ________________________________

                      By:


                      Title:


      


      


      


                      _______________________________

       

      



      
        
          
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      Exhibit
        A to 

      Incentive
        Stock Option Agreement

      of
        PlyGem
        Prime Holdings, Inc.

      


      


      Date
        of Option Grant:  

      


      Name
        and Address 

      of
        Optionee:   

          ________________________________

          ________________________________

          


      Number
        of Shares 

      Subject
        to Stock Option: 

      


      Exercise
        Price per Share: 

      


      “Liquidity
        Event” means any transaction in which Caxton-Iseman (Ply Gem), L.P. has the
        right to exercise “Drag Along Rights” pursuant to Section 4.7 of the
        Stockholders Agreement or the closing of the initial underwritten public
        offering of shares of Common Stock pursuant to an effective registration
        statement under the Securities Act.