**Exhibit 10.2**

**IncentiveStock Option Agreementunder the WII Components, Inc.2003 Stock Option and Grant Plan**
| **Name of Optionee:**            |   | John Fitzpatrick (the “Optionee”)                                                     |
|----------------------------------|--------|-------------------------------------------------------------------------------------------------|
| **No. of Option Shares:**        |   | 160,000 Shares of  Common Stock                                                                 |
| **Grant Date:**                  |   | May 31, 2006 (the  “Grant Date”)                                                      |
| **Expiration Date:**             |   | May 31, 2016 (the  “Expiration Date”)                                                 |
| **Option Exercise Price/Share:** |   | $5.54 (subject to  adjustment as provided in Section 14, the “Option Exercise Price”) |

 

Pursuant to the WII Components, Inc. 2003 Stock Optionand Grant Plan (the “Plan”), WII Components, Inc., a Delaware corporation(together with all successors thereto, the “Company”), hereby grants to theOptionee, who is an employee of the Company or any of its Subsidiaries, anoption (the “Stock Option”) to purchase on or prior to the Expiration Date, orsuch earlier date as is specified herein, all or any part of the number ofshares of Voting Common Stock, par value $0.01 per share (“Common Stock”), ofthe Company indicated above (the “Option Shares,” and such shares once issuedshall be referred to as the “Issued Shares”), at the Option Exercise Price pershare, subject to the terms and conditions set forth in this Incentive StockOption Agreement (this “Agreement”) and in the Plan.  This Stock Option is intended to qualify asan “incentive stock option” as defined in Section 422(b) of the InternalRevenue Code of 1986, as amended from time to time (the “Code”).  To the extent that any portion of the StockOption does not so qualify, it shall be deemed a non-qualified stockoption.

# **1.             Definitions.**  For the purposes of this Agreement, thefollowing terms shall have the following respective meanings.  All capitalized terms used herein and nototherwise defined shall have the respective meanings set forth in the Plan.

An “Affiliate” ofany Person means a Person that directly or indirectly, through one or moreintermediaries, controls, is controlled by or is under common control with thefirst mentioned Person.  A Person shallbe deemed to control another Person if such first Person possesses directly orindirectly the power to direct, or cause the direction of, the management andpolicies of the second Person, whether through the ownership of votingsecurities, by contract or otherwise.

“Bankruptcy” shallmean (i) the filing of a voluntary petition under any bankruptcy or insolvencylaw, or a petition for the appointment of a receiver or the making of anassignment for the benefit of creditors, with respect to the Optionee or anyPermitted Transferee, or (ii) the Optionee or any Permitted Transferee beingsubjected involuntarily to such a petition or assignment or to an attachment orother legal or equitable interest with respect to the Optionee’s or suchPermitted Transferee’s assets, which involuntary petition or assignment orattachment is not discharged within 60 days after its date, and (iii) theOptionee or any Permitted 

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Transferee being subject to a transfer of the StockOption or the Issued Shares by operation of law (including by divorce, even ifnot insolvent), except by reason of death.

“Cause” shall meana vote of the Board resolving that the Optionee should be dismissed as a resultof (i) the commission of any act by the Optionee constituting financialdishonesty against the Company (which act would be chargeable as a crime underapplicable law); (ii) the Optionee’s engaging in any other act of dishonesty,fraud, intentional misrepresentation, moral turpitude, illegality or harassmentwhich, as determined in good faith by the Board, would:  (A) materially adversely affect the businessor the reputation of the Company with its current or prospective customers,suppliers, lenders and/or other third parties with whom it does or might dobusiness; or (B) expose the Company to a risk of civil or criminal legaldamages, liabilities or penalties; (iii) the repeated failure by the Optioneeto follow the directives of the Company’s chief executive officer or Board or(iv) any material misconduct, violation of the Company’s policies, or willfuland deliberate non-performance of duty by the Optionee in connection with thebusiness affairs of the Company; provided, however, the Companyacknowledges and hereby agrees that, in the event Optionee is appointed to theposition of Chairman, Optionee’s responsibilities and obligations will bereduced and that such reduction shall not in any way be deemed to constitute “Cause”under this Agreement.

“Good Reason”shall mean the occurrence of any of the following events: (i) a substantialadverse change in the nature or scope of the Optionee’s responsibilities,authorities, powers, functions or duties; (ii) a reduction in the Optionee’sannual base salary except for across-the-board salary reductions similarlyaffecting all or substantially all management employees; or (iii) therelocation of the offices at which the Optionee is principally employed to alocation more than 50 miles from such offices; provided, however,that the Board may appoint Optionee to the position of Chairman withoutreduction in Optionee’s annual cash compensation and such appointment shall notbe deemed to constitute Good Reason.

“Permitted Transferees”shall mean any of the following to whom the Optionee may transfer Issued Shareshereunder (as set forth in Section 8): the Optionee’s spouse, children (natural or adopted), stepchildren or atrust for their sole benefit of which the Optionee is the settlor; provided,however, that any such trust does not require or permit distribution ofany Issued Shares during the term of this Agreement unless subject to itsterms.  Upon the death of the Optionee(or a Permitted Transferee to whom shares have been transferred hereunder), theterm Permitted Transferees shall also include such deceased Optionee’s (or suchdeceased Permitted Transferee’s) estate, executions, administrations, personalrepresentations, heirs, legatees and distributees, as the case may be.

“Person” shallmean any individual, corporation, partnership (limited or general), limitedliability company, limited liability partnership, association, trust, jointventure, unincorporated organization or any similar entity.

“Sale Event” shallmean, regardless of form thereof, consummation of (i) the dissolution orliquidation of the Company, (ii) the sale of all or substantially all of theassets of the Company on a consolidated basis to an unrelated person or entity,(iii) a merger, reorganization or consolidation in which the outstanding sharesof Stock are converted into or exchanged for securities of the successor entityand the holders of the Company’s outstanding 

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voting power immediately prior to such transaction donot own a majority of the outstanding voting power of the successor entityimmediately upon completion of such transaction, (iv) the sale of all or amajority of the outstanding capital stock of the Company to an unrelated personor entity or (v) any other transaction in which the owners of the Company’soutstanding voting power immediately prior to such transaction do not own atleast a majority of the outstanding voting power of the successor entityimmediately upon completion of the transaction; provided, however,that no such event shall constitute a Sale Event unless, if requested by theBoard, Optionee agrees in writing to continue his Service Relationship with theCompany or its successor in substantially the same capacity as Optionee servedimmediately prior to the Sale Event for a term of two (2) years.

“Service Relationship”  shall mean any relationship as an employee orpart-time employee with the Company or one of its Subsidiaries (or theirsuccessors) such that, for example, a Service Relationship shall be deemed tocontinue without interruption in the event that the Optionee’s status changesfrom employee to part-time employee.

“Subsidiary” shallmean any corporation (other than the Company) in any unbroken chain ofcorporations or other entities beginning with the Company if each of thecorporations (other than the last corporation in the unbroken chain) owns stockor other interests possessing 50 percent or more of the total combined votingpower of all classes of stock or in one of the other corporations in the chain.

# **2.             Vesting, Exercisability andTermination.**

## (a)           No portion of thisStock Option may be exercised until such portion shall have vested.

## (b)           This Stock Optionshall be deemed vested and exercisable in full upon the earliest to occur ofthe following:

### (i)            A Sale Event; or

### (ii)           June 30, 2009; provided, however, inthe event the Optionee’s Service Relationship terminates prior to June 30,2009, and such termination is either (a) by the Company without Cause, or (b)by the Optionee for Good Reason, a portion of this Stock Option may vestaccording to the provisions set forth in Section 2(c) of this Agreement.

### No portion of this Stock Option shall vest orbecome exercisable unless and until any of the events described insubparagraphs (i) and (ii) above occur.

## (c)           Termination.  Except as may otherwise be provided by theCommittee, if the Optionee’s Service Relationship is terminated, the periodwithin which to exercise this Stock Option may be subject to earliertermination as set forth below:

### (i)            Termination By Company WithoutCause.  In the event Optionee’sService Relationship is terminated by the Company without Cause, or by theOptionee for 

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###  

### Good Reason prior to June 30, 2009, and aSale Event occurs thereafter, this Stock Option will vest as indicated below:

| Determination Date:            | ** ** | ** ** | ** ** | **% of Option Vesting:** | ** ** |
|-------------------------------------|------------|------------|------------|-----------------------------------------|------------|
| 0-365 days after  termination date  |       | 100        | %          |
| 366-546 days after termination date |       | 50         | %          |
| 547-730 days after termination date |       | 25         | %          |
| thereafter                          |       | 0          | %          |

 

The date that a letter ofintent regarding a bona fide acquisition of the Company (an “LOI”) has beenapproved by the Board and executed by the Company and the relevant third partyshall be the Determination Date used in the table above.  By way of illustration only, if Optionee’sService Relationship is terminated by the Company without Cause on February 9,2007 and the Company executes an LOI on February 14, 2008, then, uponconsummation of the Sale Event described in the LOI, 50% of the Option shall vestand be exercisable.

### (ii)           Termination By Optionee WithoutGood Reason or for Cause.  In theevent Optionee terminates the Service Relationship without Good Reason, or theCompany terminates Optionee’s Service Relationship for Cause prior to June 30,2009, no portion of this Stock Option shall vest.

### (iii)          Termination Due to Death orDisability.  If the Optionee’sService Relationship terminates by reason of such Optionee’s death ordisability (as defined in Section 422(c) of the Code), this Stock Optionmay be exercised, to the extent exercisable on the date of such termination, bythe Optionee, the Optionee’s legal representative or legatee for a period of 12months from the date of death or disability or until the Expiration Date, ifearlier, subject in any event to Section 6.

### (iv)          Other Termination.  If the Optionee’s Service Relationshipterminates for any reason other than death or disability, and unless otherwisedetermined by the Committee, this Stock Option may be exercised, to the extentexercisable on the date of termination, for a period of 90 days from the dateof termination or until the Expiration Date, if earlier; providedhowever,if the Optionee’s Service Relationship is terminated for Cause, this StockOption shall terminate immediately upon the date of such termination.

For purposes hereof, the Committee’s determination ofthe reason for termination of the Optionee’s Service Relationship shall beconclusive and binding on the Optionee and his or her representatives orlegatees or Permitted Transferees.  Anyportion of this Stock Option that is not 

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exercisable on the date of termination of the ServiceRelationship shall terminate immediately and be null and void.

It is understood and intended that this Stock Optionis intended to qualify as an “incentive stock option” as defined inSection 422 of the Code to the extent permitted under applicable law.  Accordingly, the Optionee understands that inorder to obtain the benefits of an incentive stock option underSection 422 of the Code, no sale or other disposition may be made ofIssued Shares for which incentive stock option treatment is desired within theone-year period beginning on the day after the day of the transfer ofsuch Issued Shares to him or her, nor within the two-year periodbeginning on the day after the grant of this Stock Option and further that thisStock Option must be exercised within three (3) months after termination ofemployment as an employee (or 12 months in the case of death or disability) toqualify as an incentive stock option.  Ifthe Optionee disposes (whether by sale, gift, transfer or otherwise) of anysuch Issued Shares within either of these periods, he or she will notify theCompany within 30 days after such disposition. The Optionee also agrees to provide the Company with any informationconcerning any such dispositions required by the Company for tax purposes.  Further, to the extent Option Shares and anyother incentive stock options of the Optionee having an aggregate Fair MarketValue in excess of $100,000 (determined as of the Grant Date) vest in any year,such options will not qualify as incentive stock options.

# **3.             Exercise of Stock Option.**

## (a)           The Optionee mayexercise this Stock Option only in the following manner:  Prior to the Expiration Date (subject toSection 6), the Optionee may deliver a Stock Option exercise notice (an “ExerciseNotice”) in the form of Appendix A hereto indicating his or herelection to purchase some or all of the Option Shares with respect to whichthis Stock Option is exercisable at the time of such notice.  Such notice shall specify the number ofOption Shares to be purchased.  Paymentof the purchase price may be made by one or more of the methods describedbelow.  Payment instruments will bereceived subject to collection.

### (i)            in cash, by certified or bank check,or other instrument acceptable to the Committee in U.S. funds payable to theorder of the Company in an amount equal to the purchase price of such OptionShares; or

### (ii)           if the Company’s Initial PublicOffering has occurred, then (A) through the delivery (or attestation toownership) of shares of Common Stock that have been purchased by the Optioneeon the open market or that have been held by the Optionee for at least sixmonths and are not subject to restrictions under any plan of the Company and inany event with an aggregate Fair Market Value (as of the date of such exercise)equal to the option purchase price, (B) by the Optionee delivering to theCompany a properly executed Exercise Notice together with irrevocableinstructions to a broker to promptly deliver to the Company cash or a checkpayable and acceptable to the Company to pay the option purchase price,provided that in the event the Optionee chooses to pay the option purchaseprice as so provided, the Optionee and the broker shall comply with suchprocedures and enter into such agreements of indemnity and other agreements asthe Committee shall prescribe as a condition of such payment procedure, or (C) acombination of (i), (ii)(A) and (ii)(B) above.

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## (b)           Certificatesfor the Option Shares so purchased will be issued and delivered to theOptionee upon compliance to the satisfaction of the Committee with allrequirements under applicable laws or regulations in connection with suchissuance.  Until the Optionee shall havecomplied with the requirements hereof and of the Plan, the Company shall beunder no obligation to issue the Option Shares subject to this Stock Option,and the determination of the Committee as to such compliance shall be final andbinding on the Optionee.  The Optioneeshall not be deemed to be the holder of, or to have any of the rights of aholder with respect to, any shares of Common Stock subject to this Stock Optionunless and until this Stock Option shall have been exercised pursuant to theterms hereof, the Company shall have issued and delivered the Issued Shares tothe Optionee, and the Optionee’s name shall have been entered as a stockholderof record on the books of the Company.  Thereupon,the Optionee shall have full dividend and other ownership rights with respectto such Issued Shares, subject to the terms of this Agreement.

## (c)           Notwithstanding anyother provision hereof or of the Plan, no portion of this Stock Option shall beexercisable after the Expiration Date.

# **4.             Incorporation of Plan**.  Notwithstanding anything herein to thecontrary, this Stock Option shall be subject to and governed by all the termsand conditions of the Plan.

# **5.             Transferability of Stock Option.**  This Agreementis personal to the Optionee and is not transferable by the Optionee in anymanner other than by will or by the laws of descent and distribution.  The Stock Option may be exercised during theOptionee’s lifetime only by the Optionee (or by the Optionee’s guardian orpersonal representative in the event of the Optionee’s incapacity).  The Optionee may elect to designate abeneficiary by providing written notice of the name of such beneficiary to theCompany, and may revoke or change such designation at any time by filingwritten notice of revocation or change with the Company; such beneficiary mayexercise the Optionee’s Stock Option in the event of the Optionee’s death tothe extent provided herein.  If theOptionee does not designate a beneficiary, or if the designated beneficiarypredeceases the Optionee, the legal representative of the Optionee may exercisethis Stock Option to the extent provided herein in the event of the Optionee’sdeath.

# **6.             [Reserved]**

# **7.             Withholding Taxes**. The Optionee shall, not later than the date as of which the exercise ofthis Stock Option becomes a taxable event for federal income tax purposes, payto the Company or make arrangements satisfactory to the Committee for paymentof any federal, state and local taxes required by law to be withheld on accountof such taxable event.  Subject toapproval by the Committee, the Optionee may elect to have the minimum taxwithholding obligation satisfied, in whole or in part, by authorizing the Companyto withhold from shares of Common Stock to be issued or transferring to theCompany, a number of shares of Common Stock with an aggregate Fair Market Valuethat would satisfy the minimum withholding amount due.  The Optionee acknowledges and agrees that theCompany or any Subsidiary of the Company has the right to deduct from paymentsof any kind otherwise due to the Optionee, or from the Option Shares to beissued in respect of an exercise of this Stock Option, any federal, state orlocal taxes of any kind required by law to be withheld with respect to theissuance of Option Shares to the Optionee.

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# **8.             Restrictions on Transfer of Issued Shares.**  None of the Issued Shares acquired uponexercise of the Stock Option shall be sold, assigned, transferred, pledged,hypothecated, given away or in any other manner disposed of or encumbered,whether voluntarily or by operation of law, unless such transfer is incompliance with all applicable securities laws (including, without limitation,the Securities Act of 1933, as amended, and the rules and regulationsthereunder (the “Act”)), and such disposition is in accordance with the termsand conditions of Sections 8 and 9 and such disposition does not cause theCompany to become subject to the reporting requirements of the SecuritiesExchange Act of 1934, as amended.  Inconnection with any transfer of Issued Shares, the Company may require thetransferor to provide at the Optionee’s own expense an opinion of counsel tothe transferor, satisfactory to the Company, that such transfer is incompliance with all foreign, federal and state securities laws (including,without limitation, the Act).  Anyattempted disposition of Issued Shares not in accordance with the terms andconditions of Sections 8 and 9 shall be null and void, and the Company shallnot reflect on its records any change in record ownership of any Issued Sharesas a result of any such disposition, shall otherwise refuse to recognize anysuch disposition and shall not in any way give effect to any such dispositionof any Issued Shares.  Subject to theforegoing general provisions, Issued Shares may be transferred pursuant to thefollowing specific terms and conditions:

## (a)           Transfers toPermitted Transferees.  The Optioneemay sell, assign, transfer or give away any or all of the Issued Shares to PermittedTransferees; provided, however, that such Permitted Transferee(s)shall, as a condition to any such transfer, agree to be subject to theprovisions of this Agreement to the same extent as the Optionee (including,without limitation, the provisions of Sections 8, 9, 11 and 12) and shall havedelivered a written acknowledgment to that effect to the Company.

## (b)           Transfers UponDeath.  Upon the death of theOptionee, any Issued Shares then held by the Optionee at the time of such deathand any Issued Shares acquired thereafter by the Optionee’s legalrepresentative pursuant to this Agreement shall be subject to the provisions ofSections 8, 9, 11 and 12, if applicable, and the Optionee’s estate, executors,administrators, personal representatives, heirs, legatees and distributeesshall be obligated to convey such Issued Shares to the Company or its assignsunder the terms contemplated hereby.

## (c)           Company’s Rightof First Refusal.  In the event thatthe Optionee (or any Permitted Transferee holding Issued Shares subject to thisSection 8(c)) desires to sell or otherwise transfer all or any part of theIssued Shares, the Optionee (or Permitted Transferee) first shall give writtennotice to the Company of the Optionee’s (or Permitted Transferee’s) intention tomake such transfer.  Such notice shallstate the number of Issued Shares which the Optionee (or Permitted Transferee)proposes to sell (the “Offered Shares”), the price and the terms at which theproposed sale is to be made and the name and address of the proposedtransferee.  At any time within 30 daysafter the receipt of such notice by the Company, the Company or its assigns mayelect to purchase all or any portion of the Offered Shares at the price and onthe terms offered by the proposed transferee and specified in the notice.  The Company or its assigns shall exercisethis right by mailing or delivering written notice to the Optionee (orPermitted Transferee) within the foregoing 30-day period.  If the Company or its assigns elect toexercise its purchase rights under this Section 8(c), the closing for suchpurchase shall, in any event, take place within 45 days after the receipt bythe Company of the initial notice from the 

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Optionee (or Permitted Transferee).  In the event that the Company or its assignsdo not elect to exercise such purchase right, or in the event that the Companyor its assigns do not pay the full purchase price within such 45-dayperiod, the Optionee (or Permitted Transferee) may, within 60 days thereafter,sell the Offered Shares to the proposed transferee and at the same price and onthe same terms as specified in the Optionee’s (or Permitted Transferee’s)notice.  Any Shares purchased by suchproposed transferee shall no longer be subject to the terms of thisAgreement.  Any Shares not sold to theproposed transferee shall remain subject to this Agreement.  Notwithstanding the foregoing, therestrictions under this Section 8(c) shall terminate in accordance withSection 13(a).

# **9.             Company’s Right of Repurchase.**

## (a)           Right of Repurchase.  The Company shall have the right, but not theobligation (the “Repurchase Right”) upon the occurrence of any of the eventsspecified in Section 9(b) below (the “Repurchase Event”) to repurchasefrom the Optionee (or any Permitted Transferee) some or all (as determined bythe Company) of the Issued Shares held or subsequently acquired upon exerciseof this Stock Option in accordance with the terms hereof by the Optionee (orany Permitted Transferee) at the price specified below (the “Repurchase Price”).  The Repurchase Right may be exercised by theCompany within the later of (i) six months following the date of such event or(ii) seven months after the exercise of this Stock Option (the “RepurchasePeriod”).  The Repurchase Right shall beexercised by the Company by giving the holder written notice on or before thelast day of the Repurchase Period of its intention to exercise the RepurchaseRight, and, together with such notice, tendering to the holder an amount equalto the Repurchase Price of the shares, determined as provided inSection 9(c).  The Company mayassign the Repurchase Right to one or more Persons.  Upon such notification, the Optionee and anyPermitted Transferees shall promptly surrender to the Company any certificatesrepresenting the Issued Shares being purchased, together with a duly executedstock power for the transfer of such Issued Shares to the Company or theCompany’s assignee or assignees.  Uponthe Company’s or its assignee’s receipt of the certificates from the Optioneeor any Permitted Transferees, the Company or its assignee or assignees shalldeliver to him, her or them a check for the Repurchase Price of the IssuedShares being purchased; provided, however, that the Company maypay the Repurchase Price for such shares by offsetting and canceling anyindebtedness then owed by the Optionee to the Company.  At such time, the Optionee and/or any holderof the Issued Shares shall deliver to the Company the certificate orcertificates representing the Issued Shares so repurchased, duly endorsed fortransfer, free and clear of any liens or encumbrances.  The Repurchase Right shall terminate inaccordance with Section 13(a).

## (b)           Company’s Rightto Exercise Repurchase Right.  TheCompany shall have the Repurchase Right in the event that any of the followingevents shall occur:

### (i)            The termination of the Optionee’sService Relationship with the Company and its Subsidiaries for any reasonwhatsoever, regardless of the circumstances thereof, and including withoutlimitation upon death, disability, retirement, discharge or resignation for anyreason, whether voluntarily or involuntarily; or

### (ii)           The Optionee’s or PermittedTransferee’s Bankruptcy.

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## (c)           Determination ofRepurchase Price.  The RepurchasePrice shall be the fair market value of the Issued Shares, provided that if theOptionee’s Service Relationship is terminated for Cause, the Repurchase Rightshall be the lesser of fair market value or the purchase price paid by Optioneefor the shares being repurchased.  Forpurposes of this Section 9, the fair market value of the Issued Shares shall bedetermined by the Board as of the date of the Termination Event or Bankruptcy.

# **10.          Escrow Arrangement.**

## (a)           Escrow.  In order to carry out the provisions ofSections 8, 9 and 11 of this Agreement more effectively, the Company shall holdany Issued Shares in escrow together with separate stock powers executed by theOptionee in blank for transfer, and any Permitted Transferee shall, as anadditional condition to any transfer of Issued Shares, execute a like stockpower as to such Issued Shares.  TheCompany shall not dispose of the Issued Shares except as otherwise provided inthis Agreement.  In the event of any repurchaseby the Company (or any of its assigns), the Company is hereby authorized by theOptionee and any Permitted Transferee, as the Optionee’s and each suchPermitted Transferee’s attorney-in-fact, to date and complete the stock powersnecessary for the transfer of the Issued Shares being purchased and to transfersuch Issued Shares in accordance with the terms hereof.  At such time as any Issued Shares are nolonger subject to the Company’s repurchase, first refusal and drag alongrights, the Company shall, at the written request of the Optionee, deliver tothe Optionee (or the relevant Permitted Transferee) a certificate representingsuch Issued Shares with the balance of the Issued Shares to be held in escrowpursuant to this Section 10.

## (b)           Remedy.  Without limitation of any other provision ofthis Agreement or other rights, in the event that the Optionee, any PermittedTransferees or any other person or entity is required to sell the Optionee’sIssued Shares pursuant to the provisions of Section 8, 9 and 11 of thisAgreement and in the further event that he or she refuses or for any reasonfails to deliver to the Company or its designated purchaser of such IssuedShares the certificate or certificates evidencing such Issued Shares togetherwith a related stock power, the Company or such designated purchaser maydeposit the applicable purchase price for such Issued Shares with a bankdesignated by the Company, or with the Company’s independent public accountingfirm, as agent or trustee, or in escrow, for the Optionee, any PermittedTransferees or other person or entity, to be held by such bank or accountingfirm for the benefit of and for delivery to him, her, them or it, and/or, inits discretion, pay such purchase price by offsetting any indebtedness thenowed by the Optionee as provided above. Upon any such deposit and/or offset by the Company or its designatedpurchaser of such amount and upon notice to the person or entity who wasrequired to sell the Issued Shares to be sold pursuant to the provisions ofSections 8, 9 and 11, such Issued Shares shall at such time be deemed to havebeen sold, assigned, transferred and conveyed to such purchaser, the holderthereof shall have no further rights thereto (other than the right to withdrawthe payment thereof held in escrow, if applicable), and the Company shallrecord such transfer in its stock transfer book or in any appropriate manner.

# **11.          Drag Along Right.**  In the event the holders of a majority of theCompany’s equity securities then outstanding (the “Majority Shareholders”)determine to sell or otherwise dispose of all or substantially all of theassets of the Company or all or fifty percent (50%) or more of the capitalstock of the Company in each case in a transaction constituting a change in 

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control of the Company, to any non-Affiliate(s)of the Company or any of the Majority Shareholders, or to cause the Company tomerge with or into or consolidate with any non-Affiliate(s) of the Company orany of the Majority Shareholders (in each case, the “Buyer”) in a *bona fide* negotiated transaction (a “Sale”),the Optionee, including any Permitted Transferees, shall be obligated to andshall upon the written request of a Majority Shareholders (subject toSection 6):  (a) sell, transfer anddeliver, or cause to be sold, transferred and delivered, to the Buyer, his orher Issued Shares (including for this purpose all of such Optionee’s or his orher Permitted Transferee’s Issued Shares that presently or as a result of anysuch transaction may be acquired upon the exercise of options (following thepayment of the exercise price therefor)) on substantially the same termsapplicable to the Majority Shareholders (with appropriate adjustments toreflect the conversion of convertible securities, the redemption of redeemablesecurities and the exercise of exercisable securities as well as the relativepreferences and priorities of preferred stock); and (b) execute and deliversuch instruments of conveyance and transfer and take such other action,including voting such Issued Shares in favor of any Sale proposed by theMajority Shareholders and executing any purchase agreements, merger agreements,indemnity agreements, escrow agreements or related documents, as the MajorityShareholders or the Buyer may reasonably require in order to carry out theterms and provisions of this Section 11. The obligations under this Section 11 shall terminate in accordancewith  Section 13(a).

# **12.          Lockup Provision.**  The Optionee agrees, if requested by theCompany and any underwriter engaged by the Company, not to sell or otherwisetransfer or dispose of any Issued Shares (including, without limitationpursuant to Rule 144 under the Act) held by him or her for such periodfollowing the effective date of any registration statement of the Company filedunder the Act as the Company or such underwriter shall specify reasonably andin good faith, not to exceed 180 days.

# **13.          MiscellaneousProvisions.**

## (a)           Termination.  The Company’s repurchase rights underSection 9, the restrictions on transfer of Issued Shares underSection 8(c) and the Drag Along obligations under Section 11 shallterminate upon the closing of the Company’s Initial Public Offering or uponconsummation of any Sale Event, in either case as a result of which shares ofthe Company (or successor entity) of the same class as the Issued Shares areregistered under Section 12 of the Exchange Act and publicly traded onNASDAQ/NMS or any national securities exchange.

## (b)           EquitableRelief.  The parties hereto agree anddeclare that legal remedies may be inadequate to enforce the provisions of thisAgreement and that equitable relief, including specific performance andinjunctive relief, may be used to enforce the provisions of this Agreement.

## (c)           Adjustmentsfor Changes in Capital Structure. If, as a result of any reorganization, recapitalization,reclassification, stock dividend, stock split, reverse stock split or othersimilar change in the Common Stock, the outstanding shares of Common Stock areincreased or decreased or are exchanged for a different number or kind ofshares of the Company’s stock, the restrictions contained in this Agreementshall apply with equal force to 

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additional and/or substitute securities, if any,received by the Optionee in exchange for, or by virtue of his or her ownershipof, Issued Shares.

## (d)           Changeand Modifications.  This Agreementmay not be orally changed, modified or terminated, nor shall any oral waiver ofany of its terms be effective.  ThisAgreement may be changed, modified or terminated only by an agreement inwriting signed by the Company and the Optionee.

## (e)           Governing Law.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Delaware without regardto conflict of law principles.

## (f)            Headings.  The headings are intended only forconvenience in finding the subject matter and do not constitute part of thetext of this Agreement and shall not be considered in the interpretation ofthis Agreement.

## (g)           Saving Clause.  If any provision(s) of this Agreement shallbe determined to be illegal or unenforceable, such determination shall in nomanner affect the legality or enforceability of any other provision hereof.

## (h)           Notices.  All notices, requests, consents and othercommunications shall be in writing and be deemed given when deliveredpersonally, by telex or facsimile transmission or when received if mailed byfirst class registered or certified mail, postage prepaid.  Notices to the Company or the Optionee shallbe addressed as set forth underneath their signatures below, or to such otheraddress or addresses as may have been furnished by such party in writing to theother.

## (i)            Benefit andBinding Effect.  This Agreement shallbe binding upon and shall inure to the benefit of the parties hereto, theirrespective successors, permitted assigns, and legal representatives.  The Company has the right to assign thisAgreement, and such assignee shall become entitled to all the rights of theCompany hereunder to the extent of such assignment.

## (j)            DisputeResolution.  Except as providedbelow, any dispute arising out of or relating to this Agreement or the breach,termination or validity hereof shall be finally settled by binding arbitrationconducted expeditiously in accordance with the J.A.M.S./Endispute ComprehensiveArbitration Rules and Procedures (the “J.A.M.S. Rules”).  The arbitration shall be governed by theUnited States Arbitration Act, 9 U.S.C. §§1-16, and judgment upon theaward rendered by the arbitrators may be entered by any court havingjurisdiction thereof.  The place ofarbitration shall be****Minneapolis,MN.

The parties covenant and agree that the arbitrationshall commence within 60 days of the date on which a written demand forarbitration is filed by any party hereto. In connection with the arbitration proceeding, the arbitrator shall havethe power to order the production of documents by each party and anythird-party witnesses.  In addition, eachparty may take up to three (3) depositions as of right, and the arbitrator mayin his or her discretion allow additional depositions upon good cause shown bythe moving party.  However, the arbitratorshall not have the power to order the answering of interrogatories or theresponse to requests for admission.  Inconnection with any arbitration, each party shall provide to the other, nolater than seven (7) 

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business days before the date of the arbitration, theidentity of all persons that may testify at the arbitration and a copy of alldocuments that may be introduced at the arbitration or considered or used by aparty’s witness or expert.  Thearbitrator’s decision and award shall be made and delivered within six (6)months of the selection of the arbitrator. The arbitrator’s decision shall set forth a reasoned basis for any awardof damages or finding of liability.  Thearbitrator shall not have power to award damages in excess of actual compensatorydamages and shall not multiply actual damages or award punitive damages or anyother damages that are specifically excluded under this Agreement, and eachparty hereby irrevocably waives any claim to such damages.

The parties covenant and agree that they willparticipate in the arbitration in good faith. This Section 13(j) applies equally to requests for temporary,preliminary or permanent injunctive relief, except that in the case oftemporary or preliminary injunctive relief any party may proceed in courtwithout prior arbitration for the limited purpose of avoiding immediate andirreparable harm.

Each of the parties hereto (i) hereby irrevocablysubmits to the jurisdiction of any United States District Court of competentjurisdiction for the purpose of enforcing the award or decision in any suchproceeding, (ii) hereby waives, and agrees not to assert, by way of motion, asa defense, or otherwise, in any such suit, action or proceeding, any claim thatit is not subject personally to the jurisdiction of the above-namedcourts, that its property is exempt or immune from attachment or execution(except as protected by applicable law), that the suit, action or proceeding isbrought in an inconvenient forum, that the venue of the suit, action or proceedingis improper or that this Agreement or the subject matter hereof may not beenforced in or by such court, and hereby waives and agrees not to seek anyreview by any court of any other jurisdiction which may be called upon to grantan enforcement of the judgment of any such court.  Each of the parties hereto hereby consents toservice of process by registered mail at the address to which notices are to begiven.  Each of the parties hereto agreesthat its, his or her submission to jurisdiction and its, his or her consent toservice of process by mail is made for the express benefit of the other partieshereto.  Final judgment against any partyhereto in any such action, suit or proceeding may be enforced in otherjurisdictions by suit, action or proceeding on the judgment, or in any othermanner provided by or pursuant to the laws of such other jurisdiction.

## (k)           Counterparts.  For the convenience of the parties and tofacilitate execution, this Agreement may be executed in two or morecounterparts, each of which shall be deemed an original, but all of which shallconstitute one and the same document.

# **14.          Adjustment of Option Exercise Price. **The Option Exercise Priceshall be increased by the amount of $0.83 on July 1, 2007 and each anniversary thereofuntil the termination of this Stock Option.

[SIGNATURE PAGEFOLLOWS]

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The foregoingAgreement is hereby accepted and the terms and conditions thereof hereby agreedto by the undersigned as of the date first above written.
|            | **WII COMPONENTS, INC.** |
|------------|--------------------------|
| ** ** | ** **               | ** ** |
|       | By:                      | /s/ Rodney Cohen |
|       |                     | Name: Rodney Cohen |
|       |                     | Title: President |

 

The foregoingAgreement is hereby accepted and the terms and conditions thereof hereby agreedto by the undersigned as of the date first above written.
|        | OPTIONEE:              |
|--------|------------------------|
|   |                   |
|   | /s/ John Fitzpatrick   |
|   | Name: John Fitzpatrick |
|   | Address:               |
|   |                   |
|   | 1710 Shadywood Road    |
|   | Wayzata, MN 55391      |

 
| SPOUSE’S CONSENT                       |   |
|---------------------------------------------|--------|
| I acknowledge  that I have read the         |   |
| foregoing  Incentive Stock Option Agreement |   |
| and understand  the contents thereof.       |   |
|                                        |   |
|                                        |   |

 

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|        |   | DESIGNATED BENEFICIARY:     |
|--------|--------|-----------------------------|
|   |   |                        |
|   |   |                        |
|   |   | Beneficiary’s Address: |
|   |   |                        |
|   |   |                        |
|   |   |                        |
|   |   |                        |
|   |   |                        |
|   |   |                        |

 

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**AppendixA**

**STOCKOPTION EXERCISE NOTICE**
| WII Components, Inc.                |   |
|-------------------------------------|--------|
| Attention: Chief  Financial Officer |   |
|                                |   |
|                                |   |

 

Pursuant to the terms of my stock option agreementdated                   (the “Agreement”) under the WII Components, Inc. 2003 Stock Option and GrantPlan, I, [Insert Name]                         ,hereby [Circle One] partially/fully exercise such option by including hereinpayment in the amount of $            representing the purchase price for [Fill in number of Option Shares]             option shares.  I have chosen thefollowing form(s) of payment:

o            1.             Cash

o            2.             Certifiedor bank check payable to WII Components, Inc.

o                                    3.             Other (as described in theAgreement (please describe))_____________________________________________________.

In connection with my exercise of the option as setforth above, I hereby represent and warrant to WII Components, Inc. as follows:

### (i)            I am purchasing the option sharesfor my own account for investment only, and not for resale or with a view tothe distribution thereof.

### (ii)           I have had such an opportunity as Ihave deemed adequate to obtain from WII Components, Inc. such information as isnecessary to permit me to evaluate the merits and risks of my investment in WIIComponents, Inc. and have consulted with my own advisers with respect to myinvestment in WII Components, Inc.

### (iii)          I have sufficient experience inbusiness, financial and investment matters to be able to evaluate the risksinvolved in the purchase of the option shares and to make an informedinvestment decision with respect to such purchase.

### (iv)          I can afford a complete loss of thevalue of the option shares and am able to bear the economic risk of holdingsuch option shares for an indefinite period of time.

### (v)           I understand that the option sharesmay not be registered under the Securities Act of 1933 (it being understood thatthe option shares are being issued and sold in reliance on the exemptionprovided in Rule 701 thereunder) or any applicable state securities or “bluesky” laws and may not be sold or otherwise transferred or disposed of in theabsence of an effective registration statement under the Securities Act of 1933and under any applicable state securities or “blue sky” laws (or exemptionsfrom 

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###  

### theregistration requirement thereof).  Ifurther acknowledge that certificates representing option shares will bear restrictivelegends reflecting the foregoing.

|        | Sincerely yours, |
|--------|------------------|
|   |             |
|   |             |
|   | Name:            |
|   |             |
|   | Address:         |
|   |             |
|   |             |
|   |             |
|   |             |
|   |             |
|   |             |

 

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