DEFM14A 1 d728177ddefm14a.htm DEFM14A DEFM14A

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a 6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material under § 240.14a 12

PGT INNOVATIONS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

Fee paid previously with preliminary materials.

 

 

 


LOGO

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

Dear PGT Innovations, Inc. Stockholder:

On January 16, 2024, PGT Innovations, Inc. (referred to as “PGTI”), MIWD Holding Company LLC (referred to as “MITER”) and RMR MergeCo, Inc., an indirect wholly owned subsidiary of MITER (referred to as “Merger Sub”), entered into an Agreement and Plan of Merger that provides for the acquisition of PGTI by MITER (such agreement, as it may be amended from time to time, referred to as the “merger agreement”). Pursuant to the terms of the merger agreement, Merger Sub will merge with and into PGTI (referred to as the “merger”), with PGTI surviving the merger as a wholly owned subsidiary of MITER (referred to as the “surviving corporation”). The respective boards of directors of PGTI and MITER have unanimously approved the merger agreement and the merger.

Upon the terms and subject to the conditions of the merger agreement, at the effective time of the merger, you will be entitled to receive, for each share of common stock, par value $0.01 per share, of PGTI (referred to as a “PGTI common stock”) that you own immediately prior to the effective time of the merger, $42.00 in cash without interest (referred to as the “merger consideration”). The merger consideration represents an approximately 60% premium over the unaffected price of PGTI common stock of $26.20 (which was the closing trading price on October 9, 2023, the last trading day prior to the public disclosure of an offer by MITER for the acquisition of PGTI).

The PGTI board of directors has unanimously (i) determined that the merger agreement and the transactions contemplated thereby are fair to and in the best interests of PGTI and PGTI stockholders, (ii) declared it advisable to enter into the merger agreement and consummate the transactions contemplated thereby upon the terms and subject to the conditions set forth therein, (iii) approved the execution and delivery of the merger agreement by PGTI, the performance by PGTI of its covenants and other obligations thereunder and the consummation of the transactions contemplated thereby upon the terms and conditions set forth therein, (iv) resolved to recommend that PGTI stockholders vote to adopt the merger agreement in accordance with the Delaware General Corporation Law and (v) directed that the adoption of the merger agreement be submitted for consideration by PGTI stockholders at a meeting thereof. The PGTI board of directors further approved, adopted and declared advisable the certificate of incorporation amendment described below.

At the special meeting of PGTI stockholders described in the accompanying proxy statement (referred to as the “special meeting”), you will be asked to approve the merger agreement proposal and to vote on other merger-related matters. You will also be asked to vote on a proposal to amend PGTI’s certificate of incorporation to designate PGTI as the agent of PGTI stockholders to pursue damages in the event that specific performance is not sought or granted as a remedy for MITER’s fraud or material and willful breach of the merger agreement (referred to as the “certificate of incorporation amendment proposal”). The PGTI board of directors unanimously recommends that PGTI stockholders vote “FOR” the merger agreement proposal, “FOR” the certificate of incorporation amendment proposal and “FOR” each of the other proposals described in the accompanying proxy statement.

Your vote is very important regardless of the number of shares of PGTI common stock that you own. MITER and PGTI cannot complete the merger without the approval of the merger agreement proposal by PGTI stockholders holding at least a majority of the shares of PGTI common stock outstanding at the

 


close of business on February 7, 2024, the record date for the special meeting. The failure of any PGTI stockholder to vote will have the same effect as a vote against the approval of the merger agreement proposal and against the certificate of incorporation amendment proposal. Whether or not you plan to participate in the special meeting, PGTI urges you to submit a proxy in advance of the special meeting to have your shares voted by using one of the methods described in the accompanying proxy statement. If your shares are held in the name of a bank, brokerage firm or other nominee, please follow the instructions on the voting instruction card furnished by such bank, brokerage firm or other nominee. You must provide voting instructions by filling out the voting instruction card in order for your shares to be voted.

More information about MITER, PGTI, the special meeting, the merger and the other proposals for consideration at the special meeting is contained in the accompanying proxy statement. Please carefully read the entire proxy statement and the annexes and documents included in, or incorporated by reference into, the proxy statement.

If you have any questions or need assistance voting your shares of PGTI common stock, please contact MacKenzie Partners, Inc., our proxy solicitor (referred to as “MacKenzie Partners”), by calling toll-free at (800) 322-2885.

On behalf of the PGTI board of directors, thank you for your continued support.

Sincerely,

 

LOGO

Rodney Hershberger

Chairman of the Board

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE MERGER, PASSED UPON THE MERITS OF THE MERGER AGREEMENT, THE MERGER OR THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT OR DETERMINED IF THE ACCOMPANYING PROXY STATEMENT IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The accompanying proxy statement is dated February 14, 2024 and is first being mailed to PGTI stockholders on or about February 16, 2024.

 


LOGO

PGT Innovations, Inc.

1070 Technology Drive

North Venice, FL 34275

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON MARCH 18, 2024

Dear PGT Innovations, Inc. Stockholder:

This is a notice that the special meeting of stockholders of PGT Innovations, Inc. (referred to as “PGTI”) will be held on March 18, 2024, beginning at 10:30 a.m., Eastern Time (such meeting is referred to as the “special meeting”). The special meeting will be a completely virtual, live audio webcast meeting of stockholders and will be held for the following purposes:

 

1.

to adopt the Agreement and Plan of Merger, dated as of January 16, 2024 (such agreement, as it may be amended from time to time, is referred to as the “merger agreement”), among PGTI, MIWD Holding Company LLC (referred to as “MITER”), and RMR MergeCo, Inc., an indirect wholly owned subsidiary of MITER (referred to as “Merger Sub”), pursuant to which, upon the terms and subject to the conditions of the merger agreement, Merger Sub will merge with and into PGTI (referred to as the “merger”), with PGTI surviving the merger and becoming a wholly owned subsidiary of MITER (referred to as the “merger agreement proposal”);

 

2.

to approve on an advisory (non-binding) basis the compensation that may be paid or become payable to PGTI’s named executive officers that is based on or otherwise relates to the merger (referred to as the “merger-related compensation proposal”);

 

3.

to approve and adopt an amendment to the Amended and Restated Certificate of Incorporation of PGTI (referred to as the “certificate of incorporation amendment”) designating PGTI as the agent of PGTI stockholders to pursue damages in the event that specific performance is not sought or granted as a remedy for MITER’s fraud or material and willful breach of the merger agreement (referred to as the “certificate of incorporation amendment proposal”); and

 

4.

to approve the adjournment of the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes to approve the merger agreement proposal (referred to as the “adjournment proposal”).

The proxy statement of which this notice is a part (a) incorporates important business and financial information about PGTI, MITER and Merger Sub from other documents that PGTI has filed with the U.S. Securities and Exchange Commission (referred to as the “SEC”) and that are contained in or incorporated by reference into this proxy statement and (b) provides a detailed description of the merger and the merger agreement and the other matters to be considered at the special meeting, including the proposals listed above. Please refer to the accompanying proxy statement, including the merger agreement and the other annexes and documents included in, or incorporated by reference into, the accompanying proxy statement for further information with respect to the business to be transacted at the special meeting. You are encouraged to read the entire proxy statement carefully before voting. The PGTI board of directors has unanimously (i) determined that the merger agreement and the transactions contemplated thereby are fair to and in the best interests of PGTI and PGTI stockholders, (ii) declared it advisable to enter into the merger agreement and consummate the transactions contemplated thereby upon the terms and subject to the conditions set forth therein, (iii) approved the execution and delivery of the merger agreement by PGTI, the performance by PGTI of its covenants and other obligations thereunder and the consummation of the transactions contemplated thereby upon the terms and conditions set forth therein, (iv) resolved to recommend that PGTI stockholders adopt the merger agreement in accordance with the Delaware General Corporation

 


Law and (v) directed that the adoption of the merger agreement be submitted for consideration by PGTI stockholders at a meeting thereof. The PGTI board of directors further approved, adopted and declared advisable the certificate of incorporation amendment.

The PGTI board of directors unanimously recommends that PGTI stockholders vote “FOR” the merger agreement proposal, “FOR” the merger-related compensation proposal, “FOR” the certificate of incorporation amendment proposal and “FOR” the adjournment proposal.

The PGTI board of directors has fixed the close of business on February 7, 2024, as the record date for determination of PGTI stockholders entitled to receive notice of, and to vote at, the special meeting or any adjournments or postponements thereof (referred to as the “record date”). Only holders of record of PGTI common stock as of the close of business on the record date are entitled to receive notice of, and to vote at, the special meeting.

Under Delaware law, holders of PGTI common stock who do not vote in favor of the merger agreement proposal will have the right to seek appraisal and obtain payment in cash for the fair value of their shares of PGTI common stock, as determined by the Court of Chancery of the State of Delaware if the merger is completed, but only if they strictly comply with the procedures prescribed by Delaware law. These procedures are summarized in “Appraisal Rights of PGTI Stockholders” beginning on page 94 of the accompanying proxy statement. In addition, the text of the applicable provisions of Delaware law is attached as Annex D to the accompanying proxy statement.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.

The merger cannot be completed unless the merger agreement proposal is approved by the affirmative vote, virtually or by proxy, of holders of at least a majority of the outstanding shares of PGTI common stock entitled to vote thereon.

The affirmative vote, virtually or by proxy, of holders of at least a majority of the outstanding shares of PGTI common stock entitled to vote thereon is required to approve the certificate of incorporation amendment proposal.

If you fail to (1) return your proxy card, (2) grant your proxy electronically over the internet or by telephone or (3) attend the special meeting in person (virtually), your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If a quorum is present, your shares will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement and the certificate of incorporation amendment, but will have no effect on the other proposals.

Whether or not you expect to participate in the special meeting, PGTI urges you to submit a proxy to have your shares voted as promptly as possible either: (1) via the internet at www.proxyvote.com (see proxy card for instructions); (2) by telephone (see proxy card for instructions); or (3) by completing, signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares may be represented and voted at the special meeting. If your shares are held in “street name” by a bank, brokerage firm or other nominee, please follow the instructions on the voting instruction card furnished by such bank, brokerage firm or other nominee. Any stockholder of record participating in the special meeting may vote even if such stockholder has returned a proxy card. However, if your shares are held in “street name” you must obtain a “legal proxy” from the bank, brokerage firm or other nominee to vote at the special meeting.

PGTI stockholders of record as of February 7, 2024 will be able to participate in the special meeting by visiting www.virtualshareholdermeeting.com/PGTI2024SM and entering the 16-digit control number included on your proxy card or voting instruction card that accompanied your proxy materials. If you would like to view the special meeting materials via the internet, please visit www.proxydocs.com/PGTI.

 


If you have any questions about the special meeting, the merger, the proposals or the accompanying proxy statement, would like additional copies of this proxy statement, need to obtain proxy cards or other information related to this proxy solicitation or need help submitting a proxy or voting your shares of PGTI common stock, you should contact:

PGT Innovations, Inc.

Attention: General Counsel and Corporate Secretary

1070 Technology Drive

North Venice, Florida 34275

(941) 480-1600

or

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

Call Toll Free: (800) 322-2885

Email: proxy@mackenziepartners.com

By order of the PGTI board of directors,

 

LOGO

Ryan Quinn

General Counsel and Corporate Secretary

Dated: February 14, 2024

North Venice, Florida

 


PGT Innovations, Inc.

1070 Technology Drive, North Venice, Florida 34275

PGT INNOVATIONS, INC.

PROXY STATEMENT

SPECIAL MEETING OF STOCKHOLDERS

TABLE OF CONTENTS

 

 

 

     Page  

SUMMARY

     1  

THE COMPANIES

     2  

PGT Innovations, Inc.

     2  

MIWD Holding Company LLC

     2  

RMR MergeCo, Inc.

     2  

THE MERGER AND MERGER AGREEMENT

     3  

Effects of the Merger

     3  

Merger Consideration

     4  

Treatment of PGTI Equity Awards

     4  

PGTI’s Reasons for the Merger; Recommendation of the PGTI’s Board of Directors

     5  

Opinion of PGTI’s Financial Advisor

     5  

Financing of the Merger

     6  

Material U.S. Federal Income Tax Consequences of the Merger

     6  

Regulatory Clearances and Approvals Required for the Merger

     7  

Expected Timing of the Merger

     7  

Conditions to the Merger

     7  

No Solicitation of Other Offers by PGTI

     8  

Change of Recommendation; Match Rights

     8  

Termination of the Merger Agreement

     9  

Termination Fees and Expenses

     10  

Masonite Termination Fee

     10  

Remedies; Maximum Liability

     10  

Specific Performance

     11  

Appraisal Rights of PGTI Stockholders

     11  

PGTI Special Meeting

     12  

Interests of PGTI’s Directors and Executive Officers in the Merger

     12  

Directors’ and Officers’ Indemnification and Insurance

     13  

Market Prices of PGTI Common Stock

     13  

QUESTIONS AND ANSWERS

     14  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     24  

THE COMPANIES

     26  

PGT Innovations, Inc.

     26  

MIWD Holding Company LLC

     26  

RMR MergeCo, Inc.

     26  

THE SPECIAL MEETING

     27  

General

     27  

Date, Time and Place of the Special Meeting

     27  

Purposes of the Special Meeting

     27  

Recommendation of the PGTI’s Board of Directors

     27  

Virtual Participation at Special Meeting

     28  

 


Outstanding Shares as of the Record Date

     28  

Record Date; Stockholders Entitled to Vote

     28  

Quorum and Broker Non-Votes

     28  

Required Vote; Treatment of Abstentions and Failure to Vote

     29  

Shares and Voting of PGTI’s Directors and Executive Officers

     30  

How to Vote or Have Your Shares Voted

     30  

Revocation of Proxies

     31  

Delivery of Proxy Materials

     32  

Shares Held in Name of Broker

     32  

Tabulation of Votes

     32  

Solicitation of Proxies

     32  

Adjournments

     32  

Questions and Additional Information

     33  

THE MERGER (PROPOSAL 1)

     34  

Effects of the Merger

     34  

Effect on PGTI if the Merger is Not Completed

     35  

Merger Consideration

     36  

Background of the Merger

     36  

PGTI’s Reasons for the Merger; Recommendation of the PGTI Board of Directors

     50  

Opinion of PGTI’s Financial Advisor

     54  

Summary of Evercore’s Financial Analyses

     57  

Certain Financial Projections Utilized by the PGTI Board of Directors and PGTI’s Financial Advisor

     61  

PGTI Management Financial Projections

     63  

Interests of PGTI’s Directors and Executive Officers in the Merger

     64  

Financing of the Merger

     70  

Regulatory Clearances and Approvals Required for the Merger

     70  

Appraisal Rights of PGTI Stockholders

     71  

THE MERGER AGREEMENT

     72  

Explanatory Note Regarding the Merger Agreement

     72  

Structure of the Merger

     72  

Timing of Closing

     72  

Effect of the Merger on PGTI Common Stock

     73  

Exchange and Payment Procedures

     75  

Representations and Warranties

     76  

Material Adverse Effect

     77  

Conduct of Businesses of PGTI Prior to Completion of the Merger

     79  

Conduct of Businesses of MITER Prior to Completion of the Merger

     81  

Stockholder Meeting and Board Recommendation

     81  

No Solicitation of Other Offers by PGTI

     82  

Change of Recommendation; Match Rights

     84  

Efforts to Obtain Regulatory Clearances

     85  

Employee Matters

     88  

Directors’ and Officers’ Indemnification and Insurance

     88  

Financing of the Merger

     89  

Financing Cooperation; Actions With Respect to PGTI Debt

     89  

Other Covenants

     89  

Conditions to the Merger

     90  

Termination of the Merger Agreement

     91  

Termination Fees and Expenses

     93  

Masonite Termination Fee

     94  

Effect of Termination

     94  

 


PGTI Certificate of Incorporation Amendment

     95  

Remedies; Maximum Liability

     95  

Specific Performance

     96  

Fees and Expenses

     96  

Amendments and Waivers

     96  

Governing Law and Venue; Waiver of Jury Trial

     96  

MARKET PRICES OF PGTI COMMON STOCK

     98  

Dividend Policy

     98  

APPRAISAL RIGHTS OF PGTI STOCKHOLDERS

     99  

General

     99  

How to Exercise and Perfect Your Appraisal Rights

     99  

Who May Exercise Appraisal Rights

     100  

Written Demand and Notice

     100  

Judicial Appraisal

     101  

Withdrawal

     102  

ADVISORY VOTE ON NAMED EXECUTIVE OFFICER MERGER-RELATED COMPENSATION ARRANGEMENTS (PROPOSAL 2)

     104  

Overview

     104  

Vote Required for Approval

     104  

Recommendation of the PGTI Board of Directors

     104  

VOTE ON THE CERTIFICATE OF INCORPORATION AMENDMENT (PROPOSAL 3)

     105  

Overview

     105  

Vote Required for Approval

     105  

Recommendation of the PGTI Board of Directors

     105  

VOTE ON ADJOURNMENT (PROPOSAL 4)

     106  

Overview

     106  

Vote Required for Approval

     106  

Recommendation of the PGTI Board of Directors

     106  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     107  

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

     109  

U.S. Holders

     110  

Non-U.S. Holders

     110  

Information Reporting and Backup Withholding

     111  

FUTURE PGTI STOCKHOLDER PROPOSALS

     112  

MULTIPLE STOCKHOLDERS SHARING ONE ADDRESS

     113  

WHERE YOU CAN FIND MORE INFORMATION

     114  

MISCELLANEOUS

     116  

Annex A—Merger Agreement

     A-1  

Annex B—PGTI Certificate of Incorporation Amendment

     B-1  

Annex C—Opinion of Evercore Group L.L.C.

     C-1  

Annex D—Section 262 of the DGCL

     D-1  

 


SUMMARY

The following summary highlights selected information described in more detail elsewhere in this proxy statement and the documents incorporated by reference into this proxy statement and may not contain all the information that may be important to you. To understand the merger and the matters being voted on by PGTI stockholders at the special meeting more fully, and to obtain a more complete description of the legal terms of the merger agreement, you should carefully read this entire proxy statement, including the annexes, and the documents to which we refer you. Each item in this summary includes a page reference directing you to a more complete description of that topic. See the section titled “Where You Can Find More Information.”

All references to “PGTI,” “we,” “us” or “our” in this proxy statement refer to PGT Innovations, Inc., a Delaware corporation, including in some cases, its subsidiaries; all references to “MITER” refer to MIWD Holding Company LLC, a Delaware limited liability company; all references to “Merger Sub” refer to RMR MergeCo, Inc., Inc., a Delaware corporation and an indirect wholly owned subsidiary of MITER incorporated for the sole purpose of consummating the merger; all references to “PGTI common stock” refer to the common stock of PGTI, $0.01 par value; all references to the “PGTI board of directors” refer to the board of directors of PGTI; all references to the “merger” refer to the merger of Merger Sub with and into PGTI with PGTI surviving as a wholly owned subsidiary of MITER; and, unless otherwise indicated or as the context requires, all references to the “merger agreement” refer to the Agreement and Plan of Merger, dated as of January 16, 2024, as may be amended from time to time, among PGTI, MITER and Merger Sub. PGTI, following the completion of the merger, is sometimes referred to in this proxy statement as the “surviving corporation.”

 

1


THE COMPANIES

PGT Innovations, Inc.

PGT Innovations, Inc. is a manufacturer of impact-resistant aluminum and vinyl-framed windows and doors and offers a broad range of fully customizable window and door products. PGTI sells its products to customers in Florida, other parts of the United States, the Caribbean, Canada, and South and Central America. PGTI was incorporated in the state of Delaware on December 16, 2003, as JLL Window Holdings, Inc., and was renamed PGT, Inc. on February 15, 2006 and PGT Innovations, Inc. on December 14, 2016. PGTI common stock trades on the New York Stock Exchange under the symbol “PGTI.” The principal executive offices of PGTI are located at 1070 Technology Drive, North Venice, Florida 34275, and its telephone number is (941) 480-1600.

MIWD Holding Company LLC

MIWD Holding Company LLC is a Delaware limited liability company. MITER and Merger Sub are each affiliated with MITER Brands. MITER Brands is a residential window and door manufacturer that produces a portfolio of window and door brands for the new construction and replacement segments with an owner-operated, family-first approach.

MITER’s principal executive office is located at 2550 Interstate Drive, Suite 400, Harrisburg, PA 17110. MITER’s telephone number is (717) 365-3300. MITER’s internet website address is www.miterbrands.com. The information provided on MITER’s website is not part of this proxy statement and is not incorporated in this proxy statement by reference by this or any other reference to its website provided in this proxy statement.

RMR MergeCo, Inc.

RMR MergeCo, Inc., a Delaware corporation, is an indirect wholly owned subsidiary of MITER. Merger Sub was incorporated by MITER solely in contemplation of the transactions contemplated by the merger agreement, has not conducted any business and has no assets, liabilities or obligations of any nature other than as set forth in the merger agreement. The principal executive offices of Merger Sub are located at c/o MIWD Holding Company LLC, 2550 Interstate Drive, Suite 400, Harrisburg, PA 17110, and its telephone number is (717) 365-3300.

 

2


THE MERGER AND MERGER AGREEMENT

A copy of the merger agreement is attached as Annex A to this proxy statement. PGTI encourages you to read the entire merger agreement carefully because it is the principal document governing the merger. For more information on the merger agreement, see the section titled “The Merger Agreement” beginning on page 68 of this proxy statement.

Effects of the Merger (see page 32)

Upon the terms and subject to the conditions set forth in the merger agreement and in accordance with Delaware law, Merger Sub will merge with and into PGTI, with PGTI surviving the merger and becoming an indirect wholly owned subsidiary of MITER.

The following diagrams illustrate in simplified terms the merger and the effect of the merger on the organizational structures of MITER and PGTI.

The following diagram illustrates in simplified terms the organizational structure of MITER and PGTI prior to the merger:

 

 

LOGO

The following diagram illustrates in simplified terms the merger:

 

 

LOGO

 

3


The following diagram illustrates in simplified terms the organizational structure of MITER and PGTI after the merger:

 

 

LOGO

Merger Consideration (see page 33)

At the effective time, each share of PGTI common stock issued and outstanding immediately prior to the effective time (other than (x) shares held by PGTI as treasury stock or held by MITER, PGTI, Merger Sub or any of their respective subsidiaries and (y) shares of PGTI common stock with respect to which appraisal rights are properly demanded and not withdrawn or lost under the General Corporation Law of the State of Delaware) will be entitled to receive: $42.00 in cash, without interest (referred to as the “merger consideration”).

For additional information on the consideration PGTI stockholders will receive in connection with the merger, see the section titled “The Merger Agreement—Effect of the Merger on PGTI Common Stock.”

Treatment of PGTI Equity Awards (see page 61)

Effective as of immediately prior to the effective time, the restrictions on each PGTI restricted share that is granted under the PGTI equity plan prior to the date of the merger agreement and then outstanding will lapse, and each such PGTI restricted share will be canceled and converted into the right to receive the merger consideration. For purposes of each such award of PGTI restricted shares subject to performance conditions (each such share referred to as a “PGTI performance share”), the restrictions on such PGTI performance share will lapse with respect to a number of shares of PGTI common stock calculated pursuant to the following assumptions and otherwise in accordance with the PGTI equity plan and the applicable award agreement governing such PGTI performance share: (a) with respect to any applicable EBITDA performance measure, actual performance for PGTI performance shares granted in 2021, 2022 and 2023; and (b) with respect to any applicable relative shareholder return modifier, (i) actual performance for any performance period that is completed prior to the effective time, and (ii) assuming maximum performance for any performance period that is not completed prior to the effective time.

Notwithstanding anything to the contrary in the foregoing paragraph, effective as of immediately prior to the effective time, each PGTI restricted share granted after the date of the merger agreement and then outstanding (each such share referred to as a “PGTI interim restricted share”) will be converted into an award to receive,

 

4


upon vesting in accordance with the original vesting terms and conditions, an amount in cash equal to the merger consideration plus interest accrued on the basis of prime rate as published in The Wall Street Journal in effect at the effective time, compounded quarterly, calculated on the basis of actual days elapsed (including the closing date of the merger and each applicable vesting date).

Effective as of immediately prior to the effective time, each restricted stock unit under a PGTI equity plan (each such unit referred to as a “PGTI RSU”) that is outstanding immediately prior to the effective time will be canceled and converted into the right to receive an amount equal to: (a) the merger consideration plus (b) any accrued but unpaid dividends or dividend equivalents in respect of such PGTI RSU as of the effective time.

For additional information on the treatment of PGTI equity awards in connection with the merger, see the section titled “The Merger Agreement—Treatment of PGTI Equity Awards.”

PGTIs Reasons for the Merger; Recommendation of the PGTIs Board of Directors (see page 47)

At its January 16, 2024 meeting held to evaluate the merger, the PGTI board of directors unanimously (i) determined that the merger agreement and the transactions contemplated thereby are fair to and in the best interests of PGTI and PGTI stockholders, (ii) declared it advisable to enter into the merger agreement and consummate the transactions contemplated thereby upon the terms and subject to the conditions set forth therein, (iii) approved the execution and delivery of the merger agreement by PGTI, the performance by PGTI of its covenants and other obligations thereunder, and the consummation of the transactions contemplated thereby upon the terms and conditions set forth therein, (iv) resolved to recommend that PGTI stockholders adopt the merger agreement in accordance with the Delaware General Corporation Law (referred to as the “DGCL”) and (v) directed that the adoption of the merger agreement be submitted for consideration by PGTI stockholders at a meeting thereof. Additionally, the PGTI board of directors approved, adopted and declared advisable the certificate of incorporation amendment.

The PGTI board of directors unanimously recommends that PGTI stockholders vote “FOR” the merger agreement proposal, “FOR” the merger-related compensation proposal, “FOR” the certificate of incorporation amendment proposal and “FOR” the adjournment proposal.

In evaluating the merger and the merger agreement and arriving at its determination, the PGTI board of directors consulted with PGTI’s senior management, PGTI’s financial advisor, Evercore Group L.L.C. (referred to as “Evercore”), and PGTI’s outside legal counsel, Davis Polk & Wardwell LLP (referred to as “Davis Polk”), and considered a number of substantive factors, both positive and negative, and potential benefits and detriments of the merger to PGTI and PGTI stockholders, as described in more detail in the section titled “The Merger (Proposal 1)—PGTI’s Reasons for the Merger; Recommendation of the PGTI Board of Directors.”

Opinion of PGTIs Financial Advisor (see page 51)

PGTI retained Evercore to act as its financial advisor in connection with the PGTI board of directors’ evaluation of strategic and financial alternatives, including the merger. As part of this engagement, PGTI requested that Evercore evaluate the fairness, from a financial point of view, of the merger consideration to be received by the holders of PGTI common stock. At a meeting of the PGTI board of directors held on January 16, 2024, Evercore rendered to the PGTI board of directors its opinion to the effect that, as of that date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the merger consideration of $42.00 in cash per share to be received by the holders of PGTI common stock in the merger was fair, from a financial point of view, to such holders (other than MITER or any subsidiary of MITER or PGTI or any subsidiary of PGTI, or holders of dissenting shares).

 

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The full text of the written opinion of Evercore, dated as of January 16, 2024, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex C to this proxy statement and is incorporated herein by reference. PGTI encourages you to read this opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the PGTI board of directors (in its capacity as such) in connection with its evaluation of the proposed merger. The opinion does not constitute a recommendation to the PGTI board of directors or to any other persons

in respect of the merger, including as to how any holder of shares of PGTI common stock should vote or act in respect of the merger. Evercore’s opinion does not address the relative merits of the merger as compared to other business or financial strategies that might be available to PGTI, nor does it address the underlying business decision of PGTI to engage in the merger.

For additional information, see the section titled “The Merger (Proposal 1)—Opinion of PGTI’s Financial Advisor.”

Financing of the Merger (see pages 66 and 85)

MITER intends to fund the cash portion of the merger consideration with proceeds from new debt and equity financing together with cash on hand. Concurrently with the entry into the merger agreement, MITER entered into (i) a debt commitment letter (referred to as the “debt commitment letter”), pursuant to which certain financial institutions (referred to as the “lenders”) have committed to provide to MITER up to (a) $1,800,000,000 aggregate principal amount under a senior secured term loan facility and (b) $325,000,000 aggregate principal amount under a senior secured asset-based revolving credit facility and (ii) an equity commitment letter (referred to as the “equity commitment letter” and, the equity commitment letter and the debt commitment letter together referred to as the “commitment letters”), pursuant to which Koch Equity Development LLC (referred to as “Koch”) has committed to purchase up to $979,000,000 of equity interests in MITER. The obligations of the lenders to provide debt financing under the debt commitment letter and Koch to provide equity financing under the equity commitment letter are subject to certain customary conditions, including (a) the execution and delivery of definitive documentation with respect to such financing in accordance with such commitment letter and (b) the consummation of the merger in all material respects in accordance with the terms and conditions of the merger agreement. The receipt of financing by MITER is not a condition to MITER’s obligations to complete the merger. For more information about the financing of the merger, see the sections titled “The Merger (Proposal 1)—Financing of the Merger” and “The Merger Agreement—Financing of the Merger.”

Material U.S. Federal Income Tax Consequences of the Merger (see page 104)

The receipt of cash in exchange for PGTI common stock pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes. U.S. Holders (as defined below under “Material U.S. Federal Income Tax Consequences of the Merger—U.S. Holders”) generally will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any between (a) the amount of cash received and (b) the U.S. Holder’s adjusted tax basis in the PGTI common stock surrendered in exchange.

Except in certain specific circumstances described below and under “Material U.S. Federal Income Tax Consequences of the Merger—Non-U.S. Holders,” Non-U.S. Holders (as defined below under “Material U.S. Federal Income Tax Consequences of the Merger—U.S. Holders”) generally will not be subject to U.S. federal income tax unless such Non-U.S. Holder has certain connections with the United States.

The U.S. federal income tax consequences described above may not apply to all holders of PGTI common stock. You should read the section titled “Material U.S. Federal Income Tax Consequences of the Merger” for a more complete discussion of the U.S. federal income tax consequences of the merger. Tax matters can be complicated and the tax consequences of the merger to you will depend on your particular tax situation. You should consult your tax advisor to determine the applicable U.S. federal, state, local and non-U.S. tax consequences of the merger to you.

 

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Regulatory Clearances and Approvals Required for the Merger (see pages 67 and 86)

The merger is subject to the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (referred to as the “HSR Act”), which prevents PGTI and MITER from completing the merger until required information and materials are furnished to the Antitrust Division of the Department of Justice (referred to as the “DOJ”) and the Federal Trade Commission (referred to as the “FTC”) and the HSR Act waiting period is terminated or expires. A transaction notifiable under the HSR Act may not be completed until the expiration of a 30-calendar-day waiting period following the parties’ filings of their respective HSR Act notification forms or the early termination of that waiting period. The parties may also choose to voluntarily re-start the initial 30-calendar-day waiting period by following certain prescribed procedures. After the expiration of the initial waiting period (or the re-started initial waiting period), the Antitrust Division of the DOJ or the FTC may issue a Request for Additional Information and Documentary Material (referred to as a “second request”). If a second request is issued, the parties may not complete the merger until they substantially comply with the second request and observe a second 30-calendar-day waiting period, unless the waiting period is terminated earlier, or the parties commit not to close for some additional period of time. PGTI and MITER submitted the requisite notification and report forms under the HSR Act on January 23, 2024, and the waiting period will expire on February 22, 2024 at 11:59 p.m., Eastern Time, unless it is extended by request for additional information or terminated earlier or if PGTI and MITER pull and refile or commit not to close for some additional period of time.

For more information about regulatory clearance relating to the merger, see the sections titled “The Merger (Proposal 1)—Regulatory Clearances and Approvals Required for the Merger” and “The Merger Agreement—Conditions to the Merger.”

Although the parties expect that the required regulatory clearance will be obtained, the parties cannot assure you that regulatory clearance will be timely obtained or obtained at all or that the granting of regulatory clearance will not involve the imposition of additional conditions on the completion of the merger, including the requirement to divest assets, create or modify contractual rights or obligations or enter into supply or services agreements. Any such additional conditions could result in the conditions to the merger not being satisfied.

Expected Timing of the Merger (see pages 67, 81 and 86)

MITER and PGTI are working to complete the merger as soon as practicable and currently expect the merger to be completed in the middle of 2024, subject to the satisfaction or waiver of customary closing conditions, including the adoption of the merger agreement by the affirmative vote of at least a majority of the outstanding shares of PGTI common stock and the expiration or termination of the waiting period under the HSR Act. Neither MITER nor PGTI can predict the actual date on which the merger will be completed because completion is subject to certain closing conditions beyond each party’s control, and it is possible that such conditions could result in the merger being completed earlier or later or not being completed at all. See the sections titled “The Merger Agreement—Efforts to Obtain Regulatory Clearances” and “The Merger Agreement—Conditions to the Merger.” Also, see the section titled “The Merger (Proposal 1)—Regulatory Clearances and Approvals Required for the Merger.”

Conditions to the Merger (see page 86)

In addition to the approval of the adoption of the merger agreement in accordance with the DGCL, and the expiration or termination of the waiting period applicable to the consummation of the merger under the HSR Act, each party’s obligation to complete the merger is also subject to the satisfaction or waiver (to the extent permitted under applicable law) of certain other customary conditions, including the following: the absence of any order issued by any court of competent jurisdiction or other governmental authority or applicable law prohibiting, rendering illegal or permanently enjoining the consummation of the merger; the accuracy of the other party’s representations and warranties in the merger agreement (subject to the materiality standards set forth in the merger agreement); compliance by the other party in all material respects with its covenants, obligations and

 

7


agreements required to be performed or complied with by it under the merger agreement prior to the closing of the merger; and delivery of officer certificates by the other party certifying satisfaction of certain of the conditions described above. The obligation of MITER to consummate the merger is also subject to there not having occurred since the date of the merger agreement an event that had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on PGTI that is continuing. Consummation of the merger is not subject to any financing condition.

See “The Merger Agreement—Conditions to the Merger.”

No Solicitation of Other Offers by PGTI (see page 78)

As more fully described in this proxy statement and in the merger agreement, and subject to certain exceptions, PGTI has agreed not to solicit alternative acquisition proposals, engage in discussions with third parties regarding alternative acquisition proposals or change its recommendation in favor of the merger to its stockholders.

In the event PGTI receives an unsolicited bona fide offer, inquiry, proposal or indication of interest from a third party with respect to an acquisition proposal that did not result from a material breach of PGTI’s non-solicitation obligations prior to obtaining its stockholders’ approval for the merger agreement proposal and the PGTI board of directors determines in good faith that such acquisition proposal constitutes, or would reasonably be expected to lead to, a superior proposal, PGTI may provide information to, and engage in discussions and negotiations with, the person making the acquisition proposal, subject to complying with notice requirements and other specified conditions. For more information on what constitutes a superior proposal, see the section titled “The Merger Agreement—No Solicitation of Other Offers by PGTI.”

Prior to obtaining approval for the merger agreement proposal from PGTI stockholders, the PGTI board of directors has the right, in connection with (a) the receipt of a superior proposal or (b) an intervening event to change its recommendation in favor of the merger or, in the case of a superior proposal, to terminate the merger agreement, in each case, subject to complying with notice requirements and other specified conditions (including giving MITER the opportunity to propose changes to the merger agreement in response to such superior proposal or intervening event, as applicable), if the PGTI board of directors determines in good faith that the failure to take such action would be inconsistent with its fiduciary duties under applicable law. For more information on what constitutes an intervening event, see the section titled “The Merger Agreement—Change of Recommendation; Match Rights.”

Change of Recommendation; Match Rights (see page 80)

Under the merger agreement, under certain circumstances and subject to certain requirements, including as described in this section, the PGTI board of directors is entitled to make an adverse recommendation change prior to receipt of stockholder approval of the merger agreement, if the PGTI board of directors determines in good faith, after consultation with its outside legal counsel and financial advisor, that an acquisition proposal constitutes a superior proposal, or in response to an intervening event, if the PGTI board of directors determines, after consultation with its outside legal counsel and financial advisor, that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law; provided that:

 

   

PGTI notifies MITER in writing at least four business days before taking such action that PGTI intends to take such action, which notice specifies the reasons for the adverse recommendation change (A) in the case of a superior proposal, including the identity of the person making such acquisition proposal and the material terms and conditions thereof, including unredacted copies of all material proposed transaction agreements and other material documents provided in connection therewith, including copies of all portions of written materials sent or provided to PGTI that describe such material terms and conditions or (B) in the case of an intervening event, a reasonably detailed description of the facts and circumstances relating to such intervening event. With respect to any change of recommendation in

 

8


 

response to a superior proposal, if there is any material amendment, revision or change to the terms of the then-existing superior proposal (including any revision to the form, amount or timing of payment of consideration proposed to be received by PGTI stockholders as a result of such superior proposal), PGTI must again comply with the obligations described in this bullet, except the applicable four business day period will be replaced with three business days; and

 

   

PGTI has negotiated, and has caused its representatives to negotiate, in good faith (to the extent MITER wishes to negotiate) to make such adjustments to the terms and conditions of the merger agreement as MITER may propose, and after such notice period, the PGTI board of directors will have considered in good faith any revisions to the terms of the merger agreement and/or the commitment letters proposed in writing by MITER that, if accepted by PGTI, would be binding upon MITER, and shall have determined in good faith, after consultation with its outside legal counsel and financial advisor, that the failure of the PGTI board of directors to make such adverse recommendation change would be inconsistent with its fiduciary duties under applicable law and, in the case of a superior proposal, that such acquisition proposal continues to constitute a superior proposal.

In the event that the PGTI board of directors is permitted to change its recommendation with respect to the merger agreement following the receipt of an acquisition proposal that it determines to be a superior proposal, PGTI may also terminate the merger agreement to enter into a definitive written agreement for such superior proposal if, concurrently with such termination, PGTI pays to MITER the fee required to be paid to MITER as described in the section titled “The Merger Agreement—Termination Fees and Expenses.”

Termination of the Merger Agreement (see page 87)

Among other customary circumstances, MITER or PGTI may terminate the merger agreement if:

 

   

the merger has not been consummated on or before July 16, 2025 (referred to as the “end date”); provided that (a) if all of the conditions to the merger are satisfied (or, in the case of conditions that by their nature are to be satisfied by actions taken at the closing of the merger, are then capable of being satisfied if the closing of the merger were to occur on such date) on a date that occurs on or prior to the end date but the closing of the merger would thereafter occur on a date that occurs within three business days after the end date (such date referred to as the “specified date”), then the end date will automatically be extended to such specified date and the specified date will become the end date and (b) in the event the marketing period has commenced on or prior to the end date but has not completed as of the end date, the end date will be extended (or further extended) to the date that is three business days after the then-scheduled expiration date of the marketing period; provided, further, that the right to terminate the merger agreement described herein will (i) not be available to any party who is in breach of, or has breached, its obligations under the merger agreement, where such breach has primarily caused or resulted in the failure of the closing of the merger to occur on or before the end date and (ii) be subject to the provision of the merger agreement that provides that if any party brings any suit, action or proceeding to enforce specifically the performance of the terms and provisions of the merger agreement by any other party, the end date will automatically be extended by the amount of time during which such suit, action or proceeding is pending, plus five business days, or such longer time period established by the court presiding over such suit, action or proceeding, if any;

 

   

any court or other governmental authority of competent jurisdiction has issued a final, non-appealable order rendering illegal or permanently enjoining the consummation of the merger; provided that, at the time at which such person would otherwise exercise such termination right, the material breach by such person (and, in the case of MITER, Merger Sub’s) of its (or their) obligations under the merger agreement has not been the primary cause of, or resulted in, the events specified in this bullet; or

 

   

the special meeting (including any adjournments or postponements thereof) has concluded and the PGTI stockholders have not adopted the merger agreement.

 

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PGTI may terminate the merger agreement in other circumstances, including to enter into a definitive agreement with respect to a superior proposal, if MITER fails to consummate the merger by the end date when it is otherwise required to do so or in response to certain breaches of the merger agreement by MITER or Merger Sub, subject to a cure period. MITER may also terminate the merger agreement in other circumstances, including in response to an adverse recommendation change by the PGTI board of directors, a failure to obtain the approval by PGTI stockholders to adopt the merger agreement proposal by the end date or at the special meeting or certain breaches of the merger agreement by PGTI, subject to a cure period.

See “The Merger Agreement—Termination of the Merger Agreement.”

Termination Fees and Expenses (see page 89)

PGTI must pay MITER a termination fee of $86,000,000 if the merger agreement is terminated in certain circumstances, including as a result of PGTI entering into a definitive agreement with respect to a superior proposal, an adverse recommendation change, failure to obtain approval by PGTI stockholders of the merger agreement proposal by the end date or at the special meeting or certain breaches of the merger agreement by PGTI, subject to a cure period.

MITER must pay PGTI a termination fee of $184,000,000 (referred to as the “MITER termination fee”) if the merger agreement is terminated in certain circumstances, including as a result of MITER’s failure to consummate the merger by the end date when its conditions to closing have been satisfied or waived (or, in the case of conditions that by their nature are to be satisfied by actions taken at the closing of the merger, are then capable of being satisfied if the closing of the merger were to occur on such date) or certain breaches of the merger agreement by MITER or Merger Sub, subject to a cure period. In addition, MITER must pay PGTI a regulatory termination fee of $221,000,000 (referred to as the “MITER regulatory termination fee”) under certain circumstances if the merger agreement is terminated in connection with a failure to obtain required regulatory approvals. If the merger agreement is terminated in circumstances where both the MITER termination fee and the MITER regulatory termination fee would be payable, then only the MITER regulatory termination fee will be payable. All other expenses relating to the merger will generally be paid by the party incurring the expense, except MITER will pay all fees, costs and expenses incurred in connection with the regulatory undertaking obligations of the parties. In no event will either PGTI or MITER be obligated to pay either the termination fee or the MITER regulatory termination fee on more than one occasion.

See “The Merger Agreement—Termination Fees and Expenses.”

Masonite Termination Fee (see page 90)

Concurrently with the execution of the merger agreement, (a) PGTI was obligated to terminate the Masonite merger agreement (as defined below) and (b) MITER was obligated to pay or cause to be paid to the PGTI (or, at the direction of PGTI, to Masonite International Corporation (referred to as “Masonite”) on behalf of PGTI) the termination fee due to Masonite under the Masonite merger agreement. The parties timely fulfilled such obligations.

See “The Merger Agreement—Masonite Termination Fee.”

Remedies; Maximum Liability (see page 91)

The merger agreement provides that, except in the case of fraud or any material and willful breach of the merger agreement, upon the valid termination of the merger agreement under circumstances where a termination fee is payable by PGTI, MITER’s right to receive payment of such termination fee will be the sole and exclusive remedy of MITER and Merger Sub in connection with the merger agreement and the transactions contemplated thereby, and upon payment in full of such amount, neither MITER nor Merger Sub will seek to obtain any

 

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recovery, judgment, or damages of any kind against PGTI or any of PGTI’s subsidiaries or any of their respective directors, officers, employees, partners, managers, members, stockholders, affiliates or representatives in connection with the merger agreement or the transactions contemplated thereby, including any breach of the merger agreement.

In addition, the merger agreement provides that, except in the case of fraud or any material and willful breach of the merger agreement, upon the valid termination of the merger agreement under circumstances where the MITER termination fee or the MITER regulatory termination fee, as applicable, is payable by MITER, PGTI’s right to receive payment of the MITER termination fee or the MITER regulatory termination fee, as applicable, will be the sole and exclusive remedy of PGTI in connection with the merger agreement and the transactions contemplated thereby, and upon payment in full of such amount, PGTI will not seek to obtain any recovery, judgment, or damages of any kind against MITER or any of MITER’s subsidiaries or any of their respective directors, officers, employees, partners, managers, members, stockholders, affiliates or representatives or any of MITER’s financing sources or certain related parties of such financing sources in connection with the merger agreement or the transactions contemplated thereby, including any breach of the merger agreement.

See “The Merger Agreement—Remedies; Maximum Liability.”

Specific Performance (see page 92)

The merger agreement provides that the parties will be entitled to an injunction or injunctions or any other appropriate form of equitable relief, to prevent or restrain breaches or threatened breaches of the merger agreement, the debt commitment letter and/or the equity commitment letter, or to enforce specifically the performance of the terms and provisions thereof, in addition to any other remedy to which they are entitled at law or in equity.

See “The Merger Agreement—Specific Performance.”

Appraisal Rights of PGTI Stockholders (see pages 70 and 94)

PGTI stockholders who do not vote in favor of approval of the merger agreement proposal, who continuously hold their shares of PGTI common stock and who otherwise comply precisely with the applicable provisions of Section 262 of the DGCL will be entitled to seek appraisal of the fair value of their shares of PGTI common stock, as determined by the Delaware Court of Chancery, if the merger is completed, in lieu of receiving the merger consideration in respect of such shares. The “fair value” of your shares of PGTI common stock as determined by the Delaware Court of Chancery could be greater than, the same as, or less than the value of the merger consideration that you would otherwise be entitled to receive under the terms of the merger agreement. PGTI stockholders who wish to exercise the right to seek an appraisal of their shares must so advise PGTI by submitting a written demand for appraisal in the form described in this proxy statement prior to the vote to approve the merger agreement proposal, and must otherwise follow the procedures prescribed by Section 262 of the DGCL. A person having a beneficial interest in shares of PGTI common stock held of record in the name of another person, such as a nominee or intermediary, must act promptly to cause the record holder to follow the steps summarized in this proxy statement and in a timely manner to perfect appraisal rights.

The text of Section 262 of the DGCL is attached as Annex D to this proxy statement. You are encouraged to read these provisions carefully and in their entirety. Due to the complexity of the procedures for exercising appraisal rights, PGTI stockholders who are considering exercising such rights are encouraged to seek the advice of legal counsel and their financial advisors. Failure to strictly comply with these provisions may result in the loss of appraisal rights.

See “The Merger Agreement—Effect of the Merger on PGTI Common Stock—Shares of Dissenting Stockholders” and “Appraisal Rights of PGTI Stockholders.”

 

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PGTI Special Meeting (see page 28)

Purposes of the Special Meeting

At the special meeting, PGTI stockholders will be asked to vote upon the following proposals:

 

   

the merger agreement proposal;

 

   

the merger-related compensation proposal;

 

   

the certificate of incorporation amendment proposal; and

 

   

the adjournment proposal.

Record Date

The record date for the determination of stockholders entitled to notice of and to vote at the special meeting is February 7, 2024. Only PGTI stockholders who held shares of record as of the close of business on the record date are entitled to receive notice of and vote at the special meeting and any adjournment or postponement of the special meeting, and only as long as such shares remain outstanding on the date of the special meeting. PGTI’s official stock ownership records will conclusively determine whether a stockholder is a “holder of record” as of the record date.

Required Vote

 

   

Proposal 1—The Merger Agreement Proposal. The affirmative vote of holders of at least a majority of the outstanding shares of PGTI common stock entitled to vote thereon is required to approve the merger agreement proposal.

 

   

Proposal 2—The Merger-Related Compensation Proposal. The affirmative vote of holders of at least a majority of the shares of PGTI common stock present virtually or represented by proxy at the special meeting and entitled to vote thereon is required to approve, on an advisory (non-binding) basis, the merger-related compensation proposal.

 

   

Proposal 3—The Certificate of Incorporation Amendment Proposal. The affirmative vote of holders of at least a majority of the outstanding shares of PGTI common stock entitled to thereon is required to approve the certificate of incorporation amendment proposal.

 

   

Proposal 4—The Adjournment Proposal. The affirmative vote of holders of at least a majority of the shares of PGTI common stock present virtually or represented by proxy at the special meeting and entitled to vote on the adjournment proposal is required to approve the adjournment proposal.

See “The Special Meeting—Required Vote; Treatment of Abstentions and Failure to Vote.”

Interests of PGTIs Directors and Executive Officers in the Merger (see page 60)

PGTI’s directors and executive officers have interests in the merger that may be different from, or in addition to, those of PGTI stockholders generally. These interests include, among others, potential severance payments and benefits under the applicable employment agreements and equity award agreements and rights to ongoing indemnification and insurance coverage. The PGTI board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, in approving the merger agreement, and in recommending the approval of the merger agreement by the PGTI stockholders. See the section titled “The Merger (Proposal 1)—Interests of PGTI’s Directors and Executive Officers in the Merger.”

 

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Directors and Officers Indemnification and Insurance (see pages 64 and 84)

Under the merger agreement, for a period of six years after the effective time, MITER must cause the surviving corporation to indemnify and hold harmless to the fullest extent permitted by applicable law and the organizational documents of PGTI or its subsidiaries, the present and former directors and officers of PGTI and its subsidiaries and their respective successors and heirs against any losses, damages, liabilities, costs, expenses (including attorneys’ fees), judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any thereof) in respect of the persons having served in such capacity prior to the effective time.

In addition, for a period of six years following the effective time, MITER is required to maintain in effect provisions in the organizational documents of the surviving corporation and its subsidiaries regarding elimination of liability of directors, indemnification of directors, officers, employees, fiduciaries and agents and advancement of fees, costs and expenses that are no less advantageous to the intended beneficiaries than the corresponding provisions that were in existence as of the date of the merger agreement.

At or prior to the effective time, PGTI will (or if PGTI is unable to, MITER will cause the surviving corporation to) purchase a directors’ and officers’ liability insurance and fiduciary liability insurance “tail” insurance policy for a period of six years after the effective time with respect to matters arising at or prior to the effective time with terms, conditions, retentions and limits of liability that are no less favorable than the coverage provided under PGTI’s existing policies as of the date of the merger agreement, with a one-time cost not in excess of 350% of the last aggregate annual premium paid by PGTI for its directors’ and officers’ liability insurance and fiduciary liability insurance prior to the date of the merger agreement, and if the cost of such “tail” insurance policy would otherwise exceed such amount, the surviving corporation must purchase a policy with the greatest coverage available for a cost not exceeding such amount.

See “The Merger (Proposal 1)—Interests of PGTI’s Directors and Executive Officers in the Merger—Indemnification and Insurance” and “The Merger Agreement—Directors’ and Officers’ Indemnification and Insurance.”

Market Prices of PGTI Common Stock (see page 93)

The merger consideration of $42.00 per share represents a premium of approximately 60% over PGTI’s unaffected share price (which was the closing price on October 9, 2023, the last trading day prior to the public disclosure of the third MITER offer (as defined below)). The closing price of PGTI common stock on the New York Stock Exchange (referred to as the “NYSE”) on February 12, 2024, the most recent practicable date prior to the date of this proxy statement, was $41.32 per share. You are encouraged to obtain current market prices of PGTI common stock in connection with voting your shares of PGTI common stock.

 

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QUESTIONS AND ANSWERS

The following are some questions that you, as a PGTI stockholder, may have regarding the merger and the special meeting and the answers to those questions. PGTI urges you to carefully read the remainder of this proxy statement because the information in this section does not provide all the information that might be important to you with respect to the merger and the special meeting. Additional important information is also contained in the annexes to and the documents incorporated by reference into this proxy statement.

 

Q:

What is the purpose of the special meeting?

 

A:

At the special meeting, stockholders will consider and act upon the matters outlined in the notice of meeting on the cover page of this proxy statement, namely:

 

  1.

A proposal to adopt the merger agreement, which is further described in the sections titled “The Merger (Proposal 1)” and “The Merger Agreement,” beginning on pages 32 and 68, respectively, of this proxy statement;

 

  2.

A proposal to approve, on a non-binding, advisory basis, the compensation that will or may be paid by PGTI to its named executive officers that is based on or otherwise relates to the merger, discussed under the sections titled “Advisory Vote on Named Executive Officer Merger-Related Compensation Arrangements (Proposal 2)” and “The Merger (Proposal 1)—Interests of PGTI’s Directors and Executive Officers in the Merger” beginning on pages 99 and 60, respectively, of this proxy statement;

 

  3.

A proposal to approve the amendment to the Amended and Restated Certificate of Incorporation of PGTI, which is further described in the sections titled “Vote on the Certificate of Incorporation Amendment (Proposal 3)” and “The Merger Agreement—PGTI Certificate of Incorporation Amendment” beginning on pages 100 and 90, respectively, and a copy of which is attached to this proxy statement as Annex B; and

 

  4.

A proposal to approve an adjournment of the special meeting, including if necessary to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are not sufficient votes at the time of such adjournment to adopt the merger agreement which is further described in the section titled “Vote on Adjournment (Proposal 4)” beginning on page 101 of this proxy statement.

 

Q:

Where and when is the special meeting?

 

A:

The special meeting will be held on March 18, 2024, beginning at 10:30 a.m., Eastern Time (with log-in beginning at 10:15 a.m., Eastern Time), unless postponed to a later date. The special meeting will be a virtual only meeting conducted via live audio webcast at www.virtualshareholdermeeting.com/PGTI2024SM. You will need the 16-digit control number provided on your proxy card or voting instruction card in order to participate in the special meeting. Because the special meeting is completed virtually and being conducted via live webcast, stockholders will not be able to attend the meeting in person. You can view the special meeting materials via the internet, please visit www.proxydocs.com/PGTI.

 

Q:

How does the PGTI board of directors recommend that I vote on the proposals?

 

A:

The PGTI board of directors unanimously recommends that PGTI stockholders vote “FOR” the merger agreement proposal, “FOR” the merger-related compensation amendment proposal, “FOR” the certificate of incorporation amendment proposal and “FOR” the adjournment proposal.

 

Q:

How does the per share merger consideration compare to the market price of PGTI common stock prior to announcement of the merger?

 

A:

The merger consideration of $42.00 per share represents a premium of approximately 60% over PGTI’s unaffected share price (which was the closing price on October 9, 2023, the last trading day prior to the

 

14


  public disclosure of the third MITER offer (as defined below)). The closing price of PGTI common stock on the NYSE on February 12, 2024, the most recent practicable date prior to the date of this proxy statement, was $41.32 per share. You are encouraged to obtain current market prices of PGTI common stock in connection with voting your shares of PGTI common stock.

 

Q:

What will happen in the merger?

 

A:

Pursuant to the merger agreement, Merger Sub will merge with and into PGTI, with PGTI surviving the merger as an indirect wholly owned subsidiary of MITER. After the merger, PGTI common stock will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934, as amended (referred to as the “Exchange Act”), and, as a result, PGTI will no longer be a publicly held company.

 

Q:

Who will own PGTI after the merger?

 

A:

Immediately following the merger, PGTI will be an indirect wholly owned subsidiary of MITER.

 

Q:

What will I receive in the merger?

 

A:

At the effective time of the merger (referred to as the “effective time”), you will be entitled to receive, for each share of PGTI common stock that you hold (other than (x) shares held by PGTI as treasury stock or held by MITER, PGTI, Merger Sub or any of their respective subsidiaries (referred to as “excluded shares”) and (y) shares of PGTI common stock with respect to which appraisal rights are properly demanded and not withdrawn or lost (referred to as “dissenting shares”) under the DGCL), $42.00 in cash, without interest. Certain shares of PGTI common stock subject to stock-based awards will be treated in the manner described under the heading “The Merger (Proposal 1)—Interests of PGTI’s Directors and Executive Officers in the Merger.”

 

Q:

What will happen in the merger to PGTI equity awards?

 

A:

Effective as of immediately prior to the effective time, the restrictions on each restricted share of PGTI common stock (each referred to as a “PGTI restricted share”) granted under the Amended and Restated PGT Innovations, Inc. 2019 Equity and Incentive Compensation Plan (referred to as the “PGTI equity plan”) prior to the date of the merger agreement and then outstanding will lapse, and each such PGTI restricted share will be canceled and converted into the right to receive the merger consideration. For purposes of each PGTI performance share, the restrictions on such PGTI performance share will lapse with respect to a number of shares of PGTI common stock calculated pursuant to the following assumptions and otherwise in accordance with the PGTI equity plan and the applicable award agreement governing such PGTI performance shares: (a) with respect to any applicable EBITDA performance measure, actual performance for PGTI performance shares granted in 2021, 2022 and 2023; and (b) with respect to any applicable relative shareholder return modifier, (i) actual performance for any performance period that is completed prior to the effective time, and (ii) assuming maximum performance for any performance period that is not completed prior to the effective time.

Notwithstanding anything to the contrary in the foregoing paragraph, effective as of immediately prior to the effective time, each PGTI interim restricted share will be converted into an award to receive, upon vesting in accordance with the original vesting terms and conditions, an amount in cash equal to the merger consideration plus interest accrued on the basis of prime rate as published in The Wall Street Journal in effect at the effective time, compounded quarterly, calculated on the basis of actual days elapsed (including the closing date of the merger and each applicable vesting date).

Effective as of immediately prior to effective time, each PGTI RSU that is outstanding immediately prior to the effective time will be canceled and converted into the right to receive an amount equal to: (a) the merger consideration plus (b) any accrued but unpaid dividends or dividend equivalents in respect of such PGTI RSU as of the effective time.

 

15


For additional information on the treatment of PGTI equity awards in connection with the merger, see the section titled “The Merger Agreement—Effect of Merger on PGTI Common Stock—PGT Restricted Shares; PGTI RSUs.”

 

Q:

Am I entitled to exercise appraisal rights instead of receiving the merger consideration for my shares of PGTI common stock?

 

A:

Yes. PGTI stockholders are entitled to appraisal rights under Section 262 of the DGCL in connection with the merger, provided they follow the procedures and satisfy the conditions set forth in Section 262 of the DGCL. For more information regarding appraisal rights, see the sections titled “The Merger (Proposal 1)—Appraisal Rights of PGTI Stockholders” and “Appraisal Rights of PGTI Stockholders.” In addition, a copy of Section 262 of the DGCL is attached as Annex D to this proxy statement. Failure to strictly comply with Section 262 of the DGCL may result in your waiver of, or inability to, exercise appraisal rights.

 

Q:

What vote is required to adopt the merger agreement?

 

A:

The votes required for each proposal are as follows:

 

  1.

Proposal 1—The Merger Agreement Proposal: The affirmative vote of holders of at least a majority of the outstanding shares of PGTI common stock entitled to vote thereon is required to approve the merger agreement proposal.

 

  2.

Proposal 2—The Merger-Related Compensation Proposal: The affirmative vote of holders of at least a majority of the shares of PGTI common stock present virtually or represented by proxy at the special meeting and entitled to vote thereon is required to approve, on an advisory (non-binding) basis, the merger-related compensation proposal.

 

  3.

Proposal 3—The Certificate of Incorporation Amendment Proposal: The affirmative vote of holders of at least a majority of the outstanding shares of PGTI common stock entitled to vote thereon is required to approve the certificate of incorporation amendment proposal.

 

  4.

Proposal 4—The Adjournment Proposal: The affirmative vote of holders of at least a majority of the shares of PGTI common stock present virtually or represented by proxy at the special meeting and entitled to vote thereon is required to approve the adjournment proposal.

As of February 7, 2024, the record date, PGTI directors and executive officers, as a group, owned and were entitled to vote 2,813,212 shares of PGTI common stock, which includes restricted and performance shares in amounts as permitted per the grant agreements, or approximately 4.8% of the outstanding shares of PGTI common stock. PGTI currently expects that these directors and executive officers will vote their shares in favor of the merger agreement proposal and each of the other proposals described in this proxy statement, although none of them are obligated to do so.

 

Q:

Do any of PGTI’s directors or officers have interests in the merger that may differ from or be in addition to my interests as a stockholder?

 

A:

In considering the recommendation of the PGTI board of directors with respect to the merger agreement proposal, you should be aware that PGTI’s directors and executive officers have certain interests in the merger that may be different from, or in addition to, the interests of PGTI stockholders generally. The PGTI board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending that the merger agreement be approved by the PGTI stockholders. See “The Merger (Proposal 1)—Interests of PGTI’s Directors and Executive Officers in the Merger” and “Advisory Vote on Named Executive Officer Merger-Related Compensation Arrangements (Proposal 2).”

 

16


Q:

When do you expect the merger to be completed?

 

A:

In order to complete the merger, PGTI must obtain the stockholder approval of the merger agreement proposal described in this proxy statement and the other closing conditions under the merger agreement must be satisfied or waived. The parties to the merger agreement currently expect to complete the merger in the middle of 2024, although neither party can assure completion by any particular date, if at all. Because the merger is subject to a number of conditions, the exact timing of the merger cannot be determined at this time.

 

Q:

What conditions must be satisfied to complete the merger?

 

A:

The expiration or termination of the waiting period applicable to the consummation of the merger under the HSR Act, each party’s obligation to complete the merger is also subject to the satisfaction or waiver (to the extent permitted under applicable law) of certain other customary conditions, including the following: the absence of any order issued by any court of competent jurisdiction or other governmental authority or applicable law prohibiting, rendering illegal or permanently enjoining the consummation of the merger; the accuracy of the other party’s representations and warranties in the merger agreement (subject to the materiality standards set forth in the merger agreement); compliance by the other party in all material respects with its covenants, obligations and agreements required to be performed or complied with by it under the merger agreement prior to the closing of the merger; and delivery of an officer certificate by the other party certifying satisfaction of certain of the conditions described above. The obligation of MITER to consummate the merger is also subject to there not having occurred since the date of the merger agreement an event that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on PGTI that is continuing. Consummation of the merger is not subject to any financing condition.

 

Q:

What happened to the proposed merger with Masonite?

 

A:

The Masonite merger agreement (as defined below) was terminated on January 16, 2024, concurrently with PGTI’s entry into the merger agreement, and the proposed merger with Masonite has been abandoned. PGTI stockholders are not being asked to vote on the Masonite merger agreement.

After PGTI entered into the Agreement and Plan of Merger, dated as of December 17, 2023 (referred to as the “Masonite merger agreement”), among PGTI, Masonite and Peach Acquisition, Inc., MITER submitted its proposal to acquire PGTI for $42.00 per share of PGTI common stock in an all-cash transaction. The PGTI board of directors unanimously determined that MITER’s offer was a “Superior Proposal” within the meaning of the Masonite merger agreement. Following such determination, Masonite waived its right to match such offer, and, as a result, PGTI terminated the Masonite merger agreement. In connection with such termination, MITER, on behalf of PGTI, paid the termination fee due to Masonite under the Masonite merger agreement. For more information regarding the background of the merger, see the section titled “The Merger (Proposal 1)—Background of the Merger.”

 

Q:

Why am I being asked to consider and act upon a proposal to approve, on a non-binding, advisory basis, the compensation that will or may be paid by PGTI to its named executive officers that is based on or otherwise relates to the merger?

 

A:

Section 14A of the Exchange Act requires PGTI to seek a non-binding, advisory vote to approve any agreements or understandings and compensation that will or may be paid by PGTI to its named executive officers that is based on or otherwise relates to the merger. Approval of this proposal by PGTI stockholders is not required to complete the merger.

 

17


Q:

Do you expect the merger to be taxable to PGTI stockholders?

 

A:

The receipt of cash in exchange for PGTI common stock pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes. U.S. Holders generally will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any between (a) the amount of cash received and (b) the U.S. Holder’s adjusted tax basis in the PGTI common stock surrendered in exchange.

Except in certain specific circumstances described below and under “Material U.S. Federal Income Tax Consequences of the Merger—Non-U.S. Holders,” Non-U.S. Holders generally will not be subject to U.S. federal income tax unless such Non-U.S. Holder has certain connections with the United States.

The U.S. federal income tax consequences described above may not apply to all holders of PGTI common stock. You should read the section titled “Material U.S. Federal Income Tax Consequences of the Merger” for a more complete discussion of the U.S. federal income tax consequences of the merger. Tax matters can be complicated and the tax consequences of the merger to you will depend on your particular tax situation. You should consult your tax advisor to determine the applicable U.S. federal, state, local and non-U.S. tax consequences of the merger to you.

 

Q:

Who is entitled to vote at the special meeting?

 

A:

Only PGTI stockholders who held shares of record as of the close of business on February 7, 2024, the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting. PGTI’s official stock ownership records will conclusively determine whether a stockholder is a “holder of record” as of the record date. Participating stockholders who log-on to the special meeting using their unique 16-digit control number will also be able to examine the stockholder list during the special meeting by following the instructions provided on the meeting website at www.virtualshareholdermeeting.com/PGTI2024SM.

 

Q:

Who may attend the special meeting?

 

A:

Only stockholders as of the close of business on February 7, 2024, or their duly appointed proxies, and invited guests of PGTI may attend the meeting. “Street name” holders (those whose shares are held through a broker, bank or other nominee) who wish to vote at the special meeting must obtain a proxy, executed in their favor, from their broker, bank or other nominee giving them the right to vote their shares at the special meeting.

 

Q:

Who is soliciting my vote?

 

A:

The PGTI board of directors is soliciting your proxy, and PGTI will bear the cost of soliciting proxies. MacKenzie Partners has been retained to assist with the solicitation of proxies. MacKenzie Partners will be paid a solicitation fee of approximately $30,000 and will be reimbursed for its reasonable out-of-pocket expenses relating to the special meeting and its prior work in connection with preparing for the special meeting of PGTI stockholders that was contemplated by the Masonite merger agreement. Solicitation initially will be made by mail. Forms of proxies and proxy materials may also be distributed through brokers, custodians, and other like parties to the beneficial owners of shares of PGTI common stock, in which case these parties will be reimbursed for their reasonable out-of-pocket expenses. Proxies may also be solicited in person or by telephone, facsimile, electronic mail or other electronic medium by MacKenzie Partners or, without additional compensation, by certain of PGTI’s directors, officers and employees.

 

Q:

What do I need to do now?

 

A:

After carefully reading and considering the information contained in this proxy statement, please submit your proxy as soon as possible so that your shares of PGTI common stock will be represented and voted at the special meeting. Please follow the instructions set forth on the proxy card or on the voting instruction card provided by the record holder if your shares are held in “street name” by your bank, brokerage firm or other nominee.

 

18


Q:

How do I vote if my shares are registered directly in my name?

 

A:

If you are a stockholder of record, you may vote virtually at the special meeting or vote by proxy using one of the methods described below. Whether or not you plan to participate in the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still participate in the special meeting and vote virtually even if you have already voted by proxy.

 

   

To vote via the internet, submit your proxy by using the internet at www.proxyvote.com. Internet voting is available 24 hours a day and will be accessible until 11:59 p.m., Eastern Time, on March 17, 2024, the day before the special meeting.

 

   

To vote by telephone, submit your proxy by using a touch-tone telephone at 1-800-690-6903. Telephone voting is available 24 hours a day and will be accessible until 11:59 p.m., Eastern Time, on March 17, 2024, the day before the special meeting.

 

   

To vote using the proxy card, simply complete, sign and return the enclosed proxy card in the postage-paid envelope (if mailed in the United States) included with this proxy statement. PGTI stockholders who vote this way should mail the proxy card early enough so that it is received before the date of the special meeting. If you return your signed proxy card to us before the special meeting, we will vote your shares as you direct.

 

   

To vote virtually at the special meeting, visit www.virtualshareholdermeeting.com/PGTI2024SM and enter the 16-digit control number included on your proxy card or voting instruction card that accompanied your proxy materials.

Whether or not you plan to attend the meeting, we urge you to vote by proxy, whether by internet, by telephone or by mail, to ensure your vote is counted. You may still attend the meeting virtually and vote your shares, even if you have already voted by proxy. If you later decide to vote at the special meeting, your proxy prior to the special meeting will be revoked; however, attending the special meeting will not revoke your written, internet or telephone proxy, as the case may be, unless you specifically request revocation or cast a ballot at the special meeting. Please choose only one method to cast your vote by proxy. We encourage you to vote over the internet, which is a convenient, cost-effective and reliable alternative compared to returning a proxy card by mail.

 

Q:

How do I vote if my shares are held in the name of my broker (street name)?

 

A:

If your shares are held in “street name” by your bank, brokerage firm or other nominee, you must direct your bank, brokerage firm or other nominee on how to vote and you will receive instructions from your bank, brokerage firm or other nominee describing how to vote your shares of PGTI common stock. The availability of internet or telephonic voting will depend on the nominee’s voting process. Please check with your bank, brokerage firm or other nominee and follow the voting procedures your bank, brokerage firm or other nominee provides.

In accordance with the rules of the NYSE, your bank, brokerage firm or other nominee can vote your shares of PGTI common stock on “routine” matters when they have not received voting instructions from you. However, such banks, brokerage firms and other nominees are precluded from exercising their voting discretion with respect to “non-routine” matters. If you are a beneficial owner and you do not provide these instructions, a “non-vote” occurs with respect to those matters. All proposals described in this proxy to be voted on at the special meeting are considered “non-routine” matters. Accordingly, if you are a beneficial holder and you do not provide your bank, brokerage firm or other nominee instructions on how to vote your shares of PGTI common stock at the special meeting, your bank, brokerage firm or other nominee generally will not be permitted to vote your shares on any of the proposals at the special meeting. If you are a beneficial holder, PGTI strongly encourages you to provide voting instructions to your bank, brokerage firm or other nominee so that your vote will be counted on all matters.

 

19


Q:

Can I change my vote after I submit my proxy?

 

A:

Yes. You can change or revoke your proxy at any time before the final vote at the special meeting or any adjournment or postponement thereof. If you are the record holder of your shares, you may change or revoke your proxy in any one of three ways:

 

   

You may submit another properly completed proxy bearing a later date, whether over the internet, by telephone or by mail;

 

   

You may deliver a written notice prior to the special meeting (or any adjournment or postponement thereof) that you are revoking your proxy to PGT Innovations, Inc., Attention: General Counsel and Corporate Secretary, 1070 Technology Drive, North Venice, FL 34275; or

 

   

You may attend and vote at the virtual special meeting (or any adjournment or postponement thereof).

If your shares are held by your broker, bank or other nominee, you will have to follow the instructions provided by your broker, bank or other nominee to change or revoke your proxy.

If you have questions about how to vote or change your vote, please contact MacKenzie Partners, the firm assisting us in the solicitation of proxies, toll-free at (800) 322-2885.

 

Q:

What happens if I sell my shares of PGTI common stock before the special meeting?

 

A:

If you transfer your shares before the special meeting, you will retain the right to vote such shares at the special meeting, but you will have transferred the right to receive the merger consideration to the person to whom you transfer your shares. In order to receive the merger consideration, you must hold your shares of common stock through completion of the merger.

 

Q:

What happens if I sell my shares of PGTI common stock after the special meeting but before the effective time?

 

A:

If you transfer your shares after the special meeting but before the effective time, you will have transferred the right to receive the merger consideration to the person to whom you transfer your shares. In order to receive the merger consideration, you must hold your shares of common stock through completion of the merger.

 

Q:

Should I send in my stock certificates now?

 

A:

No. Please do not send in your PGTI stock certificates with your proxy. After the merger is completed, the exchange agent will send you instructions for exchanging PGTI stock certificates for the consideration to be received in the merger. See “The Merger Agreement—Exchange and Payment Procedures.”

 

Q:

How many shares must be present to constitute a quorum for the meeting?

 

A:

Holders of a majority of the total number of issued shares of PGTI common stock as of the record date and entitled to vote at the special meeting must be present or represented by proxy at the special meeting to constitute a quorum for the transaction of business at the special meeting. If you fail to submit a proxy or to vote at the special meeting, or fail to instruct your bank, brokerage firm or other nominee how to vote, your shares of PGTI common stock will not be counted towards a quorum. “Broker non-votes” will not be treated as present for purposes of determining whether a quorum is present. Marks to “ABSTAIN” on any proposal are considered present for purposes of establishing a quorum.

 

Q:

What if I abstain from voting or fail to vote or submit a proxy?

 

A:

If you attend the special meeting or send in your signed proxy card, but abstain from voting on any proposal, your shares will still be counted for purposes of determining whether a quorum exists, but it will have the same effect as a vote “AGAINST” such proposal.

 

20


Q:

Will my shares be voted if I do not sign and return my proxy card or vote over the internet, by mail, by telephone or by attendance in person (virtually) at the special meeting?

 

A:

If you are a registered stockholder and you do not sign and return your proxy card by mail or vote over the internet, by telephone or by attendance in person (virtually) at the special meeting, your shares will not be voted at the special meeting and will not be counted for purposes of determining whether a quorum exists. If you are a beneficial owner of shares held in “street name” by your bank, brokerage firm or other nominee, you should have received a voting instruction card with these proxy materials from that organization rather than from PGTI. Follow the instructions from your bank, brokerage firm or other nominee to see which of the above choices are available to you to ensure that your vote is counted. To vote virtually at the special meeting, you must obtain a “legal proxy” from your bank, brokerage firm or other nominee.

If you fail to submit a proxy or to vote at the special meeting or fail to instruct your bank, brokerage firm or other nominee how to with respect to the merger agreement proposal or the certificate of incorporation amendment proposal, it will have the same effect as a vote “AGAINST” such proposal. If you fail to submit a proxy or to vote at the special meeting or fail to instruct your bank, brokerage firm or other nominee how to with respect to merger-related compensation proposal or the adjournment proposal, it will have no effect on the outcome of such proposal (assuming, in the case of the merger-related compensation proposal, a quorum is present).

 

Q:

What is a broker non-vote?

 

A:

A so-called “broker non-vote” results when banks, brokerage firms and other nominees return a valid proxy but do not vote on a particular proposal because they do not have discretionary authority to vote on the matter and have not received specific voting instructions from the beneficial owner of those shares. Broker non-votes count toward a quorum only if at least one proposal is presented with respect to “routine” matters to which the bank, brokerage firm or other nominee has discretionary authority. All proposals described in this proxy statement to be voted on at the special meeting are considered “non-routine” matters, and, therefore, broker non-votes, if any, will not be counted as present and entitled to vote for purposes of determining a quorum at the special meeting. The effect of not instructing your broker how you wish your shares to be voted will be the same as a vote “AGAINST” the merger agreement proposal and the certificate of incorporation amendment proposal, but will not have an effect on the adjournment proposal or the merger-related compensation proposal (assuming, in the case of the merger-related compensation proposal, a quorum is present).

 

Q:

Will my shares held in “street name” or another form of record ownership be combined for voting purposes with shares I hold of record?

 

A:

No. Because any shares you may hold in “street name” will be deemed to be held by a different stockholder than any shares you hold of record, any shares so held will not be combined for voting purposes with shares you hold of record. Similarly, if you own shares in various registered forms, such as jointly with your spouse, as trustee of a trust or as custodian for a minor, you will receive, and will need to sign and return, a separate proxy card for those shares because they are held in a different form of record ownership. Shares held by a corporation or business entity must be voted by an authorized officer of the entity. Shares held in an individual retirement account must be voted under the rules governing the account.

 

Q:

What does it mean if I receive more than one set of proxy materials?

 

A:

You may receive more than one set of voting materials for the special meeting, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your PGTI common stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please submit each separate

 

21


  proxy card or voting instruction card that you receive by following the instructions set forth in each separate proxy card or voting instruction card.

 

Q:

Who will count the votes?

 

A:

A representative from MacKenzie Partners will serve as the inspector of election.

 

Q:

Can I participate if I am unable to attend the special meeting?

 

A:

If you are unable to attend the virtual special meeting, you may participate by completing, signing, dating and returning your proxy card or by voting over the internet, by telephone or by mail.

 

Q:

Where can I find the voting results of the special meeting?

 

A:

PGTI intends to announce preliminary voting results at the special meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC following the special meeting. All reports that PGTI files with the SEC are publicly available when filed.

 

Q:

What happens if the merger is not completed?

 

A:

If the merger agreement is not adopted by PGTI stockholders or if the merger is not completed for any other reason, PGTI stockholders will not receive any consideration for their shares of PGTI common stock in connection with the merger. Instead, PGTI will remain an independent public company, PGTI common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act and PGTI will continue to file periodic reports with the SEC. Under certain specific circumstances, PGTI is required to pay MITER a termination fee of $86,000,000 and, under certain other specific circumstances, MITER is required to pay PGTI the MITER termination fee of $184,000,000 or the MITER regulatory termination fee of $210,000,000, as applicable. See section titled “The Merger Agreement—Termination Fees and Expenses.”

 

Q:

How can I obtain additional information about PGTI?

 

A:

PGTI will provide copies of this proxy statement and its most recent Annual Report to Stockholders, including its Annual Report on Form 10-K, without charge to any stockholder who makes a written request to our General Counsel and Corporate Secretary at PGT Innovations, Inc., 1070 Technology Drive, North Venice, FL 34275. PGTI’s Annual Report on Form 10-K and other SEC filings may also be accessed at www.sec.gov or on the Investor Relations section of PGTI’s website at www.pgtinnovations.com. PGTI’s website address is provided as an inactive textual reference only. The information provided on or accessible through our website is not part of this proxy statement and is not incorporated by reference in this proxy statement by this or any other reference to our website provided in this proxy statement.

 

Q:

How many copies of this proxy statement and related voting materials should I receive if I share an address with another stockholder?

 

A:

The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single annual report or proxy statement, as applicable, addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies.

PGTI and some brokers may be householding our proxy materials by delivering proxy materials to multiple stockholders who request a copy and share an address, unless contrary instructions have been received from

 

22


the affected stockholders. Once you have received notice from your broker or us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If at any time you no longer wish to participate in householding and would prefer to receive a separate proxy statement and annual report, please notify your broker if your shares are held in a brokerage account or PGTI if you are a stockholder of record. You can notify us by sending a written request to PGT Innovations, Inc., 1070 Technology Drive, North Venice, FL 34275, Attention: General Counsel and Corporate Secretary, or calling (941) 480-1600. Stockholders who share a single address, but receive multiple copies of this proxy statement, may request that in the future they receive a single copy by notifying PGTI at the telephone or address set forth in the prior sentence. In addition, PGTI will promptly deliver, upon written or oral request to the address or telephone number above, a separate copy of this proxy statement to a stockholder at a shared address to which a single copy of the documents was delivered pursuant to a prior request. If you would like to view the special meeting materials via the internet, please visit www.proxydocs.com/PGTI.

 

Q:

Whom should I contact if I have any questions?

 

A:

If you have any questions about the special meeting, the merger, the proposals or this proxy statement, would like additional copies of this proxy statement, need to obtain proxy cards or other information related to this proxy solicitation or need help submitting a proxy or voting your shares of PGTI common stock, you should contact:

PGT Innovations, Inc.

Attention: General Counsel and Corporate Secretary

1070 Technology Drive,

North Venice, Florida 34275

(941) 480-1600

or

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

Call Toll Free: (800) 322-2885

Email: proxy@mackenziepartners.com

 

23


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement and the documents incorporated by reference into this proxy statement contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts but reflect PGTI’s current beliefs, expectations or intentions regarding future events. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements regarding the transactions contemplated by the merger agreement, including: the expected time period to consummate the merger, opportunities and anticipated future performance. All such forward-looking statements are based upon current plans, estimates, expectations and ambitions that are subject to risks, uncertainties and assumptions, many of which are beyond the control of PGTI, that could cause actual results to differ materially from those expressed in such forward-looking statements.

You can identify these statements and other forward-looking statements in this document by words such as “may,” “will,” “should,” “can,” “could,” “anticipate,” “estimate,” “expect,” “predict,” “project,” “future,” “potential,” “intend,” “plan,” “assume,” “believe,” “forecast,” “look,” “build,” “focus,” “create,” “work,” “continue,” “target,” “poised,” “advance,” “drive,” “aim,” “forecast,” “approach,” “seek,” “schedule,” “position,” “pursue,” “progress,” “budget,” “outlook,” “trend,” “guidance,” “commit,” “on track,” “objective,” “goal,” “strategy,” “opportunity,” “ambitions,” “aspire” and similar expressions, and variations or negative of such terms or other variations thereof. Words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. These forward-looking statements are based on current expectations and beliefs of management and current market trends and conditions.

These forward-looking statements involve risks and uncertainties that are outside of PGTI’s control and may cause actual results to differ materially from those contained in forward-looking statements. These risks and uncertainties include, among others, risks and uncertainties relating to:

 

   

the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the merger;

 

   

the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement;

 

   

the possibility that PGTI stockholders may not approve the merger;

 

   

the outcome of any legal proceedings related to the merger;

 

   

the risk that the parties may not be able to satisfy the conditions to the merger in a timely manner or at all;

 

   

the ability to consummate the merger on a timely basis or at all;

 

   

the risk of unforeseen or unknown liabilities;

 

   

the risk of potential litigation relating to the merger that could be instituted against PGTI or its directors and/or officers;

 

   

the risk that the merger and its announcement could have an adverse effect on PGTI’s business relationships and business generally, including the ability of PGTI to maintain relationships with customers, suppliers and other business partners, to retain and hire key personnel, and on its operating results and business generally;

 

   

difficulties in retaining and hiring key personnel and employees due to the merger;

 

   

risks related to diversion or disruption of management time from ongoing business operations due to the merger;

 

   

the impact of public health crises, such as pandemics (including COVID-19) and epidemics and any related company or government policies and actions to protect the health and safety of individuals or

 

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government policies or actions to maintain the functioning of national or global economies and markets;

 

   

cyber-attacks, information security and data privacy;

 

   

global political and economic conditions, including rising interest rates, the impact of inflation and challenges in manufacturing and the global supply chain; and

 

   

events and trends on a national, regional and global scale, including the cyclicality in the public building materials industry and other target markets and those of a political, economic, business, competitive and regulatory nature.

PGTI cautions that the foregoing list of factors is not exhaustive. Additional information concerning these and other risk factors is contained in PGTI’s most recently filed Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other SEC filings, as such filings may be amended from time to time. All of the forward-looking statements made by PGTI contained or incorporated by reference in this proxy statement and all subsequent written and oral forward-looking statements concerning PGTI, the merger or other matters attributable to PGTI or any person acting on its behalf are expressly qualified in their entirety by the cautionary statement above.

If any of these risks materialize or any of PGTI’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that PGTI presently does not know of or that PGTI currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect PGTI’s expectations, plans or forecasts of future events and views as of the date of this proxy statement. PGTI anticipates that subsequent events and developments will cause PGTI’s assessments to change. However, while PGTI may elect to update these forward-looking statements at some point in the future, PGTI specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing PGTI’s assessments as of any date subsequent to the date of this proxy statement. Accordingly, undue reliance should not be placed upon the forward-looking statements.

 

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THE COMPANIES

PGT Innovations, Inc.

PGT Innovations, Inc. is a manufacturer of impact-resistant aluminum and vinyl-framed windows and doors and offers a broad range of fully customizable window and door products. PGTI sells its products to customers in Florida, other parts of the United States, the Caribbean, Canada, and South and Central America. PGTI was incorporated in the state of Delaware on December 16, 2003, as JLL Window Holdings, Inc., and was renamed PGT, Inc. on February 15, 2006 and PGT Innovations, Inc. on December 14, 2016. PGTI common stock trades on the New York Stock Exchange under the symbol “PGTI.” The principal executive offices of PGTI are located at 1070 Technology Drive, North Venice, Florida 34275, and its telephone number is (941) 480-1600.

MIWD Holding Company LLC

MIWD Holding Company LLC is a Delaware limited liability company. MIWD Holding Company LLC and Merger Sub are each affiliated with MITER Brands. MITER Brands is a residential window and door manufacturer that produces a portfolio of window and door brands for the new construction and replacement segments with an owner-operated, family-first approach.

MITER’s principal executive office is located at 2550 Interstate Drive, Suite 400, Harrisburg, PA 17110. MITER’s telephone number is (717) 365-3300. MITER’s internet website address is www.miterbrands.com. The information provided on MITER’s website is not part of this proxy statement and is not incorporated in this proxy statement by reference by this or any other reference to its website provided in this proxy statement.

RMR MergeCo, Inc.

RMR MergeCo, Inc., a Delaware corporation, is an indirect wholly owned subsidiary of MITER. Merger Sub was incorporated by MITER solely in contemplation of the transactions contemplated by the merger agreement, has not conducted any business and has no assets, liabilities or obligations of any nature other than as set forth in the merger agreement. The principal executive offices of Merger Sub are located at c/o MIWD Holding Company LLC, 2550 Interstate Drive, Suite 400, Harrisburg, PA 17110, and its telephone number is (717) 365-3300.

 

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THE SPECIAL MEETING

General

This proxy statement is first being mailed on or about February 16, 2024, and constitutes notice of the special meeting in conformity with the requirements of the DGCL and PGTI’s bylaws.

This proxy statement is being provided to PGTI stockholders as part of a solicitation of proxies by the PGTI board of directors for use at the special meeting of PGTI stockholders and at any adjournments or postponements of such special meeting. This proxy statement provides PGTI stockholders with information about the special meeting and should be read carefully in its entirety.

Date, Time and Place of the Special Meeting

The special meeting will be held on March 18, 2024, beginning at 10:30 a.m., Eastern Time, unless postponed to a later date, via live audio webcast at www.virtualshareholdermeeting.com/PGTI2024SM. To virtually participate in the special meeting, visit such website and enter the 16-digit control number provided on your proxy card or voting instruction card in order to participate in the special meeting.

Purposes of the Special Meeting

At the special meeting, PGTI stockholders will be asked to vote upon the following proposals:

 

   

Proposal 1—The Merger Agreement Proposal: the proposal to adopt the merger agreement, which is further described in the sections titled “The Merger (Proposal 1)” and “The Merger Agreement” of this proxy statement and a copy of which is attached to this proxy statement as Annex A;

 

   

Proposal 2—The Merger-Related Compensation Proposal: the proposal to approve, on a non-binding, advisory basis, the compensation that may be paid or become payable by PGTI to its named executive officers that is based on or otherwise relates to the merger, which is further described in the sections titled “Advisory Vote on Named Executive Officer Merger-Related Compensation Arrangements (Proposal 2)” and “The Merger (Proposal 1)—Interests of PGTI’s Directors and Executive Officers in the Merger”;

 

   

Proposal 3—The Certificate of Incorporation Amendment Proposal: the proposal to approve the amendment to the Amended and Restated Certificate of Incorporation of PGTI, which is further described in the sections titled “Vote on the Certificate of Incorporation Amendment (Proposal 3)” and “The Merger Agreement—PGTI Certificate of Incorporation Amendment” and a copy of which is attached to this proxy statement as Annex B; and

 

   

Proposal 4—The Adjournment Proposal: the proposal to approve the adjournment of the special meeting, if necessary, to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are not sufficient votes at the time of such adjournment to approve the merger agreement proposal, which is further described in the section titled “Vote on Adjournment (Proposal 4).”

Only the approval of the merger agreement proposal is required for completion of the merger. PGTI will transact no other business at the special meeting except such business as may properly be brought before the special meeting or any adjournment or postponement thereof.

Recommendation of the PGTI’s Board of Directors

At a special meeting held on January 16, 2024, the PGTI board of directors unanimously determined that the merger agreement and the transactions contemplated thereby are advisable, fair to and in the best interests of

 

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PGTI and PGTI stockholders, approved the execution of the merger agreement and the consummation of the transactions contemplated thereby, approved the certificate of incorporation amendment and directed that the adoption of the merger agreement and the certificate of incorporation amendment be submitted to a vote at a meeting of the PGTI stockholders.

Accordingly, the PGTI board of directors unanimously recommends that PGTI stockholders vote “FOR” the merger agreement proposal, “FOR” the merger-related compensation proposal, “FOR” the certificate of incorporation amendment proposal and “FOR” the adjournment proposal.

PGTI stockholders should carefully read this proxy statement, including any documents incorporated by reference, and the annexes in their entirety for more detailed information concerning the merger and the transactions contemplated by the merger agreement.

Virtual Participation at Special Meeting

The special meeting will be a completely virtual meeting of stockholders conducted via live audio webcast through the website described above under the heading “Date, Time and Place of the Special Meeting.”

PGTI will have technicians ready to assist PGTI stockholders with any technical difficulties they may have accessing the virtual meeting. If PGTI stockholders encounter any difficulties accessing the virtual meeting or during the meeting time, PGTI stockholders should navigate to www.virtualshareholdermeeting.com/PGTI2024SM, where a phone number for IT support will be posted.

Outstanding Shares as of the Record Date

As of the record date, there were 58,326,059 shares of PGTI common stock outstanding and owned by PGTI stockholders (i.e., excluding shares of PGTI common stock held in treasury by PGTI), held by approximately 2,500 holders of record. Each share of PGTI common stock is entitled to one vote on each matter considered at the special meeting.

Stockholders may request an appointment to inspect a complete list of stockholders entitled to vote at the special meeting for any purpose germane to the special meeting at PGTI’s principal executive offices located at 1070 Technology Drive, North Venice, Florida 34275, during ordinary business hours within 10 days prior to the special meeting. This list will also be made available at the special meeting for examination by any stockholder virtually present at the special meeting.

Record Date; Stockholders Entitled to Vote

The record date for the determination of stockholders entitled to notice of and to vote at the special meeting is February 7, 2024. Only holders of PGTI common stock as of the close of business on the record date are entitled to receive notice of, and vote at, the special meeting or any adjournment or postponement thereof. PGTI’s official stock ownership records will conclusively determine whether a stockholder is a “holder of record” as of the record date.

Quorum and Broker Non-Votes

Holders of a majority of the total number of issued shares of PGTI common stock as of the record date and entitled to vote at the special meeting must be present or represented by proxy at the special meeting to constitute a quorum for the transaction of business at the special meeting. If you fail to submit a proxy or to vote at the special meeting, or fail to instruct your bank, brokerage firm or other nominee how to vote, your shares of PGTI common stock will not be counted towards a quorum. Marks to “ABSTAIN” on any proposal are considered present for purposes of establishing a quorum. In the event that a quorum is not present at the special meeting, it

 

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is expected that the special meeting will be adjourned or postponed. If the special meeting is postponed or adjourned, it will not affect the ability of holders of record of PGTI common stock as of the record date to exercise their voting rights or to revoke any previously granted proxy using the methods described below; however, if a new record date is set for an adjourned meeting, a new quorum will be required to be established.

Banks, brokerage firms and other nominees who hold shares in “street name” for the accounts of their clients may vote such shares either as directed by their clients or in their own discretion on “routine” matters. When a broker does not receive instructions from a beneficial owner on how to vote shares with respect to a “non-routine” matter, a “broker non-vote” occurs. “Broker non-votes” will not be treated as present for purposes of determining whether a quorum is present. All proposals described in this proxy statement to be voted on at the special meeting are considered “non-routine” matters.

Your shares will be counted for purposes of determining if there is a quorum, whether representing votes for, against or abstained, if you (1) participate in the special meeting or (2) have voted via the internet, by telephone or by properly submitting a proxy card or voting instruction card by mail.

Required Vote; Treatment of Abstentions and Failure to Vote

The votes required for each proposal are as follows:

Proposal 1—The Merger Agreement Proposal: The affirmative vote of holders of at least a majority of the outstanding shares of PGTI common stock entitled to vote thereon is required to approve the merger agreement proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or to vote at the special meeting or fail to instruct your bank, brokerage firm or other nominee to vote with respect to the merger agreement proposal, it will have the same effect as a vote “AGAINST” the merger agreement proposal.

Proposal 2—The Merger-Related Compensation Proposal: The affirmative vote of holders of at least a majority of the shares of PGTI common stock present virtually or represented by proxy at the special meeting and entitled to vote thereon is required to approve, on an advisory (non-binding) basis, the merger-related compensation proposal. If you mark “ABSTAIN” on your proxy, it will have the same effect as a vote “AGAINST” the merger-related compensation proposal. If you fail to submit a proxy or to vote at the special meeting or fail to instruct your bank, brokerage firm or other nominee how to with respect to the merger-related compensation proposal, it will have no effect on the merger-related compensation proposal (assuming a quorum is present).

Proposal 3—The Certificate of Incorporation Amendment Proposal: The affirmative vote of holders of at least a majority of the outstanding shares of PGTI common stock entitled to vote thereon is required to approve the certificate of incorporation amendment proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or to vote at the special meeting or fail to instruct your bank, brokerage firm or other nominee how to vote with respect to the certificate of incorporation amendment proposal, it will have the same effect as a vote “AGAINST” the certificate of incorporation amendment proposal.

Proposal 4—The Adjournment Proposal: The affirmative vote of holders of at least a majority of the shares of PGTI common stock present virtually or represented by proxy at the special meeting and entitled to vote thereon is required to approve the adjournment proposal, including if necessary to solicit additional proxies for the adoption of the merger agreement. If you mark “ABSTAIN” on your proxy, it will have the same effect as a vote “AGAINST” the adjournment proposal. If you fail to submit a proxy or to vote at the special meeting or fail instruct your bank, brokerage firm or other nominee how to vote with respect to the adjournment proposal, it will have no effect on the adjournment proposal.

An abstention occurs when a stockholder attends a meeting, either by attendance in person (virtually) or by proxy, but abstains from voting. At the special meeting, abstentions will be counted in determining whether a

 

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quorum is present and will have the effect of a vote “AGAINST” the merger agreement proposal, the merger-related compensation proposal, the certificate of incorporation amendment proposal and the adjournment proposal, including if necessary to permit further solicitation of proxies.

If you are a registered stockholder and you do not sign and return your proxy card by mail or vote over the internet, by telephone or by attendance in person (virtually) at the special meeting, your shares will not be voted at the special meeting and will not be counted for purposes of determining whether a quorum exists. If you are the record owner of your shares and you fail to vote, it will have the same effect as a vote “AGAINST” the merger agreement proposal, the certificate of incorporation amendment proposal and the adjournment proposal, including if necessary to permit further solicitation of proxies, but will have no effect on the outcome of the merger-related compensation proposal.

Shares and Voting of PGTI’s Directors and Executive Officers

As of the record date, PGTI directors and executive officers, as a group, owned and were entitled to vote 2,813,212 shares of PGTI common stock, which includes restricted and performance shares in amounts as permitted per the grant agreements, or approximately 4.8% of the outstanding shares of PGTI common stock. PGTI currently expects that these directors and executive officers will vote their shares in favor of the merger agreement proposal and each of the other proposals described in this proxy statement, although none of the directors and executive officers are obligated to do so.

How to Vote or Have Your Shares Voted

PGTI stockholders of record may vote their shares of PGTI common stock or submit a proxy to have their shares of PGTI common stock voted at the special meeting in one of the following ways:

 

   

Internet: PGTI stockholders may submit their proxy by using the internet at www.proxyvote.com. Internet voting is available 24 hours a day and will be accessible until 11:59 p.m., Eastern Time, on March 17, 2024, the day before the special meeting.

 

   

Telephone: PGTI stockholders may submit their proxy by using a touch-tone telephone at 1-800-690-6903. Telephone voting is available 24 hours a day and will be accessible until 11:59 p.m., Eastern Time, on March 17, 2024, the day before the special meeting.

 

   

Mail: PGTI stockholders may submit their proxy by properly completing, signing, dating and mailing their proxy card in the postage-paid envelope (if mailed in the United States) included with this proxy statement. PGTI stockholders who vote this way should mail the proxy card early enough so that it is received before the date of the special meeting.

 

   

To Vote Virtually at the Special Meeting: To vote virtually at the special meeting, visit www.virtualshareholdermeeting.com/PGTI2024SM and enter the 16-digit control number included on your proxy card or voting instruction card that accompanied your proxy materials.

Whether or not you plan to participate in the special meeting, PGTI urges you to submit your proxy by completing and returning the proxy card as promptly as possible, or by submitting your proxy by telephone or via the internet, prior to the special meeting to ensure that your shares of PGTI common stock will be represented and voted at the special meeting if you are unable to participate.

The PGTI board of directors has appointed certain persons as proxy holders to vote proxies in accordance with the instructions of PGTI stockholders. If you are a stockholder of record and you authorize these proxy holders to vote your shares of PGTI common stock with respect to any matter to be acted upon, your shares will be voted in accordance with your instructions in your proxy. If you are a stockholder of record and you authorize these proxy holders to vote your shares but do not specify how your shares should be voted on a proposal, these proxy holders will vote your shares on such proposals as the PGTI board of directors recommends. If any other matter properly comes before the special meeting, these proxy holders will vote on that matter in their discretion.

 

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If, as of the record date, your shares of PGTI common stock are registered directly in your name with the transfer agent of PGTI, Equiniti Trust Company, LLC (f.k.a., American Stock Transfer & Trust Company, LLC), you are considered the stockholder of record with respect to those shares. As the stockholder of record, you have the right to vote or to grant a proxy for your vote directly to PGTI or to a third party to vote at the special meeting.

If, as of the record date, your shares were held in an account at a bank, brokerage firm or other nominee, you are the beneficial owner of shares held in “street name,” and, for the purposes of this proxy statement, a beneficial owner, and your bank, brokerage firm or other nominee is considered the stockholder of record with respect to those shares. If you are a beneficial owner, you have a right to direct your bank, brokerage firm or other nominee on how to vote the shares held in your account. The availability of internet or telephonic voting will depend on the nominee’s voting process. Please check with your bank, brokerage firm or other nominee and follow the voting procedures your bank, brokerage firm or other nominee provides.

In accordance with the rules of the NYSE, your bank, brokerage firm or other nominee may generally vote on “routine” matters when they have not received voting instructions from you. However, such banks, brokerage firms and other nominees are precluded from exercising their voting discretion with respect to “non-routine” matters. If you are a beneficial owner and do not provide these instructions, a “non-vote” occurs with respect to those matters. All proposals described in this proxy statement to be voted on at the special meeting are considered “non-routine” matters. Accordingly, if you are a beneficial owner and do not provide your bank, brokerage firm or other nominee instructions on how to vote your shares of PGTI common stock, your bank, brokerage firm or other nominee generally will not be permitted to vote your shares on any of the proposals. The effect of not instructing your broker how you wish your shares to be voted will be the same as a vote “AGAINST” the merger agreement proposal and the certificate of incorporation amendment proposal but will not have an effect on the adjournment proposal or the merger-related compensation proposal (assuming, in the case of the merger-related compensation proposal, that a quorum is present). If you are a beneficial holder, PGTI strongly encourages you to provide voting instructions to your bank, brokerage firm or other nominee so that your vote will be counted on all matters.

If you are a beneficial owner, you are invited to participate in the special meeting; however, you may not vote your shares at the special meeting unless you obtain a “legal proxy” from your bank, brokerage firm or other nominee that holds your shares, giving you the right to vote the shares at the special meeting.

Revocation of Proxies

PGTI stockholders of record may revoke their proxies at any time prior to the voting at the special meeting in any of the following ways:

 

   

signing and delivering a new proxy relating to the same shares and bearing a later date than the original proxy;

 

   

delivering a signed, written notice of revocation that is received prior to the polls closing at the special meeting (or any adjournment or postponement thereof), which is dated later than the date of the proxy and states that the proxy is revoked, to PGT Innovations, Inc., Attention: General Counsel and Corporate Secretary, 1070 Technology Drive, North Venice, Florida 34275; or

 

   

participating in and voting during the virtual special meeting. Participation in the virtual special meeting will not, however, in and of itself, constitute a vote or revocation of a prior proxy.

PGTI beneficial owners may change their voting instruction only by following the directions received from their bank, brokerage firm or other nominee for changing their voting instructions.

 

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Delivery of Proxy Materials

As permitted by applicable law, only one copy of this proxy statement is being delivered to holders of PGTI common stock residing at the same address, unless such holders of PGTI common stock have notified PGTI of their desire to receive multiple copies of this proxy statement.

PGTI will promptly deliver, upon oral or written request, a separate copy of this proxy statement to any holder of PGTI common stock residing at an address to which only one copy of this proxy statement was mailed. Requests for additional copies should be directed to PGTI by mail at PGT Innovations, Inc., Attention: General Counsel and Corporate Secretary, 1070 Technology Drive, North Venice, Florida 34275 or by calling (941) 480-1600 or to PGTI’s proxy solicitor, MacKenzie Partners, by calling toll-free at (800) 322-2885 or by email at proxy@mackenziepartners.com.

Shares Held in Name of Broker

If your shares are held by your broker, bank or other nominee, often referred to as held in “street name,” you will receive a form from your broker, bank or other nominee seeking instruction as to how your shares should be voted. You should contact your broker, bank or other nominee with questions about how to provide or revoke your instructions.

Tabulation of Votes

A representative from MacKenzie Partners will serve as the inspector of election.

Solicitation of Proxies

PGTI will pay for the proxy solicitation costs related to the special meeting. In addition to sending and making available these materials, some of PGTI’s directors, officers and employees may solicit proxies in person by contacting PGTI stockholders by telephone or over the Internet. PGTI stockholders may also be solicited by press releases issued by PGTI, postings on PGTI’s websites and advertisements in periodicals. None of PGTI’s directors, officers or employees will receive additional compensation for their solicitation services. PGTI has engaged MacKenzie Partners to assist in the solicitation of proxies for the special meeting. PGTI estimates that it will pay MacKenzie Partners a fee of approximately $30,000, plus reasonable out-of-pocket expenses relating to the special meeting and its prior work in connection with preparing for the special meeting of PGTI stockholders that was contemplated by the Masonite merger agreement. Certain banking institutions, brokerage firms, custodians, trustees, nominees and fiduciaries who hold shares for the benefit of another party may solicit proxies for PGTI. If so, they will mail proxy information to, or otherwise communicate with, the beneficial owners of shares of PGTI common stock held by them. PGTI will also reimburse banks, brokerage firms, custodians, trustees, nominees and fiduciaries for their expenses incurred in sending proxies and proxy materials to beneficial owners of PGTI common stock.

Adjournments

The special meeting may be adjourned by the holders of shares representing at least a majority of the votes entitled to be cast by PGTI stockholders present virtually or represented by proxy, if sufficient votes are cast in favor of the adjournment proposal, whether or not there is a quorum.

Notice need not be given of any adjourned meeting if the time and place, if any, thereof and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken unless the adjournment is for more than 30 days, in which case a notice of the adjourned meeting will be given to each stockholder of record entitled to vote at the meeting. If, after any adjournment, a new record date for the

 

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stockholders entitled to vote is fixed for any adjourned meeting, notice of the place, if any, date, and time of the adjourned meeting and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present and vote at such adjourned meeting must be given to each stockholder of record entitled to vote at the meeting.

Questions and Additional Information

You may contact PGTI’s proxy solicitor, MacKenzie Partners, Inc., toll-free at (800) 322-2885 or by email at proxy@mackenziepartners.com, with any questions about the special meeting, the merger, the proposals or this proxy statement, if you would like additional copies of this proxy statement, if you need to obtain proxy cards or other information related to the proxy solicitation or if you need help submitting a proxy or voting your shares of PGTI common stock.

 

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THE MERGER (PROPOSAL 1)

This section of this proxy statement describes the material aspects of the merger. This section may not contain all of the information that is important to you. You should carefully read this entire proxy statement and the documents incorporated by reference into this proxy statement, including the full text of the merger agreement, a copy of which is attached to this proxy statement as Annex A, for a more complete understanding of the merger. In addition, important information about PGTI is included in or incorporated by reference into this proxy statement. See the section titled “Where You Can Find More Information.”

Effects of the Merger

Upon the terms and subject to the conditions of the merger agreement and in accordance with Delaware law, Merger Sub will merge with and into PGTI, whereupon the separate existence of Merger Sub will cease and PGTI will survive the merger as an indirect wholly owned subsidiary of MITER.

The following diagrams illustrate in simplified terms the merger and the effect of the merger on the organizational structures of MITER and PGTI.

The following diagram illustrates in simplified terms the organizational structure of MITER and PGTI prior to the merger:

 

 

 

LOGO

The following diagram illustrates in simplified terms the merger:

 

 

LOGO

 

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The following diagram illustrates in simplified terms the organizational structure of MITER and PGTI after the merger:

 

LOGO

Effect on PGTI if the Merger is Not Completed

If the merger agreement is not adopted by PGTI stockholders or if the merger is not completed for any other reason, PGTI stockholders will not receive any payment for their shares (or interests in shares) of PGTI common stock in connection with the merger. Instead, PGTI will remain an independent public company, PGTI common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act and we will continue to file periodic reports with the SEC. In addition, if the merger is not completed, PGTI stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including risks related to the highly competitive industry in which PGTI operates and risks related to adverse economic conditions.

Furthermore, if the merger is not completed, and depending on the circumstances that would have caused the merger not to be completed, it is likely that the price of PGTI common stock will decline significantly. If that were to occur, it is uncertain when, if ever, the price of PGTI common stock would return to the price at which it trades as of the date of this proxy statement.

Accordingly, if the merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of PGTI common stock. If the merger agreement is not adopted by PGTI stockholders or if the merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to PGTI will be offered or that PGTI’s business, prospects or results of operation will not be adversely impacted.

In addition, the merger agreement provides that, upon termination of the merger agreement under certain circumstances, PGTI will be required to pay to MITER a termination fee of $86,000,000, or under certain other circumstances, MITER will be required to pay PGTI the MITER termination fee of $184,000,000 or the MITER regulatory termination fee of $210,000,000, as applicable, under the terms of the merger agreement. See the section titled “The Merger Agreement—Termination Fees and Expenses” for a discussion of the circumstances under which such termination fees would be required to be paid.

 

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Merger Consideration

At the effective time, each share of PGTI common stock issued and outstanding immediately prior to the effective time (other than (a) excluded shares and (b) dissenting shares) will be converted into the right to receive the merger consideration of $42.00 in cash, without interest.

Background of the Merger

The following chronology summarizes the key meetings and events that led to the signing of the merger agreement. This chronology does not purport to catalogue every conversation of or among the PGTI board of directors, MITER, PGTI’s representatives, MITER’s representatives and other parties.

The PGTI board of directors and senior management regularly review and assess PGTI’s operations, performance, opportunities, prospects and strategic direction. In connection with this review and assessment, and with the assistance of legal and financial advisors, the PGTI board of directors and management have considered potential strategic alternatives for PGTI, including potential business combinations or other transactions, to strengthen PGTI’s business and maximize shareholder value. In addition, PGTI has from time to time received unsolicited inquiries from third parties seeking to determine PGTI’s interest in various sorts of M&A transactions.

During the period discussed below, PGTI (itself or through its advisors) contacted or otherwise interacted with 12 unique financial and strategic parties in relation to possible strategic transactions, resulting in a total of 17 proposals to acquire PGTI since 2021. Described below are all such material interactions and contacts during such period, including those that led to any such proposals to acquire PGTI. All of these contracts and interactions (other than those with Party A) occurred after PGTI adopted its shareholder rights plan in March 2023, with the most significant interactions occurring during the last quarter of 2023 and the first quarter of 2024.

In early August of 2021, the CEO of Party A, a publicly listed home building products company (referred to as “Party A”), contacted PGTI’s President and CEO Jeff Jackson to request a meeting with Mr. Jackson. The topic of the meeting was not specified. The meeting was scheduled for August 11, 2021. At the August 11 meeting, Mr. Jackson and the CEO of Party A discussed a potential business combination involving PGTI and Party A, but did not discuss the price or any other terms of a potential transaction. Shortly thereafter, Mr. Jackson relayed the substance of this discussion to several members of the PGTI board of directors, including the Chairman, Rodney Hershberger.

On August 16, 2021, in light of Mr. Jackson’s discussion with the CEO of Party A and PGTI’s expectation that Party A may soon make an offer to acquire PGTI, PGTI engaged Davis Polk & Wardwell LLP, which had previously advised PGTI on certain of its strategic acquisition transactions, to serve as PGTI’s legal advisor in connection with a potential strategic transaction.

On September 2, 2021, Party A sent an unsolicited offer letter to Mr. Jackson, proposing the acquisition of PGTI by Party A for $26.50 per share of PGTI common stock in an all-cash transaction (referred to as the “first Party A offer”). Mr. Jackson promptly shared the first Party A offer with the PGTI board of directors. The first Party A offer stated that the proposed transaction would be funded with cash on hand and a combination of existing and new committed debt financing and that the transaction documentation would not include any financing contingency.

On September 4, 2021, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Davis Polk in attendance. Davis Polk provided a summary of public company transaction processes and the PGTI board of directors’ fiduciary duties, and the PGTI board of directors concluded that (a) the first Party A offer was not in the best interests of PGTI or its stockholders and did not provide a basis to engage with Party A and (b) authorized Mr. Jackson to inform Party A that the PGTI board of directors had determined that the first Party A offer did not provide sufficient value to PGTI stockholders to warrant further discussion. Mr. Jackson subsequently communicated this message to representatives of Party A.

 

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Over the next few months, from September 2021 through December 2021, representatives of PGTI and Party A held several meetings and Messrs. Hershberger and Jackson exchanged various communications with representatives of Party A. In particular, on October 20, 2021, Mr. Jackson and the CEO of Party A met for lunch, and the CEO of Party A expressed continued interest in a potential strategic transaction between PGTI and Party A, but stated that he would prefer to effectuate a transaction on a friendly basis. Mr. Jackson replied that he believed that the PGTI board of directors would not be interested in an offer at that time for a price similar to Party A’s prior offer.

On December 15, 2021, Mr. Jackson and the CEO of Party A held a phone call to further discuss a potential strategic transaction with Party A. Following that conversation, Party A sent an unsolicited indication of interest addressed to Messrs. Hershberger and Jackson, reaffirming Party A’s proposal to acquire PGTI for $26.50 per share of PGTI common stock, comprised of $20.50 in cash and $6.00 in Party A common stock (referred to as the “second Party A offer”). The second Party A offer stated that the cash portion of the proposed transaction would be financed with cash on hand and a combination of existing and new debt financing, for which Party A would secure commitments prior to the execution of definitive transaction documents. The second Party A offer further stated that the transaction documentation would not include any financing contingency. Upon receipt of the second Party A offer, Messrs. Hershberger and Jackson discussed the second Party A offer and were of the opinion that the change in the consideration mix did not materially alter Party A’s proposal. Mr. Jackson then promptly informed the PGTI board of directors of the receipt of the second Party A offer. Because the second Party A offer did not offer any increase in value compared to the first Party A offer, PGTI concluded that the second Party A offer similarly did not adequately value PGTI.

In January 2022, PGTI formally retained FGS Global Inc. as its public relations advisor in connection with a potential strategic transaction.

On January 5, 2022, Mr. Jackson and the CEO of Party A held a call during which Mr. Jackson informed the CEO of Party A that the PGTI board of directors believed the first Party A offer and the second Party A offer did not adequately value PGTI.

During January 2022, PGTI’s senior management consulted Evercore on an informal basis. On January 31, 2022, PGTI and Evercore entered into an engagement letter, pursuant to which PGTI formally retained Evercore to advise on potential shareholder activism, to prepare for and respond to proposals for a potential strategic transaction and to evaluate strategic and financial alternatives for PGTI. The determination to engage Evercore as PGTI’s financial advisor was based on, among other things, Evercore’s qualifications, experience and reputation and Evercore’s familiarity with PGTI.

On May 1, 2022, Party A sent an unsolicited indication of interest addressed to the PGTI board of directors, offering to acquire PGTI for $28.25 per share of PGTI common stock, comprised of $25.00 in cash and $3.25 in Party A common stock, based on a fixed exchange ratio using the trading price of Party A common stock during a period to be agreed (referred to as the “third Party A offer”). Mr. Jackson promptly shared the third Party A offer with the entire PGTI board of directors. The third Party A offer stated that the cash portion of the proposed transaction would be financed with cash on hand and a combination of existing and new debt financing, for which Party A would secure commitments prior to the execution of definitive transaction documents. The third Party A offer further stated that the transaction documentation would not include any financing contingency.

On May 12, 2022, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore in attendance. Representatives of Davis Polk attended in person.

On May 17, 2022, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance. Evercore summarized the proposed strategic transaction with Party A and provided a preliminary financial analysis of PGTI based on

 

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management projections and publicly available Wall Street analyst consensus forecasts. The PGTI board of directors concluded that the third Party A offer did not adequately value PGTI and authorized Messrs. Hershberger and Jackson to inform Party A of its determination.

On May 20, 2022, Messrs. Jackson and Hershberger and representatives of Party A held a call, on which Messrs. Jackson and Hershberger informed Party A that PGTI was rejecting the third Party A offer.

On May 23, 2022, Messrs. Hershberger and Jackson sent a letter to Party A formally rejecting the third Party A offer. In the letter, Messrs. Hershberger and Jackson further encouraged Party A that any revised proposal be an all-cash offer, in light of the PGTI board of directors’ concerns about the volatility in Party A’s stock price, but expressed concern about closing certainty and, in particular, Party A’s ability to finance an all-cash offer at the same price per share as reflected in the third Party A offer, given the implied leverage levels for Party A at that price point.

On June 10, 2022, Party A sent an unsolicited proposal to the PGTI board of directors, offering to acquire PGTI for $28.25 per share of PGTI common stock in an all-cash transaction (referred to as the “fourth Party A offer”). Mr. Jackson promptly shared the fourth Party A offer with the entire PGTI board of directors. The fourth Party A offer stated that the proposed transaction would be financed with cash on hand and a combination of existing and new debt financing, for which Party A would secure commitments prior to the execution of definitive transaction documents. The fourth Party A offer further stated that the definitive transaction documentation would not include any financing contingency or a reverse termination fee construct and would provide for a specific performance remedy.

On June 21, 2022, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance. Evercore summarized the proposed strategic transaction involving Party A and provided an update regarding (a) PGTI’s then-current market valuation, as well as those of comparable peer companies, (b) financing and market trends, including those impacting PGTI stock price, (c) PGTI management’s views on its 2022 financial forecast, (d) the fourth Party A offer and certain related conversations between representatives of PGTI, Evercore and Party A and (e) potential strategic alternatives for PGTI. The PGTI board of directors concluded that the fourth Party A offer did not adequately value PGTI and that, given market dislocations then affecting PGTI, the industry and the market generally, it was a suboptimal time to pursue a strategic transaction. The PGTI board of directors also expressed doubt that Party A could consummate a strategic transaction given the leverage levels implied by the fourth Party A offer and the then-current state of the credit markets. However, the PGTI board of directors determined that if Party A could consummate an all-cash strategic transaction, the potential premium could be attractive and therefore approved providing confidential information to Party A to demonstrate the additional value of PGTI.

On June 24, 2022, Messrs. Hershberger and Jackson sent a letter to Party A formally rejecting the fourth Party A offer and expressing concern about closing certainty, but offering to provide confidential information to Party A to demonstrate the additional value of PGTI, subject to the parties executing a confidentiality agreement.

During the course of July 2022 and on August 1, 2022, representatives of PGTI and Party A continued to discuss a potential strategic transaction between the parties. PGTI sent Party A a draft confidentiality agreement with a standstill period of 18 months, and Party A sent due diligence requests to PGTI.

On August 3, 2022, Party A’s financial advisors contacted certain members of PGTI’s senior management informing them that Party A was rescinding the fourth Party A offer and would not continue to pursue a strategic transaction with PGTI at that time.

On October 10, 2022, PGTI was informed of a potential accumulation in its common stock by an unknown party of approximately 4.6%.

 

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On December 7, 2022, PGTI was informed that MITER may have been the entity that had accumulated a position of at least 4.6% in PGTI’s common stock, and had since increased its holding to approximately 4.8%.

On December 8, 2022, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance, to discuss the accumulation of PGTI’s common stock by MITER as well as potential strategic transactions involving two parties in the public building materials industry. Evercore presented an overview of a potential acquisition of Party A, involving PGTI partnering with Party B, a private home building products company (referred to as “Party B”), to purchase certain assets of Party A and provided an overview of Party A’s business and the financials of the combined business of Party A and PGTI after Party B purchased certain other assets of Party A. Evercore also discussed PGTI’s potential strategy in the event of a potential hostile bid from MITER. Davis Polk then presented an overview of the PGTI board of directors’ fiduciary duties and a shareholder rights plan that the PGTI board of directors could consider adopting in response to a potential hostile bid from MITER. The PGTI board of directors approved reaching out to both Party A and Party B to explore a potential transaction. The PGTI board of directors did not make any determination regarding the adoption of a shareholder rights plan at the meeting.

Later in December 2022, Evercore held a meeting with Party B to discuss PGTI and Party B partnering to acquire Party A, whereby PGTI would acquire Party A’s North America business and Party B would acquire the other businesses of Party A, but the parties had no further discussions with respect to such an acquisition.

In early February 2023, Mr. Jackson had a discussion with representatives of MITER regarding MITER’s accumulation of shares of common stock in PGTI. At this time, no transaction terms of a potential combination of the companies were discussed.

On March 3, 2023, Mr. Jackson and Matt DeSoto, the CEO of MITER, agreed to schedule a meeting at which the parties would discuss a potential business combination and an offer would be made to acquire PGTI. No other terms were discussed. The parties later agreed that such meeting would occur on April 20, 2023.

On March 16, 2023, members of the PGTI management team were informed of a potential additional 1% accumulation by MITER of PGTI common stock during the prior week.

Also on March 16, 2023, Mr. Jackson and Mr. DeSoto held a meeting to discuss the potential accumulation of PGTI common stock and a potential strategic transaction with MITER, but did not discuss a specific price or other transaction terms. Mr. DeSoto stated that MITER did not intend to commence a hostile bid and indicated that MITER would present an offer to the PGTI board of directors in April 2023.

On March 24, 2023, based on data compiled by its advisors, PGTI became aware that MITER and its affiliates had accumulated at least 7% (and possibly 8% or more) of PGTI common stock, including through derivative positions.

On March 29, 2023, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance. Mr. Jackson provided an overview of MITER and his conversations with MITER to date. Evercore provided an overview of the previously discussed shareholder rights plan, including benchmarking the plan’s terms to other shareholder rights plans adopted under similar circumstances and how its adoption would likely be received by PGTI stockholders. Davis Polk reminded the PGTI board of directors of its fiduciary duties. Mr. Quinn presented the shareholder rights plan and proposed resolutions adopting such plan. After discussion of, among other things, (a) the appropriateness of adopting a shareholder rights plan at that time, (b) the appropriate duration and threshold of the shareholder rights plan (including discussion regarding the default position of Institutional Shareholder Services (referred to as “ISS”) with respect to a 10% threshold) and (c) the expected reaction of the market and proxy advisors, the PGTI board of directors decided that (i) given MITER’s aggregate direct and indirect accumulation of PGTI common stock, adopting a shareholder rights plan was necessary to ensure that, among

 

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other things, PGTI’s shareholders would receive a control premium in connection with a change of control of PGTI and (ii) a 10% threshold was appropriate and that ISS’ default position regarding such threshold should not apply because ISS’ position was intended to protect activists and not strategic investors, and therefore the PGTI board of directors decided to adopt a shareholder rights plan with a 10% threshold.

On March 30, 2023, the PGTI board of directors declared a dividend of one preferred stock purchase right for each outstanding share of PGTI common stock payable to holders of record of shares of PGTI common stock as of the close of business on April 10, 2023 (referred to as the “rights dividend”), and adopted the Rights Agreement (referred to as the “rights agreement”) between PGTI and Equiniti Trust Company, LLC, as Rights Agent, to protect PGTI stockholders from coercive or otherwise unfair takeover tactics. The rights agreement provided that the rights dividend would not be triggered as a result of an acquisition by any person of PGTI common stock pursuant to a negotiated strategic transaction. Later that day, PGTI issued a press release announcing the adoption of the rights dividend.

On March 31, 2023, representatives of Party C, a private equity firm that owned a controlling interest in another home building products company, contacted Evercore to express interest in a potential strategic transaction with PGTI.

On April 3, 2023, PGTI sent a letter to its stockholders, informing them that it had approved the rights agreement and declared the rights dividend.

Also on April 3, 2023, Mr. Jackson and Howard Heckes, President and CEO of Masonite, met to discuss a potential strategic transaction involving PGTI and Masonite.

Additionally, on April 3, 2023, Mr. Jackson and Mr. DeSoto held a call to discuss the potential strategic transaction, and Mr. DeSoto reconfirmed MITER’s interest in a potential strategic transaction and reconfirmed the meeting date of April 20, 2023.

In April 2023, Mr. Jackson had conversations with Party D, a private equity firm that regularly invests in industrial businesses (referred to as “Party D”) regarding a potential transaction between PGTI and Party D. Subsequently, Mr. Jackson sent a draft confidentiality agreement to Party D with a standstill period of 18 months. On April 5, 2023, Party D’s legal advisors sent a revised draft of the confidentiality agreement to Mr. Jackson with a standstill period of 12 months. Party D subsequently informed PGTI that it would not be making an offer to acquire PGTI due to PGTI’s valuation expectations which were higher than Party D could justify paying.

On April 20, 2023, representatives of MITER met with Mr. Jackson and Alexander Castaldi, a member of the PGTI board of directors, at PGTI’s headquarters to discuss the potential business combination of PGTI and MITER and provided Messrs. Jackson and Castaldi with an unsolicited indication of interest, offering to acquire PGTI for $29.00 per share of PGTI common stock in an all-cash transaction (referred to as the “first MITER offer”). The first MITER offer was not subject to any financing contingency and stated that MITER had obtained fully negotiated and signed debt financing and committed equity financing sufficient to fully finance the proposed transaction. The first MITER offer was promptly made available to the entire PGTI board of directors.

On May 1, 2023, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance. Evercore summarized (a) the proposed strategic transaction with MITER, (b) the change-in-control targets published in various analyst reports following PGTI’s approval of the shareholder rights plan and (c) a preliminary financial analysis of PGTI. Mr. Jackson summarized the reaction that PGTI had received from its stockholders since such approval and his and Mr. Castaldi’s meeting with MITER and prior communications with MITER. The PGTI board of directors concluded that the first MITER offer was not in the best interests of PGTI or its stockholders and did not provide a basis for PGTI to engage with MITER and instructed Mr. Jackson to inform MITER of its conclusion, which message Mr. Jackson promptly relayed to MITER.

 

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Also on May 1, 2023, Masonite sent a formal indication of interest in exploring a potential business combination transaction addressed to Mr. Jackson, but did not specify a price, a transaction structure, or other material terms.

On May 11, 2023, Evercore held a call with Mr. Jackson to discuss various considerations with respect to a potential strategic transaction with MITER.

On May 12, 2023, Mr. Jackson and Mr. DeSoto discussed a potential strategic transaction involving PGTI and MITER.

On May 15, 2023, Mr. Jackson met with the CEO of Party E, another publicly listed home building products company (referred to as “Party E”). During the meeting, the CEO of Party E made a verbal offer, on behalf of Party E, to acquire PGTI for $33.00 per share of PGTI common stock in a mixed stock-and-cash transaction. Mr. Jackson promptly informed the PGTI board of directors of Party E’s offer.

On May 19, 2023, Mr. Jackson and the financial advisor for MITER discussed a potential strategic transaction involving PGTI and MITER. Also on May 19, 2023, Mr. Jackson met with the CEO of Party E and discussed Party E providing a written offer.

On May 22, 2023, Evercore prepared a preliminary ability to pay analysis in response to Mr. Jackson’s conversation with the CEO of Party E.

On May 24, 2023, Mr. Jackson met with the financial advisor of Party E and discussed a potential strategic transaction, including points of emphasis related to a potential written offer.

On May 25, 2023, Mr. Jackson met with the CEO of Party E to discuss a potential strategic transaction, including the potential consideration mix.

Also on May 25, 2023, MITER sent an unsolicited indication of interest addressed to Messrs. Castaldi and Jackson and members of the PGTI Finance and Transaction Committee, which was formed by the PGTI board of directors on February 25, 2022, Mr. Hershberger, Brett Milgram and Floyd Sherman, offering to acquire PGTI for between $30.00 and $32.00 per share of PGTI common stock in an all-cash transaction (referred to as the “second MITER offer”). As with the first MITER offer, the second MITER offer stated that MITER had obtained committed financing from debt and equity financing sources in amounts sufficient to fully finance the proposed transaction. In connection with the second MITER offer, MITER provided copies of signed debt commitments and stated that it had prepared a draft of the definitive transaction agreement, which did not include a financing condition to closing. The second MITER offer was promptly made available to the entire PGTI board of directors.

On May 30, 2023, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance. Mr. Jackson summarized the second MITER offer and provided an update on his conversations with MITER. Evercore presented a preliminary valuation analysis of PGTI, including a summary of market conditions, stock performance, trading multiples and financial analysis for PGTI, and discussed various options to respond to MITER. In light of (a) the recent financial performance of PGTI and the ability to continue pursuing the PGTI board of directors’ strategic plan, (b) discussions with certain PGTI stockholders, (c) the lack of definitiveness in MITER’s proposal by virtue of its inclusion of a price range as opposed to a single price, (d) the receipt of a higher verbal offer from Party E and (e) comparable transactions, the PGTI board of directors determined that the second MITER offer was inadequate and inferior to PGTI’s alternatives, and authorized Evercore to provide a verbal response to KeyBanc Capital Markets Inc. (referred to as “KeyBanc”), one of MITER’s financial advisors, rejecting the second MITER offer and noting that MITER should only provide a revised proposal if it represented a meaningful increase to the price reflected in the second MITER offer. Evercore and Mr. Jackson promptly provided that

 

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response to KeyBanc and Mr. DeSoto, and Mr. Jackson and Evercore also informed Mr. DeSoto and KeyBanc that PGTI had received a verbal offer above the upper end of the second MITER offer.

Shortly thereafter, Party E informed PGTI that it would not be making an offer to acquire PGTI due to the implied leverage levels for Party E and the amount of stock Party E would have to offer at the valuation that had been discussed.

On June 22, 2023, after having a call with Mr. Jackson and Evercore and KeyBanc and Mr. DeSoto to preview the offer, MITER sent an unsolicited indication of interest addressed to Messrs. Hershberger, Milgram, Sherman, Castaldi and Jackson, offering to acquire PGTI for $33.00 per share of PGTI common stock in an all-cash transaction (referred to as the “third MITER offer”). As with the first MITER offer and the second MITER offer, the third MITER offer stated that MITER had obtained committed financing from debt and equity financing sources in amounts sufficient to fully finance the proposed transaction. The third MITER offer further stated that, including cash-settled total return swaps, MITER had total economic exposure to over 10% of PGTI’s shares, which it had acquired prior to the adoption of the rights dividend. The third MITER offer was promptly made available to the entire PGTI board of directors.

On June 28, 2023, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance, and, in light of (a) the recent financial performance of PGTI and the ability to continue pursuing the PGTI board of directors’ strategic plan, including the new glass venture, (b) discussions with PGTI’s shareholders, and (c) the 2023 and 2024 financial forecasts, the PGTI board of directors concluded that the third MITER offer was not in the best interests of PGTI or its stockholders. Notwithstanding those considerations, the PGTI board of directors determined that it was advisable and in the best interest of PGTI stockholders for PGTI to provide certain limited information to MITER, on a confidential basis and without disclosing competitively sensitive information, sufficient to provide MITER the opportunity to submit a higher offer that properly accounted for PGTI’s value. On June 30, 2023, Mr. Jackson and Evercore conveyed the PGTI board of directors’ decision to KeyBanc and Mr. DeSoto, including a list of non-public information that PGTI would be willing to provide for this purpose.

On July 3, 2023, a representative of PGTI sent MITER a draft confidentiality agreement (referred to as the “MITER NDA”), which included an 18-month standstill.

On July 8, 2023, a representative of MITER sent a revised draft of the MITER NDA, in which MITER proposed to remove the standstill provision, among other changes, and requested that PGTI provide additional information beyond what PGTI had previously offered to provide.

On July 10, 2023, representatives of Evercore and Davis Polk discussed MITER’s July 8, 2023 request with Mr. Jackson and other members of PGTI’s senior management. PGTI instructed Evercore to respond to KeyBanc encouraging MITER to be more constructive.

On July 11, 2023, Evercore, on behalf of PGTI, informed KeyBanc that PGTI expected MITER to agree to a confidentiality agreement with a customary standstill and certain other provisions, but on that condition PGTI would be willing to share additional information with MITER.

On July 13, 2023, KeyBanc sent a due diligence request list to Evercore.

On July 16, 2023, PGTI authorized Evercore to send a revised due diligence request list, reflecting information that PGTI was willing to provide MITER, which list Evercore then provided to KeyBanc.

Between July 24, 2023 and August 28, 2023, PGTI, MITER and their representatives negotiated the terms of the MITER NDA.

 

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PGTI and MITER executed the MITER NDA on August 28, 2023 with a standstill period through June 30, 2024. The standstill provision in the MITER NDA did not restrict MITER from making a confidential offer to PGTI and terminated, in accordance with its terms, upon PGTI’s entry into any definitive agreement with respect to a change in control transaction, and therefore terminated upon PGTI’s entry into the Masonite merger agreement.

On September 10, 2023, pursuant to the MITER NDA, PGTI provided Stinson LLP, MITER’s legal counsel (referred to as “Stinson”), with access to a virtual data room with certain select non-public information of PGTI (referred to as the “data room”). On September 11, 2023, pursuant to the MITER NDA, PGTI also provided MITER with access to the data room.

On September 21, 2023, certain members of PGTI management held a due diligence meeting with representatives of MITER to discuss the information provided.

On October 6, 2023, Evercore and KeyBanc held a meeting to discuss the reaction to the information in the data room and the due diligence session that occurred on September 21, 2023, and Evercore stated that PGTI expected that any future offer would represent a meaningful increase to the third MITER offer.

On October 9, 2023, representatives from Party F, a private equity firm (referred to as “Party F”), spoke with Mr. Jackson regarding a potential strategic transaction.

On October 10, 2023, Reuters published an article reporting that PGTI had rejected a $33.00 per share offer from MITER and that MITER was considering raising its bid to $36.00 per share.

On October 11, 2023, the Chief Investment Officer of Party F sent an email to Mr. Jackson expressing an interest in pursuing a potential strategic transaction with PGTI, but did not specify a price. However, he acknowledged the Reuters article from the prior day and the significance of the prices specified in the article.

On October 13, 2023, MITER sent an unsolicited indication of interest addressed to Messrs. Jackson, Hershberger, Castaldi, Milgram and Sherman, offering to acquire PGTI for $36.50 per share of PGTI common stock in an all-cash transaction (referred to as the “fourth MITER offer”). The fourth MITER offer stated that MITER had obtained committed financing from debt and equity financing sources in amounts sufficient to fully finance the proposed transaction and that its financial due diligence was “substantively complete.” MITER provided copies of the signed debt commitments with the fourth MITER offer. The fourth MITER offer was promptly made available to the entire PGTI board of directors.

Between October 17, 2023 and October 18, 2023, representatives of PGTI and Party F exchanged drafts of a confidentiality agreement (referred to as the “Party F NDA”), which included a 12-month standstill period. The standstill provision in the Party F NDA did not restrict Party F from making a confidential offer to PGTI and terminated, in accordance with its terms, upon PGTI’s entry into the Masonite merger agreement. PGTI and Party F executed the Party F NDA on October 18, 2023. On October 19, 2023, PGTI provided Party F with access to the data room.

Also on October 19, 2023, certain members of PGTI management held a due diligence meeting and plant tour with the chief investment officer and other representatives of Party F.

On October 21, 2023, Party F sent PGTI a supplemental information request list.

On October 23, 2023, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance. Evercore summarized the proposed strategic transaction with MITER and interest from other parties, including Party F.

 

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On October 25, 2023, at Masonite’s direction, Jefferies LLC (referred to as “Jefferies”), Masonite’s financial advisor, informed Evercore that Masonite was interested in making a mixed cash-and-stock bid to acquire PGTI. Later that day, Davis Polk sent a draft confidentiality agreement (referred to as the “Masonite NDA”) for Masonite that included an 18-month standstill period. The next day, at Masonite’s request and with PGTI’s authorization, Davis Polk revised the Masonite NDA to be a mutual confidentiality agreement and sent the revised Masonite NDA, which also included an 18-month standstill period, to Masonite. The following day, on October 27, 2023, Masonite sent a revised draft of the Masonite NDA to Davis Polk, with a nine-month standstill period. The same day, Davis Polk sent Masonite’s counsel, Wachtell Lipton Rosen & Katz LLP (referred to as “Wachtell Lipton”), a revised draft of the Masonite NDA, which the parties executed. The standstill provision in the Masonite NDA would not restrict Masonite from making a confidential offer to PGTI and terminated, in accordance with its terms, upon PGTI’s entry into the Masonite merger agreement.

On October 27, 2023, Party F informed PGTI that it would not make a bid based on its due diligence, the LBO financing environment and valuation expectations as a result of the rumored bid received by PGTI according to a Reuters article.

On October 28, 2023, Evercore provided Masonite with access to the data room.

On October 31, 2023, representatives of PGTI and Masonite held a meeting, and PGTI’s management team presented an overview of PGTI.

Also on October 31, 2023, the PGTI board of directors held a meeting, with members of PGTI management and representatives of Evercore attending. Evercore reviewed a preliminary financial analysis of PGTI as well as a potential framework for a transaction with Masonite. After also discussing the potential strategic transaction with MITER, the PGTI board of directors concluded that the fourth MITER offer insufficiently valued PGTI, but decided to propose a counteroffer of $40.00 per share.

On November 1, 2023, Mr. Jackson had a call with Mr. DeSoto and conveyed a counteroffer of $40.00 per share. In his conversation with Mr. Jackson, Mr. DeSoto told Mr. Jackson that if PGTI received an offer for $40, PGTI “should take it.” In conversations between MITER’s financial advisors and Evercore that same day, MITER’s financial advisors stated on MITER’s behalf: “As one of your largest stockholders, if you have an offer that starts with a 4, we encourage you to take that offer.”

On November 6, 2023, after a call between Mr. Jackson and Mr. DeSoto to preview the offer, MITER sent an unsolicited indication of interest to Messrs. Jackson, Hershberger, Castaldi, Milgram and Sherman, offering to acquire PGTI for $37.75 per share of PGTI common stock in an all-cash transaction (referred to as the “fifth MITER offer”). The fifth MITER offer stated that MITER had obtained committed financing from debt and equity financing sources in amounts sufficient to fully finance the proposed transaction and reiterated that MITER’s financial diligence was “substantively complete.” In the fifth MITER offer, MITER requested a response by November 9, 2023. The fifth MITER offer was promptly made available to the entire PGTI board of directors. In conversations between MITER’s financial advisors and Evercore that same day, MITER’s financial advisors reiterated, on MITER’s behalf, their message that PGTI should take an offer starting with a 4.

On November 7, 2023, Mr. Jackson held a call with Evercore and Davis Polk to discuss the fifth MITER offer.

On November 8, 2023, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance, and concluded that the fifth MITER offer insufficiently valued PGTI, but decided to propose a counteroffer of $39.00 per share.

On November 9, 2023, Mr. Jackson had a call with Mr. DeSoto and conveyed a counteroffer of $39.00 per share. On that same day, Davis Polk, on behalf of PGTI, sent to Stinson a draft merger agreement, which was

 

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identical to the first draft of the merger agreement sent to Masonite. The draft merger agreement included “hell-or-high-water” regulatory obligations and full specific performance rights, with the message that such draft would serve as a basis for negotiations, assuming MITER was willing to raise its offer to at least $39.00 per share in cash.

On November 13, 2023, Mr. Jackson held a call with Mr. DeSoto to discuss a potential strategic transaction with MITER. Following that call, MITER submitted a written offer to acquire PGTI for $38.25 per share of PGTI common stock in an all-cash transaction (referred to as the “sixth MITER offer”) which it indicated was its “best and final offer.” The sixth MITER offer was promptly made available to the entire PGTI board of directors. 

On November 14, 2023, Mr. Jackson and Mr. Heckes had a call to discuss a potential strategic transaction, and Masonite submitted a written proposal to acquire PGTI for $37.00 per share of PGTI common stock, comprised of $30.96 per share in cash and $6.04 per share in Masonite common shares. Mr. Jackson indicated that he believed such an offer would be insufficient for the PGTI board of directors given that Masonite’s offer would have to be at least $40.00 per share in order for PGTI to be willing to open negotiations with Masonite.

On November 16, 2023, Masonite submitted a revised written offer to acquire PGTI for $38.50 per share of PGTI common stock, comprised of $31.93 in cash and $6.57 in Masonite common shares (referred to as the “second Masonite offer”). The second Masonite offer was promptly verbally communicated to the entire PGTI board of directors. The second Masonite offer stated that the proposed transaction would be funded with cash on hand, new debt financing and the issuance of approximately $350 million of a new Masonite mandatorily convertible security and included a highly confident letter from Jefferies. The second Masonite offer further stated that Masonite would deliver definitive financing commitment papers at signing and that the proposed transaction would not be subject to a financing contingency. The second Masonite offer was subject to PGTI entering into exclusivity with Masonite. Mr. Heckes and Mr. Jackson held a call, on which Mr. Jackson reiterated that PGTI expected an offer of at least $40 and that he needed to hear back by the end of day on November 17, 2023.

Also on November 16, 2023, the PGTI board of directors convened a meeting at which representatives of Evercore reviewed the sixth MITER offer and a preliminary financial analysis of PGTI. Evercore also reviewed the second Masonite offer. The PGTI board of directors concluded that if Masonite could increase its offer to $40.00 a share while maintaining the same Masonite common share component, then the PGTI board of directors would support pursuing a transaction with Masonite, including entering into an exclusivity period. In reaching this conclusion, the PGTI board of directors noted that it was comfortable proceeding on this basis in reliance on MITER’s statements that its last proposal was its “best and final offer” and PGTI “should take [a deal at $40 per share].”

On November 17, 2023, Masonite submitted a revised non-binding written offer to acquire PGTI for $40.00 per share of PGTI common stock, comprised of $33.50 in cash and $6.50 in Masonite common shares (referred to as the “third Masonite offer”). The third Masonite offer was otherwise identical to the second Masonite offer in all material respects, and, as with the second Masonite offer, Masonite’s willingness to proceed was predicated on PGTI entering into exclusivity with Masonite. As part of the third Masonite offer, Masonite provided a draft exclusivity agreement (referred to as the “exclusivity agreement”), with a proposed exclusivity period expiring on January 2, 2024. The third Masonite offer was promptly made available to the entire PGTI board of directors.

Later on November 17, 2023, Davis Polk sent a draft of the Masonite merger agreement to Wachtell Lipton, which provided for, among other things, (a) “hell-or-high-water” regulatory obligations and full specific performance rights, (b) a termination fee of 2% of the implied equity value of PGTI and (c) Masonite increasing the size of its board by two members and appointing two members of the PGTI board of directors to fill such new board seats. Davis Polk also sent a revised draft of the exclusivity agreement to Masonite’s advisors, with a proposed exclusivity period expiring on December 15, 2023, indicating that PGTI would need to see Masonite’s initial mark-up of the Masonite merger agreement before it would consider entering into exclusivity with Masonite.

 

45


Over the next several days, Davis Polk and Wachtell Lipton exchanged drafts of the exclusivity agreement and discussed various matters in the Masonite merger agreement. On November 21, 2023, Mr. Heckes and Mr. Jackson discussed the proposed transaction and agreed to a termination fee of 3.5% of PGTI’s implied equity value and a reverse termination fee of 7.5% of PGTI’s implied equity value in the event that the transaction failed to close due to the other party’s breach of the agreement, except in the case of a willful breach in which case the breaching party would be fully liable for all damages caused by such willful breach. On the same day, based on the satisfactory resolution of Masonite merger agreement discussions, PGTI and Masonite entered into the exclusivity agreement which provided for an exclusivity period until December 15, 2023, subject to certain requirements and an extension until December 26, 2023, at Masonite’s election, if Masonite reaffirmed the proposed merger consideration and was continuing to pursue the proposed transaction in good faith on such date.

Also on November 21, 2023, the entire PGTI board of directors was informed that PGTI had entered into an exclusivity agreement with Masonite pursuant to the instructions of the PGTI board of directors at the meeting on November 16, 2023.

On November 22, 2023, Mr. Heckes and Mr. Jackson discussed the proposed transaction between PGTI and Masonite. Mr. Jackson also informed Mr. DeSoto that the PGTI board of directors had concluded that the sixth MITER offer was insufficient, did not serve as a basis for further discussions and that there was nothing further to discuss at that time.

On November 28, 2023, Davis Polk sent a revised draft of the Masonite merger agreement to Wachtell Lipton.

On November 28, 2023, without any solicitation from or on behalf of PGTI, KeyBanc requested a call with Evercore. Evercore held a call with KeyBanc and listened to their comments regarding the sixth MITER offer without engaging in any substantive discussions and informed MITER that PGTI was not interested in the sixth MITER offer and that there was nothing further to discuss. Later during that week, KeyBanc contacted Evercore on multiple occasions requesting a call. In accordance with the exclusivity agreement and upon instruction from PGTI, Evercore did not respond to such outreach.

On December 1, 2023, Mr. Jackson received unsolicited outreach from Mr. DeSoto requesting a call. Mr. Jackson responded on December 3, 2023, that he had time to connect on December 5, 2023, and a call was scheduled for that date.

On December 3, 2023, Wachtell Lipton sent a revised draft of the Masonite merger agreement to Davis Polk.

On December 4, 2023, PGTI and Masonite held a due diligence call on which representatives of Wachtell Lipton asked representatives of PGTI certain questions about PGTI’s business.

On December 5, 2023, Mr. DeSoto and Mr. Jackson held a call during which Mr. DeSoto asked how to bridge the gap between the sixth MITER offer and PGTI’s counterproposal of $39.00 per share. During the course of this call, Mr. DeSoto stated that MITER’s board was not willing to make a higher offer. Mr. Jackson reiterated that PGTI was not interested in the sixth MITER offer and that there was nothing further to discuss.

On December 6, 2023, PGTI and Masonite held a reverse due diligence call on which representatives of PGTI asked representatives of Masonite certain questions about Masonite’s business.

On December 7, 2023, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management to, in part, discuss the status of the potential transaction with Masonite, and recent communications made by MITER.

 

46


Between December 7, 2023, and December 13, 2023, Davis Polk and Wachtell Lipton exchanged drafts of the Masonite merger agreement and held calls to discuss various points, including the marketing period required for Masonite to raise the funds required to finance the transaction.

On December 13, 2023, Reuters published an article reporting that PGTI had rejected a $38.00 per share offer from MITER and speculating about a possible future proposal from MITER.

On December 14, 2023, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance, to discuss the status of the proposed transaction with Masonite and a potential new proposal from MITER. Evercore and Davis Polk also discussed the status and key proposed terms of the proposed transaction with Masonite and an expected increased offer from MITER. Evercore reviewed with the PGTI board of directors its preliminary financial analysis of the proposed transaction with Masonite, including in comparison to the expected increased MITER offer, which management believed would be $39.00 per share. Representatives of Davis Polk then reviewed the directors’ fiduciary duties in the context of considering the proposed transaction and alternatives, including the expected increased MITER offer, and summarized the terms of the current draft of the Masonite merger agreement. At the conclusion of the meeting, the PGTI board of directors, unanimously authorized PGTI management and PGTI’s advisors to proceed with finalizing a transaction with Masonite. The same day, MITER sent an unsolicited non-binding written indication of interest to PGTI, offering to acquire PGTI for $39.00 per share of PGTI common stock in an all-cash transaction (referred to as the “seventh MITER offer”). The seventh MITER offer stated that MITER had obtained committed financing from debt and equity financing sources in amounts sufficient to fully finance the proposed transaction and stated that its financing due diligence was “substantively complete.” MITER requested a response by December 18, 2023. The seventh MITER offer was promptly made available to the entire PGTI board of directors.

On December 14, 2023, PGTI and Evercore executed an engagement letter for Evercore’s representation of PGTI in connection with a strategic transaction. The next day, Evercore provided a disclosure letter, detailing any potential relationships it may have with respect to the potential strategic transactions involving PGTI.

On December 15, 2023, Evercore confirmed receipt of the seventh MITER offer in response to outreach from KeyBanc, but neither PGTI nor its other representatives otherwise responded to MITER’s proposal or outreach.

Also on December 15, 2023, Wachtell Lipton sent a revised draft of the Masonite merger agreement to Davis Polk that, among other things, extended the length of the marketing period, and informed Davis Polk that, in accordance with the exclusivity agreement, Masonite was extending the exclusivity period to December 26, 2023.

On December 16, 2023, Mr. Jackson discussed the proposed transaction with Mr. Heckes, and proposed a fixed exchange ratio that implied total consideration of $41.00 per share of PGTI common stock, comprised of $33.50 in cash and $7.50 in Masonite common shares based on the closing price of Masonite’s common shares as of December 15, 2023. In exchange for the proposed fixed exchange ratio, Mr. Heckes proposed that any remaining open items in the Masonite merger agreement be resolved consistent with Masonite’s positions.

Also on December 16, 2023, Davis Polk sent a revised draft of the Masonite merger agreement to Wachtell Lipton, that, among other things and in light of the seventh MITER offer, provided for a reduced termination fee payable by PGTI to 2.5% of PGTI’s implied equity value.

On December 17, 2023, Davis Polk and Wachtell Lipton exchanged drafts of the Masonite merger agreement, and the parties ultimately agreed that the definitive Masonite merger agreement would reflect total consideration to $41.00 per share of PGTI common stock as of signing, comprised of $33.50 in cash and 0.07353 Masonite common shares (having a value of $7.50 based on the closing price of Masonite common shares as of

 

47


December 15, 2023), and reached final resolutions on the marketing period and termination fees. The PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance, to discuss the status and key proposed terms of the proposed transaction with Masonite. Representatives of Davis Polk summarized the revisions to the Masonite merger agreement since the December 14 meeting, including the termination fee payable by PGTI. Evercore then reviewed with the PGTI board of directors its financial analysis of the merger consideration and delivered to the PGTI board of directors its verbal opinion (which was subsequently confirmed in writing) to the effect that, as of that date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the merger consideration per share of $33.50 in cash and 0.07353 Masonite common shares to be received by the holders of shares of PGTI common stock in the merger was fair, from a financial point of view, to such holders (other than Masonite or any subsidiary of Masonite or PGTI or any subsidiary of PGTI, or holders of dissenting shares). The PGTI board of directors also reviewed the disclosure letter and related information provided by Evercore on December 15, 2023 and determined that none of the disclosed relationships impacted Evercore’s ability to act in an independent and disinterested manner in rendering its services to PGTI in connection with a potential transaction. Following such discussion, the PGTI board of directors unanimously approved the transaction with Masonite.

On the night of December 17, 2023, Masonite’s board of directors convened a meeting and unanimously approved the Masonite merger agreement. Later that night, PGTI, Masonite and its merger subsidiary executed the Masonite merger agreement.

Before the opening of NYSE normal trading hours on December 18, 2023, PGTI and Masonite issued a joint press release announcing the Masonite merger agreement and held a joint investor call to discuss the merger.

On January 2, 2024, MITER sent an unsolicited offer letter offering to acquire PGTI for $41.50 per share of PGTI common stock in an all-cash transaction (referred to as the “eighth MITER offer”). In connection with the eighth MITER offer, MITER provided copies of the commitment letters and a draft of the merger agreement. The offer was not subject to due diligence or any financing condition. On the same day, PGTI shared such offer with Masonite in accordance with the Masonite merger agreement and issued a press release disclosing the receipt of such offer and stating that the PGTI board of directors would consider whether such offer constituted a superior proposal.

On January 5, 2024, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and Davis Polk in attendance, to discuss the eighth MITER offer. Davis Polk presented a privileged comparison of certain closing certainty risks under the Masonite merger agreement and the eighth MITER offer. After such presentation, representatives of Evercore joined to present a financial comparison of the Masonite merger agreement and the eighth MITER offer and potential responses. After the PGTI board of directors asked various questions of its advisors and PGTI management and after discussion, the PGTI board of directors unanimously determined that, while the eighth MITER offer was not a superior proposal, the eighth MITER offer would reasonably be expected to lead to a superior proposal if MITER were to agree to certain improved terms and conditions and authorized PGTI’s management and advisors to enter into discussions with MITER to explore the possibility of a transaction with MITER on an acceptable basis that was superior to the existing transaction with Masonite.

On the night of January 7, 2024, Mr. Jackson called Mr. DeSoto to inform him of the determination of the PGTI board of directors.

On January 8, 2024, PGTI published a press release announcing that the PGTI board of directors had unanimously determined that the eighth MITER offer would reasonably be expected to lead to a superior proposal and that PGTI was planning to engage in discussion with MITER.

Later on January 8, 2024, Mr. Jackson and Mr. Heckes held a call to discuss the merger and the eighth MITER offer. The same day, Mr. Jackson and a member of the board of managers of MITER held an

 

48


introductory call in which they discussed some of the issues raised in the PGTI press release and the deal more generally.

Also on January 8, 2024, Mr. Jackson, Mr. DeSoto and the respective legal and financial advisors of PGTI and MITER held a call to discuss the process and next steps. After such call, Davis Polk, on behalf of PGTI, sent Stinson a revised draft of the merger agreement and a draft clean team agreement. The revised draft of the merger agreement provided for, among other things, a regulatory termination fee payable by MITER equal to 9% of the implied equity value of the proposed transaction in certain circumstances in which regulatory approval was not received and that MITER pay the termination fee due to Masonite in the event PGTI terminated the Masonite merger agreement to enter into a superior proposal with MITER.

On January 9, 2024, representatives from Davis Polk and Stinson held a call to clarify certain points in the commitment letters.

On January 10, 2024, Mr. Jackson and Mr. Heckes held a call to discuss progress on the merger.

Also on January 10, 2024, representatives from Davis Polk and Stinson held a call to clarify certain points in the draft merger agreement that Davis Polk had sent.

On January 12, 2024, Mr. DeSoto called Mr. Jackson to inform him that that MITER would be submitting a revised offer. Later that day, representatives of MITER sent PGTI a revised letter offering to acquire PGTI for $42.00 per share of PGTI common stock in an all-cash transaction (referred to as the “ninth MITER offer”). In connection with the ninth MITER offer, MITER provided revised copies of signed debt and equity commitment letters and a draft of the proposed merger agreement, which, among other things, accepted PGTI’s proposals that MITER pay (a) a regulatory termination fee equal to 9% of the implied equity value of the proposed transaction in certain circumstances in which regulatory approval was not received and (b) the termination fee due to Masonite in the event PGTI terminated the Masonite merger agreement to enter into a superior proposal with MITER. The ninth MITER offer stated that MITER’s confirmatory diligence was complete and that such offer was not subject to any financing condition. On the same day, Davis Polk, on behalf of PGTI, shared the ninth MITER offer with Masonite in accordance with the Masonite merger agreement, and Mr. Jackson informed Mr. Heckes of such offer. The ninth MITER offer was promptly shared with the PGTI board of directors.

On January 14, 2024, Davis Polk sent a revised draft of the debt commitment letter and certain financing-related edits to the merger agreement to Simpson Thacher & Bartlett LLP, financing counsel to MITER (referred to as “STB”).

On January 14, 2024, Mr. Jackson called a member of the board of managers of MITER to make the case for MITER to increase its proposal to acquire PGTI above $42.00 per share of PGTI common stock in advance of the meeting of the PGTI board of directors the following day. MITER declined to increase its offer.

On January 15, 2024, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance, to discuss the ninth MITER offer. At this meeting, representatives of Davis Polk summarized the material non-price changes to MITER’s proposal, and answered questions regarding closing certainty of the proposed transaction with MITER. In addition, representatives of Evercore then reviewed with the PGTI board of directors its financial analysis of the merger consideration offered by MITER. Following such discussion, the PGTI board of directors unanimously determined that the ninth MITER offer constituted a “Superior Proposal” (as defined in the Masonite merger agreement) and instructed Evercore to inform Masonite and MITER of the same, and to negotiate with Masonite in good faith (to the extent Masonite wishes to negotiate) to make such adjustments to the terms and conditions of the Masonite merger agreement as Masonite may propose as contemplated by Section 6.04(d) of the Masonite merger agreement.

 

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That night, following such meeting, Mr. Jackson informed Mr. Heckes of the PGTI board of directors’ determination. Masonite subsequently confirmed that it would not exercise its match rights under the Masonite merger agreement. Later that night, following such confirmation, Wachtell Lipton sent Davis Polk a draft of a termination agreement (referred to as the “Masonite termination agreement”), pursuant to which PGTI would terminate the Masonite merger agreement and agree to cause the termination fee due to Masonite thereunder to be paid, and Masonite would waive its match rights. Between January 15, 2024, and January 16, 2024, Davis Polk and Wachtell Lipton exchanged drafts of the Masonite termination agreement.

On January 16, 2024, Davis Polk and Stinson exchanged drafts of, and finalized, the merger agreement, and STB sent the final version of the debt commitment letter.

Also on January 16, 2024, Evercore delivered its updated disclosure letter, detailing any potential relationships it may have with respect to the potential strategic transactions involving PGTI.

On January 16, 2024, the PGTI board of directors convened a meeting by videoconference, with members of PGTI management and representatives of Evercore and Davis Polk in attendance, to discuss the ninth MITER offer. Representatives of Davis Polk summarized the terms of the merger agreement. Evercore then reviewed with the PGTI board of directors its financial analysis of the merger consideration and delivered to the PGTI board of directors its verbal opinion (which was subsequently confirmed in writing) to the effect that, as of that date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the merger consideration of $42.00 in cash per share to be received by the holders of shares of PGTI common stock in the merger was fair, from a financial point of view, to such holders (other than MITER or any subsidiary of MITER or PGTI or any subsidiary of PGTI, or holders of dissenting shares). The PGTI board of directors also reviewed the updated disclosure letter provided by Evercore earlier that day and determined that none of the disclosed relationships impacted Evercore’s ability to act in an independent and disinterested manner in rendering its services to PGTI in connection with the proposed transaction. Following such discussion, the PGTI board of directors unanimously approved the transaction with MITER, for the reasons described in the section titled “—PGTI’s Reasons for the Merger; Recommendation of the PGTI Board of Directors” and resolved to recommend the merger to PGTI stockholders.

Shortly after the meeting, PGTI, MITER and Merger Sub executed the merger agreement, and, concurrently with such execution, PGTI and Masonite executed the Masonite termination agreement and MITER, on behalf of PGTI, paid the termination fee due to Masonite under the Masonite merger agreement.

Before the opening of NYSE normal trading hours on January 17, 2024, PGTI and MITER issued a joint press release announcing the merger agreement and the termination of the Masonite merger agreement.

PGTI’s Reasons for the Merger; Recommendation of the PGTI Board of Directors

At its January 16, 2024 meeting held to evaluate the merger, the PGTI board of directors unanimously (i) determined that the merger agreement and the transactions contemplated thereby are fair to and in the best interests of PGTI and its stockholders, (ii) declared it advisable to enter into the merger agreement and consummate the transactions contemplated thereby upon the terms and subject to the conditions set forth therein, (iii) approved the execution and delivery of the merger agreement by PGTI, the performance by PGTI of its covenants and other obligations thereunder and the consummation of the transactions contemplated thereby upon the terms and conditions set forth therein, (iv) resolved to recommend that PGTI stockholders adopt the merger agreement in accordance with the DGCL and (v) directed that the adoption of the merger agreement be submitted for consideration by PGTI stockholders at a meeting thereof. The PGTI board of directors further approved, adopted and declared advisable the certificate of incorporation amendment. The PGTI board of directors recommends that PGTI stockholders vote:

 

  1.

“FOR” the merger agreement proposal;

 

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  2.

“FOR” the merger-related compensation proposal;

 

  3.

“FOR” the certificate of incorporation amendment proposal; and

 

  4.

“FOR” the adjournment proposal.

In evaluating the merger agreement and arriving at its determination, the PGTI board of directors consulted with PGTI’s senior management, representatives of PGTI’s financial advisor, Evercore, and PGTI’s outside legal counsel, Davis Polk, and considered a number of substantive factors, both positive and negative, and potential benefits and detriments of the merger to PGTI and PGTI stockholders. The PGTI board of directors believed that, taken as a whole, the following factors supported its decision to approve the merger:

 

   

Merger Consideration. The value of the merger consideration to be received by PGTI stockholders in relation to the market prices of PGTI common stock prior to the PGTI board of directors’ approval of the merger agreement.

 

   

Premium to Trading Price of PGTI Common Stock. The fact that the merger consideration represents a significant premium over the unaffected market price at which shares of PGTI common stock traded, including that the merger consideration represents a premium of approximately 60% over the unaffected price of PGTI common stock of $26.20 (which was the closing price on October 9, 2023, the last trading day prior to the public disclosure of the third MITER offer) and a premium of approximately 5.3% over the per share consideration under the Masonite merger agreement (based on the closing price of Masonite common shares on January 12, 2024, the last trading day prior to the approval of the merger agreement).

 

   

Uncertainty of Future Common Stock Market Price. The uncertainty of PGTI’s future stock market price if PGTI remained independent. The PGTI board of directors considered PGTI’s business, assets, financial condition, results of operations, management, competitive position and prospects, as well as current industry, economic and stock and credit market conditions. The PGTI board of directors also considered PGTI’s long range plan and the initiatives and the potential execution risks associated with such plan. In connection with these considerations, the PGTI board of directors considered the attendant risk that if PGTI remained independent, PGTI common stock might not trade at levels equal to or greater than the value of the merger consideration in the near term, over an extended period of time or at all.

 

   

Negotiations with MITER. The benefits that PGTI and its advisors were able to obtain during its negotiations with MITER, including the price increase reflected in the ninth MITER offer as compared to the eighth MITER offer, contractual protections to increase closing certainty and MITER’s agreement to pay, on behalf of PGTI, the termination fee due to Masonite under the Masonite merger agreement. The PGTI board of directors believed that the consideration reflected in the merger agreement was the best transaction that could be obtained by PGTI stockholders at the time, and that there was no assurance that a more favorable opportunity to sell PGTI would arise later or through any alternative transaction.

 

   

Merger Consideration in Cash. The fact that all of the merger consideration will be paid in cash, giving PGTI stockholders the opportunity to realize near-term value certainty.

 

   

Financial Analyses and Opinion of Evercore. The opinion of Evercore, dated January 16, 2024, to the PGTI board of directors to the effect that, as of that date and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the merger consideration of $42.00 in cash per share to be received by the holders of shares of PGTI common stock in the merger was fair, from a financial point of view, to such holders (other than MITER or any subsidiary of MITER or PGTI or any subsidiary of PGTI, or holders of dissenting shares), as more fully described below in the section titled “—Opinion of PGTI’s Financial Advisor.”

 

   

Likelihood of Consummation. The likelihood that the merger would be completed, in light of, among other things, the conditions to the merger, the absence of a financing condition, and the efforts required

 

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to obtain regulatory approvals, including the obligation of MITER to hold separate, sell, license, divest or otherwise dispose of certain businesses or properties or assets of MITER, PGTI or their respective affiliates.

 

   

Terms of the Merger Agreement. The terms and conditions of the merger agreement, including:

 

   

the representations, warranties and covenants of the parties, the conditions to the parties’ obligations to complete the merger and their ability to terminate the merger agreement;

 

   

the provisions of the merger agreement that allow PGTI to engage in negotiations or discussions with, and provide information to, a third party that makes a bona fide acquisition proposal that did not result from a material breach of PGTI’s non-solicitation obligations, if the PGTI board of directors determines in good faith, after consultation with its outside legal counsel and financial advisor, that such proposal constitutes or would reasonably be expected to lead to a transaction that is superior to the merger and PGTI complies with certain procedural requirements;

 

   

the provisions of the merger agreement that allow the PGTI board of directors to change its recommendation in favor of the adoption of the merger agreement in response to a superior proposal and terminate the merger agreement in order to accept a superior proposal if the PGTI board of directors determines in good faith, after consultation with its outside legal counsel and financial advisor, that an acquisition proposal constitutes a superior proposal (including taking into account any modifications to the terms of the merger agreement that are proposed by MITER and, in connection with the termination of the merger agreement, payment to MITER of an $86,000,000 termination fee), subject to PGTI’s compliance with certain procedural requirements;

 

   

the provisions of the merger agreement that allow the PGTI board of directors to change its recommendation in favor of the adoption of the merger agreement in response to an intervening event, if the PGTI board of directors has determined in good faith, after consultation with its outside legal counsel, that failure to take such action would be inconsistent with its directors’ fiduciary duties (including taking into account any modifications to the terms of the merger agreement that are proposed by MITER), subject to PGTI’s compliance with certain procedural requirements;

 

   

the provisions of the merger agreement that required MITER to pay, on behalf of PGTI, the termination fee due to Masonite under the Masonite merger agreement;

 

   

the belief of the PGTI board of directors that the payment of the $86,000,000 termination fee was not likely to unduly discourage additional competing third-party proposals or reduce the price of such proposals (particularly because MITER had agreed to pay, on behalf of PGTI, an equivalent termination fee (measured by transaction equity value (based on, in the case of the Masonite merger agreement, the closing price of Masonite common shares as of December 15, 2023)) due to Masonite under the Masonite merger agreement), that such termination fees and provisions are customary for transactions of this size and type, and that the size of the termination fee was reasonable in the context of comparable transactions;

 

   

the fact that upon termination of the merger agreement in certain specific circumstances, MITER would be required to pay to PGTI a $184,000,000 MITER termination fee and that upon termination of the merger agreement in certain other specific circumstances related to the failure to obtain regulatory clearance, MITER would be required to pay to PGTI a $221,000,000 termination fee, in each case, that would help offset some of the costs of the merger;

 

   

the fact that, in the event of MITER’s fraud or material and willful breach of the merger agreement, PGTI may be able to seek damages not limited to a specifically defined termination fee (which may include the benefit of the bargain lost by PGTI stockholders); and

 

   

the ability of PGTI to specifically enforce the terms of the merger agreement under certain circumstances.

 

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Timing Considerations. The timing of the merger and the risk that if PGTI did not accept the offer by MITER (as provided for in the merger agreement), it may not have another opportunity to do so or to accept a comparable opportunity. The PGTI board of directors also observed that PGTI retained the ability to consider unsolicited proposals until the meeting of the PGTI stockholders to vote on the merger agreement proposal and to enter into an agreement with respect to an acquisition proposal under certain circumstances (concurrently with terminating the merger agreement and paying the $86,000,000 termination fee).

 

   

Financing Strength of MITER. The fact that MITER has obtained committed debt and equity financing for the merger from reputable financing sources, the limited conditionality of the commitment letters and likelihood that MITER would be able to finance the merger given MITER’s financial resources and financial profile.

 

   

Availability of Appraisal Rights. The fact that appraisal rights would be available to holders of PGTI common stock under Delaware law and that there was no condition in the merger agreement relating to the maximum number of shares of PGTI common stock that could exercise appraisal rights.

 

   

Damages for MITER’s Breach. The fact that, if approved by PGTI stockholders, PGTI’s certificate of incorporation will be amended to designate PGTI as the agent of its stockholders to pursue damages in the event that specific performance is not sought or granted as a remedy for MITER’s fraud or material and willful breach of the merger agreement.

The PGTI board of directors also considered certain potentially negative factors in its deliberations concerning the merger, including the following:

 

   

Tax Treatment. The fact that the merger consideration will generally be taxable to PGTI stockholders.

 

   

No Stockholder Participation in Future Growth or Earnings. The PGTI board of directors considered that PGTI stockholders would lose the opportunity to realize the potential long-term value of the successful execution of PGTI’s current strategy as an independent public company.

 

   

Risk of Non-Completion. The possibility that the merger might not be completed, including as a result of the failure to obtain regulatory approvals or the failure of PGTI stockholders to approve the merger agreement proposal, and the effect the resulting public announcement of the termination of the merger agreement may have on:

 

   

the trading price of PGTI common stock; and

 

   

PGTI’s business and operating results, particularly in light of the costs incurred in connection with the merger.

 

   

Possible Deterrence of Competing Offers. The risk that various provisions of the merger agreement, including the requirement that PGTI must pay to MITER a termination fee of $86,000,000 if the merger agreement is terminated under certain circumstances, may discourage other parties potentially interested in an acquisition of, or combination with, PGTI from pursuing that opportunity.

 

   

Possible Disruption of the Business and Costs and Expenses. The possible disruption to PGTI’s business that may result from the merger, the resulting distraction of PGTI’s management and potential attrition of PGTI’s employees and the costs and expenses associated with completing the merger.

 

   

Restrictions on Operation of PGTI’s Business. The requirement that PGTI conduct its business in a commercially reasonable manner and in all material respects in the ordinary course of business consistent with past practice and the other restrictions on PGTI’s activities and operations prior to completion of the merger.

 

   

Impact of Announcement. The uncertainty about the effect of the merger, regardless of whether the merger is completed, on PGTI’s employees, customers and other parties, which may impair PGTI’s ability to attract, retain and motivate key personnel, and could cause customers, suppliers and others to

 

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seek to change existing business relationships with PGTI. Additionally, the potential for litigation arising in connection with the merger.

 

   

Need to Obtain Required Regulatory Clearances. The fact that completion of the merger would require approval, or expiration or termination of the applicable waiting periods, under the HSR Act.

The PGTI board of directors concluded that the potentially negative factors associated with the merger were significantly outweighed by the potential benefits that it expected the PGTI stockholders would achieve as a result of the merger. The PGTI board of directors believed that the merger would maximize the immediate value of PGTI stockholders’ shares and minimize the risks and uncertainty affecting the future prospects of PGTI, including the potential execution risks associated with its stand-alone financial plan. Accordingly, the PGTI board of directors unanimously (a) determined that the merger agreement and the transactions contemplated thereby are fair to and in the best interests of PGTI and its stockholders, (b) declared it advisable to enter into the merger agreement and consummate the transactions contemplated thereby upon the terms and subject to the conditions set forth therein, (c) approved (i) the execution and delivery of the merger agreement by PGTI, (ii) the performance by PGTI of its covenants and other obligations thereunder and (iii) the consummation of the transactions contemplated thereby upon the terms and conditions set forth therein, (d) resolved to recommend that PGTI stockholders adopt the merger agreement in accordance with the DGCL and (e) directed that the adoption of the merger agreement be submitted for consideration by PGTI stockholders at a meeting thereof.

In addition, the PGTI board of directors was aware of and considered the interests that PGTI’s directors and executive officers may have with respect to the merger that differ from, or are in addition to, the interests of PGTI stockholders generally, as described below under “—Interests of PGTI’s Directors and Executive Officers in the Merger.”

The foregoing discussion of the information and factors considered by the PGTI board of directors is not exhaustive, but PGTI believes it includes all the material factors considered by the PGTI board of directors. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the PGTI board of directors did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative or specific weight or values to any of these factors. Rather, the PGTI board of directors viewed its position and recommendation as being based on an overall analysis and on the totality of the information presented to and factors considered by it. In addition, in considering the factors described above, individual directors may have given different weights to different factors. The PGTI board of directors based its unanimous recommendation on the totality of the information presented.

This explanation of PGTI’s reasons for the merger and other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors described under “Cautionary Statement Regarding Forward-Looking Statements.”

Opinion of PGTI’s Financial Advisor

PGTI retained Evercore to act as its financial advisor in connection with the PGTI board of directors’ evaluation of strategic and financial alternatives, including the merger. As part of this engagement, PGTI requested that Evercore evaluate the fairness, from a financial point of view, of the merger consideration to be received by the holders of PGTI common stock (other than MITER or any subsidiary of MITER or PGTI or any subsidiary of PGTI, or holders of dissenting shares). At a meeting of the PGTI board of directors held on January 16, 2024, Evercore rendered to the PGTI board of directors its opinion to the effect that, as of January 16, 2024 and based upon and subject to the assumptions, limitations, qualifications and conditions described in Evercore’s opinion, the merger consideration of $42.00 in cash per share to be received by the holders of PGTI common stock in the merger was fair, from a financial point of view, to such holders (other than MITER or any subsidiary of MITER or PGTI or any subsidiary of PGTI, or holders of dissenting shares).

 

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The full text of the written opinion of Evercore, dated January 16, 2024, which sets forth, among other things, the procedures followed, assumptions made, matters considered and qualifications and limitations on the scope of review undertaken in rendering its opinion, is attached as Annex C to this proxy statement and is incorporated herein by reference. PGTI encourages you to read this opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the PGTI board of directors (in its capacity as such) in connection with its evaluation of the proposed merger. The opinion does not constitute a recommendation to the PGTI board of directors or to any other persons in respect of the merger, including as to how any holder of shares of PGTI common stock should vote or act in respect of the merger. Evercore’s opinion does not address the relative merits of the merger as compared to other business or financial strategies that might be available to PGTI, nor does it address the underlying business decision of PGTI to engage in the merger.

In connection with rendering its opinion Evercore, among other things:

 

   

reviewed certain publicly available business and financial information relating to PGTI that Evercore deemed to be relevant, including publicly available research analysts’ estimates;

 

   

reviewed certain internal projected financial data relating to PGTI prepared and furnished to Evercore by management of PGTI, as approved for Evercore’s use by PGTI (referred to as the “forecast,” as described in more detail under “—PGTI Management Financial Projections”);

 

   

discussed with management of PGTI its assessment of the past and current operations of PGTI, the current financial condition and prospects of PGTI, and the forecast;

 

   

reviewed the reported prices and the historical trading activity of PGTI common stock;

 

   

compared the financial performance of PGTI and its stock market trading multiples with those of certain other publicly traded companies that Evercore deemed relevant;

 

   

compared the financial performance of PGTI and the valuation multiples relating to the merger with the financial terms, to the extent publicly available, of certain other transactions that Evercore deemed relevant;

 

   

reviewed the financial terms and conditions of the merger agreement; and

 

   

performed such other analyses and examinations and considered such other factors that Evercore deemed appropriate.

For purposes of Evercore’s analysis and opinion, Evercore assumed and relied upon the accuracy and completeness of the financial and other information publicly available, and all of the information supplied or otherwise made available to, discussed with, or reviewed by Evercore, without any independent verification of such information (and Evercore did not assume responsibility or liability for any independent verification of such information), and further relied upon the assurances of the management of PGTI that they were not aware of any facts or circumstances that would make such information inaccurate or misleading. With respect to the forecast, Evercore assumed with PGTI’s consent that it had been reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of PGTI as to the future financial performance of PGTI and the other matters covered thereby. Evercore expressed no view as to the forecast or the assumptions on which it was based.

For purposes of Evercore’s analysis and opinion, Evercore assumed, in all respects material to its analysis, that the representations and warranties of each party contained in the merger agreement were true and correct, that each party would perform all of the covenants and agreements required to be performed by it under the merger agreement and that all conditions to the consummation of the merger would be satisfied without waiver or modification thereof. Evercore further assumed, in all respects material to its analysis, that all governmental, regulatory or other consents, approvals or releases necessary for the consummation of the merger would be obtained without any delay, limitation, restriction or condition that would have an adverse effect on PGTI or the

 

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consummation of the merger or reduce the contemplated benefits to the holders of shares of PGTI common stock of the merger.

Evercore did not conduct a physical inspection of the properties or facilities of PGTI and did not make or assume any responsibility for making any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or other off-balance sheet assets and liabilities) of PGTI, nor was Evercore furnished with any such valuations or appraisals, nor did Evercore evaluate the solvency or fair value of PGTI under any state or federal laws relating to bankruptcy, insolvency or similar matters. Evercore’s opinion is necessarily based upon information made available to Evercore as of January 16, 2024, and financial, economic, market and other conditions as they existed and as could be evaluated as of that date. It was understood that subsequent developments may affect Evercore’s opinion and Evercore does not have any obligation to update, revise or reaffirm its opinion.

Evercore was not asked to pass upon, and expressed no opinion with respect to, any matter other than the fairness to the holders of the PGTI common stock (other than MITER or any subsidiary of MITER or PGTI or any subsidiary of PGTI, or holders of dissenting shares), from a financial point of view, of the merger consideration. Evercore did not express any view on, and Evercore’s opinion does not address, the fairness of the proposed transaction to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors or other constituencies of PGTI, nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of PGTI, or any class of such persons, whether relative to the merger consideration or otherwise. Evercore was not asked to, nor did Evercore express any view on, and Evercore’s opinion did not address, any other term or aspect of the merger agreement or the proposed merger, including, without limitation, the structure or form of the proposed merger, or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into or amended in connection with the merger agreement. Evercore’s opinion did not address the relative merits of the proposed merger as compared to other business or financial strategies that might be available to PGTI, nor did it address the underlying business decision of PGTI to engage in the proposed merger. Evercore’s opinion did not constitute a recommendation to the PGTI board of directors or to any other persons in respect of the proposed merger, including as to how any holder of shares of PGTI common stock should vote or act in respect of the proposed merger. Evercore expressed no opinion as to the price at which shares of PGTI common stock will trade at any time, as to the potential effects of volatility in the credit, financial and stock markets on PGTI or the proposed merger or as to the impact of the proposed merger on the solvency or viability of PGTI or the ability of PGTI to pay its obligations when they come due. Evercore is not a legal, regulatory, accounting or tax expert and has assumed the accuracy and completeness of assessments by PGTI and its advisors with respect to legal, regulatory, accounting and tax matters.

Set forth below is a summary of the material financial analyses reviewed by Evercore with the PGTI board of directors on January 16, 2024, in connection with rendering its opinion. The following summary, however, does not purport to be a complete description of the analyses performed by Evercore. The order of the analyses described and the results of these analyses do not represent relative importance or weight given to these analyses by Evercore. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data that existed on or before January 12, 2024 (the last trading date prior to the rendering of Evercore’s opinion), and is not necessarily indicative of current market conditions.

For purposes of its analyses and reviews, Evercore considered general business, economic, market and financial conditions, industry sector performance, and other matters, as they existed and could be evaluated as of the date of its opinion, many of which are beyond the control of PGTI. The estimates contained in Evercore’s analyses and reviews, and the ranges of valuations resulting from any particular analysis or review, are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by Evercore’s analyses and reviews. In addition, analyses and reviews relating to the value of companies, businesses or securities do not purport to be appraisals or to reflect the prices at which companies, businesses or securities actually may be sold. Accordingly, the estimates used in, and the results derived from, Evercore’s analyses and reviews are inherently subject to substantial uncertainty.

 

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The following summary of Evercore’s financial analyses includes information presented in tabular format. In order to fully understand the analyses, the tables should be read together with the full text of each summary. The tables are not intended to stand alone and alone do not constitute a complete description of Evercore’s financial analyses. Considering the tables below without considering the full narrative description of Evercore’s financial analyses, including the methodologies and assumptions underlying such analyses, could create a misleading or incomplete view of such analyses.

Summary of Evercore’s Financial Analyses

Discounted Cash Flow Analysis

Evercore performed a discounted cash flow analysis of PGTI to calculate the estimated present value of the standalone unlevered, after-tax free cash flows, defined as net operating profit after tax, plus depreciation and amortization, less changes in net working capital and capital expenditures, that PGTI was forecasted to generate during PGTI’s fiscal years 2024 through 2028 for each of (i) PGTI’s core business (referred to as the “core business”) and (ii) PGTI’s Triple Diamond Glass business (referred to as “Triple Diamond Glass”), each based on the forecast (as described in more detail under “—Certain Financial Projections Utilized by the PGTI Board of Directors and PGTI’s Financial Advisor” and “—PGTI Management Financial Projections”). Evercore calculated terminal values for PGTI by applying perpetuity growth rates of (i) 3.0% to 4.0% for the core business and (ii) 3.0% to 5.0% for Triple Diamond Glass, which ranges were selected based on Evercore’s professional judgment and experience, to terminal year estimates of the unlevered, after-tax free cash flows that PGTI was forecasted to generate for the core business and Triple Diamond Glass, respectively, in each case based on the forecast. The cash flows and terminal values in each case were then discounted to present value as of December 31, 2023, using discount rates ranging from (i) 11.5% to 13.5% for the core business and (ii) 15.5% to 18.0% for Triple Diamond Glass, each of which were based on an estimate of PGTI’s weighted average cost of capital for the applicable business, and the mid-year cash flow discounting convention. Evercore then aggregated the estimated present values of the core business and Triple Diamond Glass in order to calculate an estimate of present value for PGTI as a whole. Based on this range of implied enterprise values, PGTI’s estimated net debt (calculated as total debt less cash and cash equivalents) as of December 31, 2023, and the number of fully diluted shares of PGTI common stock as of December 30, 2023, in each case as provided by PGTI management, this analysis indicated ranges of implied equity values per share of PGTI common stock, rounded to the nearest $0.25, of (i) $28.25 to $42.50 for the core business only and (ii) $30.50 to $46.00 for PGTI on a consolidated basis, including the core business and Triple Diamond Glass, in each case compared to the merger consideration of $42.00 in cash per share of PGTI common stock.

Selected Public Company Trading Analysis

Evercore reviewed and compared certain financial information of PGTI to corresponding financial multiples and ratios for the following selected publicly traded companies in the North America building products industry (referred to as the “selected companies”):

 

   

Apogee Enterprises, Inc.

 

   

Fortune Brands Innovations, Inc.

 

   

Griffon Corporation

 

   

James Hardie Industries plc

 

   

JELD-WEN Holding, Inc.

 

   

Masonite International Corporation

 

   

Quanex Building Products Corporation

 

   

Tecnoglass Inc.

 

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The AZEK Company Inc.

 

   

Trex Company, Inc.

For each of the selected companies, Evercore calculated enterprise value (defined as equity market capitalization plus total debt, plus preferred equity and minority interest, less cash and cash equivalents) as a multiple of estimated 2024 earnings before interest, taxes, depreciation and amortization before stock-based compensation expense (referred to as “Adjusted EBITDA” and such estimated 2024 earnings referred to as “2024E Adjusted EBITDA”), based on closing share prices as of January 12, 2024, except for Masonite International Corporation, whose closing share price was based on information as of December 15, 2023. Estimated financial data of the selected companies were based on publicly available research analysts’ estimates.

This analysis indicated the following:

 

Benchmark

   High      Low      Median  

2024E Adjusted EBITDA

     24.4x        5.9x        8.4x  

Based on the multiples it derived for the selected companies and based on its professional judgment and experience, Evercore applied an enterprise value/Adjusted EBITDA multiple reference range of 7.0x – 9.0x to PGTI’s 2024E Adjusted EBITDA based on the forecast. Based on this range of implied enterprise values, PGTI’s estimated net debt (calculated as total debt less cash and cash equivalents) as of December 31, 2023, and the number of fully diluted shares of PGTI common stock as of December 30, 2023, in each case as provided by PGTI management, this analysis indicated a range of implied equity values per share of PGTI common stock, rounded to the nearest $0.25, of $27.00 to $37.75, compared to the merger consideration of $42.00 in cash per share of PGTI common stock.

Although none of the selected companies is directly comparable to PGTI, Evercore selected these companies because they are publicly traded companies in the North America building products industry that Evercore, in its professional judgment and experience, considered generally relevant to PGTI for purposes of its financial analyses. In evaluating the selected companies, Evercore made judgments and assumptions with regard to general business, economic and market conditions affecting the selected companies and other matters, as well as differences in the selected companies’ financial, business and operating characteristics. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments regarding many factors that could affect the relative values of the selected companies and the multiples derived from the selected companies. Mathematical analysis, such as determining the mean or median, is not in itself a meaningful method of using the data of the selected companies.

Selected Transactions Analysis

Evercore reviewed financial information related to the following selected transactions involving target companies in the windows and doors industry announced since 2014 (referred to as the “selected transactions”). The selected transactions reviewed by Evercore, and the month and year each was announced, were as follows:

 

Month and Year Announced

  

Acquiror

  

Target

July 2014    PGT Innovations, Inc.    CGI Windows & Doors Holdings, Inc.
August 2014    Ply Gem Holdings, Inc.    Simonton Windows
November 2015    PGT Innovations, Inc.    WinDoor, Incorporated
August 2016    Headwaters Incorporated    Krestmark Industries
January 2018    Clayton, Dubilier & Rice    Ply Gem Holdings, Inc.
July 2018    NCI Building Systems, Inc.    Ply Gem Parent, LLC
July 2018    PGT Innovations, Inc.    Western Window Systems
October 2019    MI Windows    Milgard Windows & Doors

 

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Month and Year Announced

  

Acquiror

  

Target

October 2019    Pella Corporation    Custom Window Systems, Inc.
November 2020    Fortune Brands Home and Security, Inc.    LARSON Manufacturing
January 2021    PGT Innovations, Inc.    Eco Window Systems
June 2021    Westlake Chemical Corporation    Boral Ltd. North American Building Products
September 2021    PGT Innovations, Inc.    Anlin Industries
December 2021    DMC Global Inc.    Arcadia Inc.
Month and Year Announced    Acquiror    Target
February 2022    KPS Capital Partners, LP    Oldcastle BuildingEnvelope Inc.
March 2022    Clayton, Dubilier & Rice    Cornerstone Building Brands Inc.
May 2022    Nucor Corporation    C.H.I. Overhead Doors
May 2022    Compagnie de Saint-Gobain S.A.    Kaycan, Ltd.
June 2022    CRH Plc    Barrette Outdoor Living Inc.
October 2022    PGT Innovations, Inc.    Martin Door Holdings, Inc.

For each selected transaction, Evercore calculated the implied enterprise value (defined as the target company’s implied equity value based on the consideration paid in the applicable transaction plus total debt, plus preferred equity and minority interest, less cash and cash equivalents) as a multiple of last twelve-month Adjusted EBITDA for the target company at the time of the announcement of the applicable transaction, which we refer to as “LTM Adjusted EBITDA.” Estimated financial data of the selected transactions were based on publicly available information at the time of announcement of the relevant transaction.

This analysis indicated the following:

 

Benchmark

   High      Low      Median  

LTM Adjusted EBITDA

     ~13.0x        8.3x        10.0x  

Based on the multiples it derived from the selected transactions and based on its professional judgment and experience, Evercore selected a reference range of enterprise value to LTM Adjusted EBITDA multiples of 8.5x to 11.5x and applied this range of multiples to PGTI’s estimated Adjusted EBITDA for fiscal year 2023, based on the forecast. Based on this range of implied enterprise values, PGTI’s estimated net debt (calculated as total debt less cash and cash equivalents) as of December 31, 2023, and the number of fully diluted shares of PGTI common stock as of December 30, 2023, in each case as provided by PGTI management, this analysis indicated a range of implied equity values per share of PGTI common stock, rounded to the nearest $0.25, of $29.75 to $44.00, compared to the merger consideration of $42.00 in cash per share of PGTI common stock.

Although none of the target companies or businesses reviewed in the selected transactions analysis is directly comparable to PGTI and none of the selected transactions is directly comparable to the merger, Evercore selected these transactions because they involve companies or businesses that Evercore, in its professional judgment and experience, considered generally relevant to PGTI for purposes of its financial analyses. In evaluating the selected transactions, Evercore made judgments and assumptions with regard to general business, economic and market conditions and other factors existing at the time of the selected transactions, and other matters, as well as differences in financial, business and operating characteristics and other factors relevant to the target companies or businesses in the selected transactions. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments regarding many factors that could affect the relative values of the target companies or businesses in the selected transactions and the multiples derived from the selected transactions. Mathematical analysis, such as determining the mean or median, is not in itself a meaningful method of using the data of the selected transactions.

 

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Other Factors

Evercore also noted certain other factors, which were not considered material to its financial analyses with respect to its opinion, but were referenced for informational purposes only, including, among other things, the following:

Last 52-Week Trading Range

Evercore reviewed historical trading prices of shares of PGTI common stock during the twelve-month period ended October 9, 2023, the last trading day prior to the public disclosure of the third MITER offer, noting that the low and high closing prices during such period ranged from $17.53 to $29.17 per share of PGTI common stock, respectively.

Equity Research Analyst Price Targets

Evercore reviewed selected public market trading price targets for the shares of PGTI common stock prepared and published by equity research analysts that were publicly available as of October 9, 2023, the last trading day prior to the public disclosure of the third MITER offer. These price targets reflect analysts’ estimates of the future public market trading price of the shares of PGTI common stock at the time the price target was published. As of October 9, 2023, the range of selected equity research analyst price targets per share of the last trading day prior to the public disclosure of a bid for the acquisition of PGTI common stock was $27.50 to $37.00. Public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for the shares of PGTI common stock and these target prices and the analysts’ earnings estimates on which they were based are subject to risk and uncertainties, including factors affecting the financial performance of PGTI and future general industry and market conditions.

Miscellaneous

The foregoing summary of Evercore’s financial analyses does not purport to be a complete description of the analyses or data presented by Evercore to the PGTI board of directors. In connection with the review of the merger by the PGTI board of directors, Evercore performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary described above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Evercore’s opinion. In arriving at its fairness determination, Evercore considered the results of all the analyses and did not draw, in isolation, conclusions from or with regard to any one analysis or factor considered by it for purposes of its opinion. Rather, Evercore made its determination as to fairness on the basis of its professional judgment and experience after considering the results of all the analyses. In addition, Evercore may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above should not be taken to be the view of Evercore with respect to the actual value of the shares of PGTI common stock. Rounding may result in total sums set forth in this section not equaling the total of the figures shown.

Evercore prepared these analyses for the purpose of providing an opinion to the PGTI board of directors as to the fairness, from a financial point of view, of the merger consideration to the holders of shares of PGTI common stock (other than MITER or any subsidiary of MITER or PGTI or any subsidiary of PGTI, or holders of the dissenting shares). These analyses do not purport to be appraisals or to necessarily reflect the prices at which the business or securities actually may be sold. Any estimates contained in these analyses are not necessarily indicative of actual future results, which may be significantly more or less favorable than those suggested by such estimates. Accordingly, estimates used in, and the results derived from, Evercore’s analyses are inherently subject to substantial uncertainty, and Evercore assumes no responsibility if future results are materially different from those forecasted in such estimates.

 

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Evercore’s financial advisory services and its opinion were provided for the information and benefit of the PGTI board of directors (in its capacity as such) in connection with its evaluation of the proposed merger. The issuance of Evercore’s opinion was approved by an Opinion Committee of Evercore.

Evercore did not recommend any specific amount of consideration to the PGTI board of directors or PGTI management or that any specific amount of consideration constituted the only appropriate consideration in the merger for the holders of PGTI common stock.

Pursuant to the terms of Evercore’s engagement letter with PGTI, PGTI has agreed to pay Evercore a fee for its services in an estimated amount, based on the information available as of the date of announcement, of approximately $46 million, $0.5 million of which was paid upon delivery of Evercore’s opinion, $5 million of which was paid upon delivery by Evercore of an opinion in connection with the proposed acquisition of PGTI by Masonite, and the balance of which will be payable contingent upon the consummation of the merger. PGTI has also agreed to reimburse Evercore for its expenses and to indemnify Evercore against certain liabilities arising out of its engagement.

During the two-year period prior to the date of its opinion, Evercore and its affiliates have provided financial advisory services to PGTI and received fees for the rendering of these services in the amount of approximately $5 million, which includes the fee received upon delivery by Evercore of its opinion in connection with the proposed acquisition of PGTI by Masonite. In addition, during the two-year period prior to the date of its opinion, Evercore and its affiliates have not been engaged to provide financial advisory or other services to MITER, and Evercore has not received any compensation from MITER during such period. During such period, Evercore and its affiliates have provided financial advisory services to certain affiliates of Koch, a significant shareholder of MITER, and received fees of approximately $2 million for the rendering of these services, and none of such services or fees were related to transactions with or involving PGTI. Evercore may provide financial advisory or other services to PGTI, MITER and Koch and/or any of their respective affiliates or portfolio companies in the future, and in connection with any such services Evercore may receive compensation.

Evercore and its affiliates engage in a wide range of activities for its and their own accounts and the accounts of customers, including corporate finance, mergers and acquisitions, equity sales, trading and research, private equity, placement agent, asset management and related activities. In connection with these businesses or otherwise, Evercore and its affiliates and/or its or their respective employees, as well as investment funds in which any of them may have a financial interest, may at any time, directly or indirectly, hold long or short positions and may trade or otherwise effect transactions for their own accounts or the accounts of customers, in debt or equity securities, senior loans and/or derivative products or other financial instruments of or relating to PGTI or its affiliates, MITER, potential parties to the merger and their respective affiliates or persons that are competitors, customers or suppliers of PGTI.

PGTI engaged Evercore to act as a financial advisor based on Evercore’s qualifications, experience and reputation and Evercore’s familiarity with PGTI. Evercore is an internationally recognized investment banking firm and regularly provides fairness opinions to its clients in connection with mergers and acquisitions, leveraged buyouts and valuations for corporate and other purposes.

Certain Financial Projections Utilized by the PGTI Board of Directors and PGTI’s Financial Advisor

While PGTI has from time to time provided limited financial guidance to investors, PGTI’s management does not, as a matter of course, otherwise publicly disclose forecasts or internal projections as to future performance due to, among other things, the inherent difficulty of predicting financial performance for future periods and the likelihood that the underlying assumptions and estimates may not be realized. In connection with the merger, PGTI provided certain unaudited non-public financial projections regarding PGTI to the PGTI board of directors (referred to as the “financial projections”). At the direction of the PGTI board of directors, the financial projections were also provided to, and approved for use by, Evercore for purposes of performing its

 

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financial analysis in connection with rendering its opinion to the PGTI board of directors (as more fully described above under “—Opinion of PGTI’s Financial Advisor”). A summary of the financial projections is included below to give PGTI stockholders access to certain information that was considered by the PGTI board of directors for purposes of evaluating the merger. These projections are not, and should not be viewed as, public guidance or even targets.

The financial projections, while presented with numerical specificity, were based on numerous variables and assumptions, including about future performance, that are inherently uncertain and many of which are beyond PGTI’s control. The financial projections reflect numerous estimates, assumptions and judgments made by PGTI management, based on information available at the time the financial projections were developed, with respect to industry performance and competition, general business, economic, regulatory, market and financial conditions, other future events and matters specific to PGTI’s business, all of which are difficult to predict and many of which are beyond PGTI’s control. There can be no assurances that the financial projections accurately reflect future trends or accurately estimate PGTI’s future financial and operating performance. The financial projections also reflect assumptions as to certain business decisions that are subject to change. Important factors that may affect actual results and cause the financial projections not to be achieved include, but are not limited to, risks and uncertainties relating to PGTI’s business (including the ability to achieve strategic goals, objectives and targets over the applicable periods), industry performance, general business and economic conditions and other factors described in or referenced under the section titled “Cautionary Statement Regarding Forward-Looking Statements” and those risks and uncertainties detailed in PGTI’s public filings with the SEC. Further, the financial projections cover multiple years and by their nature become subject to greater uncertainty with each successive year. Accordingly, there can be no assurance that the financial projections will be realized, and actual results may vary materially from those shown. Modeling and forecasting the future performance of a home building products company is a highly speculative endeavor. Since the financial projections cover a long period of time, the financial projections by their nature are unlikely to anticipate each circumstance that will have an effect on the commercial value of PGTI’s products and services.

The financial projections were not prepared with a view toward public disclosure and, accordingly, do not necessarily comply with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation or presentation of prospective financial information or generally accepted accounting principles in the United States (referred to as “GAAP”).

The financial projections included in this document, including the financial projections set forth below under “—PGTI Management Financial Projections,” are the responsibility of PGTI’s management. Ernst & Young LLP (referred to as “EY”), PGTI’s independent registered public accounting firm, has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the financial projections and, accordingly, EY has not expressed an opinion or any other form of assurance with respect thereto. The EY report on PGTI’s consolidated financial statements incorporated by reference from PGTI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, relates to PGTI’s previously issued financial statements. It does not extend to the financial projections and should not be read to do so.

The financial projections are not being included in this proxy statement in order to influence any PGTI stockholder’s decision as to whether or not to approve the merger or whether or not to seek appraisal rights with respect to shares of PGTI common stock held by such stockholder. The summary of the financial projections is being included in this proxy statement solely because these financial projections were made available to the PGTI board of directors and Evercore.

The financial projections do not take into account any circumstances or events occurring after the date they were prepared, including the announcement of the merger and merger-related expenses. The financial projections also do not take into account the effect of any failure of the merger to close and should not be viewed as accurate or continuing in that context.

 

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The inclusion of the financial projections in this proxy statement should not be regarded as an indication that PGTI, Evercore or any of their respective affiliates, advisors or representatives considered or consider the financial projections to be predictive of actual future events, and the financial projections should not be relied on as such. None of PGTI, Evercore or any of their respective affiliates, advisors, officers, directors or representatives can give any assurance that actual results will not differ from these financial projections, and none of them undertakes any obligation to update or otherwise revise or reconcile the financial projections to reflect circumstances existing after the date such financial projections were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the financial projections are shown to be in error or no longer appropriate. PGTI does not intend to make publicly available any update or other revisions to the financial projections, except as required by law. None of PGTI, Evercore or any of their respective affiliates, advisors, officers, directors or representatives has made or makes any representation to any stockholder or other investor regarding the ultimate performance of PGTI compared to the information contained in the financial projections or that the projected results will be achieved.

PGTI stockholders are cautioned not to place undue, if any, reliance on the financial projections included in this proxy statement.

The financial projections incorporate certain financial measures which are not GAAP measures. Such financial measures should not be considered in isolation from, or as a substitute for, financial information presented in accordance with GAAP. PGTI’s calculations of these financial measures may differ from others in its industry and are not necessarily comparable with information presented under similar captions used by other companies. Financial measures provided to a financial advisor are excluded from the SEC’s definition of non-GAAP financial measures and therefore are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which may otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure to be presented. Reconciliations of these financial measures were not relied upon by Evercore for purposes of performing their respective financial analyses in connection with rendering its respective opinions to the PGTI board of directors (as described in the sections titled “—Opinion of PGTI’s Financial Advisor”) or by the PGTI board of directors. Accordingly, a reconciliation of the financial measures included in the financial projections is not provided.

Subject to the foregoing qualifications, the financial projections are set forth below:

PGTI Management Financial Projections

Core Business ($ in millions)

 

Period

   2024E      2025E      2026E      2027E      2028E  

Revenue

   $ 1,681      $ 1,909      $ 2,131      $ 2,346      $ 2,534  

Adjusted EBITDA(1)

   $ 310      $ 354      $ 404      $ 446      $ 496  

Unlevered Free Cash Flow(2)

   $ 151      $ 177      $ 203      $ 226      $ 264  

Triple Diamond Glass ($ in millions)

 

Period

   2024E     2025E     2026E      2027E      2028E  

Revenue

   $ 36     $ 131     $ 229      $ 355      $ 497  

Adjusted EBITDA(1)

   ($ 1   $ 18     $ 38      $ 67      $ 100  

Unlevered Free Cash Flow(2)

   ($ 26   ($ 28   $ 2      $ 20      $ 38  

 

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PGTI (Combined) ($ in millions)

 

Period

   2024E      2025E      2026E      2027E      2028E  

Revenue

   $ 1,717      $ 2,040      $ 2,360      $ 2,701      $ 3,031  

Adjusted EBITDA(1)

   $ 310      $ 373      $ 442      $ 513      $ 596  

Unlevered Free Cash Flow(2)

   $ 125      $ 149      $ 205      $ 246      $ 302  

 

(1)

For purposes of the PGTI management financial projections, Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, and stock-based compensation expense, and reflects certain other adjustments for 2023.

(2)

For purposes of the PGTI management financial projections, unlevered free cash flow is defined as net operating profit after tax, plus depreciation and amortization, less changes in net working capital and capital expenditures.

For additional information on PGTI’s actual results and historical financial information, see the section titled “Where You Can Find More Information.”

Interests of PGTI’s Directors and Executive Officers in the Merger

In considering the recommendation of the PGTI board of directors that PGTI stockholders vote “FOR” the merger agreement proposal and merger-related compensation proposal, PGTI stockholders should be aware that the directors and executive officers of PGTI have interests in the merger that may be different from, or in addition to, those of PGTI stockholders generally.

These interests are described below, and certain of them are quantified below. The PGTI board of directors was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, in approving the merger agreement, and in recommending the approval of the merger agreement by the PGTI stockholders.

Treatment of PGTI Equity Awards

Each of PGTI’s directors and executive officers holds PGTI restricted shares or PGTI RSUs.

Effective as of immediately prior to the effective time, the restrictions on each PGTI restricted share that is granted under the PGTI equity plan prior to the date of the merger agreement and then outstanding will lapse, and each such PGTI restricted share will be canceled and converted into the right to receive the merger consideration. For purposes of each PGTI performance share, the restrictions on such PGTI performance share will lapse with respect to a number of shares of PGTI common stock calculated pursuant to the following assumptions and otherwise in accordance with the PGTI equity plan and the applicable award agreement governing such PGTI performance shares: (a) with respect to any applicable EBITDA performance measure, actual performance for PGTI performance shares granted in 2021, 2022 and 2023; and (b) with respect to any applicable relative shareholder return modifier, (i) actual performance for any performance period that is completed prior to the effective time; and (ii) assuming maximum performance for any performance period that is not completed prior to the effective time.

Notwithstanding anything to the contrary in the foregoing paragraph, effective as of immediately prior to the effective time, each PGTI interim restricted share will be converted into an award to receive, upon vesting in accordance with the original vesting terms and conditions, an amount in cash equal to the merger consideration plus interest accrued on the basis of prime rate as published in The Wall Street Journal in effect at the effective time, compounded quarterly, calculated on the basis of actual days elapsed (including the closing date of the merger and each applicable vesting date).

 

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Effective as of immediately prior to the effective time, each PGTI RSU that is granted under the PGTI equity plan and that is outstanding immediately prior to the effective time will be canceled and converted into the right to receive an amount equal to: (a) the merger consideration plus (b) any accrued but unpaid dividends or dividend equivalents in respect of such PGTI RSU as of the effective time.

The table below sets forth the number of outstanding PGTI restricted shares (excluding PGTI performance shares), PGTI performance shares (based on target level of performance) and PGTI RSUs held by each of PGTI’s executive officers and non-employee directors as of February 7, 2024, and an estimate of the value of such awards (on a pre-tax basis) based on a per share price of PGTI common stock of $42.00. Depending on the date upon which the closing of the merger actually occurs, certain PGTI restricted shares, PGTI performance shares and PGTI RSUs that are unvested as of the date of this proxy statement and that are included in the table below may vest pursuant to their terms, without regard to the merger. For additional information regarding shares of PGTI common stock held by PGTI executive officers and non-employee directors, see the section titled “Security Ownership of Certain Beneficial Owners and Management.”

 

Person

   Restricted
Shares (#)
     Restricted
Shares ($)
     Performance
Shares (#)
     Performance
Shares ($)
     RSUs (#)      RSUs ($)  

Executive Officers

                 

Jeffrey Jackson

     66,938        2,811,396        107,676        4,522,392        —         —   

Craig Henderson

     3,770        158,340        3,690        154,980        —         —   

Mike Wothe

     11,173        469,266        17,855        749,910        —         —   

Robert A. Keller

     9,520        399,840        15,481        650,202        —         —   

Eric Kowalewski

     11,162        468,804        17,833        748,986        —         —   

Deborah LaPinska

     7,091        297,822        11,326        475,692        —         —   

Ryan Quinn

     6,920        290,640        11,147        468,174        —         —   

Non-Employee Directors

                 

Xavier Boza

     3,517        147,714        —         —         —         —   

Alexander Castaldi

     3,517        147,714        —         —         —         —   

William Morgan

     3,517        147,714        —         —         —         —   

Richard Feintuch

     —         —         —         —         12,612        529,704  

Brett Milgrim

     3,517        147,714        —         —         —         —   

Frances Powell Hawes

     3,517        147,714        —         —         9,104        382,368  

Sheree Bargabos

     3,517        147,714        —         —         —         —   

Rodney Hershberger

     3,517        147,714        —         —         —         —   

Floyd Sherman

     3,517        147,714        —         —         —         —   

Chris Stephens

     3,434        144,228        —         —         —         —   

These amounts do not attempt to forecast any additional equity award grants, issuances or forfeitures that may occur prior to the closing of the merger following the date of this proxy statement. As a result of the foregoing assumptions, which may or may not actually occur or be accurate on the relevant date, the actual amounts, if any, to be received by PGTI’s executive officers and non-employee directors may materially differ from the amounts set forth above.

Treatment of PGTI Employee Stock Purchase Plan

The PGT Innovations, Inc. 2019 Employee Stock Purchase Plan (referred to as the “PGTI ESPP”) will be frozen and suspended at the end of the offering period that is in progress as of the date of the merger agreement and no new offering periods shall commence under the PGTI ESPP at any time on or after the date of the merger agreement. No new participants will commence participation in the PGTI ESPP following the date of the merger agreement, and no participant in the PGTI ESPP will increase his or her payroll contribution rate in effect as of the date of the merger agreement or make separate non-payroll contributions following the date of the merger agreement. No individuals not participating in the PGTI ESPP as of the day before the date of the merger

 

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agreement will commence participation in the PGTI ESPP during the period from the date of the merger agreement through the effective time. The PGTI ESPP will terminate no later than immediately prior to the effective time. The purchase date of any offering period that would be in effect at the effective time will be accelerated to a date on or prior to the fifth business day prior to the effective time.

2023 Annual Cash Bonuses of Executive Officers

The PGTI board of directors approved an acceleration of the timing of 90% of the estimated cash bonus payments under the 2023 Annual Incentive Plan (referred to as the “2023 AIP payment”) based on 125% of target performance to December 2023, which amounts have been paid. PGTI may make any remaining 2023 AIP payment in February 2024 based on 125% of target performance.

2024 LTIP Awards

The Compensation Committee of PGTI may grant up to 291,668 time-vesting PGTI restricted shares (based on PGTI’s existing form award agreement for such PGTI interim restricted shares) to Long-Term Incentive Plan (referred to as “LTIP”) participants in the ordinary course of business consistent with past practice. Any PGTI performance shares that PGTI would have granted will be replaced with time-vesting PGTI restricted shares with an equivalent grant date fair value. These PGTI restricted shares will not vest in connection with the occurrence of the effective time but will instead convert into an award to receive, upon vesting in accordance with the original vesting terms and conditions, an amount in cash equal to the merger consideration plus interest accrued on the basis of prime rate as published in The Wall Street Journal in effect at the effective time, compounded quarterly, calculated on the basis of actual days elapsed (including the closing date of the merger and each applicable vesting date).

Certain Executive Signing Bonuses

PGTI paid one-time signing bonuses to the following executive officers: $100,000 to each of Messrs. Henderson and Quinn in consideration of exemplary performance in connection with the acquisition of PGTI.

Existing PGTI Employment Agreements

PGTI is a party to an employment agreement with each of the following executive officers: Jeffrey Jackson, Craig Henderson, Mike Wothe, Robert Keller, Eric Kowalewski, Deborah LaPinska and Ryan Quinn. Pursuant to the employment agreements, in the event that within 24 months of a “change of control” (as defined in the employment agreements) (a) the executive’s employment is terminated by PGTI without “cause” (as defined in the employment agreements) or (b) the executive terminates his employment for “good reason” (as defined in the employment agreements) (each referred to as a “qualifying termination”), and subject to the execution and non-revocation of a general release of claims against PGTI and its affiliates, the executive is entitled to:

 

   

24 months of base salary in a lump sum (except for Mr. Jackson who receives 30 months of his base salary in a lump sum);

 

   

payment by PGTI of applicable premiums for medical benefits for 24 months (except for Mr. Jackson for whom the period is 30 months);

 

   

payment in a lump sum of an amount of cash equal to 200% of the executive’s target incentive amount (except for Mr. Jackson for whom such percentage is 250%) payable under the PGTI Annual Incentive Plan for the award period ending in the year in which the termination of employment occurred;

 

   

any outstanding stock options held by the executive that are vested and exercisable as of the date of termination remaining exercisable until the earlier of a period of one year after the date of termination, or the original term of the option; and

 

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any equity awards held by the executive that are unvested as of the date of the termination vesting, with any performance-based equity awards paid out in such amount as if maximum performance has been achieved for the relevant performance period.

For purposes of the employment agreements:

 

   

“Cause” generally means the occurrence of any of the following events during the employment period: (a) conduct amounting to fraud or dishonesty against PGTI or any affiliate of PGTI; (b) the executive’s intentional misconduct, refusal or failure to follow the lawful directions of the chief executive officer, or such other senior officer as the executive may report to from time to time or a breach of the employment agreement; (c) intoxication with alcohol or drugs while on PGTI’s property or while carrying out the business of the PGTI; (d) a conviction or plea of guilty or nolo contendere to a felony or to a misdemeanor involving charges of embezzlement, fraud, stealing or theft, or assault or battery to others; (e) a material breach or violation of PGTI’s code of conduct, employee handbook or similar policies or rules, including without limitation, due to sexual or other forms of prohibited harassment; or (f) the executive’s failure to observe and comply with certain restrictive covenants set forth in the employment agreement.

 

   

“Good Reason” generally means the occurrence of any of the following events during the executive’s period of employment: (a) a material diminution of the duties or responsibilities of the executive; or (b) the assignment of the executive to a worksite outside of a 50-mile radius from PGTI’s current headquarters.

The estimated aggregate value of severance payments and benefits provided to PGTI’s executive officers (including PGTI’s named executive officers) under the employment agreements assuming that (a) the merger closed on April 1, 2024, (b) each executive officer experiences a qualifying termination immediately following consummation of the merger, and (c) each executive officer has complied with all requirements necessary in order to receive all payments and benefits, is approximately $31,867,617. For further information regarding these assumptions and the estimated severance values associated with a qualifying termination of PGTI’s named executive officers, see below under “—Quantification of Potential Payments and Benefits to PGTI’s Named Executive Officers in Connection with the Merger.”

Indemnification and Insurance

Under the merger agreement, for a period of six years after the effective time, MITER must cause the surviving corporation to, indemnify and hold harmless, to the fullest extent permitted by applicable law and the organizational documents of PGTI or its subsidiaries, each current and former director and officer of PGTI and its subsidiaries and their respective successors and heirs from and against any losses, damages, liabilities, costs, expenses (including attorneys’ fees), judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any thereof) in connection with serving as a director or officer of PGTI prior to the effective time.

In addition, for a period of six years following the effective time, MITER is required to maintain in effect the provisions in the organizational documents of PGTI and its subsidiaries regarding elimination of liability of directors, indemnification of directors, officers, employees, fiduciaries and agents and advancement of fees, costs and expenses that are no less advantageous to the intended beneficiaries than the corresponding provisions that were in existence as of the date of the merger agreement.

At or prior to the effective time, PGTI will (or if PGTI is unable to, MITER will cause the surviving corporation to) purchase a directors’ and officers’ liability insurance and fiduciary liability insurance “tail” insurance policy for a period of six years after the effective time with respect to matters arising at or prior to the effective time.

 

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For a more detailed description of the provisions of the merger agreement relating to director and officer indemnification and liability insurance, please see the section titled “The Merger Agreement—Directors’ and Officers’ Indemnification and Insurance.”

Quantification of Potential Payments and Benefits to PGTI’s Named Executive Officers in Connection with the Merger

The information set forth below is required by Item 402(t) of Regulation S-K regarding compensation that is based on or otherwise relates to the merger that PGTI’s named executive officers could receive in connection with the merger. Such amounts have been calculated assuming that:

 

   

the effective time will occur on April 1, 2024 (which, as an illustration, is the assumed closing date of the merger solely for purposes of this golden parachute compensation disclosure);

 

   

the value per share of PGTI common stock on consummation of the merger is $42.00.

 

   

the equity awards that were outstanding as of February 7, 2024, are the equity awards that PGTI has granted to its named executive officers through, and are outstanding as of, February 7, 2024;

 

   

when calculating the amount received in connection with a “double trigger” termination, each named executive officer experiences a qualifying termination immediately following consummation of the merger, without taking into account any possible reduction that might be required to avoid the excise tax in connection with Section 280G and Section 4999 of the Code; and

 

   

each named executive officer has complied with all requirements necessary in order to receive all payments and benefits.

The payments and benefits described below are calculated based on, to the extent applicable, the terms of the merger agreement and each named executive officer’s existing employment agreement. See sections above under “—Treatment of PGTI Equity Awards” and “—Existing PGTI Employment Agreements,” for a description of the treatment of the equity awards held by the named executive officers and the terms of their employment agreements. In addition, certain equity awards held by the named executive officers may vest in accordance with their terms prior to the merger. Furthermore, additional equity awards may be granted to the executive officers in respect of 2024, as described above under “—2024 LTIP Awards,” which are not included in the calculations below. These amounts do not attempt to forecast any additional equity award grants, issuances or forfeitures that may occur after the date of this proxy statement but before the effective time. As a result of the foregoing assumptions, which may or may not actually occur or be accurate on the relevant date, including the assumptions described in the footnotes to the table, the actual amounts, if any, to be received by PGTI’s named executive officers may materially differ from the amounts set forth below.

Golden Parachute Compensation

 

Name (1)

   Cash ($)(2)      Equity ($)(3)      Pension/
NQDC ($)
     Perquisites/
Benefits ($)(4)
     Others ($)(5)      Total ($)  

Jeffrey Jackson

   $ 5,250,000      $ 10,355,184      $ —       $ 39,527      $ —       $ 15,644,711  

Craig Henderson

   $ 1,275,000      $ 425,292      $ —       $ 31,621      $ 100,000      $ 1,831,913  

Mike Wothe

   $ 1,785,000      $ 1,693,986      $ —       $ 24,570      $ —       $ 3,503,556  

Robert A. Keller

   $ 1,392,000      $ 1,521,324      $ —       $ 31,621      $ —       $ 2,944,945  

Eric Kowalewski

   $ 1,534,500      $ 1,691,298      $ —       $ 31,621      $ —       $ 3,257,419  

 

(1)

John Kunz was a named executive officer of PGTI for 2023 because he served as PGTI’s Chief Financial Officer until the close of business on February 27, 2023. However, Mr. Kunz is not included in the golden parachute table because he will not receive any compensation in connection with this transaction.

(2)

These amounts reflect the cash severance payment payable under the employment agreements with each named executive officer described above under “—Existing PGTI Employment Agreements” in the event of

 

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  a qualifying termination immediately following the merger on April 1, 2024. The amounts include the dollar value of the continuation of named executive officer’s then-current annual base salary and target bonus under the PGTI Annual Incentive Plan for a period of 24 months, except in the case of Mr. Jackson, whose salary continuation period is 30 months and who receives 250% of his target bonus. Such cash severance is “double-trigger,” which means that a named executive officer must experience a qualifying termination within 24 months following a change in control of PGTI. Details of the cash payments are shown in the following supplemental table:

 

Name

   Salary ($)      Target
Bonus ($)
     Total ($)  

Jeffrey Jackson

   $ 1,000,000      $ 1,100,000      $ 5,250,000  

Craig Henderson

   $ 375,000      $ 262,500      $ 1,275,000  

Mike Wothe

   $ 510,000      $ 382,500      $ 1,785,000  

Robert A. Keller

   $ 435,000      $ 261,000      $ 1,392,000  

Eric Kowalewski

   $ 465,000      $ 302,250      $ 1,534,500  

 

(3)

These amounts reflect the value of time-based PGTI restricted shares and PGTI performance shares as described above under “—Treatment of PGTI Equity Awards.” Effective as of immediately prior to the effective time, the restrictions on each outstanding PGTI restricted share will lapse with respect to a number of shares of PGTI common stock calculated based on PGTI’s actual performance (and in the case of any applicable relative shareholder return modifier for any performance period that is not completed prior to the effective time, assuming maximum performance). The amount is based on a per share value of PGTI common stock of $42.00. Details of the equity award payments are shown in the following supplemental table:

 

Name

   Restricted
Shares (#)
     Restricted
Shares ($)
     Performance
Shares (#)
     Performance
Shares ($)
     Total ($)  

Jeffrey Jackson

     66,938        2,811,396        179,614        7,543,788        10,355,184  

Craig Henderson

     3,770        158,340        6,356        266,952        425,292  

Mike Wothe

     11,173        469,266        29,160        1,224,720        1,693,986  

Robert A. Keller

     9,520        399,840        26,702        1,121,484        1,521,324  

Eric Kowalewski

     11,162        468,804        29,107        1,222,494        1,691,298  

 

(4)

These amounts reflect the estimated value of perquisites and benefits payable or provided under the employment agreements with each named executive officer described above under “—Existing PGTI Employment Agreements” in the event of a qualifying termination immediately following the merger on April 1, 2024. These amounts reflect the estimated cost of continued medical coverage of the named executive officer for a period of 24 months (or 30 months in the case of Mr. Jackson). Such payments are “double-trigger,” which means that a named executive officer must experience a qualifying termination within the 24 months following a change in control of PGTI in order to receive them.

(5)

These amounts reflect the one-time signing bonus granted to the named executive officer in connection with the merger.

280G Mitigation Actions

In order to mitigate the potential impact of Sections 280G and 4999 of the Code, the PGTI board of directors approved an acceleration of the timing of certain 2023 AIP payments, as described further under the section titled “—2023 Annual Cash Bonuses of Executive Officers.”

In addition, in connection with the acquisition of PGTI, the Compensation Committee of PGTI approved the following:

 

   

Accelerated vesting on December 29, 2023, of any outstanding time-based PGTI restricted shares held by certain “disqualified individuals,” including each named executive officer, that would otherwise vest in the ordinary course on or prior to February 15, 2024; and

 

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Accelerated vesting on December 29, 2023, of any outstanding PGTI performance shares held by certain “disqualified individuals,” including each named executive officer, that would otherwise vest in the ordinary course on or prior to February 15, 2024, based on estimated actual performance as of December 29, 2023.

Amount reported in the Golden Parachute Compensation table are exclusive of the value of the accelerated equity awards described above, as these equity awards would have vested on or prior to February 15, 2024, in the ordinary course of business before the assumed closing date, regardless of the merger. See the section titled “Security Ownership of Certain Beneficial Owners and Management” for the amount of equity awards accelerated pursuant to these 280G mitigation actions for each of PGTI’s executive officers.

Financing of the Merger

MITER intends to fund the cash portion of the merger consideration with proceeds from new debt and equity financing together with cash on hand. Concurrently with the entry into the Merger Agreement, MITER entered into (i) the debt commitment letter, pursuant to which the lenders have committed to provide to MITER up to (a) $1,800,000,000 aggregate principal amount under a senior secured term loan facility and (b) $325,000,000 aggregate principal amount under a senior secured asset-based revolving credit facility (the foregoing clauses (a) and (b), referred to as the “debt financing”) and (ii) the equity commitment letter, pursuant to which Koch has committed to purchase up to $979,000,000 of equity interests in MITER (referred to as the “equity financing”). The obligations of the lenders to provide debt financing under the debt commitment letter and Koch to provide equity financing under the equity commitment letter are subject to certain customary conditions, including (a) the execution and delivery of definitive documentation with respect to such financing in accordance with such commitment letter and (b) the consummation of the merger in all material respects in accordance with the terms and conditions of the merger agreement. The receipt of financing by MITER is not a condition to MITER’s obligations to complete the merger. Commitments in respect of the debt commitment letter will terminate on the earliest to occur of (1) the termination of the merger agreement in accordance with its terms prior to the consummation of the merger, (2) the consummation of the merger without the funding of the debt financing and (3) 11:59 p.m. New York City time on July 23, 2025. The commitment in respect of the equity financing will automatically terminate if the merger agreement is terminated in accordance with its terms. Further, if an event occurs that would cause the termination of the commitments under the debt commitment letter in accordance with its terms, then Koch will have the right to terminate the equity commitment letter at any time thereafter. The proceeds of the debt financing would be used at the closing of the merger, together with the proceeds of the equity financing, for the purposes of (1) financing the consummation of the merger, including paying fees and expenses incurred in connection with the merger, and (2) the repayment of all or a portion of PGTI’s outstanding indebtedness under the PGTI credit agreement and the PGTI indenture (each as defined below).

Regulatory Clearances and Approvals Required for the Merger

The merger is subject to the requirements of the HSR Act, which prevents PGTI and MITER from completing the merger until required information and materials are furnished to the Antitrust Division of the DOJ and the FTC and the HSR Act waiting period is terminated or expires. A transaction notifiable under the HSR Act may not be completed until the expiration of a 30-calendar-day waiting period following the parties’ filings of their respective HSR Act notification forms or the early termination of that waiting period. The parties may also choose to voluntarily re-start the initial 30-calendar-day waiting period by following certain prescribed procedures. After the expiration of the initial waiting period (or the re-started initial waiting period), the Antitrust Division of the DOJ or the FTC may issue a Request for Additional Information and Documentary Material (referred to as a “second request”). If a second request is issued, the parties may not complete the merger until they substantially comply with the second request and observe a second 30-calendar-day waiting period, unless the waiting period is terminated earlier, or the parties commit not to close for some additional period of time. PGTI and MITER submitted the requisite notification and report forms under the HSR Act on January 23, 2024,

 

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and the waiting period will expire on February 22, 2024 at 11:59 p.m., Eastern Time, unless it is extended by request for additional information or terminated earlier or if PGTI and MITER pull and refile or commit not to close for some additional period of time.

For more information about regulatory approvals relating to the merger, see the section titled “The Merger Agreement—Conditions to the Merger.”

Although the parties expect that all required regulatory clearances will be obtained, the parties cannot assure you that these regulatory clearances will be timely obtained or obtained at all or that the granting of these regulatory clearances will not involve the imposition of additional conditions on the completion of the merger, including the requirement to divest assets, create or modify contractual rights or obligations or enter into supply or services agreements. These conditions could result in the conditions to the merger not being satisfied.

Appraisal Rights of PGTI Stockholders

PGTI stockholders who do not vote in favor of approval of the merger agreement proposal, who continuously hold their shares of PGTI common stock and who otherwise comply precisely with the applicable provisions of Section 262 of the DGCL will be entitled to seek appraisal of the fair value of their shares of PGTI common stock, as determined by the Delaware Court of Chancery, if the merger is completed, in lieu of receiving the merger consideration in respect of such shares. The “fair value” of your shares of PGTI common stock as determined by the Delaware Court of Chancery could be greater than, the same as, or less than the value of the merger consideration that you would otherwise be entitled to receive under the terms of the merger agreement. PGTI stockholders who wish to exercise the right to seek an appraisal of their shares must so advise PGTI by submitting a written demand for appraisal in the form described in this proxy statement prior to the vote to approve the merger agreement proposal, and must otherwise follow the procedures prescribed by Section 262 of the DGCL. A person having a beneficial interest in shares of PGTI common stock held of record in the name of another person, such as a nominee or intermediary, must act promptly to cause the record holder to follow the steps summarized in this proxy statement and in a timely manner to perfect appraisal rights.

The text of Section 262 of the DGCL is attached as Annex D to this proxy statement. You are encouraged to read these provisions carefully and in their entirety. Due to the complexity of the procedures for exercising appraisal rights, PGTI stockholders who are considering exercising such rights are encouraged to seek the advice of legal counsel and their financial advisors. Failure to strictly comply with these provisions may result in the loss of appraisal rights.

 

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THE MERGER AGREEMENT

The following describes the material provisions of the merger agreement, which is attached as Annex A to this proxy statement and is incorporated by reference herein. The summary of the material provisions of the merger agreement below and elsewhere in this proxy statement is qualified in its entirety by reference to the merger agreement. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. PGTI encourages you to read carefully the merger agreement in its entirety before making any decisions regarding the merger as it is the legal document governing the merger.

Explanatory Note Regarding the Merger Agreement

The merger agreement and this summary of its terms have been included to provide you with information regarding the terms of the merger agreement. PGTI is responsible for considering whether additional disclosure of material information is required to make the statements in this proxy statement not misleading. Factual disclosures about PGTI contained in this proxy statement or PGTI’s public reports filed with the SEC may supplement, update or modify the factual disclosures about PGTI contained in the merger agreement and described in this summary. The representations, warranties and covenants made in the merger agreement by MITER, Merger Sub and PGTI are qualified and subject to important limitations agreed to by the parties to the merger agreement in connection with negotiating the terms of the merger agreement. In particular, in your review of the representations and warranties contained in the merger agreement and described in this summary, it is important to bear in mind that the representations and warranties were made solely for the benefit of the parties to the merger agreement, and were negotiated with the principal purpose of allocating risk between the parties to the merger agreement, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality that may be different from that generally relevant to stockholders or applicable to reports and documents filed with the SEC, and in some cases are qualified by confidential disclosures that were made by each party to the other, which disclosures are not publicly disclosed. The representations and warranties in the merger agreement will not survive the completion of the merger.

PGTI Stockholders should not rely on representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of MITER, Merger Sub, PGTI or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the merger agreement. For the foregoing reasons, the representations, warranties and covenants or any descriptions of those provisions should not be read alone, but instead should be read together with the information provided elsewhere in this proxy statement and in the documents incorporated by reference into this proxy statement. See the section titled “Where You Can Find More Information.”

Structure of the Merger

The merger agreement provides, upon the terms and subject to the conditions set forth therein and in accordance with Delaware law, for Merger Sub to merge with and into PGTI, with PGTI continuing as the surviving corporation and an indirect wholly owned subsidiary of MITER.

Timing of Closing

Unless another place and time is mutually agreed to in writing by MITER and PGTI, the closing of the merger will occur (a) no later than three business days after the satisfaction or waiver (to the extent permitted by the merger agreement or by applicable law) of the last to be satisfied or waived of the conditions set forth in the merger agreement (other than those conditions that by their terms are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver (to the extent permitted by the merger agreement or applicable law) of such conditions). However, if the marketing period has not ended at the time of the satisfaction or waiver of the

 

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last of the conditions set forth in the merger agreement (other than those conditions that by their terms are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver (to the extent permitted by the merger agreement or applicable law) of such conditions), the closing of the merger will take place on the earlier to occur of (i) any business day before or during the marketing period as may be specified by MITER on no fewer than three business days’ written notice to PGTI and (ii) the third business day immediately following the final day of the marketing period (subject, in each case, to the satisfaction or waiver (to the extent permitted by the merger agreement and applicable law) of the conditions set forth in the merger agreement (other than those conditions that by their terms are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver (to the extent permitted by the merger agreement or applicable law) of such conditions)) or (b) such other time or on such other date as MITER and PGTI may mutually agree in writing.

Effect of the Merger on PGTI Common Stock

Conversion of PGTI Common Stock

At the effective time, each share of PGTI common stock issued and outstanding immediately prior to the effective time (other than (a) excluded shares and (b) dissenting shares), will be converted into the right to receive the merger consideration of $42.00 in cash, without interest. At the effective time, all such shares will no longer be outstanding and will automatically be cancelled and retired and will cease to exist, and will thereafter represent only the right to receive $42.00 in cash, without interest.

Cancellation of Certain PGTI Common Stock

At the effective time, each share of PGTI common stock issued and outstanding immediately prior to the effective time that is held in treasury by PGTI or owned by MITER, Merger Sub or any other subsidiary of MITER will automatically be canceled and will cease to exist, and no consideration will be delivered in exchange for such shares.

Shares Held by PGTI Subsidiaries

Each share of PGTI common stock held by any subsidiary of PGTI immediately prior to the effective time will be converted into such number of common shares of the surviving corporation such that each subsidiary owns the same percentage of the capital stock in the surviving corporation immediately following the effective time as such subsidiary owned in PGTI immediately prior to the effective time.

Shares of Merger Sub

Each common share of Merger Sub outstanding immediately prior to the effective time will be converted into and become one common share of the surviving corporation and, except as described above under “—Shares Held by PGTI Subsidiaries,” will constitute the only outstanding shares of capital stock of the surviving corporation.

PGT Restricted Shares; PGTI RSUs

Effective as of immediately prior to the effective time, the restrictions on each PGTI restricted share that is granted under the PGTI equity plan prior to the date of the merger agreement and then outstanding will lapse, and each such PGTI restricted share will be canceled and converted into the right to receive the merger consideration. The restrictions on each PGTI performance share will lapse with respect to a number of shares of PGTI common stock calculated pursuant to the following assumptions and otherwise in accordance with the PGTI equity plan and the applicable award agreement governing such PGTI performance shares: (a) with respect to any applicable EBITDA performance measure, actual performance for PGTI performance shares granted in 2021, 2022 and 2023; and (b) with respect to any applicable relative shareholder return modifier, (i) actual performance for any performance period that is completed prior to the effective time; and (ii) assuming maximum performance for any performance period that is not completed prior to the effective time.

 

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Notwithstanding anything to the contrary in the foregoing paragraph, effective as of immediately prior to the effective time, each PGTI interim restricted share will be converted into an award to receive, upon vesting in accordance with the original vesting terms and conditions, an amount in cash equal to the merger consideration plus interest accrued on the basis of prime rate as published in The Wall Street Journal in effect at the effective time, compounded quarterly, calculated on the basis of actual days elapsed (including the closing date of the merger and each applicable vesting date).

Effective as of immediately prior to the effective time, each PGTI RSU that is granted under the PGTI equity plan and that is outstanding immediately prior to the effective time will be canceled and converted into the right to receive an amount equal to: (a) the merger consideration plus (b) any accrued but unpaid dividends or dividend equivalents in respect of such PGTI RSU as of the effective time.

ESPP

The PGTI ESPP will be frozen and suspended at the end of the offering period that is in progress as of the date of the merger agreement and no new offering periods shall commence under the PGTI ESPP at any time on or after the date of the merger agreement. No new participants will commence participation in the PGTI ESPP following the date of the merger agreement, and no participant in the PGTI ESPP will increase his or her payroll contribution rate in effect as of the date of the merger agreement or make separate non-payroll contributions on or following the date of the merger agreement. No individuals not participating in the PGTI ESPP as of the day before the date of the merger agreement will commence participation in the PGTI ESPP during the period from the date of the merger agreement through the effective time. The PGTI ESPP will terminate no later than immediately prior to the effective time.

Shares of Dissenting Stockholders

Shares of PGTI common stock issued and outstanding immediately prior to the effective time and held by a PGTI stockholder who (i) did not vote in favor of the merger agreement proposal or consent in writing thereto and (ii) validly demanded their statutory rights of appraisal in respect of such shares of PGTI common stock in accordance with Section 262 of the DGCL, will not be converted into, or represent the right to receive, the merger consideration unless such holder fails to perfect, withdraws or otherwise loses the right to appraisal. Instead, such dissenting stockholders will be entitled to receive payment of the appraised value of such shares of PGTI common stock in accordance with Section 262 of the DGCL.

If any dissenting stockholder fails to perfect or otherwise effectively withdraws or loses their rights of appraisal, such shares of PGTI common stock will thereupon be deemed to have been converted into, and to have become exchangeable for, as of the effective time, the right to receive the merger consideration. For more information regarding appraisal rights, see the section titled “Appraisal Rights of PGTI Stockholders.” In addition, a copy of Section 262 of the DGCL is attached as Annex D to this proxy statement.

Governing Documents; Officers and Directors

At the effective time of the merger, the certificate of incorporation of PGTI, as in effect immediately prior to the completion of the merger, will be amended and restated in its entirety as set forth in Exhibit A to the merger agreement and, as so amended and restated, will be the certificate of incorporation of the surviving corporation, except with respect to the name of the surviving corporation, which will be determined by MITER prior to the closing of the merger.

The bylaws of Merger Sub, as in effect immediately prior to the completion of the merger, will be the bylaws of the surviving corporation. As used herein, the “effective time” of the merger means the time at which the certificate of merger with respect to the merger is duly filed with the Secretary of State of the State of Delaware or at such later time as MITER, PGTI and Merger Sub may agree and specify in such certificate of merger.

 

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From and after the effective time, until their successors are duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and the bylaws of the surviving corporation and applicable law, (a) the directors of Merger Sub at the effective time will be the directors of the surviving corporation and (b) the officers of Merger Sub at the effective time will be the officers of the surviving corporation. Prior to the closing date of the merger, PGTI will either remove (or cause the removal of) or use reasonable best efforts to procure resignation letters (in a form and substance reasonably satisfactory to MITER) of each individual serving as a director of any subsidiary of PGTI or member of any committee of a subsidiary of PGTI’s board of directors, in each case, solely in such individual’s capacity as a director of any subsidiary of PGTI and member of any such committee, and in each case conditioned upon and effective as of the closing of the merger, and will deliver, or cause to be delivered, to MITER such procured resignation letters (or evidence of such removal) at or prior to the closing of the merger.

Exchange and Payment Procedures

As promptly as practicable after the effective time (but no later than two business days thereafter), MITER will send, or will cause the exchange agent to send, to each PGTI stockholder at the effective time a letter of transmittal and instructions, which will contain instructions on how to surrender certificated and book-entry shares of PGTI common stock in exchange for the merger consideration. No interest will be paid or will accrue on the cash payable upon surrender of any such shares of PGTI common stock.

If any portion of the merger consideration is to be paid to a person other than the person in whose name the surrendered certificated or the transferred uncertificated shares of PGTI stock is registered, it will be a condition to such payment that (a) either such certificate be properly endorsed or otherwise be in proper form for transfer or such uncertificated share be properly transferred and (b) the person requesting such payment will pay to the exchange agent any transfer or other taxes required as a result of such payment or establish to the satisfaction of the exchange agent that such tax has been paid or is not payable.

Lost, Stolen or Destroyed Certificates

In the event that a PGTI share certificate is lost, stolen or destroyed, the previous holder of the PGTI share certificate may obtain the merger consideration by (a) making an affidavit regarding the loss, theft or destruction of the PGTI share certificate and (b) if required by MITER, agreeing to indemnify the surviving corporation against any claim that may be made with respect to such lost, stolen or destroyed certificate (including, if required by the surviving corporation, the posting by such person of a bond, in such reasonable amount as the surviving corporation may direct).

Rights of PGTI Stockholders Following the Effective Time; Transfers Following the Effective Time

From and after the effective time, all holders of PGTI share certificates and uncertificated shares will cease to have any rights as PGTI stockholders other than the right to receive the merger consideration upon the surrender of such shares, without interest. From and after the effective time, the stock transfer books of PGTI will be closed with respect to all shares of PGTI common stock outstanding immediately prior to the effective time.

None of the parties to the merger agreement or the exchange agent will be liable to any person with respect to any portion of the merger consideration delivered to a governmental authority if required by any applicable abandoned property, escheat or similar law.

Any portion of the merger consideration made available to the exchange agent (and any interest or other income earned thereon) that remains unclaimed by the holders of PGTI common stock 12 months after the effective time will be returned to MITER, upon demand, and such PGTI stockholders must thereafter look only to MITER for payment of the merger consideration. Further, any portion of the merger consideration that remains

 

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undistributed to holders of PGTI share certificates and uncertificated shares immediately prior to the date on which the merger consideration would otherwise escheat to or become the property of any governmental entity will, to the extent permitted by applicable law, become the property of MITER, free and clear of all claims or interest of any person previously entitled to such claims or interest.

Withholding Rights

MITER, PGTI, the surviving corporation and any of their respective affiliates or agents will be entitled to deduct and withhold from any amounts otherwise payable pursuant to the merger agreement such amounts as are required to be deducted or withheld under the Code or any other applicable tax law. Any amounts so deducted or withheld will, to the extent paid over to the appropriate taxing authority, be treated for all purposes of the merger agreement as having been paid to the person in respect of which such deduction or withholding was made.

Representations and Warranties

The merger agreement contains customary representations and warranties of the parties. These include representations and warranties of PGTI with respect to:

 

   

organization, valid existence, good standing and corporate power;

 

   

due execution, delivery and enforceability of the merger agreement;

 

   

ownership of subsidiaries;

 

   

capitalization;

 

   

voting trusts or agreements;

 

   

corporate authority;

 

   

required consents and approvals;

 

   

no violations;

 

   

SEC filings;

 

   

financial statements;

 

   

internal controls and procedures;

 

   

the absence of undisclosed liabilities;

 

   

absence of certain changes or events;

 

   

compliance with applicable laws;

 

   

permits;

 

   

employee benefit plans;

 

   

labor matters;

 

   

tax matters;

 

   

litigation and orders;

 

   

intellectual property;

 

   

privacy and data protection;

 

   

real property;

 

   

absence of certain product defects, warranty claims or recalls;

 

   

material contracts;

 

   

environmental matters;

 

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customers and suppliers;

 

   

insurance;

 

   

information supplied for SEC filings;

 

   

opinion of the financial advisor to PGTI;

 

   

takeover statutes;

 

   

finders and brokers; and

 

   

the termination of the Masonite merger agreement.

The merger agreement also contains customary representations and warranties of MITER and Merger Sub, including among other things:

 

   

organization, valid existence, good standing and corporate power;

 

   

due execution, delivery and enforceability of the merger agreement;

 

   

required consents and approvals;

 

   

no violations;

 

   

compliance with applicable laws;

 

   

litigation and orders;

 

   

information supplied for SEC filings;

 

   

financing, the commitment letters and sufficiency of funds;

 

   

solvency;

 

   

finders and brokers;

 

   

ownership of shares of PGTI common stock; and

 

   

payment of the termination fee due to Masonite under the Masonite merger agreement.

The representations and warranties in the merger agreement do not survive the closing or termination of the merger agreement.

Certain of the representations and warranties made by the parties are qualified as to “knowledge,” “materiality” or “material adverse effect,” as defined in the merger agreement and described below.

Material Adverse Effect

A “material adverse effect” with respect to PGTI means any change, effect, development, circumstance, condition, fact, state of facts, event or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on:

(a) the financial condition, assets, business or results of operations of PGTI, taken as a whole, excluding any change, effect, development, circumstance, condition, fact, state of facts, event or occurrence to the extent resulting from:

(i) changes or prospective changes in GAAP or the interpretation thereof;

(ii) general economic, political, regulatory, legal or tax conditions in the United States or any other country or region, including changes in financial, credit, securities or currency markets (including changes in interest or exchange rates) and the imposition or adjustment of tariffs;

 

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(iii) conditions generally affecting any of the industries in which PGTI and its subsidiaries operate;

(iv) changes or prospective changes in applicable law or the interpretation thereof;

(v) geopolitical conditions, the outbreak or escalation of hostilities, acts of war, sabotage, terrorism, cyberattacks, protests, riots, strikes, global health conditions (including any epidemic, pandemic or disease outbreak) or natural disasters;

(vi) the execution, delivery and performance of the merger agreement or the announcement or consummation of the transactions contemplated by the merger agreement or the identity of or any facts or circumstances relating to MITER or any of its affiliates, including the impact of any of the foregoing on the business relationships, contractual or otherwise, of PGTI and any of its subsidiaries with customers, suppliers, service providers, employees, governmental authorities or any other business relationships resulting from any of the foregoing (provided that this clause (vi) will not apply to any representation or warranty to the extent such representation or warranty expressly purports to address, as applicable, the consequences resulting from the execution, delivery and performance of the merger agreement or the announcement or consummation of the transactions contemplated by the merger agreement);

(vii) any actions requested in writing to be taken (or omitted to be taken) by or on behalf of the MITER or Merger Sub;

(viii) any failure by PGTI or any of its subsidiaries to meet any internal or published budgets, projections, forecasts or predictions of financial performance or integration synergies for any period;

(ix) changes in the price or trading volume of the shares or any other securities of PGTI on the NYSE or any other market on which such securities are quoted for purchase and sale or changes in the credit ratings of PGTI (it being understood that any underlying facts giving rise or contributing to the failure or changes described in clauses (viii) or (ix) that are not otherwise excluded from the definition of a “material adverse effect” may be taken into account in determining whether there has been a material adverse effect); or

(x) any actions taken (or omitted to be taken) by PGTI or any of its subsidiaries that are required or expressly permitted to be taken (or omitted to be taken) pursuant to the merger agreement, including any actions required under the merger agreement to obtain any approvals, consents, registrations, permits, authorizations and other confirmations under applicable competition laws for the consummation of the merger;

except, with respect to clauses (i), (ii), (iii), (iv) and (v) above, to the extent that such change, effect, development, circumstance, condition, fact, state of facts, event or occurrence is disproportionately adverse to PGTI and its subsidiaries relative to others in the industry or industries in which PGTI and its subsidiaries operate, in which case only the incremental disproportionate adverse change, effect, development, circumstance, condition, fact, state of facts, event or occurrence may be taken into account in determining whether a material adverse effect has occurred or would reasonably be expected to occur; or

(b) the ability of PGTI to consummate the merger on or prior to the end date.

A “material adverse effect” with respect to MITER means any change, effect, development, circumstance, condition, fact, state of facts, event or occurrence that that would reasonably be expected to prevent, impair or materially delay the ability of MITER or Merger Sub to perform its material obligations hereunder or prevent, impair or materially delay the consummation of the merger or the other transactions contemplated thereby on or prior to the end date:

 

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Conduct of Businesses of PGTI Prior to Completion of the Merger

The merger agreement provides for certain restrictions on PGTI’s and its subsidiaries’ activities until the earlier of the effective time or the date (if any) the merger agreement is validly terminated. In general, except as required or expressly contemplated by the merger agreement, as required by applicable law or as consented to in writing by MITER (which may not be unreasonably withheld, conditioned or delayed), subject to specified exceptions set forth in the merger agreement and the confidential schedules thereto, each of PGTI and its subsidiaries is required to use reasonable best efforts to (a) conduct its business in accordance with applicable law and in the ordinary course of business and (b) preserve intact in all material respects its current business operations, organization, ongoing businesses, license, permits and material business relationships with third parties, including vendors, suppliers, customers, partners and governmental authorities and maintain in full force and effect its insurance policies (including, for the avoidance of doubt, paying all premiums thereon and renewing or replacing such insurance policies on or prior to their expiration) in all material respects, in each case, consistent with past practice or customs in the industries in which PGTI and its subsidiaries conduct business.

In addition, except as required or expressly contemplated by the merger agreement, as required by applicable law or as consented to in writing by MITER (which may not be unreasonably withheld, conditioned or delayed), subject to specified exceptions set forth in the merger agreement and the confidential schedules thereto, PGTI must not and must not permit any of its subsidiaries to:

 

   

amend any certificate of incorporation, bylaws or other similar organizational documents, other than immaterial amendments to the organizational documents of PGTI’s subsidiaries;

 

   

(a) split, combine, subdivide, reduce or reclassify any shares of its capital stock, (b) declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of its capital stock, except for dividends or other such distributions by any of its wholly owned subsidiaries or (c) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any securities of PGTI or its subsidiaries, except as required by the terms of any PGTI employee benefit plan;

 

   

(a) issue, deliver, grant or sell, or authorize the issuance, delivery, grant or sale of, any securities of PGTI or its subsidiaries, other than the issuance of (i) PGTI common stock in connection with the settlement of PGTI restricted shares or PGTI RSUs, in each case, outstanding on the date of the merger agreement in accordance with their terms as in effect on the date of the merger agreement or issued after the date of the merger agreement in accordance with their terms and the terms of the merger agreement, (ii) the issuance of PGTI common stock upon the exercise of the rights under the ESPP in accordance with the terms thereof as in effect on the date of the merger agreement and (iii) an issuance, delivery or sale among PGTI and any of its wholly owned subsidiaries or between any of such wholly owned subsidiaries or (b) amend any term of any security of PGTI or its subsidiaries, except as required by the terms of any PGTI employee benefit plan in effect on the date of the merger agreement;

 

   

acquire (by merger, consolidation, acquisition of shares or assets or otherwise), directly or indirectly, any securities or business in excess of $1,000,000 in the aggregate in any one transaction or series of related transactions;

 

   

enter into any new line of business outside the existing business of PGTI and its subsidiaries as of the date of the merger agreement;

 

   

sell, lease, license, assign or otherwise transfer, abandon or otherwise dispose, voluntarily permit to lapse, encumber or subject to any lien (other than permitted liens pursuant to the merger agreement) any businesses, properties or assets of PGTI or any of its subsidiaries, including intellectual property, other than (a) such sales, leases, non-exclusive licenses, assignments, transfers, liens or other dispositions that are in the ordinary course of business, or (b) such abandonment or permitting to lapse of any intellectual property that is not material to PGTI or any of its subsidiaries;

 

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make or authorize any capital expenditure other than any capital expenditures that: (a) are provided for in PGTI’s capital expense budget previously provided to MITER; or (b) when added to all other capital expenditures made on behalf of PGTI and its subsidiaries since the date of the merger agreement but not provided for in such capital expense budget, do not exceed $3,000,000 individually or in the aggregate during any fiscal quarter;

 

   

other than in connection with certain actions permitted by the merger agreement, make any loans, advances or capital contributions to, or investments in, any other person (other than loans or advances among PGTI and any of its wholly owned subsidiaries and capital contributions to or investments in its wholly owned subsidiaries), other than trade credit and similar loans and advances made to employees, customers and suppliers in the ordinary course of business;

 

   

other than (a) borrowings under PGTI’s existing credit agreements in the ordinary course of business and in an aggregate principal amount not to exceed $40,000,000 or (b) indebtedness incurred between PGTI and any of its wholly owned subsidiaries or between any of such wholly owned subsidiaries or guarantees by PGTI of indebtedness of any wholly owned subsidiary, (i) incur any indebtedness for borrowed money (or guarantees thereof) or (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any other person, except with respect to obligations of direct or indirect wholly owned subsidiaries of PGTI, in the cases of the foregoing clauses (i) and (ii), in excess of $5,000,000 in the aggregate;

 

   

other than in connection with any stockholder or derivative litigation, commence (other than any collection action in the ordinary course of business), waive, release, assign, compromise or settle any legal proceedings that would require a payment by PGTI in excess of $500,000 in any individual case or $2,000,000 in the aggregate, other than claims reserved against in PGTI’s financial statements (for amounts not materially in excess of such reserves); provided that the payment, discharge, settlement or satisfaction of such legal proceeding does not include any material obligation (other than the payment of money and confidentiality and other similar obligations incidental to such waiver, release, assignment, compromise or settlement) to be performed, or the admission of wrongdoing, by PGTI or any of its subsidiaries or any of their respective officers or directors;

(a) amend or modify in any material respect, waive any material rights under, terminate (other than any termination in accordance with the terms of an existing material contract), release, settle or compromise any material claim, liability or obligation under any material contract or (b) enter into any contract which if entered into prior to the date of the merger agreement would have been a material contract, in each case other than (i) the automatic renewal or extension of any such material contract pursuant to its terms or on terms not less favorable for PGTI, taken as a whole or (ii) with respect to certain contracts with top customers or top suppliers, certain contracts involving payments in excess of $3,000,000 or certain contracts relating to indebtedness or capital expenditures, in each case, in the ordinary course;

 

   

except as required under the terms of any PGTI employee benefit plan in effect on the date of the merger agreement, (a) grant, increase or accelerate the compensation, bonuses or other benefits of any service provider, (b) grant, pay or award any bonus, change in control, deferred compensation, severance, retention, equity or equity-based right or other incentive compensation to any service provider, except in the case of separation and release agreements entered into in the ordinary course of business providing for severance in accordance with the terms of the PGTI employee benefit plan as in effect on the date of the merger agreement applicable to such service provider with employees below the level of vice president who are terminated in the ordinary course of business, (c) establish, adopt, terminate or amend in any material respect any PGTI employee benefit plan (or any plan, program, arrangement, practice or agreement that would be a material PGTI employee benefit plan if it were in existence on the date of the merger agreement), not including annual renewals of broad-based, nondiscriminatory welfare benefit plans made in the ordinary course of business consistent with past practice, (d) amend or waive any of its rights under, or accelerate the vesting under, any provision of any of the PGTI employee benefit plans (or any plan, program, arrangement, practice or agreement that

 

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would be a PGTI employee benefit plan if it were in existence on the date of the merger agreement) or (e) terminate any employee at or above the vice president level, other than for cause, or hire any employee at or above the vice president level (or promote any employee to such level); provided, however, that, PGTI and its subsidiaries may (i) provide increases in base salary or wages in connection with new hires, promotions or merit increases in the ordinary course of business for employees at or below the level of vice president, provided that such increases will not exceed 4% in the aggregate, (ii) make, determine and pay annual or quarterly bonus payments, commissions and other short- or long-term cash incentive awards in the ordinary course of business based on actual performance in accordance with the terms of the PGTI employee benefit plans for employees below the level of vice president (provided that, prior to making any such payment, PGTI will consult with MITER, provide to MITER details regarding its determination of actual performance and consider MITER’s comments in good faith), and (iii) establish performance targets in respect of any cash incentive compensation or awards with performance periods covering all or any portion of fiscal year 2024 in the ordinary course of business and subject to prior consultation with MITER.

 

   

modify, extend, or enter into any collective bargaining agreement, or recognize or certify any labor union, labor organization, or group of service providers as the bargaining representative for any employees of PGTI or its subsidiaries;

 

   

adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization (other than the merger);

 

   

change its methods of financial accounting or make any material change in any method of financial accounting practice or working capital or cash management practice or policy, except as required by concurrent changes in GAAP or in Regulation S-X of the 1934 Act, as agreed to by its independent public accountants;

 

   

make (other than in the ordinary course of business), change or revoke any material tax election, change any tax accounting period, make any material change in any of its methods of tax accounting, or settle or compromise any material tax claim, audit or assessment, enter into any closing agreement pursuant to Section 7121 of the Code (or any similar provision of state, local or non-U.S. applicable law), or amend any material tax return;

 

   

engage in any transaction with, or enter into any agreement, arrangement or understanding with, any person covered by Item 404 of Regulation S-K that would be required to be disclosed pursuant to Item 404; or

 

   

agree, resolve or commit to do any of the foregoing.

Conduct of Businesses of MITER Prior to Completion of the Merger

The merger agreement also provides for certain restrictions on MITER’s activities until the earlier of the effective time or the date (if any) the merger agreement is validly terminated. In general, MITER must not and must not permit any of its subsidiaries to take any action or fail to take any action that is intended to, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the ability of MITER and Merger Sub to consummate the merger or the other transactions contemplated by the merger agreement, including the financing thereof.

Stockholder Meeting and Board Recommendation

As promptly as practicable after the date of the merger agreement (and in no event no later than 20 business days after the date of the merger agreement), PGTI must prepare (with the assistance and cooperation of MITER as reasonably requested by PGTI) and file or cause to be filed with the SEC this proxy statement. MITER and PGTI must also cooperate in responding to any comments from the SEC and must use their respective reasonable best efforts to have this proxy statement cleared by the SEC as promptly as reasonably practicable after the filing.

 

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PGTI must, as promptly as practicable (and in any event within five business days) following the date the SEC advises that it has no further comments on this proxy statement or that PGTI may commence mailing this proxy statement, duly call and give notice of, and commence mailing of this proxy statement to holders of shares of PGTI common stock as of the record date established for, a meeting of such holders to take place within 35 days following the mailing of this proxy statement to PGTI stockholders (unless otherwise agreed by MITER and PGTI), for purposes of submitting the merger agreement and the certificate of incorporate amendment proposal to its stockholders for adoption. The special meeting constitutes that required meeting of the PGTI stockholders.

Subject to the ability of the PGTI board of directors to make an adverse recommendation change (as defined below), the PGTI board of directors is required to recommend to PGTI stockholders the adoption of the merger agreement, and PGTI is required to include that recommendation in this proxy statement and use reasonable best efforts to obtain from the PGTI stockholders the approval of the merger agreement proposal.

Under the terms of the merger agreement, PGTI may adjourn or postpone the PGTI special meeting (a) with the consent of MITER or (b) to the extent PGTI believes in good faith (after consultation with outside legal counsel) that such adjournment or postponement is reasonably necessary (i) due to applicable law or request from the SEC, (ii) to allow reasonable additional time to solicit additional proxies necessary to obtain the PGTI stockholder approval or (iii) to allow reasonable additional time to ensure there are sufficient shares of PGTI common stock represented and voting to constitute a quorum necessary to conduct the business of the special meeting. However, PGTI may not adjourn or postpone the special meeting more than once or for more than 20 business days in the aggregate without the prior written consent of MITER.

Unless the merger agreement is validly terminated in accordance with its terms, PGTI must submit the merger agreement to its stockholders for adoption at the special meeting even if the PGTI board of directors has made an adverse recommendation change.

No Solicitation of Other Offers by PGTI

Under the terms of the merger agreement, subject to certain exceptions described below, PGTI has agreed that, from and after the date of the merger agreement until the earlier of the effective time or the date (if any) the merger agreement is validly terminated, PGTI will not, will cause its subsidiaries not to, and will use reasonable best efforts to cause its and their respective representatives not to, directly or indirectly:

 

  (a)

solicit, initiate or take any action to knowingly induce the making, submission or announcement of, or knowingly facilitate or encourage the submission of any inquiry or proposal that constitutes, or would reasonably be expected to lead to, any acquisition proposal (as defined below);

 

  (b)

enter into, participate or engage in any discussions or negotiations with, furnish any material nonpublic information relating to PGTI or any of its subsidiaries or knowingly afford access to the business, properties, assets, books or records, or to any personnel, of PGTI or any of its subsidiaries to, or otherwise knowingly cooperate with, any third party, in each case relating to an acquisition proposal by such third party or that would reasonably be expected to lead to an acquisition proposal;

 

  (c)

(i) withhold (or qualify or modify in a manner adverse to MITER or Merger Sub), or publicly announce its intention to do the same, the PGTI board of directors’ recommendation that PGTI stockholders vote to adopt the merger agreement, or fail to include such recommendation in this proxy statement, (ii) other than with respect to a tender offer or exchange offer, within 10 business days of MITER’s written request, fail to make or reaffirm such recommendation following the date any acquisition proposal or any material modification thereto is first published or broadly sent or given to the PGTI stockholders (provided that MITER will be entitled to make such a written request for reaffirmation only once for each acquisition proposal and for each material modification to such acquisition proposal) or (iii) fail to recommend, in a Solicitation/Recommendation Statement on Schedule 14D-9, against any acquisition proposal that is a tender offer or exchange offer subject to Regulation D

 

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  promulgated under the 1934 Act within 10 business days after the commencement (within the meaning of Rule 14d-2 under the 1934 Act) of such tender offer or exchange offer (any of the foregoing in clauses (i) through (iii) referred to as an “adverse recommendation change”); or

 

  (d)

enter into any agreement in principle, letter of intent, term sheet, memorandum of understanding, merger agreement, acquisition agreement, option agreement, share exchange agreement, joint venture agreement, other agreement or other similar instrument providing for, or that would reasonably be expected to lead to, an acquisition proposal.

In addition, under the merger agreement, PGTI has agreed that it will, and will cause its subsidiaries and its and their representatives to, cease immediately and cause to be terminated any and all existing activities, discussions or negotiations with any third party and its representatives conducted prior to the date of the merger agreement with respect to any acquisition proposal. PGTI also agreed to, within four business days after the date of the merger agreement, (a) request in writing that each person that had previously executed a confidentiality agreement in connection with its consideration of an acquisition proposal or potential acquisition proposal promptly destroy or return to PGTI all nonpublic information previously furnished by PGTI or any of its representatives to such person or any of its representatives in accordance with the terms of such confidentiality agreement and (b) terminate access to any physical or electronic data rooms relating to a possible acquisition proposal by such person and its representatives, which actions PGTI timely completed.

Notwithstanding the prohibitions described above, if prior to the PGTI stockholders adopting the merger agreement, PGTI receives a bona fide offer, inquiry, proposal or indication of interest from a third party with respect to an acquisition proposal that did not result from a material breach of PGTI’s non-solicitation obligations and the PGTI board of directors determines in good faith, after consultation with its outside legal counsel and financial advisor, constitutes or would reasonably be expected to lead to a superior proposal (as defined below), PGTI may engage in negotiations or discussions with such third party and its representatives and furnish to such third party or its representatives nonpublic information relating to PGTI or any of its subsidiaries, provided that PGTI also provides MITER the same such nonpublic information (to the extent not previously provided to MITER) substantially contemporaneously with (and in any event within 24 hours of) providing it to the third party.

Under the merger agreement, PGTI is obligated to notify MITER promptly (and in any event within 24 hours) of any receipt by PGTI of any acquisition proposal (including any bona fide offer, inquiry, proposal or indication of interest with respect thereto) or any amendment or modification to the material terms of any previously-received acquisition proposal or any material discussions with respect to any such acquisition proposal. The notice must include the identity of the person making such acquisition proposal and the material terms and conditions thereof, including unredacted copies of all material proposed transaction agreements and other material documents provided in connection therewith, including copies of all portions of written materials sent or provided to PGTI that describe such material terms and conditions. PGTI must also notify MITER promptly (and in any event within 24 hours) of any request for nonpublic information relating to the PGTI or any of its subsidiaries or for access to the business, properties, assets, books or records or personnel of PGTI or any of its subsidiaries by any third party that has notified PGTI that it is considering making, or has made, an acquisition proposal.

Without limiting the foregoing, PGTI must keep MITER reasonably informed on a reasonably current basis (but in no event less often than once every 24 hours) of any changes (or any material discussions with respect thereto) to the status and material terms and conditions (along with unredacted copies of all material proposed transaction agreements and other material documents provided in connection therewith, including copies of all portions of written materials sent or provided to PGTI that describe such material terms and conditions thereof) of any acquisition proposal (or bona fide offer, inquiry, proposal or indication of interest with respect to thereto).

 

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An “acquisition proposal” for purposes of the merger agreement means any bona fide third party offer or proposal relating to:

 

   

any acquisition or purchase, direct or indirect, of 20% or more of the consolidated assets of PGTI or 20% or more of any class of equity or voting securities of PGTI or any of its subsidiaries whose assets, individually or in the aggregate, constitute 20% or more of the consolidated assets of PGTI;

 

   

any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in such third party beneficially owning 20% or more of any class of equity or voting securities of PGTI or any of its subsidiaries whose assets, individually or in the aggregate, constitute 20% or more of the consolidated assets of PGTI; or

 

   

a merger, consolidation, share exchange, business combination, sale of all or substantially all of the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving PGTI or any of its subsidiaries whose assets, individually or in the aggregate, constitute 20% or more of the consolidated assets of PGTI.

A “superior proposal” for purposes of the merger agreement means a bona fide, unsolicited, written acquisition proposal, made after the date of the merger agreement (but substituting “50%” for all references to “20%” in the definition of such term) that the PGTI board of directors determines in good faith, after consultation with its outside legal counsel and financial advisor, is more favorable from a financial point of view to PGTI stockholders (solely in their capacity as such) than the merger, in each case, taking into consideration:

 

   

all relevant factors (including the identity of the counterparty, the terms and conditions of such acquisition proposal (including the transaction consideration, conditionality, timing, legal, financial (including any break-up fee), certainty of financing and regulatory clearances and the expected timing and likelihood of consummation and such other factors determined by the PGTI board of directors in good faith to be relevant)); and

 

   

if applicable, any changes to the terms of the merger agreement proposed by MITER pursuant to MITER’s “match rights,” described below under “—Change of Recommendation; Match Rights.”

Change of Recommendation; Match Rights

The merger agreement requires the PGTI board of directors to recommend that PGTI stockholders vote to adopt the merger agreement and not make an adverse recommendation change as described above. Notwithstanding the foregoing, prior to the PGTI stockholders adopting the merger agreement:

 

   

the PGTI board of directors may, in response to a bona fide offer, inquiry, proposal or indication of interest from a third party with respect to an acquisition proposal that did not result from a material breach of PGTI’s non-solicitation obligations, make an adverse recommendation change or terminate the merger agreement in order to substantially concurrently enter into a written definitive agreement for a superior proposal; or

 

   

the PGTI board of directors may make an adverse recommendation change in response to an intervening event (as defined below) if the PGTI board of directors determines in good faith, after consultation with its outside legal counsel and financial advisor, that the failure to take such action would be inconsistent with its fiduciary duties under applicable law.

Prior to making an adverse recommendation change for any reason set forth above, PGTI must provide MITER four business days’ prior written notice advising MITER that it intends to make an adverse recommendation change or terminate the merger agreement. The notice must specify in reasonable detail the facts and circumstances relating to the adverse recommendation change due to an intervening event (as defined below), or the terms of the superior proposal (including the identity of the person or group making such proposal, a copy of any proposed definitive agreement and all other documentation and information described above under “—No Solicitation of Other Offers by PGTI”) for any adverse recommendation change due to a superior proposal.

 

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In each case, PGTI must, and must cause its representatives to, negotiate in good faith (to the extent MITER wishes to negotiate) during such four business day period any proposal by MITER to amend the merger agreement in a manner that would eliminate the need for the PGTI board of directors to make an adverse recommendation change. The PGTI board of directors must make all of the required determinations regarding its fiduciary duties again at the end of such four business day period (after in good faith taking into account the amendments to the merger agreement proposed by MITER) and may only make its adverse recommendation change if it determines at the end of such four business day period that the failure to make such adverse recommendation change would be inconsistent with its fiduciary duties under applicable law, and, in the case of superior proposal, that the acquisition proposal continues to constitute a superior proposal. With respect to any change of recommendation in response to a superior proposal, if there is any material amendment, revision or change to the terms of the then-existing superior proposal (including any revision to the form, amount or timing of payment of consideration proposed to be received by PGTI stockholders as a result of such superior proposal), PGTI must again comply with the obligations described in this paragraph, except that references to the applicable four business day period will be replaced with three business days.

An “intervening event” for purposes of the merger agreement is any event, fact, circumstance, development or occurrence that:

 

   

was not known to or reasonably foreseeable by the PGTI board of directors as of the date of the merger agreement, which event or circumstance becomes known to or by the PGTI board of directors prior to receipt of PGTI stockholders’ approval of the merger agreement proposal or was known to or reasonably foreseeable by the PGTI board of directors as of the date of the merger agreement, but the consequences of which (or the magnitude thereof) were not; and

 

   

does not relate to an acquisition proposal;

provided that in no event will the following events constitute or be taken into account in determining the existence of an intervening event: (a) PGTI meeting, failing to meet or exceeding any internal or published revenue or earnings forecasts or projections for any period or (b) changes in the market price or trading volume of PGTI common stock, provided that, in the case of the foregoing clauses (a) and (b), the underlying causes of such effect may be considered and taken into account in determining whether there has been an intervening event.

In addition, nothing in the merger agreement prohibits PGTI or the PGTI board of directors from (a) taking and disclosing to PGTI stockholders a position contemplated by Rule 14d-9 and Rule 14e-2(a) promulgated under the Exchange Act (or any similar communication to stockholders in connection with the making or amendment of a tender offer or exchange offer) or from making any legally required disclosure to stockholders with regard to the transactions contemplated by the merger agreement or an offer, inquiry, proposal or indication of interest with respect to an acquisition proposal (provided that neither PGTI nor the PGTI board of directors may make an adverse recommendation change unless permitted by the merger agreement), (b) issuing a “stop, look and listen” disclosure or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange Act or (c) contacting and engaging in discussions with any person or group and their respective representatives who has made an offer, inquiry, proposal or indication of interest with respect to an acquisition proposal that was not solicited in breach of the merger agreement solely for the purpose of clarifying such offer, inquiry, proposal or indication of interest and the terms thereof or informing such third party of the non-solicitation restrictions imposed by the merger agreement.

Efforts to Obtain Regulatory Clearances

Under the merger agreement, MITER and PGTI are required to use reasonable best efforts to take, or cause to be taken (including by causing their affiliates to take), all actions (including instituting or defending any legal proceeding), and to do, or cause to be done, all things necessary, proper or advisable under applicable law to

 

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consummate the transactions contemplated by the merger agreement as soon as reasonably practicable (and in any event, at least five business days prior to the end date), including:

 

   

preparing and filing as promptly as reasonably practicable with any governmental authority or other third party all documentation to effect all necessary, proper or advisable filings, notices, petitions, statements, registrations, submissions of information, applications and other documents; and

 

   

obtaining and maintaining all approvals, consents, registrations, permits, authorizations and other confirmations required to be obtained from any governmental authority or other third party that are necessary, proper or advisable to consummate the transactions contemplated by the merger agreement as soon as practicable (and in any event, at least five business days prior to the end date).

In furtherance and not in limitation of the obligations described in the previous paragraph, the merger agreement requires MITER and PGTI to:

 

   

make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by the merger agreement as promptly as reasonably practicable and in any event within five business days after the date of the merger agreement (and such filings shall request early termination of any applicable waiting period under the HSR Act), which filing was timely made by the parties (and the waiting period will expire on February 22, 2024 at 11:59 p.m., Eastern Time, unless it is extended by request for additional information or terminated earlier or if PGTI and MITER pull and refile), and furnish to the other party as promptly as practicable all information within its (or its affiliates’) control requested by such other party and required for such other party to make any application or other filing to be made by it pursuant to any applicable law in connection with the transactions contemplated by the merger agreement; and

 

   

respond as promptly as practicable to any inquiries received from any governmental authority for additional information or documentary material that may be requested pursuant to the HSR Act or any other applicable competition laws and use reasonable best efforts to promptly take all other actions necessary, proper or advisable to cause the expiration or termination of the applicable waiting periods under the HSR Act and, if applicable, any other applicable competition laws as promptly as practicable.

Each of MITER and PGTI agrees to take all actions reasonably necessary to resolve any objections by any governmental authority or third party and obtain any authorization, consent or approval of a governmental authority or to avoid or eliminate any impediments under the HSR Act or any such other competition law as promptly as practicable so as to enable the consummation of the transactions contemplated by the merger agreement to occur no later than the end date, including:

 

   

agreeing to hold separate, sell, license, divest or otherwise dispose of any of the businesses or properties or assets of MITER, PGTI or any of their respective affiliates;

 

   

terminating, amending or assigning any existing relationships and contractual rights and obligations;

 

   

terminating any venture or other arrangement;

 

   

granting any right or commercial or other accommodation to, or entering into any contractual or other commercial relationship with, any third party;

 

   

imposing limitations on MITER, Merger Sub, PGTI or any of their respective affiliates with respect to how they own, retain, conduct or operate all or any portion of their respective businesses or assets;

 

   

effectuating any other change to, or restructuring of, MITER, PGTI or any of their respective affiliates,

 

   

opposing (a) any administrative or judicial legal proceeding that is initiated or threatened to be initiated challenging the merger agreement or the consummation of the transactions contemplated thereby (including seeking to have any stay or temporary restraining order entered by any court or other governmental authority vacated or reversed) and (b) any request for, the entry of, and seek to have

 

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vacated or terminated, any order that could reasonably be expected to restrain, prevent or materially delay the consummation of the transactions contemplated by the merger agreement, including, in the case of either (a) or (b), by defending through litigation any legal proceeding brought by any person in any court or before any governmental authority, and pursuing all available avenues of administrative and judicial appeal (and, in each case, entering into agreements with, or stipulating to the entry of an order by, any governmental Authority in connection with any of the foregoing and in the case of legal proceedings by or with respect to PGTI, by consenting to any such action), in each case, as may be required (i) by the applicable governmental authority in order to resolve such objections as such governmental authority may have to such transactions under the HSR Act or any other applicable law or (ii) by any domestic or foreign court or other tribunal in any legal proceeding challenging such transactions as violative of the HSR Act or any other applicable law, in order to avoid the entry of, or to effect the dissolution, vacating, lifting, altering or reversal of, any order that has the effect of restricting, preventing or prohibiting the consummation of the transactions contemplated by the merger agreement and

 

   

not taking any action (including entering into or consummating any contracts or arrangements for an acquisition, however structured, of any ownership interest, assets or rights in any person) if such action would (a) reasonably be expected to make it materially more likely that there would arise any impediments under any antitrust, competition or trade regulation laws or other applicable laws that may be asserted by any governmental authority to the consummation of the merger and the other transactions contemplated by the merger agreement as promptly as practicable or (b) impose any material delay in the expiration of any waiting period or obtaining of any approval from any governmental authority applicable to the transactions contemplated by the merger agreement.

However, MITER is not required to (and PGTI may not, without MITER’s prior written consent) offer, propose, negotiate, commit or agree to take or effect any regulatory action that would be, or would reasonably be expected to be, in the aggregate, material to MITER and its subsidiaries (including PGTI and its subsidiaries), taken as a whole after giving effect to the merger (“material” shall mean material measured on a scale relative only to the size of PGTI and its subsidiaries, taken as a whole); provided that any of the regulatory actions specified in the foregoing eight bullets will be conditioned upon the consummation of the merger. Solely at MITER’s request or with MITER’s written consent, PGTI will agree to divest, hold separate or otherwise take or commit to take any action that limits its freedom of action with respect to, or its ability to retain, any of its or its subsidiaries, businesses, services or assets; provided that any such action shall be conditioned upon the consummation of the merger.

Under the merger agreement, MITER and PGTI also agree to:

 

   

promptly notify the other parties of any substantive communication to that party from any governmental authority regarding the merger agreement or the transactions contemplated thereby and, subject to applicable law, permit the other parties to review, reasonably in advance, any written communication or presentation proposed to be submitted to any governmental authority and consider in good faith any comments such other may party may provide;

 

   

not participate in any substantive meeting or discussion with any governmental authority in respect of any filings, investigation or inquiry concerning any competition or antitrust matters in connection with the merger agreement or the merger and the other transactions contemplated thereby unless it consults with the other parties in advance and, to the extent permitted by such governmental authority, gives the other parties the opportunity to attend and participate;

 

   

furnish the other parties with copies of all filings and material correspondences and communications (and memoranda setting forth the substance thereof) between them and their affiliates and their respective representatives, on the one hand, and any governmental authority or members or their respective staffs, on the other hand, with respect to any competition laws in connection with the merger agreement; and

 

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consult and cooperate with one another in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of the other party relating to proceedings under any competition law.

Without limiting MITER’s obligation described above to use reasonable best efforts to take all steps as may be necessary, subject to the limitations described above, to obtain all required approvals, MITER and PGTI have agreed that MITER will control the ultimate strategy and timing with respect to the antitrust matters described in this section, provided that MITER reasonably consults with and considers in good faith any comments of PGTI or its representatives relating to such strategy and provided that MITER will not extend any waiting period under the HSR Act or under any other competition law or enter into any agreement with any governmental authority not to consummate the transactions contemplated by the merger agreement without PGTI’s prior written consent, which, in the case of extending any such waiting period, will not be unreasonably withheld.

Employee Matters

For 12 months following the effective time, MITER will cause each PGTI employee whose employment continues as of such time (each referred to as a “continuing employee”) to receive (a) an annual rate of base salary and wages that is no less favorable than the annual rate of base salary and wages provided to such continuing employee as of immediately prior to the effective time, (b) target cash and equity incentive compensation opportunities (excluding any change in control, retention or similar payments) that are no less favorable in the aggregate than the cash and equity incentive compensation opportunities provided to such continuing employee during applicable periods prior to the effective time, and (c) all other compensation and employee benefits that are substantially comparable in the aggregate to all other compensation and employee benefits provided to such continuing employee as of immediately prior to the effective time or that are provided to similarly situated employees of MITER or its subsidiaries (excluding any defined benefit pension and retiree medical or life insurance benefits).

Directors’ and Officers’ Indemnification and Insurance

Under the merger agreement, for a period of six years after the effective time, MITER must cause the surviving corporation to indemnify and hold harmless, to the fullest extent permitted by applicable law and the organizational documents of PGTI or its subsidiaries, each current and former director and officer of PGTI and its subsidiaries and their respective successors and heirs against any losses, damages, liabilities, costs, expenses (including attorneys’ fees), judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any thereof) in connection with serving as a director or officer of PGTI prior to the effective time.

In addition, for a period of six years following the effective time, MITER is required to maintain in effect provisions in the organizational documents of the surviving corporation and its subsidiaries regarding elimination of liability of directors, indemnification of directors, officers, employees, fiduciaries and agents and advancement of fees, costs and expenses that are no less advantageous to the intended beneficiaries than the corresponding provisions that were in existence as of the date of the merger agreement.

At or prior to the effective time, PGTI will (or if PGTI is unable to, MITER will cause the surviving corporation to) purchase a directors’ and officers’ liability insurance and fiduciary liability insurance “tail” insurance policy for a period of six years after the effective time with respect to matters arising at or prior to the effective time with terms, conditions, retentions and limits of liability that are no less favorable than the coverage provided under PGTI’s existing policies as of the date of the merger agreement, with a one-time cost not in excess of 350% of the last aggregate annual premium paid by PGTI for its directors’ and officers’ liability insurance and fiduciary liability insurance prior to the date of the merger agreement, and if the cost of such “tail” insurance policy would otherwise exceed such amount, the surviving corporation must purchase a policy with the greatest coverage available for a cost not exceeding such amount.

 

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Financing of the Merger

MITER intends to fund the cash portion of the merger consideration with proceeds from new debt and equity financing together with cash on hand. Concurrently with the entry into the Merger Agreement, MITER entered into (i) the debt commitment letter, pursuant to which the lenders have committed to provide to MITER up to (a) $1,800,000,000 aggregate principal amount under a senior secured term loan facility and (b) $325,000,000 aggregate principal amount under a senior secured asset-based revolving credit facility and (ii) the equity commitment letter, pursuant to which Koch has committed to purchase up to $979,000,000 of equity interests in MITER. The obligations of the lenders to provide debt financing under the debt commitment letter and Koch to provide equity financing under the equity commitment letter are subject to certain customary conditions, including (a) the execution and delivery of definitive documentation with respect to such financing in accordance with such commitment letter and (b) the consummation of the merger in all material respects in accordance with the terms and conditions of the merger agreement. The receipt of financing by MITER is not a condition to MITER’s obligations to complete the merger.

Financing Cooperation; Actions With Respect to PGTI Debt

Under the merger agreement, PGTI and its subsidiaries will use their reasonable best efforts to, and will use their reasonable best efforts to cause their respective representatives to, provide (a) all cooperation in connection with the arrangement of the debt financing as may be reasonably requested by MITER that is necessary and customary for financings of the type contemplated by the debt commitment letter and (b) customary information in connection with the debt financing the merger, subject to certain limitations set forth in the merger agreement.

In connection with the merger, MITER intends to, in coordination with PGTI, fully repay the loans outstanding and terminate all commitments available under the PGTI credit agreement and fully redeem, repurchase or otherwise retire PGTI’s 4.375% Senior Notes due 2029 under the PGTI indenture.

In connection therewith, the merger agreement provides that PGTI will, and will cause its subsidiaries to, deliver notices of prepayment or redemption within the time periods required by (i) that certain Credit Agreement, dated as of February 16, 2016, among PGTI, the lenders from time to time party thereto and Deutsche Bank AG New York Branch, as amended prior to the closing date of the merger (referred to as the “PGTI credit agreement”) or (ii) that certain Indenture, dated as of September 24, 2021, by and among PGTI, the guarantors party thereto and U.S. Bank National Association, as trustee, and the other parties thereto, governing PGTI’s 4.375% Senior Notes due 2029, as amended prior to the closing date of the merger (referred to as “the PGTI indenture”), as applicable (which may be conditional upon closing), and use reasonable best efforts to obtain customary payoff letters, lien terminations and instructions of discharge and to give any other necessary notices to allow for the payoff, discharge and termination of the indebtedness under the PGTI credit agreement and the PGTI indenture. This proxy statement does not constitute a notice of repayment or redemption of any of the foregoing. See the section titled “The Merger (Proposal 1)—Financing of the Merger.”

Other Covenants

The merger agreement contains additional agreements of MITER, PGTI and Merger Sub relating to, among other things:

 

   

the coordination between MITER and PGTI regarding press releases and other public announcements or filings relating to the transactions contemplated by the merger agreement;

 

   

PGTI taking all action necessary to cause the rights under PGTI’s shareholder rights agreement, dated as of March 30, 2023 between PGTI and Equiniti Trust Company, LLC (f.k.a., American Stock Transfer & Trust Company, LLC), to be inapplicable to the transactions contemplated by the merger agreement, including the merger, such that MITER is not considered an “acquiring person” and the merger does not trigger a “distribution date” or a “stock acquisition date” under such rights agreement (which action has been taken by PGTI);

 

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MITER taking all action necessary to cause Merger Sub to perform its obligations under the merger agreement;

 

   

the notification of certain matters and the settlement of any litigation in connection with the merger agreement;

 

   

actions to cause the disposition of equity securities of PGTI held by each individual who is a director or officer of PGTI pursuant to the transactions contemplated by the merger agreement to be exempt under Rule 16b-3 promulgated under the Exchange Act;

 

   

the removal or resignation of each member of the PGTI board of directors; and

 

   

the de-listing from the NYSE of PGTI shares and deregistration under the Exchange Act.

Conditions to the Merger

The respective obligations of each party to effect the merger are subject to the satisfaction or waiver of the following conditions:

 

   

PGTI stockholders having approved the adoption of the merger agreement in accordance with the DGCL;

 

   

no order issued by any court of competent jurisdiction or other governmental authority or applicable law prohibiting, rendering illegal or permanently enjoining the consummation of the merger being in effect; and

 

   

any applicable waiting period (including any extension thereof and any timing agreement with a governmental authority) under the HSR Act relating to the merger having expired or been terminated.

The obligations of MITER and Merger Sub to effect the merger are subject to the satisfaction or waiver of the following additional conditions:

 

   

PGTI having performed and complied with in all material respects all of the covenants, obligations and agreements required to be performed or complied with by it under the merger agreement prior to the closing of the merger;

 

   

(a) the representations and warranties of PGTI set forth in the merger agreement regarding corporate existence and power and non-contravention being true and correct in all respects (after giving effect to the materiality qualifiers set forth in the merger agreement), (b) the representations and warranties of PGTI set forth in the merger agreement regarding PGTI’s corporate authorization, finders’ fees, opinion of its financial advisor, capitalization, takeover statutes, the inapplicability of the rights agreement to the merger and the termination of the Masonite merger agreement being true and correct other than for de minimis inaccuracies, (c) the representations and warranties of PGTI set forth in the merger agreement regarding changes, events or effects that have or would reasonably be expected to have, individually or in the aggregate a material adverse effect on PGTI being true and correct in all respects and (d) all other representations and warranties of PGTI set forth in the merger agreement (without giving effect to any materiality or material adverse effect qualifications contained therein) being true and correct, except in the case of this clause (d), for such failure to be true and correct that would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on PGTI, in the case of each of clauses (a) through (d), as of the date of the merger agreement and as of the closing date of the merger as though made on and as of the closing date of the merger (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date);

 

   

no material adverse effect on PGTI having occurred since the date of the merger agreement that is continuing; and

 

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MITER and Merger Sub having received from PGTI a certificate, signed by an executive officer of PGTI, certifying to the effect that the conditions set forth in the foregoing three bullets have been satisfied (such conditions in the first, second, and this fourth bullet, referred to as the “specified MITER conditions”).

The obligation of PGTI to effect the merger is subject to the satisfaction or waiver of the following additional conditions:

 

   

each of MITER and Merger Sub having performed and complied with in all material respects all of the covenants, obligations and agreements required to be performed or complied with by it under the merger agreement prior to the closing of the merger;

 

   

(a) the representations and warranties of MITER and Merger Sub set forth in the merger agreement regarding corporate existence and power and non-contravention being true and correct in all respects (after giving effect to the materiality qualifiers set forth in the merger agreement), (b) the representations and warranties of MITER and Merger Sub set forth in the merger agreement regarding MITER’s and Merger Sub’s corporate authorization, finders’ fees, and solvency being true and correct other than for de minimis inaccuracies, and (c) all other representations and warranties of MITER and Merger Sub set forth in the merger agreement (without giving effect to any qualification as to materiality or material adverse effect contained therein) being true and correct in all respects, except in the case of this clause (c), for such failure to be true and correct that would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on MITER, in the case of each of clauses (a) through (c), as of the date of the merger agreement and as of the closing date of the merger as though made on and as of the closing date of the merger (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date); and

 

   

PGTI having received from MITER a certificate, signed by an executive officer of MITER, certifying to the effect that the conditions set forth in the foregoing two bullets have been satisfied.

Termination of the Merger Agreement

Termination by MITER or PGTI

The merger agreement may be terminated at any time before the effective time:

 

   

by mutual written consent of MITER and PGTI; or

 

   

by either MITER or PGTI, if:

 

   

the merger has not been consummated on or before the end date, which is July 16, 2025; provided that (a) if all of the conditions to the merger are satisfied (or, in the case of conditions that by their nature are to be satisfied by actions taken at the closing of the merger, are then capable of being satisfied if the closing of the merger were to occur on such date) on a date that occurs on or prior to the end date but the closing of the merger would thereafter occur on a date that occurs on a specified date, being a date within three business days after the end date, then the end date will automatically be extended to such specified date and the specified date will become the end date and (b) in the event the marketing period has commenced on or prior to the end date but has not completed as of the end date, the end date will be extended (or further extended) to the date that is three business days after the then-scheduled expiration date of the marketing period; provided, further, that the right to terminate the merger agreement described herein will (i) not be available to any party who is in breach of, or has breached, its obligations under the merger agreement, where such breach has primarily caused or resulted in the failure of the closing of the merger to occur on or before the end date and (ii) be subject to the provision of the merger agreement that provides that if any party brings any suit, action or proceeding to enforce specifically the performance of the terms and provisions of the merger agreement by any other party, the end date

 

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will automatically be extended by the amount of time during which such suit, action or proceeding is pending, plus five business days, or such longer time period established by the court presiding over such suit, action or proceeding, if any;

 

   

any court or other governmental authority of competent jurisdiction has issued a final, non-appealable order rendering illegal or permanently enjoining the consummation of the merger; provided that, at the time at which such person would otherwise exercise such termination right, the material breach by such person (and, in the case of MITER, Merger Sub’s) of its (or their) obligations under the merger agreement has not been the primary cause of, or resulted in, the events specified in this bullet; or

 

   

the special meeting (including any adjournments or postponements thereof) has concluded and the PGTI stockholders have not adopted the merger agreement.

Termination by PGTI

The merger agreement may be terminated at any time before the effective time by PGTI if:

 

   

prior to PGTI stockholders adopting the merger agreement, the PGTI board of directors authorizes PGTI to enter into a written definitive agreement concerning a superior proposal in accordance and in compliance with PGTI’s obligations described under “—No Solicitation of Other Offers by PGTI” and “—Change of Recommendation; Match Rights” (and with such agreement being substantially concurrently with the valid termination of the merger agreement); provided that concurrently with such termination, PGTI pays to MITER the $86,000,000 termination fee described below;

 

   

MITER and/or Merger Sub have breached any representation or warranty or failed to perform their respective covenants or agreements under the merger agreement that (a) causes any of the conditions to PGTI’s obligations to consummate the merger not to be satisfied and (b) is incapable of being cured or, if capable of being cured, is not cured by the date that is 20 business days after its receipt of written notice thereof from PGTI (or, if earlier, five business days prior to the end date); provided that PGTI is not then in material breach of the merger agreement, nor is there any inaccuracy of any of its representations, warranties, covenants or agreements contained in the merger agreement that would give rise to a failure of the condition to MITER’s obligations to close the merger related to the absence of PGTI’s breach of the merger agreement (such termination right, referred to as “MITER breach”); or

 

   

(a) the closing of the merger has not occurred on or prior to the date that is no later than three business days after the satisfaction or waiver (to the extent permitted by the merger agreement or by applicable law) of the last to be satisfied or waived of the conditions set forth in the merger agreement (other than those conditions that by their terms are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver (to the extent permitted by the merger agreement or applicable law) of such conditions at the closing), (b) all of the conditions to MITER’s obligation to consummate the merger have been satisfied or waived (other than those conditions that (i) by their nature are to be satisfied by actions taken at the closing of the merger, but which are then capable of being satisfied or (ii) are not being satisfied as a result of a breach or failure by MITER or Merger Sub of or under the merger agreement), (c) PGTI has confirmed in writing to MITER (and not revoked such confirmation) at least two business days prior to such termination that PGTI stands ready, willing and able to consummate the closing of the merger prior to such termination, and (d) MITER has failed to consummate the closing of the merger prior to such termination (such termination right, referred to as “MITER failure to close”).

 

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Termination by MITER

The merger agreement may be terminated at any time before the effective time by MITER if:

 

   

prior to the PGTI stockholders adopting the merger agreement, the PGTI board of directors has effected an adverse recommendation change as described under “—No Solicitation of Other Offers by PGTI” or “—Change of Recommendation; Match Rights”; or

 

   

PGTI has breached any representation or warranty or failed to perform its covenants or agreements under the merger agreement that (a) causes any of the conditions to MITER’s obligations to consummate the merger not to be satisfied and (b) is incapable of being cured or, if capable of being cured, is not cured by the date that is 20 business days after its receipt of written notice thereof from MITER (or, if earlier, five business days prior to the end date); provided that MITER is not then in material breach of the merger agreement, nor is there any inaccuracy of any of its representations, warranties, covenants or agreements contained in the merger agreement that would give rise to a failure of the condition to PGTI’s obligations to close the merger related to the absence of MITER’s breach of the merger agreement.

Termination Fees and Expenses

PGTI Termination Fee

The merger agreement provides that PGTI will pay MITER a termination fee of $86,000,000 if:

 

   

PGTI validly terminates the merger agreement to enter into a definitive agreement with respect to a superior proposal;

 

   

MITER validly terminates the merger agreement after the PGTI board of directors has effected an adverse recommendation change; or

 

   

(a) the merger agreement is validly terminated by (i) MITER or PGTI because (A) the PGTI stockholder approval for the adoption of the merger agreement has not been obtained by the end date or (B) the special meeting (including any adjournments or postponements thereof) has concluded and PGTI stockholders have not adopted the merger agreement or (ii) MITER because of PGTI’s breach of or failure to perform or comply with, one or more of its representations, warranties, covenants or agreements under the merger agreement, (b) after the date of the merger agreement and prior to the valid termination of the merger agreement, an acquisition proposal is publicly made or disclosed and not publicly withdrawn or otherwise abandoned at least two business days prior to such termination and (c) within 12 months of such termination, an acquisition proposal is consummated or a definitive agreement providing for an acquisition proposal is entered into by PGTI. (For purposes of this bullet, the term “acquisition proposal” has the meaning assigned to such term as described under “No Solicitation of Other Offers by PGTI,” except that all references to “20%” will be replaced with references to “50%.”).

In no event will PGTI be obligated to pay the termination fee on more than one occasion. Except in the case of fraud or material and willful breach of the merger agreement by PGTI, the receipt by MITER of the PGTI termination fee will be the sole and exclusive remedy of MITER and Merger Sub in connection with the merger agreement and neither MITER nor Merger Sub will seek to obtain any recovery, judgment, or damages of any kind, including consequential, indirect, or punitive damages, against PGTI or any of PGTI’s subsidiaries or any of their respective directors, officers, employees, partners, managers, members, stockholders, affiliates or representatives in connection with the merger agreement.

 

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MITER Termination Fee

The merger agreement provides that MITER will pay PGTI a termination fee of $184,000,000 (referred to as the “MITER termination fee”) if:

 

   

PGTI validly terminates the merger agreement because of (a) a MITER breach or (b) MITER failure to close; or

 

   

MITER or PGTI validly terminates the merger agreement due to the effective time not having occurred on or prior to the end date at a time when the merger agreement is validly terminable pursuant to (a) or (b) of the immediately preceding bullet.

In addition, MITER will be obligated to pay PGTI a termination fee of $221,000,000 (referred to as the “MITER regulatory termination fee”) if MITER or PGTI validly terminates the merger agreement due to (a) (i) the effective time not having occurred on or prior to the end date and, at the time of such termination, (x) an order issued by any court of competent jurisdiction or other governmental authority or applicable law prohibiting, rendering illegal or permanently enjoining the consummation of the merger shall be in effect (in connection with the matters that are the subject of the parties’ regulatory undertaking obligations) or (y) any applicable waiting period (including any extension thereof and any timing agreement with a governmental authority) under the HSR Act relating to the merger has not expired or been terminated or (ii) the existence of an order issued by any court or other governmental authority of competent jurisdiction rendering illegal or permanently enjoining the consummation of the merger, which order has become final and nonappealable (in connection with the matters that are the subject of the parties’ regulatory undertaking obligations), and at the time of such termination referred to in clause (i) or (ii) above, the specified MITER conditions have been satisfied, other than conditions that by their nature are to be satisfied at the closing of the merger (assuming for the purpose of determining whether such conditions have been satisfied, that all references to “closing of the merger” or “closing date of the merger”, instead refer to the time of termination of the merger agreement) or waived in accordance with the merger agreement or (b) MITER’s or Merger Sub’s breach of their regulatory undertaking obligations.

If the Merger Agreement is terminated in circumstances where both the MITER termination fee and the MITER regulatory termination fee would be payable, then only the MITER regulatory termination fee will be payable. In no event will MITER be obligated to pay the MITER termination fee or the MITER regulatory termination fee on more than one occasion. Except in the case of fraud or material and willful breach of the merger agreement by MITER or Merger Sub, the receipt by PGTI of the MITER termination fee or the MITER regulatory termination fee, as applicable, will be the sole and exclusive remedy of PGTI in connection with the merger agreement and PGTI will not seek to obtain any recovery, judgment, or damages of any kind, including consequential, indirect, or punitive damages, against MITER, Merger Sub, any of their respective subsidiaries or any of their respective directors, officers, employees, partners, managers, members, stockholders, affiliates, representatives, MITER’s financing sources or respective affiliates of such financing sources and the respective officers, directors, employees, controlling persons, agents, advisors and the other representatives and successors of such financing sources and affiliates in connection with the merger agreement.

Masonite Termination Fee

Concurrently with the execution of the merger agreement, (a) PGTI was obligated to terminate the Masonite merger agreement and (b) MITER was obligated to pay or cause to be paid to PGTI (or, at the direction of PGTI, to Masonite on behalf of PGTI) the termination fee due to Masonite under the Masonite merger agreement. The parties timely fulfilled such obligations.

Effect of Termination

In the event of termination of the merger agreement in accordance with the terms of the merger agreement, the merger agreement will become void (except that provisions relating to the effect of termination, public announcements, payment of the termination fees and certain other provisions, together with the confidentiality

 

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agreement and clean team agreement between PGTI and MITER, will survive any such termination), and there will be no liability on the part of any of the parties, except that no party will be relieved of liability for fraud or any material and willful breach of the merger agreement.

PGTI Certificate of Incorporation Amendment

The merger agreement contemplates that the PGTI stockholders will vote on an amendment to PGTI’s Amended and Restated Certificate of Incorporation that would designate PGTI as the agent of PGTI stockholders to pursue damages in the event that specific performance is not sought or granted as a remedy for MITER’s fraud or material and willful breach of the merger agreement. Adoption of the certificate of incorporation amendment is not a condition to the merger agreement and the vote of PGTI stockholders on the proposed amendment will not have any bearing on whether the merger is consummated.

The certificate of incorporation amendment is intended to address recent case law from the Delaware Chancery Court that could be construed to, in effect, limit the remedies available to PGTI and its stockholders under the merger agreement absent the certificate of incorporation amendment.

Under the merger agreement, PGTI and MITER agreed that, in the event of MITER’s fraud or material and willful breach of the merger agreement, PGTI’s damages would not be limited by the terms of the merger agreement and may include the premium reflected in the merger consideration.

In the event that the certificate of incorporation amendment is approved and adopted by the PGTI stockholders and PGTI, acting as agent of the PGTI stockholders, were to recover damages in the event of MITER’s fraud or material and willful breach of the merger agreement, whether through judgment, settlement or otherwise, the certificate of incorporation amendment provides that the PGTI board of directors shall, in its sole discretion and subject to its fiduciary duties, distribute such damages to PGTI stockholders by dividend, stock repurchase or buyback or in any other manner.

The PGTI board of directors has determined that the certificate of incorporation amendment is advisable and fair to, and in the best interests of, PGTI and its stockholders, approved, adopted, and declared advisable the certificate of incorporation amendment and recommended to PGTI stockholders to approve and adopt the certificate of incorporation amendment.

The vote on the certificate of incorporation amendment proposal is a vote separate and apart from the vote on the merger agreement proposal, the merger-related compensation proposal and the adjournment proposal. Accordingly, you may vote to approve the merger agreement proposal and/or the merger-related compensation proposal and/or the adjournment proposal and vote not to approve the certificate of incorporation amendment proposal and vice versa.

The certificate of incorporation amendment proposal requires the affirmative vote of holders of a majority of the outstanding shares of PGTI common stock entitled to vote thereon. Each share of PGTI common stock outstanding on the record date of the special meeting is entitled to one vote on this proposal. Failures to vote, broker non-votes and abstentions will have the same effect as a vote cast “AGAINST” the approval of such proposal. If the certificate of incorporation amendment proposal is approved and adopted by the PGTI stockholders at the special meeting, PGTI intends to file the proposed certificate of incorporation amendment attached to this proxy statement as Annex B with the Secretary of State of the State of Delaware promptly following the conclusion of the special meeting.

Remedies; Maximum Liability

The merger agreement provides that, except in the case of fraud or any material and willful breach of the merger agreement, upon the valid termination of the merger agreement under circumstances where the

 

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termination fee is payable by PGTI, MITER’s right to receive payment of the termination fee will be the sole and exclusive remedy of MITER and Merger Sub in connection with the merger agreement and the transactions contemplated thereby, and upon payment in full of such amount, neither MITER nor Merger Sub will seek to obtain any recovery, judgment, or damages of any kind against PGTI or any of PGTI’s subsidiaries or any of their respective directors, officers, employees, partners, managers, members, stockholders, affiliates or representatives in connection with the merger agreement or the transactions contemplated thereby, including any breach of the merger agreement.

In addition, the merger agreement provides that, except in the case of fraud or any material and willful breach of the merger agreement, upon the valid termination of the merger agreement under circumstances where the termination fee is payable by MITER, PGTI’s right to receive payment of the MITER termination fee or the MITER regulatory termination fee, as applicable, will be the sole and exclusive remedy of PGTI in connection with the merger agreement and the transactions contemplated thereby, and upon payment in full of such amount, PGTI will not seek to obtain any recovery, judgment, or damages of any kind against MITER or any of MITER’s subsidiaries or any of their respective directors, officers, employees, partners, managers, members, stockholders, affiliates or representatives or any of MITER’s financing sources or respective affiliates of such financing sources and the respective officers, directors, employees, controlling persons, agents, advisors and the other representatives and successors of such financing sources and affiliates in connection with the merger agreement or the transactions contemplated thereby, including any breach of the merger agreement.

Specific Performance

The merger agreement provides that the parties will be entitled to an injunction or injunctions, or any other appropriate form of equitable relief, to prevent or restrain breaches or threatened breaches of the merger agreement or to enforce specifically the performance of the terms and provisions thereof, without the necessity of proving that irreparable damage would occur or the inadequacy of money damages as a remedy (and each party waived any requirement for the securing or posting of any bond in connection with such remedy), in addition to any other remedy to which they are entitled at law or in equity. The parties will not assert (or interpose as a defense or in opposition) that a remedy of specific performance or other equitable relief is unenforceable, invalid, contrary to law or inequitable for any reason, that a remedy of monetary damages would provide an adequate remedy or that the parties otherwise have an adequate remedy at law.

Fees and Expenses

Except as otherwise expressly provided in the merger agreement (including the termination fees described above), all costs and expenses incurred in connection with the merger agreement and the transactions contemplated thereby will be paid by the party incurring the cost or expense.

Amendments and Waivers

At any time prior to the effective time of the merger, the parties may amend or waive any provision of the merger agreement. Any such amendment must be in writing and signed by each party to the merger agreement and any such waiver must be in writing and signed by each party against whom the waiver is to be effective. After the PGTI stockholders have approved and adopted the merger agreement, there will be no amendment or waiver that would require the further approval of the PGTI stockholders under the DGCL without such approval having first been obtained. Moreover, certain sections may not be amended or waived in a manner that is adverse in any respect to MITER’s financing sources or certain of their related parties without the prior written consent of such persons.

Governing Law and Venue; Waiver of Jury Trial

Other than in respect of certain actions against the parties providing financing to MITER or its subsidiaries in connection with the transactions contemplated by the merger agreement (which actions will be governed by

 

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the laws of the State of New York), the merger agreement is governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to conflicts of laws principles that would result in the application of the law of any other state.

The parties agreed that any action, claim, charge, complaint, arbitration, mediation, litigation, suit or other similarly formal legal proceeding seeking to enforce any provision of, relating to, or in connection with, the merger agreement will be brought exclusively in the Delaware Chancery Court or, if such court does not have or declines jurisdiction, any federal court or other Delaware state court, in each case, located in New Castle County in the State of Delaware.

Each party irrevocably and unconditionally waived any and all right to trial by jury in any action, claim, charge, complaint, arbitration, mediation, litigation, suit or other similarly formal legal proceeding arising out of, related to, or in connection with the merger agreement or the transactions contemplated thereby.

 

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MARKET PRICES OF PGTI COMMON STOCK

PGTI common stock is listed on the NYSE under the symbol “PGTI.” The following table sets forth on a per share basis the low and high intra-day prices of PGTI common stock as reported in published financial sources.

 

     High      Low      Dividends  

Fiscal Year 2024

        

First Quarter (through February 12, 2024)

   $ 41.97      $ 39.96        —   

Fiscal Year 2023

        

Fourth Quarter

   $ 41.61      $ 25.76        —   

Third Quarter

   $ 29.50      $ 25.41        —   

Second Quarter

   $ 29.64      $ 23.92        —   

First Quarter

   $ 25.78      $ 17.43        —   

Fiscal Year 2022

        

Fourth Quarter

   $ 23.81      $ 17.53        —   

Third Quarter

   $ 23.36      $ 17.24        —   

Second Quarter

   $ 20.58      $ 15.42        —   

First Quarter

   $ 22.90      $ 17.57        —   

The closing price of PGTI common stock on the NYSE on February 12, 2024, the most recent practicable date prior to the date of this proxy statement, was $41.32 per share. You are encouraged to obtain current market prices of PGTI common stock in connection with voting your shares of PGTI common stock. As of February 12, 2024, PGTI had 58,324,334 shares of PGTI common stock issued and outstanding, and PGTI had approximately 2,500 holders of record. A number of PGTI stockholders have their shares in street name; therefore, PGTI believes that there are substantially more beneficial owners of PGTI common stock.

Dividend Policy

PGTI has never declared or paid cash dividends on PGTI common stock. Under the terms of the merger agreement, from the date of the merger agreement until the earlier of the effective time of the merger or the termination of the merger agreement in accordance with its terms, PGTI may not declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, except for dividends or other such distributions by any of its wholly owned subsidiaries, without the prior written consent of MITER.

 

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APPRAISAL RIGHTS OF PGTI STOCKHOLDERS

General

Holders of PGTI common stock will become entitled to receive the merger consideration as a result of the merger. The holders of PGTI common stock will be entitled to appraisal rights under Section 262 of the DGCL in connection with the merger.

If you hold one or more shares of PGTI common stock, you are entitled to appraisal rights under Delaware law and have the right to have your shares appraised by the Delaware Court of Chancery and receive the “fair value” of such shares (exclusive of any element of value arising from the accomplishment or expectation of the merger) as of completion of the merger in place of the merger consideration, as determined by the court, if you strictly comply with the procedures specified in Section 262 of the DGCL. Any such PGTI stockholder awarded “fair value” for its, his or her shares by the court would receive payment of that fair value in cash, together with interest, if any, in lieu of the right to receive the merger consideration. Any PGTI stockholder wishing to preserve their rights to appraisal must make a demand for appraisal as described below.

The following discussion is not a full summary of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 of the DGCL that is attached to this proxy statement as Annex D. All references in Section 262 of the DGCL and in this summary to a “stockholder” are to the record holder of the shares of PGTI common stock. The following discussion does not constitute any legal or other advice, nor does it constitute a recommendation that you exercise your rights to seek appraisal under Section 262 of the DGCL.

Under Section 262 of the DGCL, when a merger is submitted for approval at a meeting of stockholders as in the case of approval of the merger agreement proposal, PGTI, not less than 20 days prior to the meeting, must notify each stockholder who was a PGTI stockholder on the record date for notice of such meeting with respect to shares for which appraisal rights are available, that appraisal rights are available and include in the notice a copy of Section 262 of the DGCL. This proxy statement constitutes the required notice, and the copy of Section 262 of the DGCL is attached to this proxy statement as Annex D. A holder of PGTI common stock who wishes to exercise appraisal rights or who wishes to preserve the right to do so should review the following discussion and Annex D carefully and consult with legal advisors. Failure to strictly comply with the procedures of Section 262 of the DGCL in a timely and proper manner may result in the loss of appraisal rights under the DGCL. A stockholder who loses his, her or its appraisal rights will be entitled to receive the merger consideration.

How to Exercise and Perfect Your Appraisal Rights

PGTI stockholders wishing to exercise the right to seek an appraisal of their shares must do ALL of the following:

 

   

you must NOT vote in favor of approval of the merger agreement proposal. Because a proxy that is signed and submitted but does not otherwise contain voting instructions will, unless revoked, be voted in favor of approval of the merger agreement proposal, if you submit a proxy and wish to exercise your appraisal rights, you must instruct the proxy to vote your shares against approval of the merger agreement proposal or abstain from voting your shares on the approval of the merger agreement proposal;

 

   

you must deliver to PGTI a written demand for appraisal before the vote on the approval of the merger agreement proposal at the special meeting, as described further below, and be a stockholder of record at the time of the making of such demand;

 

   

you must continuously hold the shares from the date of making the demand through the effective time; and

 

   

you or the surviving corporation (or any other stockholder that has properly demanded appraisal rights and is otherwise entitled to appraisal rights) must file a petition in the Delaware Court of Chancery

 

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requesting a determination of the fair value of the shares within 120 days after the effective time. The surviving corporation is under no obligation to file any such petition in the Delaware Court of Chancery and has no intention of doing so. Accordingly, it is the obligation of the PGTI stockholders to initiate all necessary action to perfect their appraisal rights in respect of shares of PGTI common stock within the time prescribed in Section 262 of the DGCL.

Voting, virtually or by proxy, against, abstaining from voting on or failing to vote on the approval of the merger agreement proposal will not constitute a written demand for appraisal as required by Section 262 of the DGCL. The written demand for appraisal must be in addition to and separate from any proxy or vote.

Who May Exercise Appraisal Rights

A demand for appraisal must be executed by or on behalf of the stockholder of record. The demand should set forth, fully and correctly, the stockholder’s name as it appears on the stock certificates (or in the stock ledger). The demand must reasonably inform PGTI of the identity of the stockholder and that the stockholder intends to demand appraisal of his, her or its common stock. Non-record owners may not directly make appraisal demands to PGTI. The non-record owner must, in such cases, have the owner of record, such as a bank, brokerage firm or other nominee, submit the required demand in respect of those shares of common stock. A record owner, such as a bank, brokerage firm or other nominee, who holds shares of PGTI common stock as a nominee for others, may exercise appraisal rights with respect to the shares of PGTI common stock held for one or more non-record owners, while not exercising this right for other non-record owners. In that case, the written demand should state the number of shares of PGTI common stock as to which appraisal is sought. Where no number of shares of PGTI common stock is expressly mentioned, the demand will be presumed to cover all shares of PGTI common stock held in the name of the record owner.

IF YOU HOLD YOUR SHARES IN BANK OR BROKERAGE ACCOUNTS OR OTHER NOMINEE FORMS, AND YOU WISH TO EXERCISE APPRAISAL RIGHTS, YOU SHOULD CONSULT WITH YOUR BANK, BROKERAGE FIRM OR OTHER NOMINEE, AS APPLICABLE, TO DETERMINE THE APPROPRIATE PROCEDURES FOR THE BANK, BROKERAGE FIRM OR OTHER NOMINEE TO MAKE A DEMAND FOR APPRAISAL OF THOSE SHARES. IF YOU HAVE A BENEFICIAL INTEREST IN SHARES HELD OF RECORD IN THE NAME OF ANOTHER PERSON, SUCH AS A BANK, BROKERAGE FIRM OR OTHER NOMINEE, YOU MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW PROPERLY AND IN A TIMELY MANNER THE STEPS NECESSARY TO PERFECT YOUR APPRAISAL RIGHTS.

Written Demand and Notice

If you own shares of PGTI common stock jointly with one or more other persons, as in a joint tenancy or tenancy in common, demand for appraisal must be executed by or for you and all other joint owners. An authorized agent, including an agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner and expressly disclose the fact that, in making the demand, such person is acting as agent for the record owner. If you hold shares of PGTI common stock through a broker who in turn holds the shares through a central securities depository nominee such as Cede & Co., a demand for appraisal of such shares must be made by or on behalf of the depository nominee and must identify the depository nominee as record holder.

If you elect to exercise appraisal rights under Section 262 of the DGCL, you should mail or deliver a written demand, executed as set forth above, to:

PGT INNOVATIONS, INC.

Attention: General Counsel and Corporate Secretary

1070 Technology Drive,

North Venice, Florida 34275

(941) 480-1600

 

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If the merger is consummated, the surviving corporation will give written notice that the merger has become effective within 10 days after the closing date of the merger to each stockholder that did not vote in favor of the merger agreement and delivered a written demand for appraisal in accordance with Section 262 of the DGCL. At any time within 60 days after the closing date of the merger, any stockholder that did not commence an appraisal proceeding or join in such a proceeding as a named party will have the right to withdraw such demand and to accept the merger consideration in accordance with the merger agreement for his, her or its shares of common stock.

Judicial Appraisal

Within 120 days after the closing date of the merger, but not later, any stockholder that has complied with the requirements of Section 262 of the DGCL, or the surviving corporation may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery, with a copy served on the surviving corporation in the merger in the case of a petition filed by a stockholder, demanding a determination of the value of the shares of PGTI common stock held by all such stockholders. The surviving corporation is under no obligation to file an appraisal petition and has no intention of doing so. If you desire to have your shares appraised and have otherwise complied with the requirements of Section 262 of the DGCL, you should initiate any petitions necessary for the perfection of your appraisal rights within the time periods and in the manner prescribed in Section 262 of the DGCL.

Within 120 days after the closing date of the merger, any stockholder that has complied with the provisions of Section 262 of the DGCL will be entitled to receive from the surviving corporation, upon written request, a statement setting forth the aggregate number of shares not voted in favor of the approval of the merger agreement proposal and with respect to which PGTI has received demands for appraisal, and the aggregate number of holders of those shares. The surviving corporation must mail this statement within the later of 10 days of receipt by the surviving corporation of the request therefor or 10 days after expiration of the period for delivery of demands for appraisal. If you are the non-record owner of shares of common stock held in a voting trust or by a nominee on your behalf, you may, in your own name, file an appraisal petition or request from the surviving corporation the statement described in this paragraph.

If a petition for appraisal is duly filed, and a copy of the petition is delivered to the surviving corporation, the surviving corporation will then be obligated, within 20 days after receiving service of a copy of the petition, to provide the Delaware Register in Chancery with a duly verified list containing the names and addresses of all holders who have demanded an appraisal of their shares of common stock. The Delaware Court of Chancery will then determine which stockholders are entitled to appraisal rights and may require the stockholders demanding appraisal who hold certificated shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings and the Delaware Court of Chancery may dismiss the proceedings as to any stockholder who fails to comply with this direction. Where proceedings are not dismissed or the demand for appraisal is not successfully withdrawn, the appraisal proceeding will be conducted as to the shares of PGTI common stock owned by such stockholders in accordance with the rules of the Delaware Court of Chancery, including any rules specifically governing appraisal proceedings. The Delaware Court of Chancery will thereafter determine the fair value of the shares of PGTI common stock at the effective time held by all stockholders who have properly perfected appraisal rights, exclusive of any element of value arising from the accomplishment or expectation of the merger. Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, interest from the closing date of the merger through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the closing date of the merger and the date of payment of the judgment. When the value is determined, the Delaware Court of Chancery will direct the payment of such value, with interest thereon, if any, to the stockholders entitled to receive the same, upon surrender by such stockholders of their stock certificates or, in the case of book-entry shares, forthwith.

 

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In determining the fair value, the Delaware Court of Chancery is required to take into account all relevant factors. In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court has stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other factors which could be ascertained as of the date of the merger which throw any light on future prospects of the merged corporation. Section 262 of the DGCL provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court construed Section 262 of the DGCL to mean that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.” An opinion of an investment banking firm as to the fairness from a financial point of view of the consideration payable in a merger is not an opinion as to, and does not in any manner address, fair value under Section 262 of the DGCL. The fair value of your shares as determined under Section 262 of the DGCL could be greater than, the same as, or less than the value of the merger consideration. MITER and the surviving corporation do not anticipate offering more than the merger consideration to any stockholder exercising appraisal rights and reserve the right to assert, in any appraisal proceeding, that, for purposes of Section 262, the “fair value” of a share of PGTI common stock is less than the merger consideration.

If no party files a petition for appraisal within 120 days after the effective time, then all stockholders will lose the right to an appraisal, and will instead receive the merger consideration described in the merger agreement, without interest thereon.

The Delaware Court of Chancery may determine the costs of the appraisal proceeding and may tax those costs against the parties as the Delaware Court of Chancery deems to be equitable under the circumstances. However, costs do not include attorneys and expert witness fees. Each stockholder is responsible for its own attorneys and expert witnesses expenses, although, upon application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including reasonable attorneys’ fees and the fees and expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal.

Any stockholder that has duly demanded an appraisal in compliance with Section 262 of the DGCL will not, after the effective time, be entitled to vote the PGTI shares subject to that demand for any purpose or receive any dividends or other distributions on those shares, except dividends or other distributions payable to holders of record of PGTI shares as of a record date prior to the effective time.

Withdrawal

Any stockholder that has not commenced an appraisal proceeding or joined such a proceeding as a named party may withdraw a demand for appraisal and accept the merger consideration by delivering a written withdrawal of the demand for appraisal to the surviving corporation, except that any attempt to withdraw made more than 60 days after the closing date of the merger will require written approval of the surviving corporation. No appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the Delaware Court of Chancery and such approval may be conditioned on the terms the Delaware Court of Chancery deems just, provided, however, that this provision will not affect the right of any stockholder who has not commenced an appraisal proceeding or joined such proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the terms offered in the merger within 60 days after the closing date of the merger. If you fail to perfect, successfully withdraw or lose the appraisal right, your shares will be converted into the right to receive the merger consideration, without interest thereon.

 

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Failure to follow the steps required by Section 262 of the DGCL for perfecting appraisal rights may result in the loss of appraisal rights. In that event, you will be entitled to receive the merger consideration for your shares in accordance with the merger agreement. In view of the complexity of the provisions of Section 262 of the DGCL, if you are a PGTI stockholder and are considering exercising your appraisal rights under the DGCL, you should consult your own legal advisor.

THE PROCESS OF DEMANDING AND EXERCISING APPRAISAL RIGHTS REQUIRES STRICT COMPLIANCE WITH TECHNICAL PREREQUISITES. IF YOU WISH TO EXERCISE YOUR APPRAISAL RIGHTS, YOU SHOULD CONSULT WITH YOUR OWN LEGAL COUNSEL IN CONNECTION WITH COMPLIANCE UNDER SECTION 262 OF THE DGCL. TO THE EXTENT THERE ARE ANY INCONSISTENCIES BETWEEN THE FOREGOING SUMMARY AND SECTION 262 OF THE DGCL, THE DGCL WILL GOVERN.

 

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ADVISORY VOTE ON NAMED EXECUTIVE OFFICER MERGER-RELATED COMPENSATION ARRANGEMENTS (PROPOSAL 2)

Overview

PGTI is providing its stockholders with the opportunity to cast a vote, on an advisory (non-binding) basis, to approve the compensation payments that may be paid or become payable by PGTI to its named executive officers, as determined in accordance with Item 402(t) of Regulation S-K, in connection with the merger as disclosed in the section titled “The Merger (Proposal 1)—Interests of PGTI’s Directors and Executive Officers in the Merger—Quantification of Potential Payments and Benefits to PGTI’s Named Executive Officers in Connection with the Merger,” including the table titled “Golden Parachute Compensation” and the accompanying footnotes, and the related narrative disclosure (referred to as the “golden parachute” compensation), as required by Section 14A of the Exchange Act.

Through this proposal, PGTI is asking its stockholders to indicate their approval, on an advisory (non-binding) basis, of the compensation that PGTI’s named executive officers will or may be eligible to receive in connection with the merger as described in the sections of this proxy statement referred to above.

You should carefully review the golden parachute compensation information disclosed in the sections of this proxy statement referred to above. The PGTI board of directors unanimously recommends that PGTI stockholders approve the following resolution:

“RESOLVED, that the stockholders of PGTI approve, solely on an advisory, non-binding basis, the golden parachute compensation that will or may be paid or become payable to PGTI’s named executive officers in connection with the merger, as disclosed pursuant to Item 402(t) of Regulation S-K in the section titled “The Merger (Proposal 1)—Interests of PGTI’s Directors and Executive Officers in the Merger—Quantification of Potential Payments and Benefits to PGTI’s Named Executive Officers in Connection with the Merger,” including the table titled “Golden Parachute Compensation” and the accompanying footnotes, and the related narrative disclosure.

Vote Required for Approval

The vote on the merger-related compensation proposal is a vote separate and apart from the vote on the merger agreement proposal, the certificate of incorporation amendment proposal and the adjournment proposal. Accordingly, you may vote to approve the merger agreement proposal and/or the certificate of incorporation amendment proposal and/or the adjournment proposal and vote not to approve the merger-related compensation proposal and vice versa. The approval of the merger-related compensation proposal by holders of PGTI common stock is not a condition to the completion of the merger. Because the vote on the merger-related compensation proposal is advisory only, it will not be binding on either PGTI or MITER. Accordingly, if the merger agreement proposal is approved and the merger is completed, the merger-related compensation will be paid to PGTI’s named executive officers to the extent payable in accordance with the terms of the compensation agreements and arrangements even if holders of PGTI common stock fail to approve the advisory vote regarding the merger-related compensation proposal.

The merger-related compensation proposal requires the affirmative vote of holders of a majority of the shares of PGTI common stock present virtually or represented by proxy at the special meeting and entitled to vote thereon. Failures to vote and broker non-votes will have no effect on the vote for this proposal (assuming a quorum is present); abstentions will have the same effect as a vote cast “AGAINST” the approval of this proposal.

Recommendation of the PGTI Board of Directors

THE PGTI BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT PGTI STOCKHOLDERS VOTE “FOR” THE MERGER-RELATED COMPENSATION PROPOSAL

 

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VOTE ON THE CERTIFICATE OF INCORPORATION AMENDMENT (PROPOSAL 3)

Overview

PGTI is asking its stockholders to approve an amendment to the Amended and Restated Certificate of Incorporation of PGTI, designating PGTI as the agent of its stockholders to pursue damages in the event that specific performance is not sought or granted as a remedy for MITER’s fraud or material and willful breach of the merger agreement. The approval of the certificate of incorporation amendment proposal by holders of PGTI common stock is not a condition to the completion of the merger.

As described in further detail in the section titled “The Merger Agreement—PGTI Certificate of Incorporation Amendment,” the certificate of incorporation amendment is intended to address recent case law from the Delaware Chancery Court that could be construed to, in effect, limit the remedies available to PGTI under the merger agreement absent the certificate of incorporation amendment.

The foregoing description of the certificate of incorporation amendment proposal should be read in connection with the full text of the certificate of incorporation amendment, which is set forth in the proposed amendment to the Amended and Restated Certificate of Incorporation of PGTI, which is attached as Annex B to this proxy statement. You are urged to read the certificate of incorporation amendment carefully and in its entirety.

Vote Required for Approval

The vote on the certificate of incorporation amendment proposal is a vote separate and apart from the vote on the merger agreement proposal, the merger-related compensation proposal and the adjournment proposal. Accordingly, you may vote to approve the merger agreement proposal and/or the merger-related compensation proposal and/or the adjournment proposal and vote not to approve the certificate of incorporation amendment proposal and vice versa.

The certificate of incorporation amendment proposal requires the affirmative vote of holders of a majority of the outstanding shares of PGTI common stock entitled to vote thereon. Each share of PGTI common stock outstanding on the record date of the special meeting is entitled to one vote on this proposal. Failures to vote, broker non-votes and abstentions will have the same effect as a vote cast “AGAINST” the approval of such proposal. If the certificate of incorporation amendment proposal is approved and adopted by the PGTI stockholders at the special meeting, PGTI intends to file the certificate of incorporation amendment attached to this proxy statement as Annex B with the Secretary of State of the State of Delaware promptly following the conclusion of the special meeting.

Recommendation of the PGTI Board of Directors

THE PGTI BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT PGTI STOCKHOLDERS VOTE “FOR” THE CERTIFICATE OF INCORPORATION AMENDMENT PROPOSAL.

 

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VOTE ON ADJOURNMENT (PROPOSAL 4)

Overview

PGTI stockholders are being asked to approve the adjournment or postponement of the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes to approve the merger agreement proposal at the time of the special meeting.

If, at the special meeting, the number of shares of PGTI common stock present or represented and voting in favor of the merger agreement proposal is insufficient to approve the merger agreement proposal, PGTI intends to move to adjourn or postpone the special meeting in order to enable the PGTI board of directors to solicit additional proxies for approval of the merger agreement proposal. In that event, PGTI will ask holders of PGTI common stock to vote on the adjournment proposal, but not the merger agreement proposal or the certificate of incorporation amendment proposal or the merger-related compensation proposal.

In this proposal, PGTI is asking holders of PGTI common stock to authorize the holder of any proxy solicited by the PGTI board of directors on a discretionary basis to vote in favor of adjourning the special meeting to another time and place for the purpose of soliciting additional proxies, including the solicitation of proxies from holders of PGTI common stock who have previously voted. Pursuant to the DGCL, the special meeting may be adjourned without new notice being given, so long as the new date, time and place of the reconvened special meeting are announced at the special meeting at which the adjournment is taken, and any business may be transacted at the reconvened special meeting that might have been transacted at the original special meeting. Pursuant to the DGCL, if, however, the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting must be given to each stockholder of record entitled to vote at the meeting. The approval of the adjournment proposal by holders of PGTI common stock is not a condition to the completion of the merger.

Vote Required for Approval

The adjournment proposal requires the affirmative vote of holders of a majority of the shares of PGTI common stock present virtually or represented by proxy and entitled to vote thereon, whether or not a quorum is present. Each share of PGTI common stock outstanding on the record date of the special meeting is entitled to one vote on this proposal. Failures to vote and broker non-votes will have no effect on the vote for this proposal; abstentions will have the same effect as a vote cast “AGAINST” the approval of this proposal.

Recommendation of the PGTI Board of Directors

THE PGTI BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT PGTI STOCKHOLDERS VOTE “FOR” THE ADJOURNMENT PROPOSAL.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

To PGTI’s knowledge, the following table sets forth certain information regarding the beneficial ownership of PGTI common stock as of the close of business on February 7, 2024, unless otherwise noted, for (a) each person who is known by PGTI to own beneficially more than 5% PGTI common stock, (b) each of PGTI’s current and incumbent directors, (c) each of PGTI’s Named Executive Officers named in the table below, and (d) all of PGTI’s directors and executive officers as a group.

The percentages of voting shares provided in the table are based on 58,326,059 shares of PGTI common stock issued and outstanding as of February 7, 2024, which includes restricted and performance shares in amounts as permitted per the grant agreements. Beneficial ownership is determined in accordance with SEC rules and regulations and generally includes voting or investment power with respect to securities. Unless otherwise indicated, each person or entity named in the table has sole voting and investment power, or shares voting and investment power with his or her spouse, with respect to all shares of PGTI common stock listed as owned by that person. The number of shares shown does not include the interest of certain persons in shares held by a family member in their own right.

 

Name and Address if Beneficial Owner(1)

   Number of Shares of
Common Stock
Beneficially Owned
    Percentage of
Voting Shares
 

Beneficial Owners of More Than 5%:

    

BlackRock, Inc.

     8,848,028(2)       15.2%  

The Vanguard Group

     3,750,436(3)       6.4%  

MIWD Holding Company LLC

     2,900,000(4)       5.0%  

Non-Employee Directors

    

Rodney Hershberger

     1,334,155       2.3%  

Sheree L. Bargabos

     38,613       *  

Xavier F. Boza

     13,281       *  

Alexander R. Castaldi

     151,197       *  

Richard D. Feintuch

     143,341(5)(6)(7)       *  

Frances Powell Hawes

     24,261(8)       *  

Brett N. Milgrim

     76,348       *  

William J. Morgan

     62,686       *  

Floyd F. Sherman

     109,415       *  

Chris J. Stephens Jr.

     6,434       *  

Named Executive Officers

    

Jeffrey T. Jackson

     685,080       1.2%  

Craig Henderson

     10,252       *  

Mike Wothe

     59,847       *  

Robert A. Keller

     80,937       *  

Eric Kowalewski

     39,090       *  

Directors and executive officers as a group

    
2,834,937 (with
RSUs)(9)(10)
 
 
   
4.8% (excludes
RSUs)
 
 
*

Less than 1%

(1)

Unless otherwise indicated, the business address of each person is PGT Innovations, Inc., 1070 Technology Drive, North Venice, Florida, 34275.

(2)

The information reported is based on a Schedule 13G/A (Amendment No. 4) filed on January 22, 2024, with the SEC, in which BlackRock, Inc. reported that at December 31, 2023, it had sole voting power over 8,760,374 shares and sole dispositive power over 8,848,028 shares. The principal business address of BlackRock, Inc. is 50 Hudson Yards, New York, New York 10001.

(3)

The information reported is based on a Schedule 13G/A (Amendment No. 6) filed on February 13, 2024, with the SEC, in which The Vanguard Group reported that at December 29, 2023, it had shared voting power over 104,684 shares, sole dispositive power over 3,593,160 shares, and shared dispositive power over

 

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  157,276 shares. The principal business address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
(4)

The principal business address of MIWD Holding Company LLC is 2550 Interstate Drive, Suite 400, Harrisburg, PA 17110.

(5)

Includes 17,244 shares of common stock of the Company owned directly by this member of the Board of Directors, and 116,993 shares owned indirectly through the Feintuch 2007 Dynasty Trust.

(6)

Includes 12,621 PGTI RSUs as this member of the PGTI board of directors wishes to defer the income from the equity portion of his compensation for service on the PGTI board of directors until the member’s separation from service on the PGTI board of directors through retirement, death, or involuntary separation, whichever comes first. Because RSUs represent the right to receive common stock at some future point in time, and not actual common stock, these shares are not eligible to vote at the special meeting.

(7)

All of Mr. Feintuch’s securities (including shares owned indirectly through the Feintuch 2007 Dynasty Trust) are pledged as collateral for certain indebtedness.

(8)

Includes 9,104 PGTI RSUs as this member of the PGTI board of directors wishes to defer the income from the equity portion of her compensation for service on the PGTI board of directors until the member’s separation from service on the PGTI board of directors through retirement, death, or involuntary separation, whichever comes first. Because RSUs represent the right to receive common stock at some future point in time, and not actual common stock, these shares are not eligible to vote at the special meeting.

(9)

This group is comprised of 17 individuals.

(10)

As disclosed in “280G Mitigation Actions” described under the section titled “The Merger (Proposal 1)—Interests of PGTI’s Directors and Executive Officers in the Merger”, in order to mitigate the impact of Section 280G and 4999 of the Code, the vesting of certain PGTI equity awards held by PGTI executive officers that were scheduled to vest on or prior to February 15, 2024, was accelerated on December 29, 2023, which are captured in the table, including: (i) 34,967 time-based PGTI restricted shares held and 37,882 PGTI performance shares held by Jeffrey Jackson; (ii) 1,145 time-based PGTI restricted shares held and 1,114 PGTI performance shares held by Craig Henderson; (iii) 5,269 time-based PGTI restricted shares held and 5,367 PGTI performance shares held by Mike Wothe; (iv) 5,511 time-based PGTI restricted shares held and 6,545 PGTI performance shares held by Robert A. Keller; (v) 4,467 time-based PGTI restricted shares held and 3,583 PGTI performance shares held by Eric Kowalewski; (vi) 3,878 time-based PGTI restricted shares held and 4,057 PGTI performance shares held by Ryan Quinn; (vii) 4,212 time-based PGTI restricted shares held and 4,315 PGTI performance shares held by Debbie LaPinska. The amounts shown in the table reflects the net amount of shares each individual received after satisfying the applicable tax withholding obligations.

 

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The following discussion sets forth the material U.S. federal income tax consequences of the merger to U.S. Holders and Non-U.S. Holders (as defined below) of PGTI common stock whose shares of PGTI common stock are converted into the right to receive cash pursuant to the merger. This discussion does not address any tax consequences arising under the laws of any U.S. state or local or non-U.S. jurisdiction, or under any U.S. federal laws other than those pertaining to income tax. In addition, it does not address any alternative minimum tax consequences of the merger, the potential application of the Medicare contribution tax on net investment income or any withholding considerations under the Foreign Account Tax Compliance Act of 2010 (including the Treasury Regulations issued thereunder and intergovernmental agreements entered into pursuant thereto or in connection therewith). This discussion is based upon the Internal Revenue Code of 1986, as amended (referred to as the “Code”), the regulations promulgated under the Code and court and administrative rulings and decisions, all as in effect on the date of this proxy statement. These laws may change, possibly retroactively, and any such change could affect the accuracy of the statements and conclusions set forth in this discussion.

This discussion addresses only consequences to those holders that hold their shares of PGTI common stock as a “capital asset” within the meaning of Section 1221 of the Code. Further, this discussion does not address all aspects of U.S. federal income taxation that may be relevant to holders in light of their particular circumstances or that may be applicable to holders that are subject to special treatment under the U.S. federal income tax laws, such as:

 

   

financial institutions;

 

   

tax-exempt organizations or accounts;

 

   

S corporations or other pass-through entities (or investors in an S corporation or other pass-through entity);

 

   

insurance companies;

 

   

mutual funds;

 

   

dealers or brokers in stocks and securities, or currencies;

 

   

traders in securities that elect mark-to-market method of tax accounting with respect to their PGTI common stock;

 

   

holders of PGTI common stock or PGTI equity awards that received PGTI common stock or PGTI equity awards through a tax-qualified retirement plan or otherwise as compensation;

 

   

persons that have a functional currency other than the U.S. dollar;

 

   

holders of PGTI common stock that hold PGTI common stock as part of a hedge, straddle, constructive sale, conversion or other integrated transaction;

 

   

except as discussed below under “—Non-U.S. Holders,” persons who actually or constructively own more than 5% of PGTI common stock;

 

   

persons subject to special tax accounting rules (including rules requiring recognition of gross income based on a taxpayer’s applicable financial statement); or

 

   

United States expatriates.

The U.S. federal income tax consequences to a partner in an entity or arrangement treated as a partnership for U.S. federal income tax purposes and that holds PGTI common stock generally will depend on the status of the partner and the activities of the partnership. Partners in such a partnership holding PGTI common stock should consult their own tax advisors.

We have not sought, and do not expect to seek, a ruling from the Internal Revenue Service (referred to as the “IRS”) as to any U.S. federal income tax consequence described herein, and no assurance can be given that

 

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the IRS will not take a position contrary to the discussion below, or that a court will not sustain any challenge by the IRS in the event of litigation. Furthermore, no opinion of counsel has been or will be rendered with respect to any tax considerations applicable to the merger, or any related transactions. If the tax consequences described below are successfully challenged, the tax consequences applicable to the merger may differ from the tax consequences described below.

Holders should consult with their own tax advisors as to the tax consequences of the merger in light of their particular circumstances, including the applicability and effect of the alternative minimum tax and any U.S. state or local, non-U.S. or other tax laws and of changes in those laws.

U.S. Holders

For purposes of this proxy statement, the term “U.S. Holder” means a beneficial owner of PGTI common stock that is:

 

   

A citizen or individual resident of the United States;

 

   

A corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

 

   

An estate the income of which is subject to U.S. federal income taxation regardless of its source; or

 

   

A trust (A) if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (B) that has elected to be treated as a U.S. person under applicable U.S. Treasury regulations.

For purposes of this proxy statement, a beneficial owner of PGTI common stock that is neither a U.S. Holder nor a partnership is referred to as a “Non-U.S. Holder.”

In general, a U.S. Holder receiving cash in exchange for PGTI common stock pursuant to the merger will recognize capital gain or loss for U.S. federal income tax purposes on the exchange in an amount equal to the difference, if any, between (i) the amount of cash received and (ii) the U.S. Holder’s adjusted tax basis in the PGTI common stock surrendered in the exchange. A U.S. Holder’s adjusted tax basis generally will equal the amount that such U.S. Holder paid for the shares of PGTI common stock.

Gain or loss generally will be treated as long-term capital gain or loss if the U.S. Holder’s holding period in the PGTI common stock is more than one year at the time of the completion of the merger. Long-term capital gains of certain non-corporate U.S. Holders, including individuals, are currently subject to U.S. federal income tax at preferential rates of taxation. The deductibility of capital losses is subject to certain limitations.

If a U.S. Holder acquired different blocks of PGTI common stock at different times or at different prices, any gain or loss and the holding period with respect to the PGTI common stock exchanged must be determined separately with respect to each block of PGTI common stock that is exchanged.

Non-U.S. Holders

The receipt of cash by a Non-U.S. Holder in exchange for shares of PGTI common stock pursuant to the merger generally will not be subject to U.S. federal income tax unless:

 

   

The gain, if any, on such shares is effectively connected with a trade or business of the Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to the Non-U.S. Holder’s permanent establishment or fixed base in the United States);

 

   

The Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of the exchange of shares of PGTI common stock pursuant to the merger and certain other conditions are met; or

 

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The Non-U.S. Holder owned, directly or under certain constructive ownership rules in the Code, more than 5% of the PGTI common stock at any time during the five-year period preceding the merger, and PGTI is or has been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period preceding the merger or the period that the Non-U.S. Holder held PGTI common stock.

Gain described in the first bullet point immediately above will be subject to U.S. federal income tax on a net income basis at the regular graduated U.S. federal income tax rates in the same manner as if the Non-U.S. Holder were a U.S. Holder, subject to an applicable income tax treaty providing otherwise. If such Non-U.S. Holder is a foreign corporation, it may also be subject to a branch profits tax at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty) on its “effectively connected earnings and profits” for the taxable year, subject to certain adjustments. Non-U.S. Holders described in the second bullet point immediately above will be subject to tax on any gain realized on the exchange at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty), which may be offset by certain U.S.-source capital losses, if any, of the Non-U.S. Holder. With respect to the third bullet point immediately above, PGTI believes that it has not been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the five-year period preceding the merger.

Information Reporting and Backup Withholding

Payments of cash to a holder in the merger may, under certain circumstances, be subject to information reporting and backup withholding (currently at a rate of 24%), unless the holder provides proof of an applicable exemption or furnishes its taxpayer identification number, and otherwise complies with all applicable requirements of the backup withholding rules (generally, by furnishing a properly completed and executed IRS Form W-9 or applicable IRS Form W-8 to the applicable withholding agent). Certain holders (such as corporations) are exempt from information reporting and backup withholding.

Non-U.S. Holders may be required to comply with certification requirements and identification procedures in order to establish an exemption from information reporting and backup withholding. Non-U.S. Holders should consult their own tax advisors regarding compliance with such requirements and procedures.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or credit against a holder’s U.S. federal income tax liability, if any, provided the required information is timely furnished to the IRS.

This discussion of material U.S. federal income tax consequences is not tax advice. Holders of PGTI common stock are urged to consult their tax advisors with respect to the application of U.S. federal income tax laws to their particular situations as well as any tax consequences arising under the U.S. federal estate or gift tax rules or under the laws of any U.S. state or local, non-U.S. or other taxing jurisdiction or under any applicable tax treaty.

 

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FUTURE PGTI STOCKHOLDER PROPOSALS

If the merger is completed prior to PGTI’s 2024 annual meeting of stockholders, PGTI will not hold such meeting. If the merger is not completed, you will continue to be entitled to attend and participate in PGTI’s annual meetings of stockholders, and PGTI will hold a 2024 annual meeting of stockholders, in which case PGTI will provide notice of or otherwise publicly disclose the date on which such 2024 annual meeting will be held. PGTI will hold an annual meeting in 2024 only if the merger has not already been completed. If the 2024 annual meeting is held, stockholder proposals will be eligible for consideration for inclusion in the proxy statement and form of proxy for the 2024 annual meeting of PGTI stockholders in accordance with Rule 14a-8 under the Exchange Act and PGTI’s bylaws, as described below. Under Rule 14a-8, a stockholder who intends to present a proposal at our annual meeting in 2024, if held, and who wishes the proposal to be included in our proxy statement for that meeting must have submitted the proposal in writing to PGT Innovations, Inc., Attention: General Counsel and Corporate Secretary, 1070 Technology Drive, North Venice, Florida 34275, prior to December 30, 2023. However, if the date of the 2024 annual meeting is changed by more than 30 days from the anniversary of the 2023 annual meeting (which occurred on June 20, 2023), notice must be so delivered a reasonable time before we begin to mail this proxy statement. The proposal and its proponent must satisfy all applicable requirements of Rule 14a-8.

Any stockholder who wishes to bring a proposal or nominate a person for election to the PGTI board of directors at the 2024 annual meeting without inclusion of the proposal in our proxy statement for that meeting must provide written notice of the proposal or nomination to the attention of PGTI’s General Counsel and Corporate Secretary, on or after February 21, 2024, and no later than March 22, 2024; provided that if the date of the 2024 annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the 2023 annual meeting (which occurred on June 20, 2023), notice must be so delivered not later than the close of business on the 10th day following the day on which such notice of the date of the 2024 annual meeting is mailed or public disclosure of the date of the 2024 annual meeting is made, whichever first occurs. In addition to satisfying the foregoing requirements under PGTI’s bylaws, to comply with the universal proxy rules under the Exchange Act, stockholders who intend to solicit proxies in support of director nominees other than PGTI’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 21, 2024. Stockholder proposals should be addressed to: PGT Innovations, Inc., Attention: General Counsel and Corporate Secretary, 1070 Technology Drive, North Venice, Florida 34275.

Stockholders are also advised to review PGTI’s bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations. A copy of the full text of the bylaw provisions discussed above may be obtained from the Corporate Governance subsection of the Investor Relations page of PGTI’s website at ir.pgtinnovations.com. PGTI’s bylaws are also on file with the SEC and are available through its website at sec.gov.

 

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MULTIPLE STOCKHOLDERS SHARING ONE ADDRESS

The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement or annual report, as applicable, addressed to those stockholders. As permitted by the Exchange Act, only one copy of this proxy statement is being delivered to stockholders residing at the same address, unless such stockholders have notified PGTI whose shares they hold of their desire to receive multiple copies of this proxy statement. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies.

Two or more stockholders sharing an address can request delivery of a single copy of PGTI’s annual disclosure documents and this proxy statement if they are receiving multiple copies by sending a written request to PGT Innovations, Inc., 1070 Technology Drive, North Venice, FL 34275, Attention: General Counsel and Corporate Secretary, or by calling PGTI Investor Relations at 941-480-1600. In the same way, two or more stockholders sharing an address and receiving only a single copy of PGTI’s annual disclosure documents and this proxy statement can request to each receive a separate copy of the disclosure documents. PGTI will promptly comply with any such request. If a broker or other nominee holds your shares, please contact your broker or nominee to make such a request. Please be sure to include your name, the name of your brokerage firm and your account number.

 

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WHERE YOU CAN FIND MORE INFORMATION

PGTI is subject to the reporting requirements of the Exchange Act. Accordingly, PGTI files annual, quarterly and current reports, proxy statements and other information with the SEC. PGTI’s SEC filings are available to the public at the internet website maintained by the SEC at www.sec.gov. PGTI also makes available free of charge on the Investor Relations section of its website its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, its definitive proxy statements and Section 16 reports on Forms 3, 4 and 5, as soon as reasonably practicable after it electronically files such reports or amendments with, or furnishes them to, the SEC. PGTI’s internet website address is www.pgtinnovations.com. The information located on, hyperlinked or otherwise connected to PGTI’s website is not, and will not be deemed to be, a part of this proxy statement or incorporated into any other filings that we make with the SEC.

The SEC allows PGTI to “incorporate by reference” the information PGTI files with the SEC into this proxy statement, which means that PGTI can disclose important information to you by referring you to other documents filed separately with the SEC. The information incorporated by reference is deemed to be part of this proxy statement, except that information that PGTI files later with the SEC will automatically update and supersede this information. This proxy statement incorporates by reference the documents listed below that have been previously filed with the SEC (other than, in each case, documents or information deemed to have been furnished and not filed in accordance with SEC rules):

 

PGTI SEC Filings (File No. 001-37971)

  

Period or File Date

Annual Report on Form 10-K    Year ended December 31, 2022, filed on February 27, 2023
Quarterly Report on Form 10-Q    Quarter ended April 1, 2023, July 1, 2023, and September 30, 2023, filed on May  11, 2023, August  3, 2023, and November 2, 2023, respectively
Current Reports on Form 8-K    Current Reports on Form 8-K, filed on February 24, 2023, March  3, 2023, March  30, 2023, April  6, 2023, June  5, 2023, June  23, 2023, July  3, 2023, August  8, 2023, November  6, 2023, December 18, 2023, the first Current Report on Form 8-K filed on January  2, 2023 and January 17, 2024
Proxy Statement on Schedule 14A    Filed on April 28, 2023

In addition, PGTI incorporates by reference any future filings it makes with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, from the date of this proxy statement until the date of the special meeting; provided, however, that PGTI is not incorporating by reference any additional documents or information furnished and not filed with the SEC.

You can obtain any of these documents from the SEC, through the SEC’s website at the address described above. You can also obtain any of these documents free of charge by sending a written request to PGT Innovations, Inc., 1070 Technology Drive, North Venice, FL 34275, Attention: General Counsel and Corporate Secretary, or by calling PGTI Investor Relations at 941-480-1600.

In the event of conflicting information in this proxy statement in comparison to any document incorporated by reference into this proxy statement, or among documents incorporated by reference, the information in the latest filed document controls.

THIS PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY IN ANY JURISDICTION WHERE, OR TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS

 

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UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE INTO THIS PROXY STATEMENT TO VOTE YOUR SHARES AT THE SPECIAL MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED FEBRUARY 14, 2024. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, AND THE MAILING OF THIS PROXY STATEMENT TO STOCKHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.

 

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MISCELLANEOUS

PGTI has supplied all information in this proxy statement relating to PGTI. MITER has supplied all of the information relating to MITER and Merger Sub contained in this proxy statement. You should rely only on the information contained or incorporated by reference into this proxy statement. We can assure the accuracy of only the information contained in this proxy statement, the annexes to this proxy statement and the documents that we incorporate by reference in this proxy statement. We have not authorized anyone to provide you with information that is different from what is contained in this proxy statement. This proxy statement is dated February 14, 2024. You should not assume that the information contained in this proxy statement is accurate as of any date other than that date (or as of an earlier date if so indicated in this proxy statement), and the mailing of this proxy statement to stockholders does not create any implication to the contrary. This proxy statement does not constitute a solicitation of a proxy in any jurisdiction where, or to or from any person to whom, it is unlawful to make a proxy solicitation.

 

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EXECUTION VERSION

Annex A

 

AGREEMENT AND PLAN OF MERGER

dated as of

January 16, 2024

among

PGT INNOVATIONS, INC.,

MIWD HOLDING COMPANY LLC

and

RMR MERGECO, INC.


TABLE OF CONTENTS

 

          Page  

ARTICLE 1 Definitions

     A-1  

Section 1.01

   Definitions      A-1  

Section 1.02

   Other Definitional and Interpretative Provisions      A-11  

ARTICLE 2 The Merger

     A-12  

Section 2.01

   The Merger      A-12  

Section 2.02

   Conversion of Shares      A-13  

Section 2.03

   Surrender and Payment      A-13  

Section 2.04

   Dissenting Shares      A-15  

Section 2.05

   Treatment of Equity Awards      A-15  

Section 2.06

   Adjustments      A-16  

Section 2.07

   Withholding Rights      A-16  

Section 2.08

   Lost Certificates      A-17  

ARTICLE 3 The Surviving Corporation

     A-17  

Section 3.01

   Certificate of Incorporation      A-17  

Section 3.02

   Bylaws      A-17  

Section 3.03

   Directors and Officers      A-17  

ARTICLE 4 Representations And Warranties Of The Company

     A-17  

Section 4.01

   Corporate Existence and Power      A-18  

Section 4.02

   Corporate Authorization      A-18  

Section 4.03

   Governmental Authorization      A-18  

Section 4.04

   Non-Contravention      A-19  

Section 4.05

   Capitalization      A-19  

Section 4.06

   Subsidiaries      A-20  

Section 4.07

   SEC Filings; Internal Control      A-21  

Section 4.08

   Financial Statements      A-22  

Section 4.09

   Disclosure Documents      A-22  

Section 4.10

   Absence of Certain Changes      A-22  

Section 4.11

   No Undisclosed Material Liabilities      A-23  

Section 4.12

   Compliance with Laws; Permits      A-23  

Section 4.13

   Litigation      A-24  

Section 4.14

   Properties      A-24  

Section 4.15

   Intellectual Property      A-24  

Section 4.16

   Taxes      A-25  

Section 4.17

   Employee Benefit Plans      A-26  

Section 4.18

   Employee and Labor Matters      A-27  

Section 4.19

   Environmental Matters      A-28  

Section 4.20

   Material Contracts      A-28  

Section 4.21

   Insurance      A-30  

Section 4.22

   Products      A-30  

Section 4.23

   Finders’ Fees      A-31  

Section 4.24

   Opinion of Financial Advisor      A-31  

Section 4.25

   Antitakeover Statutes; Rights Agreement      A-31  

Section 4.26

   Masonite Agreement      A-31  

Section 4.27

   Acknowledgement of No Other Representations and Warranties      A-31  

ARTICLE 5 Representations And Warranties Of Parent And Merger Sub

     A-31  

Section 5.01

   Corporate Existence and Power      A-31  

Section 5.02

   Corporate Authorization      A-32  

 

A-i


Section 5.03

   Governmental Authorization      A-32  

Section 5.04

   Non-Contravention      A-32  

Section 5.05

   Disclosure Documents      A-32  

Section 5.06

   Compliance with Laws      A-33  

Section 5.07

   Litigation      A-33  

Section 5.08

   Finders’ Fees      A-33  

Section 5.09

   Financing      A-33  

Section 5.10

   Solvency      A-34  

Section 5.11

   Ownership of Common Shares      A-34  

Section 5.12

   Termination of Masonite Agreement      A-35  

Section 5.13

   Acknowledgement of No Other Representations and Warranties      A-35  

ARTICLE 6 Covenants Of The Company

     A-35  

Section 6.01

   Conduct of the Company      A-35  

Section 6.02

   Company Stockholders Meeting      A-38  

Section 6.03

   Access to Information      A-39  

Section 6.04

   No-Shop; Other Offers      A-39  

Section 6.05

   Stock Exchange Delisting      A-42  

Section 6.06

   Debt Financing Cooperation      A-42  

ARTICLE 7 Covenants Of Parent

     A-45  

Section 7.01

   Conduct of Parent      A-45  

Section 7.02

   Director and Officer Liability      A-45  

Section 7.03

   Employee Matters      A-47  

Section 7.04

   Financing Covenants      A-48  

ARTICLE 8 Covenants Of Parent And The Company

     A-50  

Section 8.01

   Regulatory Undertakings      A-50  

Section 8.02

   Certain Filings      A-52  

Section 8.03

   Public Announcements      A-53  

Section 8.04

   Merger without Meeting of Stockholders      A-54  

Section 8.05

   Further Assurances      A-54  

Section 8.06

   Section 16 Matters      A-54  

Section 8.07

   Notices of Certain Events      A-54  

Section 8.08

   Litigation and Proceedings      A-54  

Section 8.09

   Takeover Statutes; Rights Agreement      A-55  

Section 8.10

   Masonite Termination Fee      A-55  

ARTICLE 9 Conditions To The Merger

     A-55  

Section 9.01

   Conditions to the Obligations of Each Party      A-55  

Section 9.02

   Conditions to the Obligations of Parent and Merger Sub      A-55  

Section 9.03

   Conditions to the Obligations of the Company      A-56  

ARTICLE 10 Termination.

     A-57  

Section 10.01

   Termination      A-57  

Section 10.02

   Effect of Termination      A-58  

ARTICLE 11 Miscellaneous

     A-59  

Section 11.01

   Notices      A-59  

Section 11.02

   No Survival of Representations and Warranties      A-59  

Section 11.03

   Amendments and Waivers      A-60  

Section 11.04

   Expenses      A-60  

Section 11.05

   Disclosure Schedule and SEC Document References      A-62  

Section 11.06

   Binding Effect; Third Party Beneficiaries; Assignment      A-62  

Section 11.07

   Governing Law      A-63  

 

A-ii


Section 11.08

   Jurisdiction      A-63  

Section 11.09

   WAIVER OF JURY TRIAL      A-63  

Section 11.10

   Counterparts; Effectiveness      A-63  

Section 11.11

   Entire Agreement      A-64  

Section 11.12

   Severability      A-64  

Section 11.13

   Specific Performance      A-64  

Section 11.14

   Financing Sources      A-64  

Exhibit A

   Certificate of Incorporation of Surviving Corporation   

Exhibit B

   Company Organizational Document Amendment   

 

A-iii


AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (as amended in accordance with the terms and conditions hereof, this “Agreement”), dated as of January 16, 2024, among PGT Innovations, Inc., a Delaware corporation (the “Company”), MIWD Holding Company LLC, a Delaware limited liability company (“Parent”), and RMR MergeCo, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent (“Merger Sub”).

W I T N E S S E T H :

WHEREAS, the board of directors of the Company (the “Board of Directors”), and the board of managers of Parent and the board of directors of Merger Sub, have approved and declared advisable this Agreement pursuant to which, among other things, Parent would acquire the Company by means of a merger of Merger Sub with and into the Company, on the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, prior to or substantially concurrently with the execution and delivery of this Agreement, (a) that certain Agreement and Plan of Merger, dated as of December 17, 2023, by and among the Company, Masonite International Corporation (“Masonite”) and Peach Acquisition, Inc. (the “Masonite Agreement”), has been validly terminated and (b) Parent has paid to the Company (or, at the direction of the Company, to Masonite on behalf of the Company) the Company Termination Fee (as defined in the Masonite Agreement), by wire transfer of immediately available funds in full satisfaction of all of the Company’s remaining obligations under the Masonite Agreement and without any further liability of the Company thereunder.

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01 Definitions. As used herein, the following terms have the following meanings:

1933 Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder.

1934 Act” means the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder.

Acceptable Confidentiality Agreement” means a confidentiality agreement that (i) contains terms, with respect to confidentiality and use, taken as a whole, that are not materially less restrictive to the Company’s counterparty thereto than those contained in the Confidentiality Agreement (it being understood and agreed that such confidentiality agreement need not restrict any person from making, publicly or privately, an Acquisition Proposal, acquiring the Company or taking any other similar action, or otherwise contain any standstill or similar provision), (ii) does not prohibit the Company from complying with Section 6.04 and (iii) does not include any provision calling for an exclusive right to negotiate with the Company prior to the valid termination of this Agreement.

Acquisition Proposal” means, other than the transactions contemplated by this Agreement, any bona fide Third Party offer or proposal relating to (i) any acquisition or purchase, direct or indirect, of twenty percent (20%) or more of the consolidated assets of the Company or twenty percent (20%) or more of any class of equity or voting securities of the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute twenty percent (20%) or more of the consolidated assets of the Company, (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in such Third Party

 

A-1


beneficially owning twenty percent (20%) or more of any class of equity or voting securities of the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute twenty percent (20%) or more of the consolidated assets of the Company or (iii) a merger, consolidation, share exchange, business combination, sale of all or substantially all of the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the Company or any of its Subsidiaries whose assets, individually or in the aggregate, constitute twenty percent (20%) or more of the consolidated assets of the Company.

Adverse Recommendation Change” has the meaning set forth in Section 6.04(a).

Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person; provided that, for purposes of this Agreement, Parent and Merger Sub shall be deemed not to be Affiliates of the Company and vice versa.

Agreement” has the meaning set forth in the Preamble.

Alternative Financing” has the meaning set forth in Section 7.04(d).

Alternative Financing Commitment Letter” has the meaning set forth in Section 7.04(d).

Anti-Corruption Law” means the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any other Applicable Law related to bribery or corruption.

Antitrust Division” has the meaning set forth in Section 8.01(b).

Applicable Law” means, with respect to any Person, any domestic or foreign federal, state, provincial or local law, constitution, treaty, act, statute, code, rule, regulation, order, injunction, judgment, decree, writ, award, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority in any relevant jurisdiction that is binding upon or applicable to such Person.

Balance Sheet Date” has the meaning set forth in Section 4.10.

Board of Directors” has the meaning set forth in the Recitals.

Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.

Cap” has the meaning set forth in Section 7.02(d).

CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116-136).

CBA” has the meaning set forth in Section 4.18(a).

Certificate of Merger” has the meaning set forth in Section 2.01(c).

Certificates” has the meaning set forth in Section 2.03(a).

Chosen Courts” has the meaning set forth in Section 11.08.

Clean Team Agreement” has the meaning set forth in Section 1.02.

Closing” has the meaning set forth in Section 2.01(b).

Closing Date” has the meaning set forth in Section 2.01(b).

 

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Code” means the U.S. Internal Revenue Code of 1986.

Commitment Letters” has the meaning set forth in Section 5.09(b).

Company” has the meaning set forth in the Preamble.

Company Balance Sheet” means the consolidated balance sheet of the Company as of December 31, 2022, and the footnotes thereto set forth in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2022.

Company Capitalization Date” has the meaning set forth in Section 4.05(a).

Company Common Shares” has the meaning set forth in Section 4.05(a).

Company Credit Agreement” means that certain Credit Agreement, dated as of February 16, 2016, among the Company, the lenders from time to time party thereto and Deutsche Bank AG New York Branch, as amended prior to the Closing Date.

Company Disclosure Schedule” means the disclosure schedule dated the date hereof regarding this Agreement that has been provided by the Company to Parent and Merger Sub or their Representatives.

Company Indenture” means that certain Indenture, dated as of September 24, 2021, by and between the Company and U.S. Bank National Association, as trustee, and the other parties thereto, governing the Company’s 4.375% Senior Notes due 2029, as amended prior to the Closing Date.

Company IT Systems” has the meaning set forth in Section 4.15(f).

Company Material Adverse Effect” means any Effect that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (a) the financial condition, assets, business or results of operations of the Company and its Subsidiaries, taken as a whole, excluding any Effect to the extent resulting from (i) changes or prospective changes in GAAP or the interpretation thereof, (ii) general economic, political, regulatory, legal or tax conditions in the United States or any other country or region, including changes in financial, credit, securities or currency markets (including changes in interest or exchange rates) and the imposition or adjustment of tariffs, (iii) conditions generally affecting any of the industries in which the Company and its Subsidiaries operate, (iv) changes or prospective changes in Applicable Law or the interpretation thereof, (v) geopolitical conditions, the outbreak or escalation of hostilities, acts of war, sabotage, terrorism, cyberattacks, protests, riots, strikes, global health conditions (including any epidemic, pandemic or disease outbreak) or natural disasters, (vi) the execution, delivery and performance of this Agreement or the announcement or consummation of the transactions contemplated by this Agreement or the identity of or any facts or circumstances relating to Parent or any of its Affiliates, including the impact of any of the foregoing on the business relationships, contractual or otherwise, of the Company and any of its Subsidiaries with customers, suppliers, service providers, employees, Governmental Authorities or any other business relationships resulting from any of the foregoing (provided that this clause (vi) shall not apply to any representation or warranty to the extent such representation or warranty expressly purports to address, as applicable, the consequences resulting from the execution, delivery and performance of this Agreement or the announcement or consummation of the transactions contemplated by this Agreement, including as provided in Section 4.04), (vii) any actions requested in writing to be taken (or omitted to be taken) by or on behalf of Parent or Merger Sub, (viii) any failure by the Company or any of its Subsidiaries to meet any internal or published budgets, projections, forecasts or predictions of financial performance or integration synergies for any period, (ix) changes in the price or trading volume of the shares of Company Common Shares or any other securities of the Company on the NYSE or any other market on which such securities are quoted for purchase and sale or changes in the credit ratings of the Company (it being understood that any underlying facts giving rise or contributing to the failure or changes

 

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described in clauses (viii) or (ix) that are not otherwise excluded from the definition of a “Company Material Adverse Effect” may be taken into account in determining whether there has been a Company Material Adverse Effect), or (x) any actions taken (or omitted to be taken) by the Company or any of its Subsidiaries that are required or expressly permitted to be taken (or omitted to be taken) pursuant to this Agreement, including any actions required under this Agreement to obtain any approvals, consents, registrations, permits, authorizations and other confirmations under applicable Competition Laws for the consummation of the Merger, except, with respect to clauses (i), (ii), (iii), (iv) and (v), to the extent that such Effect is disproportionately adverse to the Company and its Subsidiaries relative to others in the industry or industries in which the Company and its Subsidiaries operate, in which case only the incremental disproportionate adverse Effect may be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur or (b) the ability of the Company to consummate the Merger on or prior to the End Date.

Company Organizational Document Amendment” has the meaning set forth in Section 6.02.

Company-Owned Intellectual Property” means any and all Intellectual Property owned by the Company or any of its Subsidiaries.

Company Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA (whether or not subject to ERISA) and each other employment, individual consulting, bonus, incentive, termination, severance, separation, change in control, retention, profit-sharing, pension, retirement, deferred compensation, equity or equity-based, health or other welfare, disability, post-employment welfare or other compensation or benefit plan, program, policy or agreement, in each case that is sponsored, maintained, contributed to or required to be contributed to by the Company or any of its Subsidiaries for the benefit of any Company Service Provider or with respect to which the Company or any of its Subsidiaries has or could reasonably be expected to have any liabilities, other than any such plan, policy or agreement that is (i) a Multiemployer Plan, or (ii) operated by any Governmental Authority.

Company Preferred Shares” has the meaning set forth in Section 4.05(a).

Company Recommendation” has the meaning set forth in Section 4.02(b).

Company Registered Intellectual Property” has the meaning set forth in Section 4.15(c).

Company Restricted Shares” means an award of restricted shares of Company Common Shares that are subject to vesting or forfeiture granted under a Company Stock Plan.

Company RSU” means a restricted stock unit that is subject to vesting conditions based solely on continued employment or service granted under a Company Stock Plan.

Company SEC Documents” has the meaning set forth in Section 4.07(a).

Company Securities” has the meaning set forth in Section 4.05(c).

Company Service Provider” means any current or former employee, officer, director or independent contractor of the Company or any of its Subsidiaries, in each case who is a natural person (whether retained directly by the Company or its applicable Subsidiary or indirectly through a third-party entity, staffing company, or other Person).

Company Stock Plan” means the Amended and Restated PGT Innovations, Inc. 2019 Equity and Incentive Compensation Plan, as most recently amended and/or restated.

Company Stockholder Approval” has the meaning set forth in Section 4.02(a).

 

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Company Stockholders Meeting” has the meaning set forth in Section 6.02.

Company Subsidiary Securities” has the meaning set forth in Section 4.06(b).

Company Termination Fee” has the meaning set forth in Section 11.04(b)(i).

Compliant” means, as of any time of determination, with respect to any Required Information, that (i) such Required Information, taken as a whole, does not contain any untrue statement of a material fact or omit to state any material fact regarding the Company necessary in order to make such Required Information, in light of the circumstances under which the statements contained therein are made, not misleading; provided that the availability of financial information of the Company, including any “flash” numbers, prior to the time that the Required Information would become not Compliant for periods subsequent to the latest quarterly or annual period for which financial information is included in the Required Information, shall not, by virtue of such availability, render such previously delivered Required Information not Compliant, (ii) no independent auditor has withdrawn its audit opinion with respect to any financial statements contained in the Required Information, (iii) such Required Information is compliant in all material respects with all applicable requirements of Regulation S-K and Regulation S-X under the Securities Act and in a form customarily included in private placements of debt securities under Rule 144A of the Securities Act and (iv) the financial statements and other financial information included in such Required Information would not be deemed “stale” for use in a private placement of debt securities under Rule 144A of the Securities Act, and are of a date and remain otherwise sufficient throughout the Marketing Period, in each case, to permit the Company’s independent accountants to issue customary “comfort” letters with respect to such financial statements and financial information to the Debt Financing Sources providing the portion of the Debt Financing consisting of debt securities (including customary “negative assurance” comfort) in order to consummate any private placement of debt securities under Rule 144A of the Securities Act during any Business Day during the Marketing Period.

Competition Laws” means the HSR Act and all other Applicable Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization, lessening of competition or restraint of trade.

Confidentiality Agreement” has the meaning set forth in Section 6.03(b).

Continuing Employee” has the meaning set forth in Section 7.03(b).

D&O Insurance” has the meaning set forth in Section 7.02(d).

Data Security Requirements” mea