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FORM OF OPTION ROLLOVER AGREEMENT

Option Agreement

FORM OF OPTION ROLLOVER AGREEMENT | Document Parties: GOODMAN APPLIANCE HOLDING CO | Hellman & Friedman LLC You are currently viewing:
This Option Agreement involves

GOODMAN APPLIANCE HOLDING CO | Hellman & Friedman LLC

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Title: FORM OF OPTION ROLLOVER AGREEMENT
Governing Law: Delaware     Date: 4/15/2008
Law Firm: Simpson Thacher    

FORM OF OPTION ROLLOVER AGREEMENT, Parties: goodman appliance holding co , hellman & friedman llc
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Exhibit 10.19

FORM OF OPTION ROLLOVER AGREEMENT

THIS OPTION ROLLOVER AGREEMENT, dated as of February 13, 2008 (this “ Agreement ”), is made by and between Chill Holdings, Inc., a Delaware corporation (“ Holdings ”), and [            ], an individual (the “ Management Participant ”).

WHEREAS, Holdings entered into an Agreement and Plan of Merger, dated as of October 21, 2007 (as may be amended from time to time, the “ Merger Agreement ”), with Chill Acquisition, Inc., a Delaware corporation and a wholly owned indirect subsidiary of Holdings (together with its successors and assigns, “ Merger Sub ”) and Goodman Global, Inc., a Delaware corporation (the “ Company ”), pursuant to which, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company (the “ Merger ”), whereby Merger Sub will cease to exist and the Company will become a wholly owned indirect subsidiary of Holdings;

WHEREAS, pursuant to Section 2.1(f) of the Merger Agreement, each option to purchase shares of common stock of the Company (the “ Company Stock Option ”) granted under the 2004 Stock Option Plan and the 2006 Incentive Award Plan of the Company (together, the “ Company Stock Plans ”), whether vested or unvested, that is outstanding immediately prior to the consummation of the Merger (the “ Closing ”), other than any such option that is subject to an alternative arrangement specifically agreed to between Holdings and the holder thereof, shall, as of the Closing, become fully vested and be converted into the right to receive at the Closing an amount in cash in U.S. dollars equal to the product of (i) the total number of shares of common stock of the Company subject to such Company Stock Option and (ii) the excess, if any, of (A) $25.60 over (B) the exercise price per share of common stock of the Company subject to such Company Stock Option, with the aggregate amount of such payment rounded to the nearest cent less such amounts as are required to be withheld or deducted under the United States Internal Revenue Code of 1986, as amended (the “Code”) or any provision of U.S. federal, state, local or foreign tax law with respect to the making of such payment (the “ Option Consideration ”); and

WHEREAS, the Management Participant was granted one or more Company Stock Options pursuant to the Company Stock Plans;

WHEREAS, the parties hereto desire to agree that, pursuant to the Merger Agreement, the Company Stock Options held by the Management Participant (the “ Management Participant Options ”) shall become fully vested as of the Closing, and, to the extent set forth on Schedule I hereto, remain outstanding and be assumed by Holdings as provided for herein;

NOW, THEREFORE, in consideration of the mutual covenants and conditions as hereinafter set forth, the parties hereto do hereby agree as follows:

 

I. Company Stock Options .

Holdings and the Management Participant hereby acknowledge and agree that as of the date of this Agreement, the Management Participant Options shall, to the extent then outstanding, become fully vested as of the Closing.

 


II. Rollover of the Unexercised Portion of the Management Participant Option .

Subject to terms and conditions set forth herein, to the extent set forth on Schedule I hereto, the Management Participant hereby permanently and irrevocably elects not to exercise the Company Stock Options in connection with the Merger, and therefore acknowledges that following the Merger, the portion of the Management Participant Options described on Schedule I shall remain outstanding and be converted automatically into options to acquire the common stock, par value $0.01 per share of Holdings (the “ Holdings Common Stock ”) (as so converted, the “ Rollover Options ”). It is hereby expressly agreed and acknowledged that the Management Participant shall not be entitled to the Option Consideration with respect to shares of Holdings Common Stock subject to the Rollover Options. Without limiting the foregoing, the Rollover Options shall be subject to the same general terms and conditions as are applicable to the Management Participant Options as of the date hereof, except that:

(i) such Rollover Options shall be fully vested and immediately exercisable;

(ii) the exercise price per share of such Rollover Options shall be $2.07, and the number of shares of Holdings Common Stock subject to the Rollover Options shall be the number set forth on Column F of Schedule I hereto, which shall have been determined by dividing the total option spread indicated on Column E of Schedule I hereto by $7.93, whereby the total option spread before and after such conversion shall, subject to the following proviso, remain unchanged; provided , that in performing such adjustment, the number of shares subject to the Rollover Options after the conversion shall have been rounded down to the nearest whole number of shares of Holdings Common Stock, to the extent necessary;

(iii) in connection with any extraordinary cash dividend declared and paid on the Holdings Common Stock, the Rollover Option shall be adjusted by the Board of Directors of Holdings (the “ Board ”), or committee thereof, in a manner it deems equitable in its good faith, which may include the reduction of the exercise price per share of Holdings Common Stock subject to the Rollover Option by the amount of such dividend, provided that if such reduction exceeds the exercise price per share (or such percentage of the exercise price per share that Holdings determines would result in adverse tax consequences to the Management Participant) or would cause the Rollover Option to cease to be exempt from Section 409A of the Code, then such excess shall be paid in cash; and

(iv) to the extent that the Board (or any committee thereof) makes adjustments to the Management Participant’s stock option granted under the Chill Holdings, Inc. 2008 Stock Incentive Plan, pursuant to Section 11 thereof, corresponding adjustments shall be made to the Rollover Option.

 

III. Execution of Management Stockholders Agreements .

Concurrently with the execution and delivery of this Agreement, each of Holdings and the Management Participant agrees to execute and deliver the Management Stockholders Agreement, as may be amended from time to time, in the form attached as Exhibit A hereto (the “ Management Stockholders Agreement ”).

 

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IV. Termination .

This Agreement shall terminate automatically and the transactions contemplated hereby shall be abandoned if at any time prior to the Closing, the Merger Agreement shall have been terminated in accordance with its terms. In the event of any termination of this Agreement as provided in this Article IV, this Agreement shall forthwith become wholly void and of no further force or effect (except Article VI) and there shall be no liability on the part of any parties hereto or their respective officers or directors, except as provided in such Article VI. Notwithstanding the foregoing, no party hereto shall be relieved from liability for any willful breach of this Agreement.

 

V. Representations and Warranties .

1. Representations and Warranties of the Management Participant . The Management Participant represents and warrants to Holdings that:

a. He or she is competent to, and has sufficient capacity to, execute and deliver this Agreement and the agreements contemplated hereby and to perform his or her obligations hereunder and thereunder. This Agreement has been duly executed and delivered by the Management Participant and, assuming the due authorization, execution and delivery of this Agreement by Holdings, this Agreement constitutes the valid and binding obligation of the Management Participant, enforceable against the Management Participant in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by the effect of general principles of equity (re


 
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