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Exhibit 10.2
NCI BUILDING SYSTEMS, INC. 2003 LONG-TERM STOCK
INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
As described in the letter notifying Grantee of an award (the
"Award Letter"), NCI Building Systems, Inc., a Delaware corporation
(the "Company"), has granted to Grantee, pursuant to the provisions
of the NCI Building Systems, Inc. 2003 Long-Term Stock Incentive
Plan, as in effect on the Grant Date (the "Plan"), a restricted
stock award (this "Award") of the number of shares identified in
the Award Letter (the "Awarded Shares") of its common stock, $0.01
par value per share (the "Common Stock"), upon and subject to the
terms and conditions set forth in this Restricted Stock Agreement
(this "Agreement") and in the Plan. Unless otherwise defined in
this Agreement, capitalized terms used in this Agreement shall have
the meanings assigned to them in the Plan and in the Award Letter.
Grantee acknowledges receipt of a copy of the Plan in effect as
of the date hereof, the terms and conditions of which are
incorporated herein by reference.
1. Effect of the Plan . The Awarded Shares granted to
Grantee are subject to all of the provisions of the Plan and of
this Agreement, together with all rules and determinations from
time to time issued by the Committee and by the Board pursuant to
the Plan. The Company hereby reserves the right to amend, modify,
restate, supplement or terminate the Plan without the consent of
Grantee. This Award shall be subject, without further action by the
Company or Grantee, to any amendment, modification, restatement or
supplement to the Plan that is beneficial to, or increases the
rights of, Grantee. This Award shall not be subject to any
amendment, modification, restatement or supplement to the Plan that
reduces or adversely affects the rights and benefits available to
Grantee hereunder.
2. Grant . This Award shall evidence Grantee’s
ownership of the Awarded Shares, and Grantee acknowledges that the
Awarded Shares will not be transferable unless and until the
Awarded Shares vest as provided in this Agreement and all tax
withholding obligations applicable to the Vested Awarded Shares (as
defined below) have been satisfied. The Awarded Shares will be held
in escrow for Grantee pursuant to the provisions of Section 4
hereof, until the Awarded Shares have vested in accordance with
Section 3 of this Agreement or are forfeited in accordance
with Section 4 of this Agreement. Upon vesting of the Awarded
Shares, the Company shall, unless otherwise paid by Grantee as
described in Section 9(a) of this Award, withhold that number
of Vested Awarded Shares necessary to satisfy any applicable tax
withholding obligation of Grantee in accordance with the provisions
of Section 9(a) of this Award, and thereafter release from
escrow all remaining Vested Awarded Shares to Grantee. Grantee
agrees that the Awarded Shares shall be subject to all of the terms
and conditions set forth in this Agreement and the Plan, including,
but not limited to, the forfeiture and escrow conditions set forth
in Section 4 of this Agreement, the restrictions on transfer
set forth in Section 5 of this Agreement, and the satisfaction
of the Required Withholding as set forth in Section 9(a) of
this Agreement.
3. Vesting Schedule; Service Requirements . Except as
provided otherwise in Section 4 of this Agreement, the Awarded
Shares shall vest if Grantee’s continuing employment
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or consulting relationship with the Company or
any Subsidiary ("Continuous Service") is not terminated during the
period commencing with the Grant Date and ending with the
applicable date that such portion of the Awarded Shares vests
(each, a "Vesting Date"). Awarded Shares that have vested pursuant
to this Agreement are referred to herein as "Vested Awarded
Shares," and Awarded Shares that have not yet vested pursuant to
this Agreement are referred to herein as "Unvested Awarded Shares."
Subject to the provisions of Section 4 of this Agreement, if
Grantee’s Continuous Service is not terminated prior to an
applicable Vesting Date, the Awarded Shares shall vest as
follows:
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(i) twenty-five percent (25%) of the Awarded Shares shall
vest on the first anniversary of the Grant Date;
(ii) twenty-five percent (25%) of the Awarded Shares shall
vest on the second anniversary of the Grant Date;
(iii) twenty-five percent (25%) of the Awarded Shares shall
vest on the third anniversary of the Grant Date; and
(iv) the remaining Awarded Shares shall vest on the fourth
anniversary of the Grant Date.
If an installment of the vesting would result in a fractional
Vested Awarded Share, such installment will be rounded to the next
higher or lower Awarded Share, as determined by the Company, except
the final installment, which will be for the balance of the Awarded
Shares.
4. Conditions of Forfeiture .
(a) Upon any termination of Grantee’s Continuous Service
(the "Termination Date"):
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(i) by the Company for Cause (as hereinafter defined) or by
Grantee’s voluntary resignation without Good Reason (as
hereinafter defined) before all of the Awarded Shares become Vested
Awarded Shares, all Unvested Awarded Shares as of the Termination
Date shall, without further action of any kind by the Company or
Grantee, be forfeited; or
(ii) by the Company without Cause or by Grantee’s
voluntary resignation with Good Reason before all of the Awarded
Shares become Vested Awarded Shares, on the Termination Date, one
hundred percent (100%) of the Unvested Awarded Shares shall
vest.
(b) During the period of time between the Award Date and the
earlier of the date the Awarded Shares vest or are forfeited, the
Awarded Shares shall be registered in the name of Grantee and held
in escrow by an escrow agent selected by the Company. Grantee
irrevocably authorizes the Company to deposit in escrow any
certificates evidencing the Awarded Shares and any additions and
substitutions to said shares as described in this Agreement. Any
certificate shall bear a legend as provided by the Company,
conspicuously referring to the terms, conditions and restrictions
described in this Agreement. All Unvested
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Awarded Shares that are forfeited pursuant to the
terms of this Agreement shall be deemed to be immediately
transferred from escrow to the Company without any payment by the
Company or action by Grantee, and the Company shall have the full
right to cancel any evidence of Grantee’s ownership of such
forfeited Unvested Awarded Shares and to take any other action
necessary to demonstrate that Grantee no longer owns such forfeited
Unvested Awarded Shares automatically upon such forfeiture.
Following such forfeiture, Grantee shall have no further rights
with respect to such forfeited Unvested Awarded Shares. Grantee, by
his acceptance of the Award granted pursuant to this Agreement,
irrevocably grants to the Company a power of attorney to transfer
Unvested Awarded Shares that are forfeited to the Company and
agrees to execute any documents requested by the Company, including
but not limited to one or more stock assignments, to facilitate
such transfer upon forfeiture. The provisions of this Agreement
regarding transfers of Unvested Awarded Shares that are forfeited
shall be specifically performable by the Company in a court of
equity or law.
(c) Notwithstanding anything to the contrary in this Agreement,
the Unvested Awarded Shares shall become vested (i) upon the
death of Grantee during Grantee’s Continuous Service;
(ii) if Grantee suffers a Disability during Grantee’s
Continuous Service; (iii) upon Grantee’s attainment of
65 years of age during Grantee’s Continuous Service; or
(iv) in accordance with the provisions of Section 12(b)
of the Plan relating to a Change in Control.
(d) For purposes of this Agreement, "Cause" shall have the
meaning ascribed to such term in Grantee’s current employment
agreement with the Company or any of its Subsidiaries (the
"Employment Agreement"), or, if no such Employment Agreement exists
or if "Cause" is not defined in the Employment Agreement, "Cause"
means:
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(i) Grantee’s failure or inability for any reason to
devote substantially all of his business time and effort to the
performance of his duties and responsibilities to the Company and
its Subsidiaries (vacation time and absence due to sickness or
disability being excepted herefrom) and such failure or inability
continues for a period of thirty (30) days after written
notice by the Company of the existence of such failure or
inability; provided, however , that only one such notice by
the Company need be sent and, if such failure re-occurs thereafter,
no further notice and opportunity to cure such failure shall be
required;
(ii) indictment for, or conviction of, or plea of nolo
contendere to, a felony, other than a felony involving the
operation of a motor vehicle which does not result in serious
bodily harm to any person;
(iii) breach or failure by Grantee to perform any of his
material covenants contained in the Employment Agreement that is
not cured within thirty (30) days after written notice by the
Company of the breach or failure to perform; provided,
however , that only one such notice by the Company need be sent
and, if such failure re-occurs thereafter, no further notice and
opportunity to cure such failure shall be required;
(iv) disregard or failure to use commercially reasonable efforts
to carry out the reasonable and lawful instructions of any employee
to whom Grantee reports or the Board of Directors of the Company,
or a material violation of policies established by
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the Company, with respect to the operation of its
business and affairs that continues for a period of thirty
(30) days after written notice by the Company of the existence
of such violation, disregard or failure; provided, however,
that only one such notice by the Company need be sent and, if such
violation, disregard or failure re-occurs thereafter, no further
notice and opportunity to cure such violation, disregard or failure
shall be required;
(v) an act committed by Grantee which (A) brings the
Company or any of its Subsidiaries into public disgrace, or
(B) harms the business operations of the Company or any of its
Subsidiaries; provided, however, that the Board of Directors
of the Company must first provide to Grantee written notice clearly
and fully describing the particular acts or omissions which the
Board reasonably believes in good faith constitutes Cause under
this subsection and an opportunity, within thirty (30) days
following his receipt of such notice, to meet in person with the
Board of Directors to explain or defend the alleged acts or
omissions relied upon by the Board of Directors and, to the extent
practicable, to cure such acts or omissions;
(vi) habitual insobriety or illegal use of controlled substances
by Grantee; or
(vii) breach or failure by Grantee to comply in any material
respect with the Company’s Corporate Governance Guidelines,
Code of Business Conduct and Ethics or Employee Policy Manual (as
the same may be amended, restated, extended, supplemented or
otherwise modified in writing from time to time in the sole
discretion of the Board of Directors of the Company) that is not
cured within thirty (30) days after written notice by the
Company of the breach or failure to perform; provided ,
however , that only one such notice by the Company need be
sent and, if such breach or failure reoccurs thereafter, no further
notice and opportunity to cure such breach or failure shall be
required.
For purposes of this Agreement, any termination of
Grantee’s employment for Cause shall be effective only upon
delivery to Grantee of a certified copy of a resolution of the
Board of Directors of the Company, adopted by the affirmative vote
of a majority of the entire membership of the Board of Directors
(excluding Grantee, if applicable) following a meeting at which
Grantee was given an opportunity to be heard on at least five
business days’ advance notice, finding that Grantee was
guilty of the conduct constituting Cause, and specifying the
particulars thereof.
(e) For purposes of this Agreement, "Good Reason" shall have the
meaning ascribed to such term in the Employment Agreement, if any,
and further includes termination after the occurrence of any of the
following events that occur without Grantee’s prior written
consent:
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provided, however, that no act or omission shall
constitute "Good Reason" for purposes of this Agreement unless
Grantee provides to the Board of Directors of the Company a written
notice prior to Grantee’s termination and within sixty
(60) days after the occurrence of the event, that clearly and
fully describes the particular acts or omissions which Grantee
reasonably believes in good faith constitutes "Good Reason", and an
opportunity, within thirty (30) days following its receipt of
such notice, to cure such acts or omissions.
5. Non-Transferability . Grantee may not sell, transfer,
pledge, exchange, hypothecate, or otherwise encumber or dispose of
any of the Unvested Awarded Shares, or any right or interest
therein, by operation of law or otherwise. Any transfer in
violation of this Section 5 shall be void and of no force or
effect, and shall result in the immediate forfeiture of all
Unvested Awarded Shares.
6. Dividend and Voting Rights . Subject to the
restrictions contained in this Agreement, Grantee shall have the
rights of a stockholder with respect to the Awarded Shares,
including the right to vote all such Awarded Shares, including
Unvested Awarded Shares, and to receive all dividends, cash or
stock (other than stock dividends accounted for as a stock split),
paid or delivered thereon, from and after the date hereof. In the
event of forfeiture of Unvested Awarded Shares, Grantee shall have
no further rights with respect to such Unvested Awarded Shares.
However, the forfeiture of the Unvested Awarded Shares pursuant to
Section 4 hereof shall not create any obligation to repay cash
dividends or stock dividends (other than stock dividends accounted
for as a stock split) received as to such Unvested Awarded Shares,
nor shall such forfeiture invalidate any votes given by Grantee
with respect to such Unvested Awarded Shares prior to
forfeiture.
7. Capital Adjustments and Corporate Events . If, from
time to time during the term of this Agreement, there is any
capital adjustment affecting the outstanding Common Stock as a
class without the Company&rsqu
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