AMENDED AND RESTATED EXECUTIVE AGREEMENT
Exhibit 10.1
AMENDED AND RESTATED EXECUTIVE AGREEMENT
This Amended and Restated Executive Agreement (“Agreement”) 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 Xxx Xxxxxxx (“Executive”) is effective as
of the 24th day of June, 2008.
WHEREAS, the Company and Executive originally entered into an Executive Agreement effective as
of the 4th day of December, 2006 (the “Original Agreement”) that set for the terms of
Executive’s employment as the Company’s President and Chief Executive Officer;
WHEREAS, the Company and Executive wish to amend the Original Agreement to change the
provisions by which the Term of the Agreement may be renewed;
NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement, the
parties hereto agree that the Original Agreement is amended and restated as follows effective as of
the date first above written:
1. Employment. Effective January 1, 2007, the Company shall employ Executive as its
President and Chief Executive Officer (“CEO”), 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 President and CEO, he shall render such services as are consistent with such position and shall
report directly to the Company’s Board of Directors (the “Board”). 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. If not earlier terminated in accordance with the terms of this
Agreement, this Agreement and Executive’s employment shall begin on January 1, 2007 (the
“Commencement Date”) and shall continue through December 31, 2008 (the “Original Term”). Beginning
January 1, 2009, 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(d)(i) below).
3. Compensation and Benefits.
(a) Base Compensation.
(i) In general, for all services rendered by Executive under this Agreement on
behalf of the Company, the Company shall pay to Executive a base salary of Four
Hundred Thousand and No/100 Dollars ($400,000.00) per year, as such salary may be
increased from time to time by the Board, payable in accordance with the Company’s
normal payroll practices.
(ii) In no way limiting the foregoing, at all times during the Protected
Period, Executive’s annual base salary shall be at least equal to twelve times the
highest monthly base salary paid or payable to Executive by the Company during the
twelve-month period immediately preceding the month in which the Protected Period
Effective Date occurs.
(iii) In this Agreement, “Base Salary” shall be as determined in accordance
with Paragraph 3(a)(i) or 3(a)(ii), as applicable.
(b) Restricted Stock. On the Commencement Date, Executive shall be granted 75,000
shares of restricted stock of the Company, granted under and subject to the terms of the 2005
Executive Incentive Compensation Plan. The restricted stock shall be also granted pursuant to a
restricted stock agreement which shall provide, among other things, that the Company’s right of
forfeiture shall lapse 1/3rd on each of the first, second and third anniversaries of the
Commencement Date, subject to the terms of this Agreement and the restricted stock agreement.
(c) EVA Plan. Executive shall be entitled to continue to participate, as of the
Commencement Date, in the Company’s EVA Incentive Compensation Plan (“EVA Plan”) and to be eligible
to earn up to 30% of the EVA bonus pool each year during the Term, subject to and in accordance
with its terms, as it may be amended from time to time. Such bonus referred to herein as the
“Annual Bonus.”
(d) Vacation and Other Benefit Plans and Arrangements. Executive shall be entitled to
participate in such other vacation and benefit plans and arrangements as may be offered by the
Company to similarly situated executive officers of the Company; provided that, nothing contained
herein shall or shall be deemed to require the Company to develop or continue to maintain any
particular plan or arrangement.
(e) Automobile. During the Term, the Company shall lease on Executive’s behalf an
automobile, in accordance with the Company’s standard practices and procedures.
4. Termination.
(a) Termination, In General. This Agreement may terminate prior to the end of the
Term specified in Paragraph 2 above for any reason, including upon Executive’s death or Disability
(as defined in Paragraph 4(d)(v)). The provisions of this Paragraph 4(a) shall apply prior to the
Protected Period Effective Date (defined below), and payments and benefits provided under this
Paragraph 4(a) shall be in lieu of any payment or benefit provided under Paragraph 4(b). In the
event of a termination for any reason, the Company shall pay to Executive (or his estate, in the
event of his death) upon the last date of employment (the “Termination Date”) all amounts of
accrued and owing compensation, including Base Salary through the Termination
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Date, accrued but unpaid or unused vacation as may be required under applicable law, and any
other amounts of compensation or timely submitted reimbursements accrued and owing as of the
Termination Date (the “Accrued Obligations”).
(i) Termination by the Company Without Cause. If the Company
terminates Executive’s employment without Cause, or fails to renew Executive’s
employment at the end of the Original Term or any Renewal Term for reasons that do
not constitute Cause, in exchange for a release of all claims Executive may have
against the Company, its affiliates, and its or their officers, directors, employees
and agents, Executive shall receive an amount equal to two times his then current
Base Salary plus two times the Average Annual Bonus (“Severance Payment”). The
“Average Annual Bonus” shall be the average bonus paid or payable to Executive by
the Company and its affiliated companies in respect of the three fiscal years
immediately preceding the fiscal year in which the termination occurs.
(ii) The Severance Payment shall be paid to Executive in 24 equal monthly
installments, beginning with the first month following the month in which employment
terminates. 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.
(iii) Definition of Cause. For purposes of this Agreement, Cause shall
constitute either (i) personal dishonesty or breach of fiduciary duty involving
personal profit at the expense of the Company; (ii) repeated failure of Executive to
perform his duties hereunder which are demonstrably willful and deliberate on his
part and which are not remedied in a reasonable period of time after receipt of
written notice from the Company; (iii) the commission of a criminal act related to
the performance of duties, or the furnishing of proprietary confidential information
about the Company to a competitor, or potential competitor, or third party whose
interests are adverse to those of the Company; (iv) intoxication by alcohol or drugs
during work hours; (v) conviction of a felony; or (vi) any breach of any material
Company policy or any material term of this Agreement or any other agreement by and
between Executive and the Company.
(b) Termination During the Protected Period. The provisions of this Paragraph 4(b)
shall apply on and after the Protected Period Effective Date (defined below) and shall remain in
effect during the Protected Period, and payments and benefits provided under this Paragraph 4(b)
shall be in lieu of any payment or benefit provided under Paragraph 4(a). If Executive’s
employment terminates after the Protected Period Effective Date, the following shall apply:
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(i) Cause; Other Than for Good Reason. If Executive’s employment shall
be terminated for Cause during the Protected Period, this Agreement shall terminate
without further obligations to Executive other than the obligation to pay to
Executive his Base Salary through the Date of Termination plus the amount of any
compensation previously deferred by Executive (together with accrued interest
thereon, if any). If Executive terminates employment other than for Good Reason
during the Protected Period, this Agreement shall terminate without further
obligations to Executive, other than those obligations accrued or earned and vested
(if applicable) by Executive through the Date of Termination, including for this
purpose, all Accrued Obligations. All such payments hereunder shall be paid to
Executive in a lump sum in cash within 30 days of the Date of Termination.
(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”).
(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.
(2) Anything in this Agreement to the contrary notwithstanding,
Executive or his estate or beneficiary, as applicable, shall be entitled to
receive death or disability benefits at least equal to the most favorable
benefits provided by the Company and any of its subsidiaries to surviving
families of employees (in the case of death) of the Company and such
subsidiaries, or, in the case of Disability, to disabled employees and/or
their families, under such plans, programs, practices and policies relating
to disability or family death benefits, if any, in accordance with the most
favorable plans, programs, practices and policies of the Company and its
subsidiaries in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to Executive and/or
Executive’s family, as in effect on the date of Executive’s death or
Disability with respect to other key employees of the Company and its
subsidiaries and their families.
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(iii) Without Cause or for Good Reason. If Executive terminates his
employment for Good Reason or his employment is terminated by the Company without
Cause during the Protected Period, Executive shall receive:
(1) To the extent not theretofore paid, Executive’s Highest Base Salary
through the Date of Termination; and
(2) The product of (x) the greater of the Annual Bonus paid or payable
(annualized for any fiscal year consisting of less than twelve full months
or for which Executive has been employed for less than twelve full months)
to Executive for the most recently completed fiscal year during the
Employment Period, if any, or the Average Annual Bonus, such greater amount
being hereafter referred to as the “Highest Annual Bonus,” and (y) a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365;
(3) The product of (x) two and (y) the sum of (i) the Highest Base
Salary and (ii) the Average Annual Bonus; and
(4) In the case of compensation previously deferred by Executive, all
amounts previously deferred (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; and
(5) For two years after the Date of Termination, or such longer period
as any plan, program, practice or policy may provide, the Company shall
continue benefits to Executive and/or Executive’s family at least equal to
those which would have been provided to them as if Executive’s employment
had not been terminated, in accordance with the most favorable employee
welfare benefit plans (as such term is defined in Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended) of the Company
and its subsidiaries (including health insurance and life insurance) during
the 90-day period immediately preceding the Effective Date or, if more
favorable to Executive, as in effect at any time thereafter with respect to
other key employees and their families, and for purposes of eligibility for
retiree benefits pursuant to such employee welfare benefit plans, Executive
shall be considered to have remained employed for such two-year period and
to have retired on the last day of such period.
(6) All such payments under this Paragraph 4(b)(iii) shall be paid to
Executive in a lump sum in cash within 30 days of the Date of Termination.
(c) Notwithstanding any other provision to the contrary, with respect to the timing of
payments under Paragraph 4(a) or 4(b), if, at the time of Executive’s termination,
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Executive is deemed to be a “specified employee” (within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), and any successor statute, regulation and
guidance thereto) of the Company, then only to the extent necessary to comply with the requirements
of Code Section 409A, any payments to which Executive may become entitled under Paragraph 4(b)
which are subject to Code Section 409A (and not otherwise exempt from its application) will be
withheld until the first business day of the seventh month following the termination of Executive’s
employment, at which time Executive shall be paid an aggregate amount of payments otherwise due to
the Executive under the terms of Paragraph 4(a) or 4(b) for the preceding 6-month period, as
applicable.
(d) Definitions.
(i) Protected Period, Protected Period Effective Date. The “Protected
Period” shall begin on the closing date of a transaction constituting a Change of
Control (defined below) (the “Protected Period Effective Date”) and ending upon the
first to occur of the date that is 36 months from the Protected Period Effective
Date and the first day of the month next following Executive’s normal retirement
date (“Normal Retirement Date”) under the Huttig Building Products, Inc. Savings &
Investment Plan, or any successor retirement plan (the “Retirement Plan”); provided
that, if Executive’s employment with the Company is terminated prior to the date on
which a Change of Control occurs, and it 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.
(ii) Cause. Cause during the Protected Period shall have the same
meaning as set forth in Paragraph 4(a)(iii) above.
(iii) Good Reason. “Good Reason” means Executive’s good faith
determination that any of the following has occurred:
(1) Executive’s Base Salary is (A) 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, (B) not reviewed at least annually or has not
been increased at any time and from time to time in a manner substantially
consistent with increases in base salary awarded in the ordinary course of
business to other key employees of the Company and its subsidiaries, or (C)
is reduced after any such increase;
(2) Executive is not eligible to receive, an annual bonus (either
pursuant to any incentive compensation plan maintained by the Company or
otherwise) in cash on the same basis as in the fiscal year
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immediately preceding the fiscal year in which the Protected Period
Effective Date occurs or, if more favorable to Executive, on the same basis
as awarded at any time thereafter to other key employees of the Company and
its subsidiaries;
(3) The Company fails to offer to Executive (and his eligible spouse
and dependents, as applicable) incentive, savings and retirement plans,
practices, policies and programs as may be applicable to other key employees
of the Company and its subsidiaries and welfare benefit plans and policies
(including without limitation including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life, group
life, accidental death and travel accident insurance plans and programs),
which shall provide Executive (and his eligible spouse and dependents) with
compensation, benefits and reward opportunities, and welfare benefits, as
applicable, at least as favorable in the aggregate as the most favorable of
such compensation, benefits and reward opportunities and welfare benefits as
provided by the Company for Executive (and his spouse and dependents, as
applicable) under such plans, practices, policies and programs as in effect
at any time during the 90-day period immediately preceding the Protected
Period Effective Date or, if more favorable to Executive, as provided at any
time thereafter with respect to other key employees of the Company and its
subsidiaries;
(4) The Company does not provide (A) prompt reimbursement for
reasonable expenses, (B) paid vacation, (C) fringe benefits, including use
of an automobile and payment of related expenses, or (D) provide an office
or offices of a size and with furnishings and other appointments, and to
secretarial an other assistance, at least equal in all cases to the most
favorable of the foregoing provided under any policies or practices, or
provided to Executive by the Company and its subsidiaries at any time during
the 90-day period immediately preceding the Protected Period Effective Date
or, if more favorable to Executive, as provided at any time thereafter with
respect to other key employees of the Company and its subsidiaries;
(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;
(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
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more than thirty-five (35) miles from such location, except for travel
reasonably required in the performance of Executive’s responsibilities;
(7) Any purported termination by the Company of Executive’s employment
otherwise than as expressly permitted by this Agreement; or
(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. Any good faith
determination of “Good Reason” made by Executive shall be conclusive.
(iv) Change of Control. “Change of Control” shall mean:
(1) The acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than 50% of either the then outstanding shares of
common stock of the Company or the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in
the election of directors, but excluding, for this purpose, any such
acquisition by the Company or any of its subsidiaries, by The Rugby Group
Ltd. or any direct transferee from The Rugby Group Ltd., or any employee
benefit plan (or related trust) of the Company or its subsidiaries, or any
corporation with respect to which, following such acquisition, more than 50%
of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by
substantially the same individuals and entities who were the beneficial
owners, respectively, of the common stock and voting securities of the
Company immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition, of the
then outstanding shares of common stock of the Company or the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors, as the case may be;
or
(2) A majority of members of the Board is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a
majority of the members of the Board prior to the date of the appointment or
election.; or
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(3) Approval by the stockholders of the Company of a reorganization,
merger or consolidation, in each case, with respect to which substantially
the same individuals and entities who were the respective beneficial owners
of the common stock and voting securities of the Company immediately prior
to such reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own, directly or
indirectly, at least 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such reorganization, merger
or consolidation, or a complete liquidation or dissolution of the Company or
of the sale or other disposition of all or substantially all of the assets
of the Company.
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.
(v) Disability. “Disability” means
(1) Executive is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that
can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months.
(2) Executive is, by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months under an
accident and health plan covering employees of the Company.
(vi) Date of Termination. “Date of Termination” means the date of receipt of
the Notice of Termination (as defined in Paragraph 4(f) below)
(vii) or any later date specified therein, as the case may be; provided,
however, that (i) if Executive’s employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies Executive of such termination and (ii) if Executive’s employment is
terminated by reason of death or Disability, the Date of Termination shall be the
date of death of Executive or the date the Disability is determined, as the case may
be.
(e) Certain Limitations on Payments by the Company. Notwithstanding any other
provision of this Agreement to the contrary, if tax counsel selected by the Company and
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reasonably acceptable to Executive determines that any portion of any payment under this
Agreement would constitute an “excess parachute payment” under Section 280G of the Code, then the
payments to be made to Executive under this Agreement shall be reduced (but not below zero) such
that the value of the aggregate payments that Executive is entitled to receive under this Agreement
and any other agreement or plan or program of the Company shall be one dollar ($1) less than the
maximum amount of payments which Executive may receive without becoming subject to the tax imposed
by Section 4999 of the Code.
(f) Notice of Termination. Any termination by the Company for Cause or by Executive
for Good Reason shall be communicated by Notice 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 (as defined below) 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.
5. Executive Covenants.
(a) Confidential Information. Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or data relating to the
Company or any of its subsidiaries, and their respective businesses, which shall have been obtained
by Executive during Executive’s employment by the Company or any of its subsidiaries and which
shall not be or become public knowledge (other than by acts by Executive or his representatives in
violation of this Agreement). After termination of Executive’s employment with the Company,
Executive shall not, without the prior written consent of the Company, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those designated by it.
In no event shall an asserted violation of the provisions of this subparagraph (a) constitute a
basis for deferring or withholding any amounts otherwise payable to Executive under this Agreement.
(b) Covenant Not to Compete. At all times during Executive’s employment by the
Company or any of its subsidiaries and for one year following termination of Executive’s
employment, Executive shall not, unless acting with the prior written consent of the Company,
directly or indirectly (i) own, manage, operate, finance, join, control or participate in the
ownership, management, operation, financing or control of, or be associated as an officer,
director, employee, partner, principal, agent, representative, consultant or otherwise with, or use
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or permit his name to be used in connection with, any profit or not-for-profit business or
enterprise which at any time during such period designs, manufactures, assembles, sells,
distributes or provides products (or related services) in competition with those designed,
manufactured, assembled, sold, distributed, or provided, or under active development, by the
Company (including all future developments in and improvements on such products and services) in
any part of the world; (ii) offer or provide employment to, interfere with or attempt to entice
away from the Company, either on a full-time or part-time or consulting basis, any person who then
currently is, or who within one year prior thereto had been, employed by the Company; or (iii)
directly or indirectly, solicit the business of, or do business with, any customer, supplier, or
prospective customer or supplier of the Company with whom Executive had direct or indirect contact
or about whom Executive may have acquired any knowledge while employed by the Company;
provided, however, that this provision shall not be construed to prohibit the
ownership by Executive of not more than 2% of any class of securities of any corporation which is
engaged in any of the foregoing businesses that has a class of securities registered pursuant to
the Securities Exchange Act of 1934. If Executive’s spouse engages in any of the restricted
activities set forth in the preceding sentence, Executive shall be deemed to have indirectly
engaged in such activities in violation of this covenant. This provision shall be extended at the
option of the Company, for a period of time equal to all periods during which Executive is in
violation of the foregoing covenant not to compete and to extend the covenant not to compete to run
from the date any injunction may be issued against Executive, should that occur, to enable the
Company to receive the full benefit of the covenant not to compete agreed to herein by Executive.
(c) Rights and Remedies Upon Breach. It is recognized that the services to be rendered
under this Agreement by Executive are special, unique and of extraordinary character. If Executive
breaches, or threatens to commit a breach of, any of the provisions of Paragraph 5(a) or 5(b) (the
“Covenants”), then the Company and/or any of its affiliates shall have the following rights and
remedies, each of which shall be independent of the other and severally enforceable, and all of
which rights and remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity:
(d) Specific Performance. The right and remedy to have the Covenants specifically
enforced by any court having equity jurisdiction, including obtaining an injunction to prevent any
continuing violation thereof, it being acknowledged and agreed that any such breach or threatened
breach will cause irreparable injury to the Company and that money damages will be difficult to
ascertain and will not provide adequate remedy to the Company.
(e) Severability of Covenants. If any of the Covenants, or any part thereof, are
hereafter construed to be invalid or unenforceable in any jurisdiction, the same shall not affect
the remainder of the Covenants or the enforceability thereof in any other jurisdiction, which shall
be given full effect, without regard to the invalidity or unenforceability in such other
jurisdiction.
(f) Blue-Pencilling. If any of the Covenants, or any part thereof, are held to be
unenforceable because of the duration of such provision or the geographical scope covered thereby,
the parties agree that the court making such determination shall have the power to reduce the
duration or geographical scope of such provision and, in its reduced form, such provision shall
then be enforceable and shall be enforced; provided, however, that the
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determination of such court shall not affect the enforceability of the Covenants in any other
jurisdiction.
(g) Assignability. Executive specifically acknowledges and agrees that in the event
the Company should undergo any change in ownership or change in structure or control, or should the
Company transfer some or all of its assets to another entity, the Covenants contained herein and
the right to enforce the Covenants may be assigned by the Company to any company, business,
partnership, individual or entity, and that Executive will continue to remain bound by the
Covenants.
(h) Survival. This Paragraph 5 shall survive termination of this Agreement.
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 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, or by telecopy or telefacsimile, (ii) on the first
business day following the date of dispatch if delivered by Federal Express or other next-day
courier service, or (iii) 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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| (a) If to the Company: | Huttig Building Products, Inc. | |||
| 000 Xxxxxxxxx Xxxxxxxxxx Xxxxx, Xxxxx 000 | ||||
| Xx. Xxxxx, Xxxxxxxx 00000 | ||||
| Attention: General Counsel | ||||
| (b) If to Executive: | Xxx Xxxxxxx | |||
| 0000 Xxxxxx Xxxxx Xxxx | ||||
| Xxxxxxxxxxxx, XX 00000 |
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 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 Commencement 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; including,
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without limitation, the 2006 Amended and Restated Change of Control Agreement by and between
the Executive and the Company, dated October 25, 2006, except this Agreement shall not supersede
the Indemnification Agreement by and between Executive and the Company, dated October 10, 2005, or
any restricted stock or option agreement entered into prior to the Commencement Date.
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. Headings. The headings of this Agreement are inserted for convenience only and
are not to be considered in construction of the provisions hereof.
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.
| Huttig Building Products, Inc. | ||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Chairman | |||
| EXECUTIVE: | ||||
| /s/ Xxx X. Xxxxxxx | ||||
| Xxx Xxxxxxx | ||||
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