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Exhibit 10.3
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") 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.
(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 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
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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.
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’s receipt of consideration
(including stock dividends accounted for as a stock split), the
Unvested Shares shall be adjusted in accordance with the provisions
of Section 12 of the Plan. Any and all new, substituted or
additional securities to which Grantee may be entitled by reason of
Grantee’s ownership of the Unvested Awarded Shares hereunder
because of a capital adjustment shall be immediately subject to the
forfeiture provisions of this Agreement and included thereafter as
"Unvested Awarded Shares" for purposes of this Agreement.
8. Refusal to Transfer . The Company shall not be
required (i) to transfer on its books any Unvested Awarded
Shares that have been sold or otherwise transferred in violation of
any of the provisions of this Agreement or the Plan, or
(ii) to treat as owner of such Unvested Awarded Shares, or
accord the right to vote or pay or deliver dividends or other
distributions to, any purchaser or other transferee to whom or
which Grantee shall have attempted to transfer such Unvested
Awarded Shares.
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9. Tax Matters .
(a) The Company’s obligation to deliver Awarded Shares to
Grantee upon the vesting of such shares shall be subject to the
satisfaction of all applicable federal, state and local income and
employment tax withholding requirements (the "Required
Withholding"). The Company shall withhold from the Vested Awarded
Shares that otherwise would have been delivered to Grantee the
number of Vested Awarded Shares necessary to satisfy
Grantee’s Required Withholding, and deliver the remaining
Vested Awarded Shares to Grantee, unless Grantee has made
arrangements with the Company for Grantee to deliver to the Company
cash, a check or other available funds for the full amount of the
Required Withholding by 5:00 P.M. Central Standard Time on the
later of (i) the date Awarded Shares become Vested Awarded
Shares or (ii) the date on which the Vested Awarded Shares are
distributed to Grantee, or by such date Grantee has not made such
other provision for the satisfaction of the Required Withholding in
form satisfactory to the Committee or Board, in its sole
discretion. The amount of the Required Withholding and the number
of Vested Awarded Shares to be withheld by the Company, if
applicable, to satisfy Grantee’s Required Withholding, as
well as the amount reflected on tax reports filed by the Company,
shall be based on the value of the Vested Awarded Shares determined
by using the last sales price of the Common Stock (as reported by
the New York Stock Exchange) on the date prior to the applicable
Vesting Date or the date on which the Vested Awarded Shares are
distributed to Grantee, as appropriate. The obligations of the
Company under this Award will be conditioned on such satisfaction
of the Required Withholding.
(b) Grantee acknowledges that the tax consequences associated
with the Award are complex and that the Company has urged Grantee
to review with Grantee’s own tax advisors the federal, state,
and local tax consequences of this Award. Grantee is relying solely
on such advisors and not on any statements or representations of
the Company or any of its agents. Grantee understands that Grantee
(and not the Company) shall be responsible for Grantee’s own
tax liability that may arise as a result of the Award. Grantee
understands further that Section 83 of the Internal Revenue
Code of 1986, as amended (the "Code"), taxes as ordinary income the
fair market value of the Vested Awarded Shares as of the Vesting
Date for
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