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                                                                    EXHIBIT 10.4
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                        PLY GEM INVESTMENT HOLDINGS, INC.

                               PHANTOM STOCK PLAN
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         SECTION 1.        GENERAL

         (a)      PURPOSE. The purpose of this Ply Gem Investment Holdings, Inc.
Phantom Stock Plan (the "Plan") is to attract, motivate and retain certain key
employees of Ply Gem Investment 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.

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         (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. Ply Gem Investment 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 __, 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 is a
phantom stock unit representing one share of Common Stock and 0.4591 shares of
Preferred Stock that is credited to a Participant's Account. 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 0.4591
shares of Preferred Stock.

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         (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 Investment Holdings, Inc. Phantom Stock
Plan.

         (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 __, 2004, 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.

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         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

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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 0.4591 shares
of Preferred Stock in redemption thereof. 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

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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

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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:

                  18.75% on the first anniversary of the date of the applicable
                  Award Agreement, if still employed.

                  37.5% on the second anniversary of the date of the applicable
                  Award Agreement, if still employed.

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                  56.25% on the third anniversary of the date of the applicable
                  Award Agreement, if still employed.

                  75% on the fourth anniversary of the date of the applicable
                  Award Agreement, if still employed.

                  Fully Protected upon the earlier of a Realization Event or an
                  IPO, 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:

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                                    (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 6.6 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, the Cash-Out Amount is 0.4591 times the sum of (I) the "Liquidation Value"
plus (II) the "Maximum Dividend" (each as defined in the Company's Certificate
of Incorporation).

                  (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)

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(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 and each Preferred Phantom Additional Unit is 0.4591 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.

<PAGE>

                                                                              11

         (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.

<PAGE>

                                                                              12

         (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.

<PAGE>

                                                                              13

         (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.<PAGE>

                                                                    EXHIBIT 10.5
                                                                    ------------

                        PLY GEM INVESTMENT HOLDINGS, INC.

                             2004 STOCK OPTION PLAN

                       (EFFECTIVE AS OF FEBRUARY 12, 2004)

1.       PURPOSE

         The purpose of the Plan is to provide a means through which the Company
and its Affiliates may attract able persons to enter and remain in the employ of
the Company and Affiliates and to provide a means whereby employees, directors
and consultants of the Company and its Affiliates can acquire and maintain
Common Stock ownership, thereby strengthening their commitment to the welfare of
the Company and Affiliates and promoting an identity of interest between
stockholders and these employees.

         The Plan provides for granting Incentive Stock Options and Nonqualified
Stock Options.

2.       DEFINITIONS

         The following definitions shall be applicable throughout the Plan.

         (a)      "Affiliate" means (i) any entity that directly or indirectly
is controlled by, controls, or is under common control with the Company and (ii)
any entity in which the Company has a significant equity interest, in either
case as determined by the Committee.

         (b)      "Award" means, individually or collectively, any Incentive
Stock Option or Nonqualified Stock Option.

         (c)      "Board" means the Board of Directors of the Company.

         (d)      "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, nonsolicitation or willful breach of any

<PAGE>

                                                                               2

confidentiality requirements set forth in the Stockholder's Agreement whether or
not such agreement or requirement is enforceable under applicable law.

         (e)      "Code" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under
such section.

         (f)      "Committee" means the compensation committee of the Board
established under the By-Laws of the Company, or if no such committee has yet
been established, the Board. The Committee shall consist of at least two people
as the Board may appoint to administer the Plan or, if no such committee has
been appointed by the Board, the Board. On and after the time that the Company
becomes subject to the Exchange Act, unless the Board is acting as the Committee
or the Board specifically determines otherwise, each member of the Committee
shall, at the time he takes any action with respect to an Award under the Plan,
be an Eligible Director; provided that the mere fact that a Committee member
shall fail to qualify as an Eligible Director shall not invalidate any Award
granted by the Committee which Award is otherwise validly granted under the
Plan.

         (g)      "Common Stock" means the common stock, par value $0.01 per
share, of the Company.

         (h)      "Company" means Ply Gem Investment Holdings, Inc., a Delaware
corporation.

         (i)      "Date of Grant" means the date on which the granting of an
Award is authorized, or such other date as may be specified in such
authorization or, if there is no such date, the date indicated on the Stock
Option Agreement.

         (j)      "Disability" means, 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..

         (k)      "Effective Date" means February 12, 2004.

         (l)      "Eligible Director" means a person who is (i) a "non-employee
director" within the meaning of Rule 16b-3 under the Exchange Act, or a person
meeting any similar requirement under any successor rule or regulation and (ii)
an "outside director" within the meaning of Section 162(m) of the Code, and the
Treasury Regulations promulgated thereunder; PROVIDED, HOWEVER, that clause (ii)
shall apply only on and after the 162(m) Effective Date and only with respect to
grants of Awards with

<PAGE>

                                                                               3

respect to which the Company's tax deduction could be limited by Section 162(m)
of the Code if such clause did not apply.

         (m)      "Eligible Person" means any (i) individual regularly employed
by the Company or an Affiliate who satisfies all of the requirements of Section
6 hereof; (ii) director of the Company or an Affiliate; or (iii) consultant or
advisor to the Company or an Affiliate who is entitled to participate in an
"employee benefit plan" within the meaning of 17 CFR ss. 230.405 (which, as of
the Effective Date, includes those who (A) are natural persons and (B) provide
BONA FIDE services to the Company other than in connection with the offer or
sale of securities in a capital-raising transaction, and do not directly or
indirectly promote or maintain a market for the Company's securities).

         (n)      "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         (o)      "Fair Market Value" on a given date means, except to the
extent otherwise provided in a Stock Option Agreement, (i) if the Stock is
listed on a national securities exchange, the mean between the highest and
lowest sale prices reported as having occurred on the primary exchange with
which the Stock is listed and traded on the date prior to such date, or, if
there is no such sale on that date, then on the last preceding date on which
such a sale was reported; (ii) if the Stock is not listed on any national
securities exchange but is quoted in the National Market System of the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") on a
last sale basis, the average between the high bid price and low ask price
reported on the date prior to such date, or, if there is no such sale on that
date, then on the last preceding date on which a sale was reported; or (iii) if
the Stock is not listed on a national securities exchange nor quoted in the
NASDAQ on a last sale basis, the amount determined by the Committee to be the
fair market value based upon a good faith attempt to value the Stock accurately.

         (p)      "Incentive Stock Option" means an Option granted by the
Committee to a Participant under the Plan which is designated by the Committee
as an incentive stock option as described in Section 422 of the Code.

         (q)      "Nonqualified Stock Option" means an Option granted by the
Committee to a Participant under the Plan which is not designated by the
Committee as an Incentive Stock Option and otherwise meets the requirements set
forth herein.

         (r)      "162(m) Effective Date" means the first date on which Awards
granted under the Plan do not qualify for an exemption from the deduction
limitations of Section 162(m) of the Code on account of an exemption, or a
transition or grandfather rule.

         (s)      "Option" means an award granted under Section 7.

         (t)      "Option Period" means the period described in Section 7(c).

<PAGE>

                                                                               4

         (u)      "Option Price" means the exercise price for an Option as
described in Section 7(a).

         (v)      "Participant" means an Eligible Person who has been selected
by the Committee to participate in the Plan and to receive an Award pursuant to
Section 6.

         (w)      "Plan" means this Ply Gem Investment Holdings, Inc. 2004 Stock
Option Plan.

         (x)      "Securities Act" means the Securities Act of 1933, as amended.

         (y)      "Subsidiary" of a Person means any other Person (i) as to
which such Person has the power to elect a majority of the board of directors
(or other board, body or Person that serves the function of a board of
directors) of such other Person or (ii) which is included as a subsidiary in the
consolidated financial statements of such Person in accordance with United
States generally accepted accounting principles as in effect from time to time.

         (z)      "Stock" means the Common Stock or such other authorized shares
of stock of the Company as the Committee may from time to time authorize for use
under the Plan.

         (aa)     "Stock Option Agreement" means the agreement between the
Company and a Participant who has been granted an Option pursuant to Section 7
which defines the rights and obligations of the parties as required in Section
7(d).

3.       EFFECTIVE DATE, DURATION AND SHAREHOLDER APPROVAL

         The Plan is effective as of the Effective Date. The validity and
exercisability of any and all Awards granted pursuant to the Plan on and after
the 162(m) Effective Date is contingent upon approval of the Plan by the
shareholders of the Company in a manner intended to comply with the shareholder
approval requirements of Section 162(m) of the Code. No Option shall be treated
as an Incentive Stock Option unless the Plan has been approved by the
shareholders of the Company in a manner intended to comply with the shareholder
approval requirements of Section 422(b)(i) of the Code; provided that any Option
intended to be an Incentive Stock Option shall not fail to be effective solely
on account of a failure to obtain such approval, but rather such Option shall be
treated as a Nonqualified Stock Option unless and until such approval is
obtained.

         The expiration date of the Plan, on and after which no Awards may be
granted hereunder, shall be the tenth anniversary of the Effective Date;
PROVIDED, HOWEVER, that the administration of the Plan shall continue in effect
until all matters relating to the payment of Awards previously granted have been
settled.

<PAGE>

                                                                               5

4.       ADMINISTRATION

         The Committee shall administer the Plan. The majority of the members of
the Committee shall constitute a quorum. The acts of a majority of the members
present at any meeting at which a quorum is present or acts approved in writing
by a majority of the Committee shall be deemed the acts of the Committee.

         (a)      Subject to the provisions of the Plan and applicable law, the
Committee shall have the power, in addition to other express powers and
authorizations conferred on the Committee by the Plan, to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to a
Participant; (iii) determine the number of shares of Stock to be covered by, or
with respect to which payments, rights, or other matters are to be calculated in
connection with Awards; (iv) determine the terms and conditions of any Awards;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, shares of Stock, other securities, other
Options, or other property, or canceled, forfeited, or suspended and the method
or methods by which Awards may be settled, exercised, canceled, forfeited, or
suspended; (vi) determine whether, to what extent, and under what circumstances
cash, shares of Stock, other securities, other Options, other property, and
other amounts payable with respect to an Award shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
(vii) interpret, administer reconcile any inconsistency, correct any default
and/or supply any omission in the Plan and any instrument or agreement relating
to, or Award granted under the 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 the Plan; and (ix) make any other determination
and take any other action specified under the Plan or that the Committee deems
necessary or desirable for the administration of the Plan.

         (b)      Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with
respect to the Plan or any Award or any documents evidencing any and all Awards
granted pursuant to the Plan shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive and binding
upon all parties, including, without limitation, the Company, any Affiliate, any
Participant, any holder of any Award, and any shareholder.

         (c)      No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Award
hereunder.

5.       GRANT OF AWARDS; SHARES SUBJECT TO THE PLAN

         The Committee may, from time to time, grant Awards of Options to one or
more Eligible Persons; PROVIDED, HOWEVER, that:

         (a)      Subject to Section 9, the aggregate number of shares of Stock
in respect of which Awards may be granted under the Plan is 148,050 shares;

<PAGE>

                                                                               6

         (b)      Such shares shall be deemed to have been issued in payment of
Awards whether or not they are actually delivered. In the event any Award shall
be surrendered, terminate, expire, or be forfeited, the number of shares of
Stock no longer subject thereto shall thereupon be released and shall thereafter
be available for new grants under the Plan;

         (c)      Stock delivered by the Company in settlement of Awards granted
under the Plan may be authorized and unissued Stock or Stock held in the
treasury of the Company or may be purchased on the open market or by private
purchase; and

         (d)      On and after the 162(m) Effective Date, no person may be
granted Options under the Plan during any calendar year with respect to more
than 15,000 shares of Stock; provided that such number shall be adjusted
pursuant to Section 9 only in a manner which will not cause the Options granted
under the Plan to fail to qualify as "performance-based compensation" for
purposes of Section 162(m) of the Code.

6.       ELIGIBILITY

         Participation shall be limited to Eligible Persons who have entered
into a Stock Option Agreement or who received written notification from the
Committee, or from a person designated by the Committee, that they have been
selected to participate in the Plan.

7.       TERMS OF OPTIONS

         The Committee is authorized to grant one or more Incentive Stock
Options or Nonqualified Stock Options to any Eligible Person; PROVIDED, HOWEVER,
that no Incentive Stock Options shall be granted to any Eligible Person who is
not an employee of the Company or a "parent" or "subsidiary" of the Company, as
such terms are used in Section 422(a)(2) of the Code. Each Option so granted
shall be subject to the following conditions, or to such other conditions as may
be reflected in the applicable Stock Option Agreement. In all events, the
provisions in the applicable Stock Option Agreement shall control the terms of
the Option issued pursuant thereto. If there shall be a conflict between the
provisions of the Plan and such Stock Option Agreement, the provisions of the
Plan shall control.

         (a)      OPTION PRICE. The Option Price per share of Stock for each
Option shall be set by the Committee at the time of grant but shall not be less
than (i) in the case of an Incentive Stock Option, and subject to Section 7(e),
the Fair Market Value of a share of Stock at the Date of Grant, and (ii) in the
case of a Nonqualified Stock Option, the par value of a share of Stock;
PROVIDED, HOWEVER, that all Options granted on and after the 162(m) Effective
Date which are intended to qualify as "performance-based compensation" under
Section 162(m) of the Code shall have an Option Price per share of Stock no less
than the Fair Market Value of a share of Stock on the Date of Grant.

<PAGE>

                                                                               7

         (b)      MANNER OF EXERCISE AND FORM OF PAYMENT. No shares of Stock
shall be delivered pursuant to any exercise of an Option until payment in full
of the aggregate exercise price therefor is received by the Company. Options
which have become exercisable may be exercised by delivery of written notice of
exercise to the Committee accompanied by payment of the Option Price. The Option
Price shall be payable in cash and/or shares of Stock valued at the Fair Market
Value at the time the Option is exercised (including by means of attestation of
ownership of a sufficient number of shares of Stock in lieu of actual delivery
of such shares to the Company); PROVIDED, HOWEVER, that such shares are not
subject to any pledge or other security interest and have either been held by
the Participant for six months, previously acquired by the Participant on the
open market or meet such other requirements as the Committee may determine
necessary in order to avoid an accounting earnings charge in respect of the
Option) or, in the discretion of the Committee, either (i) in other property
having a fair market value on the date of exercise equal to the Option Price,
(ii) if there shall be a public market for the Stock, by delivering to the
Committee a copy of irrevocable instructions to a stockbroker to deliver
promptly to the Company an amount of loan proceeds, or proceeds of the sale of
the Stock subject to the Option, sufficient to pay the Option Price or (iii) by
such other method as the Committee may allow. Notwithstanding the foregoing, in
no event shall a Participant be permitted to exercise an Option in the manner
described in clause (ii) of the preceding sentence if the Committee determines
that exercising an Option in such manner would violate the Sarbanes-Oxley Act of
2002.

         (c)      VESTING, OPTION PERIOD AND EXPIRATION. Options shall vest and
become exercisable in such manner and on such date or dates determined by the
Committee and shall expire after such period, not to exceed ten years, as may be
determined by the Committee (the "Option Period"); PROVIDED, HOWEVER, that
notwithstanding any vesting dates set by the Committee, the Committee may in its
sole discretion accelerate the exercisability of any Option, which acceleration
shall not affect the terms and conditions of any such Option other than with
respect to exercisability. If an Option is exercisable in installments, such
installments or portions thereof which become exercisable shall remain
exercisable until the Option expires. Unless otherwise stated in the applicable
Stock Option Agreement, the Option shall expire earlier than the end of the
Option Period in the following circumstances:

                  (i)      If prior to the end of the Option Period, the
         Participant's employment with the Company terminates due to a
         termination by the Company or any Affiliate without Cause or due to the
         Participant's death or Disability, the Option shall expire on the
         earlier of the last day of the Option Period or the date that is three
         months after the date of such termination. In such event, the Option
         shall remain exercisable by the Participant until its expiration, only
         to the extent the Option was vested and exercisable at the time of such
         termination.

                  (ii)     If the Participant ceases employment or service with
         the Company and Affiliates for reasons other than the terminations
         described in clause (i) above, the Option shall expire immediately upon
         such cessation of employment or service.

<PAGE>

                                                                               8

         (d)      STOCK OPTION AGREEMENT - OTHER TERMS AND CONDITIONS. Each
Option granted under the Plan shall be evidenced by a Stock Option Agreement,
which shall contain such provisions as may be determined by the Committee and,
except as may be specifically stated otherwise in such Stock Option Agreement,
which shall be subject to the following terms and conditions:

                  (i)      Each Option or portion thereof that is exercisable
         shall be exercisable for the full amount or for any part thereof.

                  (ii)     Each share of Stock purchased through the exercise of
         an Option shall be paid for in full at the time of the exercise. Each
         Option shall cease to be exercisable, as to any share of Stock, when
         the Participant purchases the share or when the Option expires.

                  (iii)    Subject to Section 8(h), Options shall not be
         transferable by the Participant except by will or the laws of descent
         and distribution and shall be exercisable during the Participant's
         lifetime only by him.

                  (iv)     Each Option shall vest and become exercisable by the
         Participant in accordance with the vesting schedule established by the
         Committee and set forth in the Stock Option Agreement evidencing such
         Option.

                  (v)      Unless otherwise provided in a Stock Option
         Agreement, prior to the effectiveness of any Participant's exercise of
         an Option, such Participant must enter into the Stockholders Agreement,
         dated as of February __, 2004, by and among the Company, Caxton-Iseman
         (Ply Gem), L.P. and the other investors and individuals executing such
         Stockholders Agreement, as in effect from time to time.

                  (vi)     Each Stock Option Agreement may contain a provision
         that, upon demand by the Committee for such a representation, the
         Participant shall deliver to the Committee at the time of any exercise
         of an Option a written representation that the shares to be acquired
         upon such exercise are to be acquired for investment and not for resale
         or with a view to the distribution thereof, and any other
         representations deemed necessary by the Committee to ensure compliance
         with all applicable federal and state securities laws. Upon such
         demand, delivery of such representation prior to the delivery of any
         shares issued upon exercise of an Option shall be a condition precedent
         to the right of the Participant or such other person to purchase any
         shares. In the event certificates for Stock are delivered under the
         Plan with respect to which such investment representation has been
         obtained, the Committee may cause a legend or legends to be placed on
         such certificates to make appropriate reference to such representation
         and to restrict transfer in the absence of compliance with applicable
         federal or state securities laws.

                  (vii)    Each Incentive Stock Option Agreement shall contain a
         provision requiring the Participant to notify the Company in writing

<PAGE>

                                                                               9

         immediately after the Participant makes a disqualifying disposition of
         any Stock acquired pursuant to the exercise of such Incentive Stock
         Option. A disqualifying disposition is any disposition (including any
         sale) of such Stock before the later of (a) two years after the Date of
         Grant of the Incentive Stock Option or (b) one year after the date the
         Participant acquired the Stock by exercising the Incentive Stock
         Option.

         (e)      INCENTIVE STOCK OPTION GRANTS TO 10% STOCKHOLDERS.
Notwithstanding anything to the contrary in this Section 7, if an Incentive
Stock Option is granted to a Participant who owns stock representing more than
ten percent of the voting power of all classes of stock of the Company, the
Option Period shall not exceed five years from the Date of Grant of such Option
and the Option Price shall be at least 110 percent of the Fair Market Value (on
the Date of Grant) of the Stock subject to the Option.

         (f)      $100,000 PER YEAR LIMITATION FOR INCENTIVE STOCK OPTIONS. To
the extent the aggregate Fair Market Value (determined as of the Date of Grant)
of Stock for which Incentive Stock Options are exercisable for the first time by
any Participant during any calendar year (under all plans of the Company)
exceeds $100,000, such excess Incentive Stock Options shall be treated as
Nonqualified Stock Options.

         (g)      VOLUNTARY SURRENDER. The Committee may permit the voluntary
surrender of all or any portion of any Nonqualified Stock Option, if any,
granted under the Plan to be conditioned upon the granting to the Participant of
a new Option for the same or a different number of shares as the Option
surrendered or require such voluntary surrender as a condition precedent to a
grant of a new Option to such Participant. Such new Option shall be exercisable
at an Option Price, during an Option Period, and in accordance with any other
terms or conditions specified by the Committee at the time the new Option is
granted, all determined in accordance with the provisions of the Plan without
regard to the Option Price, Option Period, or any other terms and conditions of
the Nonqualified Stock Option surrendered.

8.       GENERAL

         (a)      ADDITIONAL PROVISIONS OF AN AWARD. Awards granted to a
Participant under the Plan also may be subject to such other provisions (whether
or not applicable to Awards granted to any other Participant) as the Committee
determines appropriate including, without limitation, provisions to assist the
Participant in financing the purchase of Stock upon the exercise of Options
(provided, that the Committee determines that providing such financing does not
violate the Sarbanes-Oxley Act of 2002), provisions for the forfeiture of or
restrictions on resale or other disposition of shares of Stock acquired under
any Award, provisions giving the Company the right to repurchase shares of Stock
acquired under any Award in the event the Participant elects to dispose of such
shares or terminate employment, provisions allowing the Participant to elect to
defer the receipt of payment in respect of Awards for a specified period or
until a specified event and provisions to comply with federal and state
securities laws and

<PAGE>

                                                                              10

federal and state tax withholding requirements. Any such provisions shall be
reflected in the Stock Option Agreement.

         (b)      PRIVILEGES OF STOCK OWNERSHIP. Except as otherwise
specifically provided in the Plan, no person shall be entitled to the privileges
of ownership in respect of shares of Stock which are subject to Awards hereunder
until such shares have been issued to that person.

         (c)      GOVERNMENT AND OTHER REGULATIONS. The obligation of the
Company to make payment of Awards in 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 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 Stock to be offered or sold under the Plan. If the shares of Stock
offered for sale or sold under the Plan are offered or sold pursuant to an
exemption from registration under the Securities Act, the Company may restrict
the transfer of such shares and may legend the Stock certificates representing
such shares in such manner as it deems advisable to ensure the availability of
any such exemption.

         (d)      TAX WITHHOLDING.

                  (i)      A Participant may be required to pay to the Company
         or any Affiliate and the Company or any Affiliate shall have the right
         and is hereby authorized to withhold from any shares of Stock or other
         property deliverable under any Award or from any compensation or other
         amounts owing to a Participant the amount (in cash, Stock or other
         property) of any required tax withholding and payroll taxes in respect
         of an Award, its exercise, or any payment or transfer under an Award or
         under the 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.

                  (ii)     Without limiting the generality of clause (i) above,
         if so provided in Stock Option Agreement, a Participant may satisfy, in
         whole or in part, the foregoing withholding liability (but no more than
         the minimum required withholding liability) by delivery of shares of
         Stock owned by the Participant with a Fair Market Value equal to such
         withholding liability (provided that such shares are not subject to any
         pledge or other security interest and have either been held by the
         Participant for six months, previously acquired by the Participant on
         the open market or meet such other requirements as the Committee may
         determine necessary in order to avoid an accounting earnings charge),
         or by

<PAGE>

                                                                              11

         having the Company withhold from the number of shares of Stock
         otherwise issuable pursuant to the exercise or settlement of the Award
         a number of shares with a Fair Market Value equal to such withholding
         liability.

         (e)      CLAIM TO AWARDS AND EMPLOYMENT RIGHTS. No employee of the
Company or an Affiliate, or other person, shall have any claim or right to be
granted an Award under the Plan or, having been selected for the grant of an
Award, to be selected for a grant of any other Award. Neither the Plan nor any
action taken hereunder shall be construed as giving any Participant any right to
be retained in the employ or service of the Company or an Affiliate.

         (f)      NO LIABILITY OF COMMITTEE MEMBERS. No member of the Committee
shall be personally liable by reason of any contract or other instrument
executed by such member or on his behalf in his capacity as a member of the
Committee nor for any mistake of judgment made in good faith, and the Company
shall indemnify and hold harmless each member of the Committee and each other
employee, officer or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person's
own fraud or willful bad faith; PROVIDED, HOWEVER, that approval of the Board
shall be required for the payment of any amount in settlement of a claim against
any such person. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company's Articles of Incorporation or By-Laws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

         (g)      GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the internal laws of the State of Delaware without regard to the
principles of conflicts of law thereof, or principles of conflicts of laws of
any other jurisdiction which could cause the application of the laws of any
jurisdiction other than the State of Delaware.

         (h)      FUNDING. No provision of the Plan shall require the Company,
for the purpose of satisfying any obligations under the Plan, to purchase assets
or place any assets in a trust or other entity or otherwise to segregate any
assets, nor shall the Company maintain separate bank accounts, books, records or
other evidence of the existence of a segregated or separately maintained or
administered fund for such purposes. Participants shall have no rights under the
Plan other than as unsecured general creditors of the Company, except that
insofar as they may have become entitled to payment of additional compensation
by performance of services, they shall have the same rights as other employees
under general law.

         (i)      NONTRANSFERABILITY. Each Award shall be exercisable only by
the Participant during the Participant's lifetime, or, if permissible under
applicable law, by the Participant's legal guardian or representative. No Award
may be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant

<PAGE>

                                                                              12

otherwise 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 or an Affiliate.

         (j)      RELIANCE ON REPORTS. Each member of the Committee and each
member of the Board shall be fully justified in relying, acting or failing to
act, and shall not be liable for having so relied, acted or failed to act in
good faith, upon any report made by the independent public accountant of the
Company and Affiliates and upon any other information furnished in connection
with the Plan by any person or persons other than himself.

         (k)      RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan
shall be taken into account in determining any benefits under any pension,
retirement, profit sharing, group insurance or other benefit plan of the Company
or any Affiliate except as otherwise specifically provided in such other plan.

         (l)      EXPENSES. The expenses of administering the Plan shall be
borne by the Company and Affiliates.

         (m)      PRONOUNS. Masculine pronouns and other words of masculine
gender shall refer to both men and women.

         (n)      TITLES AND HEADINGS. The titles and headings of the sections
in the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings shall
control.

         (o)      TERMINATION OF EMPLOYMENT. For all purposes herein, a person
who transfers from employment or service with the Company to employment or
service with an Affiliate or vice versa shall not be deemed to have terminated
employment or service with the Company or an Affiliate.

         (p)      SEVERABILITY. If any provision of the Plan or any Stock Option
Agreement is or becomes or is deemed to be invalid, illegal, or unenforceable in
any jurisdiction or as to any person or Award, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision shall
be construed or deemed amended to conform to the applicable laws, or if it
cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, person or Award and the
remainder of the Plan and any such Award shall remain in full force and effect.

9.       CHANGES IN CAPITAL STRUCTURE

         Awards granted under the Plan and any agreements evidencing such
awards, the maximum number of shares of Stock subject to all Options stated in
Section 5(a) and the maximum number of shares of Stock with respect to which any
one person may be granted Options during any period stated in Section 5(d) shall
be subject to adjustment or substitution, as determined by the Committee in its
sole discretion, as to the

<PAGE>

                                                                              13

number, price or kind of a share of Stock or other consideration subject to such
Awards or as otherwise determined by the Committee to be equitable (i) in the
event of changes in the outstanding Stock or in the capital structure of the
Company by reason of stock or extraordinary cash dividends, stock splits,
reverse stock splits, recapitalization, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the Date of Grant of any such Award or (ii) in
the event of any change in applicable laws or any change in circumstances which
results in or would result in any substantial dilution or enlargement of the
rights granted to, or available for, Participants, or which otherwise warrants
equitable adjustment because it interferes with the intended operation of the
Plan. Any adjustment in Incentive Stock Options under this Section 9 shall be
made only to the extent not constituting a "modification" within the meaning of
Section 424(h)(3) of the Code, and any adjustments under this Section 9 shall be
made in a manner which does not adversely affect the exemption provided pursuant
to Rule 16b-3 under the Exchange Act. Further, with respect to Awards granted on
and after the 162(m) Effective Date which are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code, such
adjustments or substitutions shall be made only to the extent that the Committee
determines that such adjustments or substitutions may be made without causing
Awards granted under the Plan to fail to qualify as such "performance-based
compensation." The Company shall give each Participant notice of an adjustment
hereunder and, upon notice, such adjustment shall be conclusive and binding for
all purposes.

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

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

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

         C.       The reorganization or liquidation of the Company; or

         D.       The Company shall enter into a written agreement to undergo an
event described in clauses A, B or C above,

then the Committee may, in its sole discretion and upon at least 10 days advance
notice to the affected persons, cancel any outstanding Awards and cause the
holders thereof to be paid, in cash or stock, or any combination thereof, the
value of such Awards which are then exercisable based upon the price per share
of Stock received or to be received by other shareholders of the Company in the
event. The terms of this Section 9 may be varied by the Committee in any
particular Stock Option Agreement.

10.      NONEXCLUSIVITY OF THE PLAN

<PAGE>

                                                                              14

         Neither the adoption of this Plan by the Board nor the submission of
this Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under this Plan, and such arrangements
may be either applicable generally or only in specific cases.

11.      AMENDMENTS AND TERMINATION

         (a)      AMENDMENT AND TERMINATION OF THE PLAN. The Board may amend,
alter, suspend, discontinue, or terminate the Plan or any portion thereof at any
time; PROVIDED that no such amendment, alteration, suspension, discontinuation
or termination shall be made without shareholder approval if such approval is
necessary to comply with any tax or regulatory requirement applicable to the
Plan (including as necessary to prevent Awards granted under the Plan on and
after the 162(m) Effective Date from failing to qualify as "performance-based
compensation" for purposes of Section 162(m) of the Code); and PROVIDED FURTHER
that any such amendment, alteration, suspension, discontinuance or termination
that would impair the rights of any Participant or any holder of any Award
theretofore granted shall not to that extent be effective without the consent of
the affected Participant or holder.

         (b)      AMENDMENT OF STOCK OPTION AGREEMENTS. The Committee may, to
the extent consistent with the terms of any Stock Option Agreement, waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate, any Award theretofore granted, prospectively or
retroactively; provided that any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would impair the rights of any
Participant in respect of any Award theretofore granted shall not to that extent
be effective without the consent of the affected Participant.

                                      * * *

As adopted by the Board of Directors of
Ply Gem Investment Holdings, Inc. as of February 12, 2004.

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