Exhibit 10.3


    Exhibit
      10.3

     

    PLY
      GEM PRIME HOLDINGS, INC. 

     

    AMENDED
      AND RESTATED

     

    PHANTOM
      STOCK PLAN

     

    


     

    SECTION
      1.  General

     

    (a)  Purpose.
      The
      purpose of this Ply Gem Prime Holdings, Inc. Phantom Stock Plan (the “Plan”) is
      to attract, motivate and retain certain key employees of Ply Gem Prime Holdings,
      Inc. (the “Company”) and its Subsidiaries who are primarily responsible for the
      long-term performance of the Company and to align their interest with that
      of
      the stockholders of the Company.

     

    (b)  Overview.
      The
      Plan is generally designed to provide non-qualified deferred compensation to
      Participants. Each Participant’s interest in the Plan is recorded in and
      maintained under a bookkeeping Account and these Accounts are deemed invested
      in
      the Company’s stock, but there is no stock actually issued to the Plan (which is
      generally why these accounts credits are called “Phantom”). When valuing a
      Participant’s Account for payment purposes, the following rules generally apply:
      if the Company becomes publicly traded through an IPO, the stock market will
      dictate the value of the Account; if a Realization Event or a Tag-Along Event
      occurs, the amount paid to shareholders will dictate the value of the Account;
      and in the event that a Participant’s employment with the Company terminates and
      if neither a Realization Event nor an IPO occurs prior to the time the
      Participant is paid the value of his or her Account, certain formulas described
      in the Plan dictate the value of the Account (which value differs depending
      upon
      the length of time a Participant has been employed with the Company and the
      circumstances surrounding the termination of employment). Following an IPO,
      each
      Participant will generally be paid out five years after the IPO, subject to
      further deferral opportunities and the right of the Company to accelerate such
      payment, with earlier payment upon a Realization Event or a termination of
      employment. The value of each Account is generally paid in cash or stock, at
      the
      discretion of the Company.

     

    SECTION
      2.  Definitions.
      

     

    As
      used
      in this Plan, capitalized terms not defined in this Plan shall have the meaning
      attributed to such terms in the Stockholders Agreement and the following terms
      shall have the meanings set forth below:

     

    (a)  Account.
      An
      unfunded bookkeeping account established to record a Participant’s interest
      under this Plan, the terms and conditions of which are set forth in this Plan
      and in each Participant’s Award Agreement.

     

    (b)  Award.
      A grant
      of Phantom Incentive Units and/or a grant of Phantom Additional Units under
      this
      Plan.

     

    (c)  Award
      Agreement.
      The
      written agreement evidencing an Award, which shall be executed or otherwise
      acknowledged in writing by a Participant.

     

    (d)  Board.
      The
      Board of Directors of the Company.

     

    (e)  Cause.
“Cause”
      means: (i) conviction of, or entry of a pleading of guilty or no contest
      by, a Participant with respect to a felony or any lesser crime of which fraud
      or
      dishonesty is a material element; (ii) a Participant’s willful and
      continued failure to perform substantially his or her duties with the Company
      or
      any of its Subsidiaries, or a failure to follow the lawful direction of the
      Board or any chief executive officer of the Company or any of its Subsidiaries
      to whom such Participant reports after the Board of Directors or such chief
      executive officer delivers a written demand for substantial performance,
      specifically identifying the manner in which the Participant has not
      substantially performed his material duties and the Participant neglects to
      cure
      such a failure within 30 days; (iii) a Participant’s theft, fraud or
      embezzlement of any property or assets of the Company or any of its Affiliates
      or Subsidiaries, or such Participant’s dishonesty against the Company or any of
      its Affiliates or Subsidiaries which has resulted in material damage to the
      Company or any of its Affiliates or Subsidiaries or (iv) a Participant’s breach
      of any noncompetition or nonsolicitation requirements set forth in the
      Stockholders Agreement or willful breach of any confidentiality requirements
      set
      forth in the Stockholders Agreement, in each case, whether or not such agreement
      or requirement is enforceable under applicable law. 

     

    (f)  Common
      Stock.
      Common
      stock, par value $0.01 per share, of the Company, and any other stock or units
      into which such common stock shall thereafter be changed by reason of a
      recapitalization, merger, consolidation, split-up, combination, exchange of
      stock or units or the like.

     

    (g)  Company.
      With
      respect to periods prior to February 24, 2006, Ply Gem Investment Holdings,
      Inc., a Delaware corporation and, with respect to periods on and after February
      24, 2006, Ply Gem Prime Holdings, Inc., a Delaware corporation.

     

    (h)  Disability.
      With
      respect to any Participant, any event of disability under the disability
      insurance plan of the Company or any of its Affiliates or Subsidiaries covering
      such Participant, or if there
      shall be no such disability plan, then as set forth in any agreement between
      such Participant and the Company or any of its Affiliates or Subsidiaries,
      or if
      there shall be no such agreement, then the inability of the Participant to
      perform his or her duties as an employee of the Company or any of its Affiliates
      or Subsidiaries for at least one-hundred eighty (180) days during any
      consecutive 12-month period.

     

    (i)  Effective
      Date.
      February 12, 2004.

     

    (j)  IPO.
      The
      closing of the initial underwritten public offering of shares of Common Stock
      pursuant to an effective registration statement filed under the Securities
      Act.

     

    (k)  Participant.
      Any
      current or future employee of the Company or any of its Subsidiaries who is
      eligible for, and is selected by the Board for, an Award under this Plan and
      who
      has executed an Award Agreement.

     

    (l)  Phantom
      Additional Unit.
      A
      Phantom Additional Unit that is first credited to a Participant’s Account in
      February, 2004 is a phantom stock unit representing one share of Common Stock
      and 0.45914 shares of Preferred Stock. A Phantom Additional Unit that is first
      credited to a Participant’s Account in August, 2004 is a phantom stock unit
      representing one share of Common Stock and 0.53803 shares of Preferred Stock.
      As
      used herein, a “Common Phantom Additional Unit” shall mean the portion of a
      Phantom Additional Unit representing one share of Common Stock and a “Preferred
      Phantom Additional Unit” shall mean the portion of a Phantom Additional Unit
      representing 0.45914 shares of Preferred Stock for Phantom Additional Units
      granted in February, 2004 and 0.53803 shares of Preferred Stock for Phantom
      Additional Units granted in August, 2004.

     

    (m)  Phantom
      Incentive Unit.
      A
      Phantom Incentive Unit is a phantom stock unit representing a share of Common
      Stock that is credited to a Participant’s Account. 

     

    (n)  Plan.
      This
      Ply Gem Prime Holdings, Inc. Amended and Restated Phantom Stock Plan, as may
      be
      amended from time to time.

     

    (o)  Preferred
      Stock.
      Senior
      Preferred Stock, par value $0.01 per share, of the Company, and any other stock
      or units into which such preferred stock shall thereafter be changed by reason
      of a recapitalization, merger, consolidation, split-up, combination, exchange
      of
      stock or units or the like.

     

    (p)  Realization
      Event.
      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.


     

    (q)  Stockholders
      Agreement.
      That
      certain Stockholders Agreement, dated as of February 12, 2004 and as amended
      from time to time, by and among the Company, Caxton-Iseman (Ply Gem), L.P.,
      the
      other investors executing the agreement and designated as “Other Investors”
therein and the individuals executing the agreement and designated as
“Management Stockholders” therein. 

     

    (r)  Tag-Along
      Event.
      Any
      occurrence of an event qualifying for “Tag Along” treatment under Section 4.5 of
      the Stockholders’ Agreement.

     

    SECTION
      3.  Administration.

     

    (a)  This
      Plan
      shall be administered by the Board. Subject to the provisions of this Plan
      and
      applicable law and subject to Participants’ rights under outstanding Award
      Agreements, the Board shall have the power and sole discretion, in addition
      to
      other express powers and authorizations conferred on the Board by this Plan,
      to:
      (i) designate Participants; (ii) determine the Awards to a Participant; (iii)
      determine, in a manner consistent with the terms of this Plan and any Award
      Agreements entered into pursuant to this Plan, payments and how other matters
      are to be calculated in connection with Awards and Accounts; (iv) determine
      the
      terms and conditions of Awards; (v) determine whether, to what extent, and
      under
      what circumstances Awards and amounts payable pursuant to an Account shall
      be
      deferred at the election of the holder thereof or of the Board; (vii) interpret,
      administer, reconcile any inconsistency, correct any defect and/or supply any
      omission in this Plan and any instrument or agreement relating to this Plan,
      or
      Awards under this Plan; (viii) establish, amend, suspend, or waive such rules
      and regulations and appoint such agents as it shall deem appropriate for the
      proper administration of this Plan; and (ix) make any other determination and
      take any other action that the Board deems necessary or desirable for the
      administration of this Plan. The decisions of the Board shall be final,
      conclusive, and binding upon all parties, including, without limitation, the
      Company, any Participant, any holder or beneficiary of any Account and any
      stockholder of the Company.

     

    (b)  No
      member
      of the Board shall be liable for any action or determination made in good faith
      with respect to this Plan, any Award or any Account.

     

    SECTION
      4.  Eligibility.
      Members
      of senior management and key employees of the Company and/or its Subsidiaries
      shall be eligible to be designated as a Participant in this Plan by the Board
      and to receive an Award credited to an Account.

     

    SECTION
      5.  Phantom
      Incentive Unit Awards and Phantom Additional Unit Awards.

     

    (a)  General.
      The
      Board shall, in its sole discretion, designate employees of the Company or
      its
      Subsidiaries as Participants in this Plan and, in connection therewith, the
      Board shall determine the number of Phantom Incentive Units and/or Phantom
      Additional Units to be granted to each Participant so designated. An Account
      shall be established in the records of the Company to which the number of
      Phantom Incentive Units and/or Phantom Additional Units so granted shall be
      credited. As more fully set forth herein, a Participant shall share in any
      dividends or distributions paid by the Company to its stockholders, and a
      Participant’s Account will be fully or partially distributed to him or her
      following the occurrence of a Realization Event.

     

    (b)  Availability
      for Award; Dividends; Value.
      

     

    (i)  Awards
      may be made in respect of up to 10% of the Common Stock outstanding as
      constituted as of the Effective Date (prior to dilution by the Phantom Incentive
      Units, Phantom Additional Units and any Contingent Rights) under the Plan.
      

     

    (ii)  To
      the
      extent that dividends or distributions are declared and paid to holders of
      Common Stock, each Participant will receive the amount that would have been
      distributed to the Participant had the Phantom Incentive Units and/or Common
      Phantom Additional Units credited to the Participant’s Account been issued and
      outstanding Common Stock and such dividend or distribution shall be paid at
      the
      same time and in the same manner as dividends or distributions are paid to
      holders of Common Stock.

     

    (iii)  To
      the
      extent that dividends or distributions are declared and paid to holders of
      Preferred Stock, each Participant will receive the amount that would have been
      distributed to the Participant had the Preferred Phantom Additional Units
      credited to the Participant’s Account been issued and outstanding Preferred
      Stock and such dividend or distribution shall be paid at the same time and
      in
      same manner as dividends and distributions are paid to holders of Preferred
      Stock.

     

    (c)  Deferral
      of Payment.
      Notwithstanding any other provision of this Plan, the Board may make good faith
      determinations respecting the time and/or medium of payment and/or impose
      conditions on payment of the value of a Participant’s Account in order to
      reflect the time and medium of payment, or conditions on payment, applicable
      to
      holders of Common Stock and/or Preferred Stock, as applicable, in connection
      with a Realization Event, IPO or otherwise, in order to accomplish the intended
      purposes of this Plan. By way of example and without limiting the generality
      of
      the foregoing, the Board may impose appropriate restrictions on the payment
      of
      the value of a Participant’s Account if the holders of Common Stock and/or
      Preferred Stock, as applicable, are subject to a clawback or are required to
      escrow payment for their Common Stock and/or Preferred Stock, as applicable.
      

     

    (d)  Termination
      of Account Following Payment.
      Following the payment of all or a portion of the Account attributable to the
      Phantom Incentive Units, any such Phantom Incentive Units shall thereafter
      be
      deemed cancelled. Following the payment of all or a portion of the Account
      attributable to Common Phantom Additional Units, any such Common Phantom
      Additional Units shall thereafter be deemed cancelled, although the Preferred
      Phantom Additional Units may still have value if such portion of the Account
      was
      not theretofore paid. Following the payment of all or a portion of the Account
      attributable to Preferred Phantom Additional Units, any such Preferred Phantom
      Additional Units shall thereafter be deemed cancelled, although the Common
      Phantom Additional Units may still have value if such portion of the Account
      was
      not theretofore paid. The payment of a dividend or distribution with respect
      to
      any Award shall not be considered a payment of any portion of a Participant’s
      Account for purposes of this Section 5(d).

     

    SECTION
      6.  Payment
      of Accounts.
      

     

    (a)  Realization
      Event.
      Except
      as provided in Section 8 (generally relating to terminations of employment
      before a Realization Event), upon the closure and funding of a Realization
      Event, each Account shall be credited with the same value per Phantom Incentive
      Unit and/or Common Phantom Additional Unit as the value received in the
      Realization Event by a holder of Common Stock for one share of Common Stock,
      and
      each Participant (or his or her estate, as applicable) will be paid the value
      of
      his or her Account, subject to the Board’s discretion to defer the payment of
      the value of a Participant’s Account to appropriately reflect the payment
      schedule, contingent payment, holdbacks or contingent obligations applicable
      to
      holders of Common Stock following the Realization Event, as
      follows:

     

    (i)  as
      soon
      as practicable following a Realization Event that is a cash transaction, the
      value of each Account shall be paid in cash to the Participants.

     

    (ii)  following
      a Realization Event that is an equity or other non-cash exchange for Common
      Stock, (A) the Board shall credit each Account attributable to any Phantom
      Incentive Unit and/or Common Phantom Additional Unit at such time and in such
      amounts of such medium (including notes, equity securities, or a combination
      of
      the foregoing) as payments are made available to holders of Common Stock
      pursuant to the Realization Event or, in the Board’s sole discretion, in cash
      and (B) the value of the Accounts attributable to the Phantom Incentive Units
      and/or Common Phantom Additional Units shall be distributed as soon as
      practicable following such credit to the Account; provided that the Board may
      elect to continue to defer payment of the Account until not later than such
      time
      as the equity or other medium received in exchange for Common Stock may be
      converted into cash or is otherwise transferable and, in the event of such
      deferral, the Board shall determine whether payment shall be made either in
      cash
      or in the same medium of payment as holders of Common Stock received in the
      Realization Event, including notes, equity securities, or a combination of
      the
      foregoing.

     

    (b)  Preferred
      Stock.
      Notwithstanding anything herein to the contrary, the value of the Accounts,
      if
      any, attributable to any Preferred Phantom Additional Unit shall be paid to
      a
      Participant upon a Realization Event only when and to the extent permitted
      in
      this Section 6(b). The Accounts attributable to each Preferred Phantom
      Additional Unit shall receive a credit at such times and in such amounts as
      payments are made to a holder of 0.45914 or 0.53803 shares of Preferred Stock
      in
      redemption thereof, as applicable, depending upon the date on which the
      Preferred Phantom Additional Unit was granted. The value of the Accounts
      attributable to the Preferred Phantom Additional Units shall be paid to the
      Participants as soon as practicable following such credit to the Account and
      in
      the same medium (cash, equity, or any other medium) received by the holders
      of
      Preferred Stock. The Company has the right to pay the value of the Account
      in
      respect of Preferred Phantom Additional Units following a Participant’s
      termination of employment for any reason and prior to any other event giving
      rise to the payout of Preferred Stock generally as described in Section
      8(b)(ii)(D) below.

     

    (c)  IPO.
      From
      and after the consummation by the Company of an IPO that occurs prior to a
      Realization Event, the following shall apply:

     

    (i)  If
      the
      Company shall be required to pay out the value of any Account or shall exercise
      any right it may have to pay out the value of any Account or if any Participant
      shall have the right to receive any portion of an Account, the Company may
      pay
      the value of the Account in shares of Common Stock (in the case of Phantom
      Incentive Units or Common Phantom Additional Units) or Preferred Stock (in
      the
      case of Preferred Phantom Additional Units) or (in the case of either Phantom
      Incentive Units or Phantom Additional Units) in cash (determined by using,
      in
      the case of Phantom Incentive Units or Common Phantom Additional Units, the
      market price of the Common Stock, and in the case of Preferred Phantom
      Additional Units, the Liquidation Value of the Company’s Preferred Stock and the
      accrued but unpaid dividends thereon, in each case on the date immediately
      prior
      to the payment) or a combination of the foregoing (“Post-IPO Payout”).


     

    (ii)  Except
      as
      provided in Section 8 (generally relating to termination of employment prior
      to
      a Realization Event) and except upon the earlier occurrence of a Realization
      Event, and subject to the Company’s right after the IPO to pay the value of the
      Account at such earlier time as it shall determine, on the fifth anniversary
      of
      the IPO the Account will be paid to the Participant, who will receive the
      Post-IPO Payout unless the Participant (or the Participant’s estate, as
      applicable) elected in writing no later than the fourth anniversary of the
      IPO
      to defer the Post-IPO Payout for an additional 36 months from the fifth
      anniversary of the IPO. Each Participant who remains employed with the Company
      and who chooses to defer the payment of his or her Post-IPO Payout (including,
      for this purpose, any Participant or Participant’s estate who otherwise deferred
      payment of his or her Account) no later than the fourth anniversary of the
      IPO
      may continue to defer the payment of the Post-IPO Payout for additional 36
      month
      intervals, provided that the election to defer is made no later than one year
      prior to the date on which the Post-IPO Payout would otherwise be paid.


     

    (d)  Tag-Along
      Event.
      In
      connection with a Tag-Along Event, the Company shall, in its discretion (A)
      immediately prior to the Tag-Along Event distribute to each Participant, a
      number of shares of such class or classes of the Company’s Capital Stock such
      that the number of shares so distributed plus the number of shares which the
      holder would be entitled to sell under Section 4.5 of the Stockholders Agreement
      without regard to the Phantom Incentive Units or Phantom Additional Units held
      by such Participant (assuming that the source for the shares to be sold
      constituted shares of Capital Stock, and shares distributed with respect to
      Phantom Incentive Units and shares distributed with respect to Phantom
      Additional Units in proportion to the number of shares or such units held)
      equals the total number of shares of Capital Stock the holder is entitled to
      sell (the “Pro Rata Portion”) or (B) immediately following the Tag-Along Event,
      credit each Participant’s Account with the value the Participant would have
      received from the shares that would be distributed pursuant to clause (A) had
      such shares been distributed and sold in the Tag-Along Event, and either pay
      such portion of the Account as soon as practicable following the Tag-Along
      Event
      or continue to defer the payment of the Account until the Account is otherwise
      payable in accordance with this Plan. For purposes of the foregoing clause
      (B),
      the credit in respect of the Account and any payment of the Account shall only
      be in respect of the Phantom Incentive Units and/or the Phantom Additional
      Units, as applicable, to which the Pro Rata Portion applies. For purposes of
      this Section 6(d), the Pro Rata Portion, to the extent it is attributable to
      Phantom Incentive Units, shall apply “pro rata” to the total number of Protected
      and Unprotected Phantom Incentive Units credited to a Participant’s Account.


     

    SECTION
      7.  Compliance
      with Debt Instruments and Legal Requirements.
      

     

    (a)  Legal
      Requirements.
      The
      grant of Phantom Incentive Units and Phantom Additional Units, payment of the
      value of a Participant’s Account (including a partial distribution of a
      Participant’s Account, if applicable), and the other obligations of the Company
      under this Plan shall be subject to all applicable federal and state laws,
      rules
      and regulations and to such approvals by any regulatory or governmental agency
      as may be required. 

     

    (b)  Debt
      Instruments.
      Notwithstanding the requirements of Section 6 hereof regarding the payment
      of
      the value of the Accounts, the Company shall not be obligated to pay the value
      of any portion of any Account (A) at any time there exists and is continuing
      a
      default or an event of default on the part of the Company or under any guarantee
      or other agreement under which the Company or one of its Subsidiaries has
      borrowed money or (B) if such payment would constitute a breach of, or result
      in
      a default or an event of default on the part of the Company or any of its
      Subsidiaries, under any such guarantee or agreement. In the event that payment
      of any portion of any Account is deferred pursuant to this Section 7(b), the
      Company shall pay the value of such portion as soon as possible following the
      date on which such payment would not result in any such breach or default,
      with
      interest at the federal short-term interest rate on the first day of the month
      the Participant (or his or her estate) has the right to receive payment of
      the
      value of his or her Account pursuant to Section 6, to be recalculated on the
      first day of each month thereafter until all such payments due under the Account
      are made.

     

    (c)  Postponement.
      The
      Board, in its sole discretion, may postpone the issuance or delivery of any
      securities under a Participant’s Account as the Company may consider appropriate
      and may require a Participant to make such representations and furnish such
      information as it may consider appropriate in connection with the issuance
      or
      delivery of any such securities in compliance with applicable laws, rules and
      regulations.

     

    SECTION
      8.  Termination
      of Employment.

     

    (a)  Protection
      of Account Values.
      Unless
      otherwise provided in an Award Agreement, Accounts shall become “Protected” as
      follows:

     

    (i)  subject
      to continued employment with the Company or one of its Subsidiaries,
      Participants shall initially be “Unprotected” but shall become Protected in the
      value of the Phantom Incentive Unit portion of their Accounts, as
      follows:

     

    
      	
              20%
                on the first anniversary of the date of the applicable Award Agreement,
                if
                still employed.

               

            
	
              40%
                on the second anniversary of the date of the applicable Award Agreement,
                if still employed.

               

            
	
              60%
                on the third anniversary of the date of the applicable Award Agreement,
                if
                still employed.

               

            
	
              80%
                on the fourth anniversary of the date of the applicable Award Agreement,
                if still employed.

               

            
	
              100%
                on the fifth anniversary of the date of the applicable Award Agreement,
                if
                still employed. 

               

            


    

    


     

    (ii)  upon
      the
      occurrence of the earlier of a Realization Event or an IPO, a Participant who
      is
      then employed with the Company or one of its Subsidiaries shall become fully
      Protected in the Phantom Incentive Unit portion of his or her Account;
      and

     

    (iii)  the
      Phantom Additional Unit portion of each Participant’s Account, as applicable, is
      fully Protected as of the date of grant of such Phantom Additional
      Units.

     

    (b)  Payment
      Upon Termination of Employment.
      

     

    (i)  Unless
      otherwise provided in an Award Agreement and notwithstanding any of the
      foregoing to the contrary, if a Participant’s employment with the Company or its
      Subsidiaries terminates for any reason, and neither a Realization Event nor
      an
      IPO has occurred as of such termination of employment, the Participant’s Account
      will be credited with the “Cash-Out
      Amount,”
as
      provided below immediately prior to the payment of the Account, and such Account
      shall be paid to such Participant within 90 days following the termination
      of
      such Participant’s employment with the Company (or up to one year following the
      date of termination as may be determined by the Chief Executive Officer of
      the
      Company), as the Board may, in its discretion, determine; provided that, in
      the
      case of death or Disability, payment of the Account will be governed by Section
      8(b)(ii)(C) and will be paid to the Participant’s estate, as
      applicable.

     

    (ii)  The
      “Cash-Out Amount” is determined as follows:

     

    (A)  Cause
      Termination.
      In the
      event that a Participant’s employment with the Company or its Subsidiaries is
      terminated by the Company for Cause and neither a Realization Event nor an
      IPO
      has occurred prior to such termination of employment, then the Cash-Out Amount
      is equal to, with respect to each Phantom Incentive Unit, (x) the initial value
      of the Phantom Incentive Unit on the date of grant as set forth in the Award
      Agreement, plus or minus (y) any change in Adjusted Retained Earnings per share
      from the date of grant through the end of the most recent fiscal quarter
      preceding the date of termination of employment; 

     

    (B)  Other
      Discharges; Quits.
      In the
      event that a Participant’s employment with the Company or its Subsidiaries
      terminates for any reason other than (i) by the Company for Cause or (ii) due
      to
      the Participant’s death or Disability, and neither a Realization Event nor an
      IPO has occurred prior to such termination of employment, then the Cash-Out
      Amount is equal to the sum of:

     

    (x) with
      respect to each Protected Phantom Incentive Unit and each Common Phantom
      Additional Unit, an amount equal to the quotient obtained by dividing (I) the
      excess of (i) the product of 6.7 times Consolidated EBITDA during the
      Measurement Period over (ii) the Consolidated Indebtedness as of the date of
      termination, by (II) the number of shares of Common Stock then issued and
      outstanding and all shares of Common Stock issuable upon the exercise of any
      then outstanding Contingent Right, whether or not such Contingent Right is
      at
      the time exercisable on the date of termination of employment; plus

     

    (y) with
      respect to each Phantom Incentive Unit that is Unprotected, an amount equal
      to
      (I) the initial value of the Phantom Incentive Unit on the date of grant as
      set
      forth in the Award Agreement, plus or minus (II) any change in Adjusted Retained
      Earnings per share from the date of grant through the end of the most recent
      fiscal quarter preceding the date of termination of employment;

     

    (C)  Death
      or Disability.
      In the
      event that a Participant’s employment with the Company or its Subsidiaries
      terminates due to the Participant’s death or Disability and neither a
      Realization Event nor an IPO has occurred prior to such termination of
      employment, then the Cash-Out Amount is the amount described in Section
      8(b)(ii)(B) (above) with respect to each Phantom Incentive Unit and the Account
      will be paid to the Participant (or the Participant’s estate, as applicable) one
      year following the termination of Participant’s employment or, in the Board’s
      discretion, at any time prior to one year following the termination of
      employment; provided that, unless the Board shall otherwise determine, the
      Participant or the Participant’s estate, as applicable, may elect within 180
      days following such termination of employment to defer the payment of the
      Account until such time as payment is otherwise required or made in accordance
      with the Plan.

     

    (D)  Phantom
      Additional Units.
      If a
      Participant’s employment with the Company or its Subsidiaries terminates for any
      reason prior to a Realization Event or an IPO, then (x) with respect to each
      Common Phantom Additional Unit, the Cash-Out Amount is the amount described
      in
      Section 8(b)(ii)(B)(x) above and (y) with respect to each Preferred Phantom
      Additional Unit granted in February, 2004, the Cash-Out Amount is 0.45914 times
      the sum of (I) the “Liquidation Value” plus (II) the “Maximum Dividend” (each as
      defined in the Company’s Certificate of Incorporation) and with respect to each
      Preferred Phantom Additional Unit granted in August, 2004, the Cash-Out Amount
      is 0.53803 times the sum of (I) the Liquidation Value plus (II) the Maximum
      Dividend. 

     

    (iii)  Notwithstanding
      the foregoing, with respect to Phantom Incentive Units valued at the Cash-Out
      Amount as described in Section 8(b)(ii)(B) above, (A) if during the Measurement
      Period the Company or any of its Subsidiaries shall have purchased or otherwise
      acquired, without the approval of the Chief Executive Officer of the Company
      (in
      a single transaction or in a series of transactions), a business which is
      outside of the building products industry, all calculations required under
      this
      Section 8(b) shall be made on a pro forma basis to eliminate the effect of
      such
      acquisition and any financing undertaking in connection therewith and (B) in
      the
      event that a sale of the Company is consummated within nine months following
      the
      payment of a Participant’s Account, and if the per share purchase price (or the
      amount available for distribution, in the event of a sale of all or
      substantially all of the Company’s assets) (such price or amount, the “Actual
      Amount”) is higher than the Cash-Out Amount used to value such Phantom Incentive
      Units, whether or not Protected, then the Participant will receive, at the
      same
      time stockholders of the Company receive payment in connection with such sale,
      an additional payment from the Company equal to the excess of (x) the number
      of
      Phantom Incentive Units multiplied by the Actual Amount over (y) the aggregate
      Cash-Out Amount for such Phantom Incentive Units.

     

    (iv)  If
      a
      Participant’s employment with the Company or its Subsidiaries terminates for any
      reason and at any time following the occurrence of an IPO, even if such
      employment terminated prior to a Realization Event, in lieu of the amounts
      described in Section 8(b)(i) through (iii), the Participant will be entitled
      to
      the Post-IPO Payout (as described in Section 6(c)(i) above) in respect of the
      Phantom Incentive Units and the Phantom Additional Units credited to such
      Participant’s Account, which Account shall be paid to such Participant in
      accordance with Section 6(c).

     

    (v)  All
      calculations under Section 6 and this Section 8 of the value of shares based
      upon the number of outstanding shares of Common Stock and/or Preferred Stock
      shall be determined assuming that each Phantom Incentive Unit and each Common
      Phantom Additional Unit is an outstanding share of Common Stock, each Preferred
      Phantom Additional Unit granted in February, 2004, is 0.45914 outstanding shares
      of Preferred Stock and each Preferred Phantom Additional Unit granted in August,
      2004, is 0.53803 outstanding shares of Preferred Stock.

     

    SECTION
      9.  Dilution
      Adjustments.

     

    (a)  Certain
      Events.
      In the
      event of a reclassification, recapitalization, stock split, stock dividend,
      combination of units, or other similar or extraordinary event, the number and
      kind of Phantom Incentive Units and Phantom Additional Units, in the aggregate,
      reserved for issuance or with respect to which Awards may be made under this
      Plan shall be adjusted to reflect such event in the same manner in which Common
      Stock and Preferred Stock are adjusted to reflect such event, and the Board
      shall make such adjustments as it deems appropriate and equitable in the number,
      kind and price of Phantom Incentive Units and Phantom Additional Units credited
      to outstanding Accounts, and in any other matters which relate to Awards or
      Accounts and which are affected by the events referred to above. 

     

    (b)  Other
      Adjustments.
      The
      Board is authorized to make adjustments in the terms and conditions of, and
      the
      criteria included in, Accounts in recognition of unusual or nonrecurring events
      (including, without limitation, the events described in Section 9(a)) affecting
      the Company, or the financial statements of the Company or any subsidiary,
      or of
      changes in applicable laws, regulations, or accounting principles, whenever
      the
      Board determines that such adjustments are appropriate in order to prevent
      dilution or enlargement of the benefits or potential benefits intended to be
      made available under this Plan.

     

    SECTION
      10.  Amendment
      and Termination.

     

    (a)  Amendments
      to the Plan.
      The
      Board may amend, alter, suspend, discontinue, or terminate this Plan or any
      portion thereof at any time; provided, however, that any such amendment,
      alteration, suspension, discontinuance, or termination that would materially
      adversely affect the rights of any Participant with respect to any outstanding
      Account held pursuant to this Plan shall not, to that extent, be effective
      without the written consent of the affected Participant.

     

    (b)  Amendments
      to Awards.
      The
      Board may waive any conditions or rights under, amend any terms of, or alter,
      suspend, discontinue, cancel or terminate, any Account, prospectively or
      retroactively; provided, however, that any such waiver, amendment, alteration,
      suspension, discontinuance, cancellation or termination not expressly
      contemplated by this Plan that would materially adversely affect the rights
      of
      any Participant or other holder of an Account shall not to that extent be
      effective without the written consent of the affected Participant or
      holder.

     

    SECTION
      11.  General
      Provisions.

     

    (a)  Nontransferability.
      Neither
      an Account, nor any Phantom Incentive Unit and/or Phantom Additional Units
      recorded thereunder, may be assigned, alienated, pledged, attached, sold or
      otherwise transferred or encumbered by a Participant other than by will or
      by
      the laws of descent and distribution, and any such purported assignment,
      alienation, pledge, attachment, sale, transfer or encumbrance shall be void
      and
      unenforceable against the Company.

     

    (b)  No
      Rights to Awards.
      No
      Person shall have any claim to be granted any Phantom Incentive Unit or Phantom
      Additional Unit, and there is no obligation for uniformity of treatment of
      Participants, or holders or beneficiaries of Accounts. The terms and conditions
      of Phantom Incentive Units and Phantom Additional Units, Accounts and the
      Board’s determinations and interpretations with respect thereto need not be the
      same with respect to each Participant (whether or not Participants are similarly
      situated).

     

    (c)  Government
      and Other Regulations. The
      obligation of the Company to settle Awards in Common Stock, Preferred Stock
      or
      otherwise shall be subject to all applicable laws, rules, and regulations,
      and
      to such approvals by governmental agencies as may be required. Notwithstanding
      any terms or conditions of any Award to the contrary, the Company shall be
      under
      no obligation to offer to sell or to sell and shall be prohibited from offering
      to sell or selling any shares of Common Stock or Preferred Stock pursuant to
      an
      Award unless such shares have been properly registered for sale pursuant to
      the
      Securities Act with the Securities and Exchange Commission or unless the Company
      has received an opinion of counsel, satisfactory to the Company, that such
      shares may be offered or sold without such registration pursuant to an available
      exemption therefrom and the terms and conditions of such exemption have been
      fully complied with. The Company shall be under no obligation to register for
      sale under the Securities Act any of the shares of Common Stock or Preferred
      Stock to be offered or sold under the Plan until an IPO. Upon an IPO, the
      Company shall undertake to register shares of Common Stock and/or Preferred
      Stock pursuant to the Securities Act on a Form S-8 with the Securities and
      Exchange Commission for issuance under this Plan, such that in the event the
      Company makes a distribution of the Accounts in shares of Common Stock or
      Preferred Stock at any time following an IPO, there will be a sufficient number
      of shares registered under this Plan.

     

    (d)  Tax
      Withholding.
      A
      Participant may be required to pay to the Company, at its request, and the
      Company shall have the right and is hereby authorized to withhold from any
      payment due or transfer made under any Account or otherwise under this Plan
      or
      from any compensation or other amount owing to or in respect of a Participant,
      the amount (in cash, securities, or other property) of any applicable
      withholding taxes in respect of an Account, its distribution or settlement
      in
      cash or in kind, or any payment or transfer under an Account or under this
      Plan,
      and to take such other action as may be necessary in the opinion of the Company
      to satisfy all obligations for the payment of such taxes.

     

    (e)  Other
      Compensation Arrangements.

     

    (i)  Nothing
      contained in this Plan shall prevent the Company or any Subsidiary or other
      Affiliate from adopting or continuing in effect other compensation arrangements,
      which may, but need not, provide for the grant of options, securities and other
      types of awards, and such arrangements may be either generally applicable or
      applicable only in specific cases.

     

    (ii)  Neither
      the grant of Phantom Incentive Units or Phantom Additional Units hereunder
      nor
      the payment of any amounts in respect of any Account shall be taken into account
      in determining a Participant’s right to receive any additional benefits or
      compensation under any other plan or arrangement.

     

    (f)  No
      Right to Service or Employment.
      The
      grant of Phantom Incentive Units or Phantom Additional Units shall not be
      construed as giving a Participant the right to be retained in the employ or
      service of the Company or any Subsidiary. Further, the Company or its
      Subsidiaries may at any time terminate a Participant from any employment or
      other service relationship or discontinue, free from any liability or any claim
      under this Plan, unless otherwise expressly provided in this Plan or in the
      Participant’s Award Agreement.

     

    (g)  Awards
      as an Unsecured Promise.

     

    (i)  The
      Phantom Incentive Units and Phantom Additional Units granted under this Plan
      do
      not constitute an equity interest in the Company or its Subsidiaries. A
      Participant shall not share in the voting rights of the Company or its
      Subsidiaries as a result of an Award.

     

    (ii)  The
      Company shall not be required to and shall not segregate any funds representing
      awards of Phantom Incentive Units or Phantom Additional Units granted hereunder,
      and nothing in this Plan or any Award Agreement shall be construed as providing
      for such segregation.

     

    (iii)  Nothing
      in this Plan or any Award Agreement, and no action taken pursuant to their
      respective terms, shall create or be construed to create a trust or escrow
      account of any kind, or a fiduciary relationship between the Company or its
      Subsidiaries, on the one hand, and any Participant, or any other Person, on
      the
      other hand.

     

    (iv)  The
      Participants and their beneficiaries and any other Persons entitled to payment
      in respect of an Account shall rely solely on the unsecured promise of the
      Company to make the payments required under the terms of any Account, but shall
      have the right to enforce such a claim in the same manner as any unsecured
      general creditor of the Company. The Participants shall not have any preferred
      claim on, or any beneficial ownership in, any assets of the Company. Any rights
      created under this Plan or any Award Agreement shall be mere unsecured
      contractual rights of the Participants against the Company.

     

    (h)  Termination
      with Subsidiaries.
      For
      purposes of this Plan, a Participant’s employment will be deemed terminated when
      he or she is no longer employed by the Company or any of its
      Subsidiaries.

     

    (i)  Conflicts.
      In the
      event of a conflict between the terms of this Plan and any Award Agreement,
      the
      terms of this Plan shall prevail.

     

    (j)  Governing
      Law.
      Unless
      otherwise provided in the applicable Award Agreement, the validity,
      construction, and effect of this Plan and any rules and regulations relating
      to
      this Plan and any Award Agreement shall be determined in accordance with the
      laws of the State of Delaware applicable to agreements made and to be performed
      entirely within such state without regard to the choice of law principles
      thereof.

     

    (k)  Headings.
      Headings are given to the sections and subsections of this Plan solely as a
      convenience to facilitate reference. Such headings shall not be deemed in any
      way material or relevant to the construction or interpretation of this Plan
      or
      any provision thereof.