Exhibit 10.2

 

 

SPLIT DOLLAR INSURANCE AGREEMENT

 

ENDORSEMENT METHOD

 

This Agreement is entered into this 18th day of May, 2016 by and between Huttig
Building Products, Inc., hereafter called the "Company," and Jon P. Vrabely,
hereafter called the "Executive."

 

WITNESSETH:

 

WHEREAS, the Executive is a valuable and efficient employee of the Company;

 

WHEREAS, the Executive has agreed to continue such service and the Company
desires that he/she do so; and

 

WHEREAS, in the continuation of such relationship the parties desire to enter
into a split‑dollar agreement in order to provide insurance protection for the
benefit of the Executive;

 

NOW THEREFORE, in consideration of the services heretofore rendered and to be
rendered by the Executive and of the mutual covenants contained herein, the
parties hereto agree as follows:  

 

1.   PURCHASE OF INSURANCE.  The Company shall apply to Principal Life Insurance
Company, Des Moines, Iowa, hereafter called the "Insurer," for an insurance
policy on the life of the Executive, hereafter at times referred to as the
"Insured," in the face amount of $5,111,549    
                                           (the "Policy"), and shall be
designated as sole owner of the Policy subject to the conditions hereafter set
forth.  

 

2.   OWNERSHIP OF POLICY.   The Company shall be the sole and absolute owner of
the Policy, and may exercise all ownership rights granted to the owner by the
terms of the Policy, except as may otherwise be provided herein.  

 

3.   PREMIUMS.  All of the premiums shall be paid by the Company as they become
due.

 

4.   BENEFICIARY PROVISIONS.   The beneficiary provisions of the Policy shall
provide that upon the death of the Executive the proceeds shall be paid as
follows:  

 

A.PART A.  To the Company, the balance of the proceeds in excess of the PART B
proceeds specified herein.

 

B.PART B.   The fixed amount of three times Executive’s Base Salary
____________________________.  The Executive may, without the consent of any
other person or legal entity, change the beneficiary with respect to this PART B
of the proceeds at any time.

 

5.   SUPPLEMENTAL AGREEMENTS.  If the Policy is issued with a supplemental
agreement providing for waiver of (1) monthly premium charges or (2) specified
premiums in the event of the Executive's disability, or for any additional death
benefit, the additional premium for such benefits shall be paid by the Company.

 

6.   FIDUCIARY PROVISIONS.  The Company is hereby designated as the "Named
Fiduciary" for the split dollar program (hereafter called the "Program")
established by this Agreement, and the Chief Financial Officer and/or the
General Counsel shall have the authority to control and manage the operation and
administration of such Program.  

 

7.   ALLOCATION OF FIDUCIARY RESPONSIBILITIES.  The Named Fiduciary shall
designate the responsibilities for the operation and administration of the
Program to the Chief Financial Officer and/or the General Counsel.    

 

8.   PROGRAM ADMINISTRATOR.  The Named Fiduciary is hereby designated as the
"Program Administrator" of this Program.

 

9.   CLAIMS PROCEDURE.  The following claims procedure shall apply to the
Program:  

 

a.Filing of a Claim for Benefits.  The Executive or the beneficiaries of the
Policy shall make a claim for the benefits provided under the Policy in the
manner provided in the Policy.  

 

 

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b.Claim Approval or Denial With Respect to Program Benefits.  With respect to a
claim for benefits, the Program Administrator shall review and make decisions on
claims for benefits.  The Program Administrator shall have complete and sole
discretionary authority to determine eligibility for benefits and to construe
the terms of the Program. 

 

 

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c.Notification to Claimant of Decision.  If a claim is wholly or partially
denied, notice of the decision, meeting the requirements of paragraph d.
following, shall be furnished to the claimant within a reasonable period of time
after the claim has been filed.   

 

d.Content of Notice.  The Program Administrator shall provide to any claimant
whose claim for benefits is denied in whole or in part a written notice setting
forth, in a manner calculated to be understood by the claimant, the following:  

 

(1)the specific reason or reasons for the denial or partial denial;

 

(2)specific reference to pertinent Policy or Program provisions on which the
denial is based;

 

(3)a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and

 

(4)an explanation of the Program's claim review procedure, as set forth in
paragraphs e. and f. following.

 

e.Review Procedure.  The purpose of the review procedure set forth in this
paragraph and in paragraph f. following is to provide a procedure by which a
claimant under the Program may have a reasonable opportunity to appeal a denial
or partial denial of a claim and request a full and fair review.  To accomplish
that purpose, the claimant or a duly authorized representative:

 

(1)may request a review by written application to the Program Administrator;  

 

(2)may review pertinent Program documents or agreements; and

 

(3)may submit issues and comments in writing.  

 

A claimant (or duly authorized representative) shall request a review at any
time within sixty (60) days by filing a written application after receipt by the
claimant of written notice of the denial of his or her claim.  

 

f.Decision on Review.  A decision on review of a denial of a claim shall be made
in the following manner.  

 

(1)The decision on review shall be made by the Program Administrator, which may
in his or her discretion hold a hearing on the denied claim.  The Program
Administrator shall make his or her decision promptly, unless special
circumstances (such as the need to hold a hearing) require an extension of time
for processing, in which case a decision shall be rendered as soon as possible,
but no later than one hundred twenty (120) days after receipt of the request for
review.  

 

(2)The decision on review shall be in writing, and shall include specific
reasons for the decision, written in a manner calculated to be understood by the
claimant, and specific references to the pertinent Policy or Program provisions
on which the decision is based.  

 

10.   TERMINATION OF AGREEMENT.  Either party hereto, with or without the
consent of the other, may terminate this Agreement by giving notice of
termination in writing.  Termination of employment, for any reason, shall
terminate this Agreement.  In addition, failure of the Company to maintain a
life insurance policy as specified in this Agreement, shall, upon lapse of the
policy, immediately terminate this Agreement. Termination of this Agreement, for
any of the foregoing reasons, shall be provided by written notice to the
Executive within seven calendar days following such termination.

 

Upon termination of the Agreement for any reason the Company may, in its sole
discretion, offer the policy for sale to the Executive.  The Executive shall
have 15 days following receipt of the Company’s offer to complete the
purchase.  The purchase price of the Policy shall be the cash surrender value
disregarding surrender charges, less any policy loan indebtedness.  In the event
of purchase by the Executive, the Company agrees to execute such documents as
may be necessary to transfer sole and complete ownership of the Policy to the
Executive.

 

11.   LIABILITY OF INSURANCE COMPANY.   It is understood by the parties hereto
that in issuing the Policy, the Insurer shall have no liability except as set
forth in the Policy.  The Insurer shall not be bound to inquire into or take
notice of any of the covenants herein contained as to the Policy or as to the
application of the proceeds of the Policy.  Rights under the Policy may be
exercised during the life of the Executive pursuant to the provisions of the
Policy.  Upon the death of the Executive, the Insurer shall be discharged from
all liability on payment of the proceeds in accordance with the Policy
provisions and without regard to this Agreement or any amendment hereof.  

 

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12.   BINDING EFFECT OF AGREEMENT.  This Agreement shall be binding upon the
parties hereto, their heirs, assigns, successors, executors and
administrators.  In the event the Company becomes a party to any merger,
consolidation or reorganization, this Agreement shall remain in full force and
effect as an obligation of the Company or its successors in interest.  

 

13.   NOTICE OF CHANGE IN RIGHTS.  The Company agrees to provide written notice
of this Agreement, within seven calendar days, to any assignee under the
specified life insurance policy, or to any other successor in interest in the
life insurance policy.  In addition, the Company agrees to provide written
notice to the Executive, within seven calendar days, of any assignment or other
change in the Company’s rights as policy owner under the policy.

 

14.   GOVERNING LAW.  This Agreement shall be governed and construed in
accordance with the laws of the State of Missouri.

 

15.   AMENDMENTS.  Amendments may be made to this Agreement by a written
agreement signed by each of the parties and attached hereto.  Additional
policies of insurance on the life of the Executive may be purchased under this
Agreement by amendment to Article 1 hereof.  

 

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IN WITNESS WHEREOF, the parties hereto have set their hands and seals, the
Company by its duly authorized officer, on the day and year above written.  

 

Huttig Building Products, Inc.

 

Jon P. Vrabely

 

 

 

By:

 

/s/ Oscar A. Martinez

 

 

/s/ Jon P. Vrabely

 

Name:  

 

Oscar A. Martinez

 

 

Its:

 

Vice President and Chief Financial Officer

 

 

 

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