EXHIBIT 10.5
EXECUTIVE EMPLOYMENT CONTRACT
This Executive Employment Contract ("Employment Contract") effective as of
the 1st day of May, 2003, between Huttig Building Products, Inc., a Delaware
corporation, with its principal office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, hereinafter termed "Company", and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, hereinafter termed "Executive".
In consideration of the premises and the representations, warranties,
covenants and agreements contained herein, the Company and the Executive agree
as follows:
1. Employment. The Company hereby employs the Executive as its President
and Chief Executive Officer and the Executive hereby accepts such employment
from the Company upon the terms and conditions hereinafter set forth.
2. Term of Employment.
(a) In General. The term of this Employment Contract shall begin on
the 1st day of May, 2003 ("Commencement Date") and shall continue until April
30, 2005.
(b) Termination Without Cause. Either party may terminate this
Employment Contract without cause upon not less than sixty (60) days prior
written notice to the other party.
(c) Termination by the Company. In addition to its rights of
termination under Section 2(b) above, this Employment Contract may be terminated
at any time by the Company upon notice to Executive upon the occurrence of any
of the following events:
(i) In the event the Executive shall be found guilty of fraud,
dishonesty or other acts of material misconduct with respect to the
business of the Company;
(ii) In the event of a Change in Control, which, for purposes of
this Employment Contract, means
(a) 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 50% or more 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
(b) Individuals who, as of the date hereof, constitute the Board
(as of the date hereof the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board,
provided that any individual becoming a director subsequent
to the date hereof whose election, or nomination for
election by the Company's stockholders, was approved by a
vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose
initial assumption of office is in connection with an actual
or threatened election contest relating to the election of
the Directors of the Company; or
(c) 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,
more than 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
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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;
or
(iii) In the event of the filing of a voluntary petition in
bankruptcy by the Company or its consent to the appointment of a trustee or
receiver or in the event involuntary bankruptcy, insolvency or similar
proceedings are instituted against the Company and are not dismissed within
60 days.
(d) Termination by the Executive. In addition to his rights of
termination under Section 2(b) above, the Executive shall have the right to
terminate this Employment Contract:
(i) In the event of a Change in Control; or
(ii) In the event of the filing of a voluntary petition in
bankruptcy by the Company or its consent to the appointment of a trustee or
receiver or in the event involuntary bankruptcy, insolvency or similar
proceedings are instituted against the Company and are not dismissed within
60 days.
(e) Automatic Termination. In addition to the foregoing, this
Employment Contract shall terminate immediately without notice in the event of
Executive's death or permanent disability. Permanent disability shall have the
meaning ascribed to it in the Company's Amended and Restated 2001 Stock
Incentive Plan ("Stock Incentive Plan"). In the event of any disagreement
between the parties with respect to whether a permanent disability exists, a
final determination shall be made by a physician mutually agreed upon by the
parties hereto.
3. Duties. The Executive shall have the authority to oversee all aspects
of the Company's business, subject to the direction of the Board of Directors of
the Company. Executive shall have those responsibilities, and the commensurate
authority to carry out such responsibilities, as are customarily within the
control of a president and CEO. Unless otherwise directed by the Board of
Directors of the Company, the Executive may take any action he deems in good
faith to be in the best interests of the Company and its shareholders. The
precise services of the Executive may be extended or curtailed from time to time
at the discretion of the Board of Directors of the Company.
4. Compensation and Benefits.
(a) Base Compensation. For all services rendered by the Executive
under this Employment Contract on behalf of the Company, the Company shall pay
the Executive a base salary of Five Hundred Thousand and No/100 Dollars
($500,000.00) per
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year, as such salary may be increased from time to time by the Board of
Directors of the Company, payable semi-monthly or as may be otherwise agreed
upon by the parties.
(b) EVA Plan. Executive shall be entitled to participate, as of the
Commencement Date, in the Company's EVA Incentive Compensation Plan ("EVA Plan")
which was previously adopted by the Company. Notwithstanding the terms of such
EVA Plan, the Company agrees: (i) to permit Executive to receive a distribution
of the entire balance of his EVA Plan account each year; and (ii) that Executive
shall receive a pro rata allocation to his EVA Plan account for all partial EVA
Plan years during the term of this Employment Contract and no such amounts shall
be forfeited or lost by Executive upon termination by the Company under Section
2(b), 2(c)(ii) or 2(c)(iii) hereof or by the Executive under Section 2(d)(i) or
2(d)(ii) hereof.
(c) Stock Options. As of the Commencement Date the Board of Directors
of the Company have awarded Executive Four Hundred Thousand (400,000)
Non-Qualified Stock Options under the Stock Incentive Plan. The Company agrees
that Executive shall be fifty percent (50%) vested in such Non-Qualified Stock
Options on April 28, 2004 and fully vested in such Non-Qualified Stock Options
on the first to occur of: (i) April 28, 2005; (ii) such date as this Employment
Contract is terminated by the Company pursuant to Section 2(b) hereof; or (iii)
upon the occurrence of a Change in Control as defined in the Stock Incentive
Plan.
(d) Automobile. The Company hereby agrees to provide to Executive, at
its own cost and expense, during the term hereof, use of a premium automobile,
as reasonably selected by Executive. The Company shall also pay or reimburse
Executive for all costs of operating such Company provided automobile, including
gas and oil expenses, repair and maintenance costs and insurance costs.
Executive shall comply with Company policies with respect to such automobile and
the submission of automobile expenses for reimbursement.
(e) Health Insurance. Executive is currently covered under a retiree
health insurance program from a prior position. The Company hereby agrees to pay
or reimburse Executive for the premiums under such insurance program as the same
may be in effect from time to time, upon submission of reasonable documentation
by Executive.
(f) Living Expenses. Since the Executive does not reside in the area
of the Company, the Company agrees to pay or reimburse Executive for local
living expenses and incurred by him in an amount not to exceed Fifty Thousand
and No/100 Dollars ($50,000.00) per year.
(g) Vacation, Holidays and Other Benefits. Executive shall be
entitled to such vacation and holiday time and shall receive such other benefits
as are provided to other executive officers of the Company in accordance with
the plans and policies of the Company in effect from time to time, including
without limitation, participation in any 401(k), pension or profit sharing plans
of the Company.
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(h) Taxes. In the event any amounts payable to the Executive hereunder
are deemed to be subject to federal taxes (not including his base compensation,
bonus compensation or taxes payable upon the exercise of a stock option) and
included as income on the executive's W-2 at the end of any calendar year the
Company shall gross up the amount included as income at the highest tax rate
applicable at that time.
5. Effect of Certain Termination. In the event of a termination by the
Company under Section 2(b), 2(c)(ii) or 2(c)(iii) hereof or by the Executive
under Section 2(d)(i) or 2(d)(ii) hereof, Company shall, within ten (10) days of
such termination, pay to Executive a fixed amount equal to one hundred percent
(100%) of the base salary due Executive under Section 4(a) hereof for the
balance of the two year term hereof and shall be responsible for the unexpired
portion of any executory apartment, automobile or other leases entered into by
Company or Executive in connection with this Employment Contract. The effect of
such termination on Executive's awards under or participation in the EVA Plan
and Stock Incentive Plan shall be as set forth in such Plan documents, as
modified in accordance with the terms of this Employment Contract.
6. 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.
(a) If to the Company: Huttig Building Products, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - General Counsel
(b) If to Executive: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
7. Waiver of Breach. The waiver of either the Company or the Executive of
a breach of any provision of this Employment Contract shall not operate or be
construed as a waiver of any subsequent breach by either the Company or the
Executive.
8. Binding Effect. This Employment Contract shall be binding upon and
shall
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inure to the benefit of both the Company and the Executive and their respective
successors, assigns, heirs and legal representatives, but neither this
Employment Contract nor any rights hereunder shall be assigned by either the
Company or the Executive without the consent in writing of the other party.
9. Indemnity. The Company shall indemnify Executive and hold him harmless
from and against any loss, expense, damage or injury suffered or sustained by
him by reason of any acts, omissions or alleged acts or omissions arising out of
the Executive's activities on behalf of the Company, including but not limited
to any judgments, awards, settlements, reasonable attorneys' fees and other
costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim, if the acts, omissions or alleged acts
or omissions upon which such actual or threatened action, proceeding or claim is
based were for a purpose reasonably believed by the Executive to be in the best
interest of the Company and were not performed or omitted fraudulently or in bad
faith or as a result of gross negligence by Executive and were not in violation
of such Executive's fiduciary obligations to the Company. Any such
indemnification shall only be from the assets of the Company. Company also
agrees to maintain director and officer liability insurance coverage for
Executive under policies reasonably acceptable to Executive, provided, however,
that Executive hereby acknowledges and agrees that the Company's director and
officer liability insurance coverage in force as of the date of this Employment
Contract is acceptable to Executive.
10. Governing Law and Venue. This Employment Contract 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 Employment
Contract, the venue of such action shall not lie exclusively within Missouri but
may lie in any court having proper jurisdiction over such matter.
11. Enforcement Costs. If any party hereto institutes any action or
proceeding to enforce this Employment Contract 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.
12. Amendment. This Employment Contract supersedes any and all other
agreements, either oral or written, between the parties hereto with respect to
the subject matter hereof. No change or modification of this Employment Contract
shall be valid unless the same is in writing and signed by the person or party
to be charged.
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13. Severability. If any portion of this Employment Contract 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.
14. Headings. The headings of this Employment Contract 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 Employment Contract to be
executed by its duly authorized officers, and Executive has hereunto set his
hand, as of the day and year first-above written.
COMPANY:
Huttig Building Products, Inc.
By: /s/ ▇. ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman
EXECUTIVE:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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