Amended and RESTATED EXECUTIVE AGREEMENT
EXHIBIT 10.21
Amended and RESTATED EXECUTIVE AGREEMENT
This Amended and Restated Executive Agreement (“Agreement”) is entered into as of the 5th day of March, 2018 by and between Huttig Building Products, Inc., a Delaware corporation, with its principal office located at 000 Xxxxxxxxx Xxxxxxxxxx Xxxxx, Xxxxx 000, Xx. Xxxxx, Xxxxxxxx 00000 (the “Company”), and Xxxxx Xxxxxxxx (“Executive”).
WHEREAS, the Company and Executive entered into an Executive Agreement effective as of November 14, 2016 (the “2016 Agreement”) that set for the terms of Executive’s employment as the Company’s Executive Vice President – Huttig-Grip;
WHEREAS, the Company and Executive wish to amend and restate the 2016 Agreement in accordance with the terms as set forth herein effective as of January 1, 2018 (the “Effective Date”);
1.Employment. Effective January 1, 2018 the Company shall employ Executive as its Executive Vice President and Chief Marketing Officer (“CMO”), and Executive agrees to be employed by the Company in such capacity, subject to the terms and conditions of this Agreement. In Executive’s capacity as CMO, he shall render such services as are consistent with such position and shall report directly to the Company’s President. It is expected that, subject to standard internal corporate oversight and reporting obligations, Executive’s duties and responsibilities will include, but not be limited to, leading and managing the Company’s Marketing, National Accounts, and Product Management functions. In addition, Executive will participate in all senior management activities as directed by the President, which may include, but not be limited to, (i) periodically attend Board of Directors’ and senior management team meetings, (ii) participate in the Company’s strategic planning process, (iii) lead the Marketing, National Accounts, and Product Management functions, develop sales and profitability growth plans and budgets, and deliver financial results, operational, and financial budgets, and (iv) all other duties and responsibilities commensurate with being a member of the Company’s senior management team. The Executive’s principal place of employment will be in the Chicago Metropolitan area, but Executive will be required to travel to the Company’s headquarters as required by the President. During the Term (as defined below), Executive shall devote all of his working time and efforts to the business and affairs of the Company and its subsidiaries and shall not engage in activities that interfere in any way with such performance.
2.Term of Employment. Executive’s employment began on November 14, 2016 (the “Commencement Date”) and shall continue through November 13, 2021 (the “Original Term”). Beginning on November 14, 2021, the Original Term shall be automatically extended for one additional year as of each annual anniversary of the Commencement Date (each such one-year extension a “Renewal Term”) unless either the Company or Executive provides written notice to the other of non-renewal not later than ninety (90) days prior to any such anniversary date. The Original Term and any Renewal Term(s) are collectively referred to herein as the “Term.” Notwithstanding the foregoing, the Term shall be extended and this Agreement shall remain in effect during the Protected Period (as defined in Paragraph 4(e)(i) below).
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(b) |
Initial Signing Bonus. In accordance with the 2016 Agreement, Executive received 58,480 time vested shares of restricted stock of Huttig Building Products, Inc. (“HBP”) under HBP’s 2005 Executive Incentive Compensation Plan, as amended (or any successor plan thereto) (the “Incentive Plan”), with a Fair Market Value (as defined in the Incentive Plan) of $300,000 on November 14, 2016 (the “Initial Signing Bonus”). The shares of restricted stock granted as the Initial Signing Bonus will vest on the fifth anniversary of the Commencement Date. If, prior to such fifth anniversary the Executive is terminated by the Company without Cause, on or after the occurrence of a Change of Control of the Company the Executive terminates his employment for Good Reason, or the Executive dies or the Executive is terminated due to Disability, then the Initial Signing Bonus will become fully vested on the Date of Termination. |
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Committee under the Incentive Plan. Such annual incentive award is referred to herein as the “Annual Bonus.” For calendar year 2017, the Annual Bonus for the Executive will be a minimum of $350,000. |
4.Termination.
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(ii) |
The Severance Payment shall be paid to Executive in 12 equal monthly installments (“Severance Period”) beginning on the first regularly scheduled payroll date occurring on or after the 60th day following the Date of Termination (the “First Payment Date”), and any severance amount that would otherwise have been paid prior to the First Payment Date shall be paid on the First Payment Date, provided that Executive has signed a Release as required by Section 4(a)(i) and such Release has become irrevocable on or before the First Payment Date. The Benefits Payment will be payable in a single cash payment on the First Payment Date. The Pro Rata Bonus shall be payable in a single cash payment no later than March 15 of the calendar year following the calendar year in which the Date of Termination occurs (and after performance results have been determined). Payments made pursuant to this Paragraph 4(a) shall be in lieu of, and non-duplicative of, payments under any other agreement between Executive and the Company. The right to payments contemplated in this Paragraph 4(a) shall cease if Executive breaches any material provision of any agreement between Executive and the Company, including without limitation Paragraph 5 or any other material term of this Agreement. This paragraph shall survive termination of this Agreement. |
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(ii) |
Death or Disability. If Executive’s employment is terminated by reason of Executive’s death or Disability during the Protected Period, Executive or his beneficiary or estate (as the case may be) shall be paid (A) Executive’s full annual Base Salary through the Date of Termination at the rate in effect on the Date of Termination or, if higher, at the highest annual rate in effect at any time from the 90-day period preceding the Protected Period Effective Date through the Date of Termination (the “Highest Base Salary”), (B) the product of the Annual Bonus paid to Executive for the last full fiscal year and a fraction, the numerator of which is the number of days in the then current fiscal year through the Date of Termination, and the denominator of which is 365 and (C) any compensation previously deferred by Executive (together with accrued interest thereon, if any) and not yet paid by the Company and any accrued vacation pay not yet paid by the Company (such amounts specified in clauses (A), (B) and (C) are hereinafter referred to as “Protected Period Accrued Obligations”). |
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(1) |
All such Protected Period Accrued Obligations shall be paid to Executive or his estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. |
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(1) |
To the extent not theretofore paid, Executive’s Highest Base Salary through the Date of Termination; and |
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(3) |
The product of (x) two and (y) the sum of (i) the Highest Base Salary and (ii) the Average Annual Bonus; and |
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(7) |
For purposes of this Agreement, the “Average Annual Bonus” shall be the average of the Annual Bonus paid or payable to Executive by the Company and its affiliated companies in respect of the two |
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fiscal years immediately preceding the fiscal year in which termination occurs. |
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(e) |
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is reasonably demonstrated that such termination (A) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (B) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement, and specifically without limitation, the “Protected Period Effective Date” shall mean the date immediately prior to the date of Executive’s termination. |
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(ii) |
Cause. Cause during the Protected Period shall have the same meaning as set forth in Paragraph 4(a)(iii) above. |
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(iii) |
Good Reason. “Good Reason” means Executive’s good faith determination that any of the following has occurred: |
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(1) |
Executive’s Base Salary is less than twelve times the highest monthly base salary paid or payable to him by the Company during the twelve-month period immediately preceding the month in which the Protected Period Effective Date occurs; |
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(2) |
Executive is not eligible to receive an Annual Bonus in cash on the same basis as in the fiscal year immediately preceding the fiscal year in which the Protected Period Effective Date occurs; |
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thereafter with respect to other key employees of the Company and its subsidiaries; |
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(5) |
The assignment of Executive of any duties inconsistent in any respect with Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as they were constituted at any time during the 90-day period immediately preceding the Protected Period Effective Date, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities; |
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(6) |
The Company requires Executive to perform his services at a location other than where he was employed immediately preceding the Protected Period Effective Date or any office or location more than thirty-five (35) miles from such location, except for travel reasonably required in the performance of Executive’s responsibilities; |
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(7) |
Any purported termination by the Company of Executive’s employment otherwise than as expressly permitted by this Agreement; or |
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(8) |
Any failure by the Company to comply with and satisfy Paragraph 10 of this Agreement. |
Notwithstanding the foregoing, for purposes of items (1) — (5) above there shall be excluded from the definition of “Good Reason” any isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive.
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For purposes of this Agreement, in all respects, the definition of “Change of Control” hereunder shall be interpreted, and limited to the extent necessary, to comply with Code Section 409A, and the provisions of Treasury Notice 2005-1, Proposed Treasury Regulation Section 1.409A and any successor statute, regulation and guidance thereto.
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(g) |
Notice of Termination. Any termination by the Company for Cause or by Executive for Good Reason shall be communicated by Notice |
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of Termination to the other party hereto given in accordance with Paragraph 8 of this Agreement. If Executive terminates this Agreement for any reason or the Company terminates this Agreement without Cause, he or it shall provide to the other not less than thirty (30) days prior written notice. The Company shall not be required to provide any advance notice in the event of a termination for Cause, except as may be specifically provided herein as a result of a “cure” provision, nor shall the thirty (30) day notice requirement apply to either party for a termination as a result of non-renewal of employment at the end of the Original Term or any Renewal Term. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) if the Date of Termination is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than sixty (60) days after the giving of such notice). The failure by Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder. |
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(b) |
Covenant Not to Compete. At all times during Executive’s employment by the Company or any of its affiliates and/or |
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6.Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices, provided by the Company or any of its subsidiaries and for which Executive may qualify, nor shall anything herein limit or otherwise affect such rights as Executive may have under any stock option, restricted stock, stock appreciation right, or other agreements with the Company or any of its affiliates or subsidiaries. Amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice or program of the Company or any of its subsidiaries at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program provided, however, that in the event the terms of any such plan, policy, practice or program concerning the payment of benefits thereunder shall conflict with any provision of this Agreement, the terms of this Agreement shall take precedence but only if and to the extent the payment would not adversely affect the tax exempt status (if applicable) of any such plan, policy, practice or program and only if the employee agrees in writing that such payment shall be in lieu of any corresponding payment from such plan, policy, practice or program.
7.Full Settlement. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or enforceability of, or liability under, any provision of Paragraph 4(b) of this Agreement or any guarantee of performance thereof, plus in each case interest at the applicable Federal rate provided for in Code Section 7872(f)(2).
8.Notices. Any notice, request, instruction or other document to be given hereunder by any party to the other shall be in writing and shall be deemed to have been duly given (i) on the date of delivery if delivered personally, (ii) on the date of delivery if delivered by facsimile or email (with confirmation of transmission) if sent during the normal business hours of the recipient, and on the next business day of recipient if sent after normal business hours of recipient, (iii) on the first business day following the date of dispatch if delivered by Federal Express or other next-day courier service, or (iv) on the third business day following the date of receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.
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Huttig Building Products, Inc. Email: xxxxxxx@xxxxxx.xxx |
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(b) If to Executive: |
Xxxxx Xxxxxxxx Email: ___________________________ |
9.Waiver of Breach. The waiver of either the Company or Executive of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by either the Company or Executive.
10.Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of both the Company and Executive and their respective successors, assigns, heirs and legal representatives, but neither this Agreement nor any rights hereunder shall be assigned by either the Company or Executive without the consent in writing of the other party. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.
11.Governing Law and Venue. This Agreement shall be governed by and constructed in accordance with the laws of the State of Missouri. However, in the event of any legal or equitable action arising under this Agreement, the venue of such action shall not lie exclusively within Missouri but may lie in any court having proper jurisdiction over such matter.
12.Enforcement Costs. Except as specifically provided herein, if any party hereto institutes any action or proceeding to enforce this Agreement the prevailing party in such action or proceeding shall be entitled to recover from the nonprevailing party all legal costs and expenses incurred by the prevailing party in such action, including, but not limited to, reasonable attorney fees, paralegal fees, law clerk fees, and other legal costs and
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expenses, whether incurred at or before trial, and whether incurred at the trial level or in any appellate, bankruptcy, or other legal proceeding.
13.Amendment; Integration. No change or modification of this Agreement shall be valid unless the same is in writing and signed by the person or party to be charged. The Company and Executive agree that they will negotiate in good faith and jointly execute an amendment to modify this Agreement to the extent necessary to comply with the requirements of Code Section 409A, or any successor statute, regulation and guidance thereto; provided, however, under no circumstances shall the Company be obligated to increase its financial obligations to Executive in connection with any such amendment. Effective as of the Effective Date, this Agreement shall supersede any and all other agreements, either oral or written, between the parties hereto with respect to the subject matter hereof, except this Agreement shall not supersede terms of prior written agreements that survive the termination of such agreements, nor shall this Agreement supersede the Indemnification Agreement by and between Executive and the Company described in Section 16 below.
14.Severability. If any portion of this Agreement shall be, for any reason, invalid or unenforceable, the remaining portion or portions shall nevertheless be valid, enforceable and carried into effect, unless to do so would clearly violate the present legal and valid intention of the parties hereto.
15.Tax Consequences. Executive hereby acknowledges and agrees that the Company makes no representations or warranties regarding the tax treatment or tax consequences of any compensation, benefits or other payments under this Agreement, including, without limitation, by operation of Code Section 409A, or any successor statute, regulation and guidance thereto.
16.Indemnification. The Company and Executive have previously executed an Indemnification Agreement dated November 14, 2016.
17.Headings. The headings of this Agreement are inserted for convenience only and are not to be considered in construction of the provisions hereof.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officers, and Executive has hereunto set his hand, as of the day and year first above written.
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HUTTIG BUILDING PRODUCTS, INC. Name: Xxx X. Xxxxxxx |
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EXECUTIVE: Xxxxx Xxxxxxxx |
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