Document:

1993 Directors' Stock Option Plan

 Exhibit 10.4 
  
 AMENDED AND RESTATED 
 1993 DIRECTORS’ STOCK OPTION PLAN OF 
 INCYTE CORPORATION 
 (As Amended May 25, 2004) 
  
 SECTION 1. INTRODUCTION. 
  
 The Plan was adopted on July 28, 1993, amended and restated as of March 30, 2001, and last amended on May 25, 2004. The purpose of the Plan is to offer
the Company’s Nonemployee Directors an opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, by purchasing Shares of the Company’s Stock. The Plan seeks to achieve this purpose by
providing for the grant of nonstatutory options to purchase Stock. 
  
 The Plan is intended to comply in all respects with Rule 16b-3 (or its successor) under the Exchange Act and shall be construed accordingly. 
  
 SECTION 2. DEFINITIONS. 
  
 (a) “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time. 
  
 (b) “Change in Control” shall mean the occurrence of either
of the following events: 
  
 (i) A change in the
composition of the Board of Directors, as a result of which fewer than one-half of the incumbent directors are directors who either: 
  
 (A) Had been directors of the Company 24 months prior to such change; or 
  
 (B) Were elected, or nominated for election, to the Board of Directors with the affirmative votes of at
least a majority of the directors who had been directors of the Company 24 months prior to such change and who were still in office at the time of the election or nomination; or 
  
 (ii) Any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act) by the
acquisition or aggregation of securities is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities ordinarily (and
apart from rights accruing under special circumstances) having the right to vote at elections of directors (the “Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any
person resulting solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner,
directly or indirectly, such person’s beneficial ownership of any securities of the Company. 

 (c) “Code” shall mean the Internal Revenue Code of 1986, as amended. 
  
 (d) “Company” shall mean Incyte Corporation (formerly Incyte
Genomics, Inc.), a Delaware corporation. 
  
 (e)
“Employee” shall mean an employee (within the meaning of section 3401(c) of the Code and the regulations thereunder) of the Company or of a Subsidiary of the Company. 
  
 (f) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 
  
 (g) “Exercise Price” shall mean the amount for which one
Share may be purchased upon exercise of an Option, as specified in the applicable Stock Option Agreement. 
  
 (h) “Fair Market Value” shall mean the market price of Stock, determined by the Board of Directors as follows: 
  
 (i) If Stock was traded over-the-counter on the date in
question but was not traded on The Nasdaq Stock Market, then the Fair Market Value shall be equal to the mean between the last reported representative bid and asked prices quoted for such date by the principal automated inter-dealer quotation system
on which Stock is quoted or, if the Stock is not quoted on any such system, by the “Pink Sheets” published by the National Quotation Bureau, Inc.; 
  
 (ii) If Stock was traded over-the-counter on the date in question and was traded on The Nasdaq Stock Market, then the Fair Market Value
shall be equal to the last-transaction price quoted for such date by The Nasdaq Stock Market; 
  
 (iii) If Stock was traded on a stock exchange on the date in question, then the Fair Market Value shall be equal to the closing price
reported for such date by the applicable composite-transactions report; and 
  
 (iv) If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Board of Directors in good faith on such basis as it deems appropriate. 
  
 In all cases, the determination of Fair Market Value by the Board of Directors shall be
conclusive and binding on all persons. 
  
 (i)
“Nonemployee Director” shall mean a member of the Board of Directors who (i) is not an Employee, (ii) does not own five percent or more of the Stock, (iii) does not represent an owner of five percent or more of the Stock and (iv)
does not join the Board of Directors pursuant to, or as a result of, a contractual arrangement between the Company and a third party. 

 (j) “Nonstatutory Option” shall mean a stock option not described in sections 422(b) or
423(b) of the Code. 
  
 (k) “Option” shall mean a
Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares. 
  
 (l) “Optionee” shall mean an individual who holds an Option. 
  
 (m) “Plan” shall mean this 1993 Directors’ Stock Option Plan of Incyte Corporation (formerly Incyte Genomics, Inc.), as it may be
amended from time to time. 
  
 (n) “Reverse
Split” shall mean the one-for-two reverse split of the Stock authorized by the Board of Directors prior to the initial adoption of the Plan. 
  
 (o) “Service” shall mean service as a member of the Board of Directors, whether or not as a Nonemployee Director. 
  
 (p) “Share” shall mean one share of Stock, as adjusted in
accordance with Section 6 (if applicable). All references to numbers of Shares in Section 3 hereof give effect to the Reverse Split and the 100% stock dividends paid in November 1997 and August 2000. 
  
 (q) “Stock” shall mean the Common Stock ($.001 par value) of
the Company. 
  
 (r) “Stock Option Agreement”
shall mean the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her Option. 
  
 (s) “Subsidiary” shall mean any corporation, if the Company and/or one or more other Subsidiaries own not less than 50 percent of the
total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

  
 (t) “Total and Permanent Disability” shall
mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a
continuous period of not less than one year. 
  
 SECTION 3. STOCK SUBJECT TO
PLAN. 
  
 (a) Basic Limitation. Shares offered under
the Plan shall be authorized but unissued Shares or treasury Shares. The aggregate number of Shares which may be issued under the Plan shall not exceed 1,100,000 Shares, subject to adjustment pursuant to Section 6. The number of Shares that are
subject to Options at any time shall not exceed the number of Shares that then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the
requirements of the Plan. 

 (b) Additional Shares. In the event that any outstanding Option for any reason expires or is
canceled or otherwise terminated, the Shares allocable to the unexercised portion of such Option shall again be available for the purposes of the Plan. 
  
 SECTION 4. TERMS AND CONDITIONS OF OPTIONS. 
  
 (a) Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions that are not inconsistent with the Plan and that the Board of Directors deems appropriate for inclusion in
a Stock Option Agreement. 
  
 (b) Initial Grants. Each new
Nonemployee Director who first joins the Board of Directors after March 30, 2001 shall receive an Option covering 30,000 Shares within one business day after his or her initial election to the Board of Directors. The number of Shares included in an
Option shall be subject to adjustment under Section 6. 
  
 (c)
Annual Grants. On the first business day following the conclusion of each regular annual meeting of the Company’s stockholders, each Nonemployee Director who will continue serving as a member of the Board of Directors thereafter shall
receive an Option covering 10,000 Shares, subject to adjustment under Section 6. Each Nonemployee Director who is not initially elected at a regular annual meeting of the Company’s stockholders shall receive an Option to purchase a pro rata
portion of 10,000 Shares within ten business days of such Director’s election based on the number of full months remaining from date of election until the next regular annual meeting of the Company’s stockholders divided by twelve. Any
fractional shares resulting from such calculation shall be rounded up to the nearest whole number. 
  
 (d) Exercise Price. The Exercise Price under each Option shall be equal to 100 percent of the Fair Market Value of the Stock subject to such Option
on the date when such Option is granted. The entire Exercise Price of Shares issued under the Plan shall be payable in cash when such Shares are purchased, except as follows: 
  
 (i) Payment may be made all or in part with Shares that have already been owned by the Optionee or the
Optionee’s representative for more than six months and that are surrendered to the Company in good form for transfer. Such Shares shall be valued at their Fair Market Value on the date when the new Shares are purchased under the Plan.

  
 (ii) Payment may be made all or in part by
the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise
Price and any withholding taxes. 
  
 (iii)
Payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the
loan proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. 

 (e) Vesting. Each Option granted under Subsection (b) above shall become exercisable (i) as to
one-fourth (1/4) of the total number of shares covered by such Option on the first anniversary of the date of grant and (ii) as to one-forty-eighth (1/48) of the total number of shares covered by such Option on each of a series of thirty-six (36)
monthly installments thereafter. Except as set forth in the next succeeding sentence and in the last sentence of this Subsection (e), each Option granted under Subsection (c) above shall become exercisable in full on the first anniversary of the
date of grant; provided, however, that each such Option shall become exercisable in full immediately prior to the next regular annual meeting of the Company’s stockholders following such date of grant in the event such meeting occurs prior to
such first anniversary date. Except as set forth in the last sentence of this Subsection (e), each Option granted under Subsection (c) to Nonemployee Directors who were not initially elected at a regular annual meeting of the Company’s
stockholders shall become exercisable in full immediately prior to the next regular annual meeting of the Company’s stockholders following the date of grant. Notwithstanding the foregoing, each Option granted under Subsection (c) above that is
outstanding shall become exercisable in full in the event that a Change in Control occurs with respect to the Company. 
  
 (f) Term of Options. Subject to Subsections (g) and (h) below, each Option shall expire on the 10th anniversary of the date when such Option was
granted. 
  
 (g) Termination of Service (Except by Death).
If an Optionee’s Service terminates for any reason other than death, then his or her Options shall expire on the earliest of the following occasions: 
  
 (i) The expiration date determined pursuant to Subsection (f) above; 
  
 (ii) The date 24 months after the termination of the Optionee’s Service, if the termination occurs
because of his or her Total and Permanent Disability; or 
  
 (iii) The date six months after the termination of the Optionee’s Service for any reason other than Total and Permanent Disability. 
  
 The Optionee may exercise all or part of his or her Options at any time before the expiration of such Options under the preceding sentence,
but only to the extent that such Options had become exercisable before his or her Service terminated. The balance of such Options shall lapse when the Optionee’s Service terminates. In the event that the Optionee dies after the termination of
his or her Service but before the expiration of his or her Options, all or part of such Options may be exercised at any time prior to their expiration by the executors or administrators of the Optionee’s estate or by any person who has acquired
such Options directly from him or her by bequest, inheritance or beneficiary designation under the Plan, but only to the extent that such Options had become exercisable before his or her Service terminated. 
  
 (h) Death of Optionee. If an Optionee dies while he or she is in
Service, then his or her Options shall expire on the earlier of the following dates: 
  
 (i) The expiration date determined pursuant to Subsection (f) above; or 

 (ii) The date 24 months after his or her death. 
  
 All or part of the Optionee’s Options may be exercised at any time before the expiration
of such Options under the preceding sentence by the executors or administrators of his or her estate or by any person who has acquired such Options directly from him or her by bequest, inheritance or beneficiary designation under the Plan.

  
 (i) Nontransferability. No Option shall be transferable
by the Optionee other than by will, by written beneficiary designation or by the laws of descent and distribution. An Option may be exercised during the lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or legal
representative. No Option or interest therein may be transferred, assigned, pledged or hypothecated by the Optionee during his or her lifetime, whether by operation of law or otherwise, or be made subject to execution, attachment or similar process.

  
 (j) Stockholder Approval. Subsection (e) above
notwithstanding, no Option shall be exercisable under any circumstances unless and until the Company’s stockholders have approved the Plan. 
  
 (k) Notwithstanding the foregoing, the Board of Directors may from time to time increase the number of Shares subject to an initial or annual grant of
Options under Subsection (b) or (c) above to any Nonemployee Director to the extent the Board of Directors determines necessary to induce a Nonemployee Director to become or remain a Nonemployee Director or to reflect an increase in the duties or
responsibilities of the Nonemployee Director, subject to all terms and conditions of the Plan otherwise applicable to grants of Options, except that the Exercise Price under each such Option may be equal to or greater than one hundred percent (100%)
of the Fair Market Value of the Stock subject to the Option on the date when such Option is granted and each such Option may become exercisable on the same schedule as set forth in Subsection (e) or on a different schedule, as the Board of Directors
in each case shall determine. 
  
 SECTION 5. MISCELLANEOUS PROVISIONS.

  
 (a) No Rights as a Stockholder. An Optionee, or a
transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by his or her Option until he or she becomes entitled, pursuant to the terms of such Option, to receive such Shares. No adjustment shall be made,
except as provided in Section 6. 
  
 (b) Modification,
Extension and Assumption of Options. Within the limitations of the Plan, the Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another
issuer) in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair
such Optionee’s rights or increase his or her obligations under such Option. 

 (c) Restrictions on Issuance of Shares. Shares shall not be issued under the Plan unless the
issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws
and regulations, and the regulations of any stock exchange on which the Company’s securities may then be listed. The Company may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate
legends on stock certificates) if, in the judgment of the Company and its counsel, such restrictions are necessary or desirable in order to achieve compliance with the provisions of the Securities Act of 1933, as amended, the securities laws of any
state or any other law. 
  
 (d) Withholding Taxes. The
Company’s obligation to deliver Stock upon the exercise of an Option shall be subject to any applicable tax withholding requirements. 
  
 (e) No Retention Rights. No provision of the Plan, nor any Option granted under the Plan, shall be construed as giving any person the right to be
elected as, or to be nominated for election as, a Nonemployee Director or to remain a Nonemployee Director. 
  
 SECTION 6. ADJUSTMENT OF SHARES. 
  
 (a) General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other than Shares in an amount that has a
material effect on the value of Shares, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a recapitalization, a spin-off, a reclassification or a similar occurrence, the Board of Directors shall make appropriate
adjustments in one or more of (i) the number of Options available for future grants under Section 3, (ii) the number of Shares to be covered by each new Option under Section 4, (iii) the number of Shares covered by each outstanding Option or (iv)
the Exercise Price under each outstanding Option. 
  
 (b)
Reorganizations. In the event that the Company is a party to a merger or other reorganization, outstanding Options shall be subject to the agreement of merger or reorganization. Such agreement shall provide (i) for the assumption of
outstanding Options by the surviving corporation or its parent, (ii) for their continuation by the Company, if the Company is a surviving corporation, (iii) for payment of a cash settlement equal to the difference between the amount to be paid for
one Share pursuant to such agreement and the Exercise Price or (iv) for the acceleration of their exercisability followed by the cancellation of Options not exercised, in all cases without the Optionees’ consent. Any cancellation shall not
occur until after such acceleration is effective and Optionees have been notified of such acceleration. 
  
 (c) Reservation of Rights. Except as provided in this Section 6, an Optionee shall have no rights by reason of (i) any subdivision or consolidation
of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Any issue by the Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an 

 Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. 
  
 SECTION 7. DURATION AND AMENDMENTS. 
  
 (a) Term of the Plan. The Plan shall become effective on the date of
its adoption by the Board of Directors, subject to approval of the Company’s stockholders. The Plan shall remain in effect until it is terminated under Subsection (b) below. 
  
 (b) Right to Amend or Terminate the Plan. The Board of Directors may amend, suspend or terminate the Plan at any time
and for any reason, except that the provisions of the Plan relating to the amount, price and timing of Option grants shall not be amended more than once in any six-month period. Any amendment of the Plan shall be subject to the approval of the
Company’s stockholders to the extent required by applicable laws, regulations, rules, listing standards or other requirements, including (without limitation) Rule 16b-3 under the Exchange Act. Stockholder approval shall not be required for any
other amendment of the Plan. 
  
 (c) Effect of Amendment or
Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination. The termination of the Plan, or any amendment thereof, shall not affect any Option
previously granted under the Plan. 
  
 SECTION 8. EXECUTION. 
  
 To record the amendment of the Plan as of May 25, 2004, the Company has
caused its authorized officer to execute the same. 
  

			
	INCYTE CORPORATION
		
	By	 	 /s/ Patricia A. Schreck

	Title	 	Executive Vice President and General CounselStock Option Agreement, dated August 5,2004

 Exhibit 10.1 
  
 EXECUTION COPY 
  
 STOCK OPTION AGREEMENT 
  
 STOCK OPTION AGREEMENT (this “Agreement”), dated as of August
5, 2004, by and among Eagle Supply Group, Inc., a Delaware corporation (the “Company”), Gulfside Supply, Inc., a Florida corporation (the “Parent”), and Gulfco Acquisition, Inc., a Delaware corporation
and wholly-owned subsidiary of the Parent (the “Purchaser”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement. 
  
 WHEREAS, the Company, Parent and Purchaser have contemporaneously with
the execution of this Agreement entered into an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), which provides, among other things, that upon the terms and subject to the conditions
thereof, the Purchaser will commence a tender offer (the “Offer”) for all of the issued and outstanding shares of common stock, par value $0.0001 per share, of the Company (the “Company Common Stock”)
and, after accepting for payment and paying for the Company Common Stock validly tendered and not withdrawn pursuant to the Offer (the “Tendered Shares”), the Purchaser shall merge with and into the Company with the Company
continuing as the surviving entity as a wholly owned subsidiary of the Parent; 
  
 WHEREAS, as an essential condition and inducement to the Parent and the Purchaser entering into the Merger Agreement and in consideration therefor, the Company has agreed to grant the Parent and the Purchaser
the Option (as hereinafter defined); 
  
 NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants and agreements contained herein and in the Merger Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereby agree as follows: 
  
 1. Grant of Option. The Company hereby grants to the Parent and the Purchaser an irrevocable option (the “Option”) to purchase a number of fully paid and nonassessable shares of Company
Common Stock (such shares being referred to herein as the “Option Shares”) equal to the Applicable Amount (as hereafter defined) at any time prior to the Expiration Date (as hereafter defined), at a price per share equal to
the Offer Price, as the same may be increased in accordance with Section 1.1(a) of the Merger Agreement (the “Exercise Price”), subject to the terms and conditions set forth herein, including, without limitation, the
conditions to exercise set forth in Section 2(a). If not exercised prior to the Expiration Date, the Option and all rights granted under the Option shall expire and lapse. The “Applicable Amount” shall be the number of shares
of Company Common Stock which, when added to the number of shares of Company Common Stock owned (of record or beneficially) by the Parent, Purchaser and their respective subsidiaries immediately prior to the exercise of the Option, would result in
the Parent, Purchaser and their respective subsidiaries owning (of record or beneficially) in the aggregate, immediately after exercise of the Option, ninety percent (90%) of the then issued and outstanding shares of Company Common Stock.

  
 2. Exercise of Option. 

 
 (a) Conditions to Exercise of Option. The Parent
or the Purchaser may exercise the Option if, but only if (i) the Purchaser shall have accepted for payment and paid for all shares of Company Common Stock validly tendered and not withdrawn pursuant to the Offer (the “Accepted
Shares”), and (ii) the Accepted Shares shall equal eighty five percent (85%) or more of the issued and outstanding shares of Company Common Stock. 
  

(b) Expiration of the Option. The right to exercise this Option shall expire upon the 

  

 
earlier of (i) the termination of the Merger Agreement, or (ii) at 5:00 p.m., Tampa, Florida time, on the thirtieth (30th) Business Day following the expiration of the Offer (the “Expiration Date”). 
  
 (c) Exercise of the Option. Subject to the conditions
set forth in Section 2(a), the Option may be exercised by the Parent or Purchaser by surrender and presentment of this Agreement to the Company, accompanied by a duly executed written notice (such notice being herein referred to as an
“Exercise Notice” and the date of delivery of an Exercise Notice being herein referred to as the “Notice Date”) indicating that the Parent or the Purchaser, as the case may be, is exercising the Option
and specifying (i) the total number of Option Shares that it will purchase pursuant to such exercise, and (ii) a place and date not earlier than one (1) Business Day and not later than five (5) Business Days from the Notice Date for the closing of
such purchase (the “Option Closing”), together with the payment of the aggregate Exercise Price (“Aggregate Exercise Price”) for the number of Option Shares specified in the Exercise Notice in the
manner specified in Section 2(d) hereof. 
  
 (d)
Delivery of Exercise Price. At the Option Closing, the Aggregate Exercise Price shall be paid by the Parent or the Purchaser, as the case may be, to the Company (i) by delivery of a certified bank or cashier’s check payable to the
Company or by wire transfer of immediately available same day funds to a bank account designated by the Company in an amount equal to the Aggregate Exercise Price which shall be determined by multiplying the Exercise Price by the number of Option
Shares specified in the Exercise Notice, or (ii) in lieu of paying the entire Aggregate Exercise Price in cash, (A) by delivery of a certified bank or cashiers’ check payable to the order of the Company or by wire transfer of immediately
available same day funds to a bank account designated by the Company in the amount equal to the aggregate par value of the number of Option Shares specified in the Exercise Notice (“Par Value Cash Payment”), and (B) by
delivery of a promissory note in the form attached hereto as Exhibit A in the principal amount equal to the Aggregate Exercise Price minus the Par Value Cash Payment. 
  
 (e) Issuance of Option Shares. At the Option Closing, simultaneously with the payment of the
Aggregate Exercise Price in the manner provided in Section 2(d), the Company shall deliver to the Parent or the Purchaser, as the case may be, a certificate or certificates representing the Option Shares purchased upon such exercise. 
  
 (f) Record Holder; Expenses. Upon the delivery by the
Parent or the Purchaser, as the case may be, of the Exercise Notice and the tender of the Exercise Price in the manner specified in Section 2(d), the Parent or the Purchaser, as the case may be, shall be deemed to be the holder of record of the
Option Shares issuable upon such exercise, notwithstanding that the stock transfer books of the Company may then be closed, that certificates representing such Option Shares may not then have been actually delivered to the Parent or the Purchaser,
as the case may be, or that the Company may have failed or refused to designate the bank account described in Section 2(d). The Company shall pay all expenses that may be payable in connection with the preparation, issuance and delivery of stock
certificates. 
  
 3. Investment
Intent. The Parent and the Purchaser represent and warrant that they are entering into this Agreement and will acquire the Option Shares or Other Option Securities (as defined below) for its own account and not with a view to resale
or any public distribution of all or any part of the Option Shares or Other Option Securities in violation of applicable law. 
  
 4. Evaluation of Investments. The Parent and the Purchaser, by reason of their knowledge and experience in financial and
business matters, and further by reason of their specific knowledge of the Company’s industry, represent and warrant that they are capable of evaluating the merits and risks of an investment in the Option, Option Shares and any Other Option
Securities (defined below) pursuant to this Agreement. 
  

 2 

 5. Reservation of Shares. Subject to the terms and conditions hereof, and for
so long as the Merger Agreement has not been terminated pursuant to the provisions thereof, the Company agrees (a) that it shall at all times maintain, free from preemptive rights, sufficient authorized but unissued or treasury shares of Company
Common Stock (or Other Option Securities) issuable pursuant to this Agreement so that the Option may be exercised without additional authorization of shares of Company Common Stock (or Other Option Securities) after giving effect to all other
options, warrants, convertible securities and other rights to purchase shares of Company Common Stock (or Other Option Securities), (b) that it will not, by charter amendment or through reorganization, consolidation, merger, dissolution or sale of
assets, or by any other voluntary act, avoid or seek to avoid the observance or performance of any of the covenants to be observed or performed hereunder by the Company, and (c) promptly to take all action as may from time to time be required in
order to permit the Parent or the Purchaser to exercise the Option and the Company to duly and effectively issue the Company Common Stock (or Other Option Securities) pursuant hereto. 
  
 6. Lost Options. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Agreement, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, the Company will execute and deliver a new agreement of like tenor and date. 
  
 7. Adjustment Upon Changes in Capitalization. The number of Option Shares purchasable upon the exercise of the Option shall be
subject to adjustment from time to time as provided in this Section 7. 
  
 (a) Transaction Adjustment. In the event of any change in the shares of Company Common Stock by reason of stock dividends, splits, mergers, recapitalizations, combinations, subdivisions, conversions, exchanges
of shares or other similar transactions, then the Option Shares purchasable upon exercise hereof shall be appropriately adjusted so that the Parent or the Purchaser, as the case may be, shall receive upon exercise of the Option and payment of the
Exercise Price hereunder the number and class of shares or other securities (any such other securities referred to herein as “Other Option Securities”) that the Parent or the Purchaser would have owned or been entitled to
receive after the happening of any of the events described above if the Option had been exercised immediately prior to such event, or the record date therefor, as applicable. 
  
 (b) Option Price Adjustment. Whenever the number of Option Shares subject to this Option are adjusted
pursuant to Section 7(a), the Option Price shall be appropriately adjusted, if applicable, by multiplying the Option Price by a fraction, the numerator of which shall be equal to the aggregate number of Option Shares purchasable under the Option
prior to the adjustment and the denominator of which shall be equal to the aggregate number of Option Shares purchasable under the Option immediately after the adjustment. If the Option shall be adjusted so that Other Option Securities are issuable
hereunder, then the price for such Other Option Securities shall be determined ratably and equitably, in the good faith discretion of the Board of Directors of the Company. 
  
 8. Representations and Warranties of the Company. The Company hereby represents and warrants to
the Parent and the Purchaser as follows: 
  
 (a)
Authority, etc. The Company has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the board of directors of the Company and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions
so 

  

 3 

 
contemplated. This Agreement has been duly and validly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with the terms hereof. 
  
 (b) Other Actions. The Company has taken all necessary action to authorize and reserve and to permit it to issue, and at all times from the date hereof through the termination of this Agreement in accordance
with its terms will have reserved for issuance upon the exercise of the Option, that number of shares of Company Common Stock equal to the maximum number of shares of Company Common Stock at any such time and from time to time issuable hereunder,
and all such shares of Company Common Stock, upon issuance pursuant hereto and in accordance with the terms hereof, will be duly authorized, validly issued, fully paid, nonassessable, and will be delivered free and clear of all liens created by the
Company and not subject to any preemptive rights. 
  
 (c) No Conflict. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, result in any violation of or default
(with or without notice or lapse of time or both) under, any provision of any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument, permit, concession, franchise, license, judgment, order,
notice, decree, statute, law, ordinance, rule or regulation applicable to the Company or the Company’s property or assets. No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or instrumentality, domestic, foreign or supranational, is required by or with respect to the Company in connection with the execution and delivery of this Agreement or the consummation by the
Company of the transactions contemplated hereby. 
  
 9. No
Transfer; No Assignment. 
  
 (a) The
Option may not be offered, sold, assigned, pledged, hypotheticated, or otherwise transferred (a “Transfer”). Further, neither the Option Shares nor any other security issued or issuable upon exercise of the Option may be
Transferred except in compliance with the Securities Act. The Company may cause a legend to this effect to be set forth on each certificate representing the Option Shares. 
  
 (b) Neither the Parent nor the Purchaser may assign any of their respective rights or obligations under this
Agreement to any other Person. The Company may not assign any of its rights or obligations under this Agreement without the prior, express written consent of the Parent. Any purported assignment in violation of the foregoing prohibitions shall be
void and of no force or effect whatsoever. 
  
 10.
Specific Performance. Except after the termination of the Merger Agreement pursuant to the terms thereof in a circumstance where the Termination Fee would be payable, (a) each party hereto agrees that irreparable damage
would occur in the event that any of the provisions of this Agreement was not performed in accordance with its specific terms or was otherwise breached, and (b) it is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court permitted under Section 14, this being in addition to any other remedy to which they are entitled at law or in equity.

  
 11. Severability. The provisions
of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or 

  

 4 

 
affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provisions shall be interpreted to be only so broad as is enforceable. 
  
 12. Notices. All notices, claims, demands and other communications hereunder shall be deemed to have been duly given or made
when delivered in accordance with Section 9.7 of the Merger Agreement. 
  
 13. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall in all respects be governed by and construed in accordance with the laws of the State of Delaware. Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement may be brought against any of the parties in any federal court located in the State of Delaware or any Delaware state court, and each of
the parties hereto hereby consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and waives any objection to venue laid therein. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether within or without the State of Delaware. Without limiting the generality of the foregoing, each party hereto agrees that service of process upon such party at the address
referred to in Section 9.7 of the Merger Agreement, together with notice of such service to such party, shall be deemed effective service of process upon such party. To the extent permitted by applicable law, the parties hereby irrevocably waive any
and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. 
  
 14. Counterparts. This Agreement may be executed in one or more separate counterparts, each of which, when so executed and
delivered, shall be deemed to constitute an original, but all of which together shall constitute one and the same instrument. 
  
 15. Expenses. Except as otherwise expressly provided herein or in the Merger Agreement, each of the parties hereto shall bear
and pay all costs and expenses incurred by it or on its behalf in connection with the transactions contemplated hereunder, including fees and expenses of its own financial consultants, investment bankers, accountants and counsel. 
  
 16. Entire Agreement. Except as otherwise
expressly provided herein or in the Merger Agreement, this Agreement contains the entire agreement between the parties with respect to the transactions contemplated hereunder and supersedes all prior arrangements or understandings with respect
thereto, written or oral. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective permitted successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer upon any party, other than the parties hereto, and their respective permitted successors and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided
herein. 
  
 17. Amendment; Waivers.
This Agreement may be amended, modified, and supplemented by a subsequent writing signed by each of the Company and the Parent. Any provision of this Agreement may be waived only in writing at any time by the party that is entitled to the benefits
of such provision. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right of such party at a later time to enforce the same or any other provision of this Agreement. No waiver
of any condition or the breach of any provision contained in this Agreement in one or more instances shall be deemed to be or construed as a further or continuing waiver of such condition or breach or a waiver of any other condition or the breach of
any other term of this Agreement. 
  

 5 

 18. Further Assurances. In the event of any exercise of the Option by the
Parent or Purchaser, the Company, the Parent and the Purchaser shall execute and deliver all other documents and instruments and take all other action that may be reasonably necessary to the fullest extent permitted by law in order to consummate the
transactions provided for by such exercise. Nothing contained in this Agreement shall be deemed to authorize the Company, the Parent or the Purchaser to violate, breach or otherwise fail to perform any provision of the Merger Agreement. 

 
 19. Captions. The captions contained in this
Agreement are for reference purposes only and are not part of this Agreement. 
  
 [Signature pages follow.] 
  

 6 

 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the
date first written above by their respective officers thereunto duly authorized. 
  

					
	EAGLE SUPPLY GROUP, INC.
			
	 	 	By:	 	 /s/ Douglas P. Fields

	 	 	 	 	 Douglas P. Fields
 Chief Executive
Officer

  

					
			
	 	 	By:	 	/s/ James E. Helzer
	 	 	 	 	 James E. Helzer
 President

  

					
	GULFSIDE SUPPLY, INC.
			
	 	 	By:	 	/s/ James S. Resch
	 	 	 	 	 James S. Resch
 President and Chief Executive Officer

  

					
	GULFCO ACQUISITION, INC.
			
	 	 	By:	 	/s/ James S. Resch
	 	 	 	 	 James S. Resch
 President and Chief Executive
Officer

  
 [Signature Page to Stock Option Agreement]

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