Exhibit 10.8

 

Date

 

«First_Name_» «Last_Name_»

«Street_Address_»

«City_», «State_» «Zip»

 

Dear «First_Name_»:

 

Subject: Stock Option Grant

 

I am pleased to advise you that the Management Organization and Compensation
Committee of the Board of Directors of Huttig Building Products, Inc. (the
“Company”), pursuant to the Company’s 2005 Executive Incentive Compensation Plan
(the “Plan”), has awarded you a non-qualified stock option for the purchase of
«OptionsGranted_» shares of common stock of the Company at an exercise price of
$             per share. The date of grant of the stock option is
                    . The terms and conditions of the option are set forth in
Annex A attached to this letter and incorporated herein by reference thereto.

 

A set of Questions and Answers regarding the Plan and options granted thereunder
is also attached. These are designed to provide you with general information
about your option and the Plan. Among other matters, the Questions and Answers
describe what happens to your option if your employment with the Company
terminates. Please read this document carefully and retain it for future
reference.

 

Please sign and return the enclosed duplicate of this letter, which, when
received by the Company, will constitute a binding option agreement at the price
and for the number of shares set forth above and subject to the terms and
conditions set forth in Annex A.

 

Sincerely,

 

Michael A. Lupo President and Chief Executive Officer Enclosures:   Annex A –
Stock Option Agreement Questions and Answers ACCEPTED AND AGREED TO:

 

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«First_Name_» «Last_Name_»

Date:

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Exhibit 10.8

 

ANNEX A

 

STOCK OPTION AGREEMENT

 

HUTTIG BUILDING PRODUCTS, INC.

2005 EXECUTIVE INCENTIVE COMPENSATION PLAN

 

1. GRANT OF OPTION

 

Huttig Building Products, Inc. (the “Company”) hereby grants to the recipient of
the letter of the Chairman, President and/or Secretary of the Company (“Letter”)
to which this Annex A is attached (“Employee”), and the Employee accepts, an
option (the “Option”) to purchase from the Company, the number of shares of
Huttig Building Products, Inc. common stock, $0.01 par value per share (“Common
Stock”), at the option exercise price set forth in the Letter. The Letter and
this Annex A together constitute the stock option agreement between the parties
(the “Agreement”). Except as otherwise expressly provided herein, the Option is
subject to the terms and provisions of the Huttig Building Products, Inc. 2005
Executive Incentive Compensation Plan (the “Plan”). The Option is hereby
designated as a non-qualified stock option that does not qualify as an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as amended.

 

2. TERM OF OPTION; EXERCISABILITY

 

The Option shall be exercisable in whole or in part (in lots of ten shares or
any multiple thereof) from time to time beginning from the date hereof, subject
to the provision that an Option may not be exercised by the Employee, except as
provided in paragraphs 4 and 5 hereof, (a) more than 90 days after the
termination of his employment by the Company or a subsidiary, or more than 10
years from the date the Option is granted, whichever period is shorter, or (b)
prior to the expiration of one year from the date of grant as indicated in the
Letter, and provided further that the Option may not be exercised in excess of
50% of the total shares subject to the Option during the second year after the
date of grant, 75% during the third year after the date of grant and 100%
thereafter during the remainder of the Option term.

 

3. FORM OF EXERCISE

 

The purchase price of the shares purchased upon the exercise of the Option shall
be paid in full at the time of exercise in cash or in whole or in part by
tendering (either actually or by attestation) shares of Common Stock, or such
other form of consideration approved by the Management Organization and
Compensation Committee of the Board of Directors of the Company (the
“Committee”). Notwithstanding the foregoing, if shares acquired pursuant to this
Option or any other option granted under a stock compensation plan of the
Company are utilized to pay such purchase price, such shares must have been
acquired by the Employee more than six

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months prior to the exercise of this Option or held for such other period of
time as the the Committee may establish. The value of each share delivered in
payment of all or part of the purchase price upon the exercise of the Option
shall be the Fair Market Value of the Common Stock on the date the Option is
exercised. The Option may also be exercised in accordance with a cashless
exercise program under which, if so instructed by the Employee, shares of Common
Stock may be issued directly to the Employee’s broker or dealer upon receipt of
an irrevocable written notice of exercise from the Employee. The Committee, upon
such terms and conditions as it shall deem appropriate, may (but shall not be
obligated to) authorize the acceptance of the surrender of the right to exercise
the Option or a portion thereof (but only to the extent and in the amounts that
the Option shall then be exercisable) and payment by the Company of an amount
equal to the excess of the Fair Market Value on the date of surrender of the
shares of Common Stock covered by such Option, or portion thereof, over the
aggregate option price of such shares. Such payment shall be made in shares of
Common Stock (valued at such Fair Market Value), or in cash, or partly in cash
and partly in Common Stock, as the Committee shall determine. For the purposes
of this Agreement, the term “Fair Market Value” as of any day shall mean the
average of the high and low sales prices of the Common Stock on the New York
Stock Exchange Composite Transaction Tape on such day or, if no sale of such
Common Stock has been recorded on such day, on the next preceding date on which
a sale was so made.

 

4. EXERCISE UPON TERMINATION OF EMPLOYMENT

 

If the Employee’s employment with the Company or one of its subsidiaries
terminates due to permanent disability (as determined by the Committee) or the
Employee’s retirement on or after reaching age 65, or after a Change in Control
(as defined in Section 2.7 of the Plan), the Employee may exercise this Option,
in whole or in part, whether or not previously exercisable, and/or the Committee
may authorize the acceptance of the surrender of the right to exercise this
Option or any portion thereof as provided in paragraph 3, at any time within 90
days after such termination due to permanent disability or retirement, or
termination after a Change in Control, but not after the expiration of the term
of this Option.

 

If the Employee’s employment is terminated for any reason other than death,
disability or retirement or after a Change in Control, this Option may be
exercised in whole or in part, at any time within 90 days after such termination
of employment, but only to the extent this Option is vested and exercisable at
the date of termination in accordance with Paragraph 2, and in any event, not
later than the expiration of the term of this Option.

 

5. DEATH

 

If the Employee shall die while employed by the Company or a subsidiary or
within 90 days of the cessation or termination of such employment due to
permanent disability or retirement, or termination after a Change in Control as
described in paragraph 4, this Option may be exercised, in whole or in part,
whether or not previously exercisable, and/or the Committee may authorize the
acceptance of the surrender of the right to exercise such Option or any portion
thereof as provided in paragraph 3, by the estate of such Employee (or by a
person who shall have acquired the right to exercise such Option by bequest or
inheritance), at any time within one year after the death of such Employee, but
not after the expiration of the term of the Option.

 

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6. DELIVERY OF STOCK CERTIFICATES

 

The obligation of the Company to sell and deliver shares of Common Stock under
this Option shall be subject to, as deemed necessary or appropriate by counsel
for the Company, (i) all applicable laws, rules and regulations and such
approvals by any governmental agencies as may be required, including, without
limitation, the effectiveness of a Registration Statement under the Securities
Act of 1933, and (ii) the condition that such shares shall have been duly listed
on such stock exchanges as the Common Stock is then listed.

 

7. ASSIGNMENT AND TRANSFER

 

The Option shall not be transferable by the Employee otherwise than by will or
the laws of descent and distribution, and shall be exercisable, during his
lifetime, only by him, except that the Option may be transferable, without
payment of consideration, to immediate family members of the Employee or to
trusts or partnerships for the benefit of such family members. Except as
provided herein, neither this Option nor the rights appurtenant hereto shall be
subject to execution, attachment or similar process. Any attempt by the Employee
to assign, pledge, hypothecate or otherwise dispose of this Option or of any
right or privilege conferred hereby contrary to the provisions of this
Agreement, shall be null and void, and the Company shall have the right, at its
option, to declare this Agreement and the rights and privileges hereby conferred
immediately terminated.

 

8. ADJUSTMENT OF OPTION

 

In accordance with Section 4.4 of the Plan, in the event of any corporate event
or transaction such as a merger, consolidation, reorganization,
recapitalization, separation, stock dividend, stock split or other similar
event, the Committee, in its sole discretion, shall substitute or adjust in an
equitable manner, the number an kind of shares that may be issued under this
Option, the applicable Exercise Price or other terms of this Option in order to
prevent dilution or enlargement of your rights hereunder.

 

9. WITHHOLDING TAXES

 

The Employee shall pay to the Company in cash the amount of any taxes which the
Company is required to withhold upon the exercise of this Option, provided that
the Company may, in accordance with such rules as the Committee may from time to
time adopt, accept shares of Common Stock received in connection with the
exercise of this Option being taxed or otherwise previously acquired in
satisfaction of such withholding requirements or up to the entire tax liability
arising from the exercise of such Option.

 

10. GENERAL

 

Except as otherwise expressly set forth in this Agreement, any notice required
to be given

 

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to the Employee shall be sent to the address of the Employee as the same appears
on the records of the Company, or at such other address as the Employee may
hereafter designate in writing, and all notices required to be given to the
Company shall be addressed to the Secretary of the Company at the address set
forth in the Letter. Any such notice shall be deemed to be duly given if and
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
registered and deposited, postage and registry fee prepaid, in a post office or
branch post office regularly maintained by the United States.

 

The Employee shall not be deemed for any purpose to be a stockholder of the
Company in respect of any shares as to which the Option shall not have been
exercised as herein provided.

 

Nothing in this Agreement shall confer upon the Employee any right to continue
in the employ of the Company or shall affect the right of the Company to
terminate the employment of the Employee, with or without cause.

 

Nothing in this Agreement or otherwise shall obligate the Company to permit the
Option to be exercised other than in accordance with the terms hereof or to
grant any waivers of the terms of this Agreement, regardless of what actions the
Company, the Board of Directors or the Committee may take or waivers the
Company, the Board of Directors or the Committee may grant under the terms of or
with respect to any options now or hereafter granted to any other person or any
other options granted to the Employee.

 

This Agreement shall be governed by the laws of the State of Delaware applicable
to agreements made and performed wholly within the State of Delaware (regardless
of the laws that might otherwise govern under applicable conflicts of laws
principles).

 

This Agreement sets forth a complete understanding between the parties with
respect to its subject matter and supersedes all prior and contemporaneous
agreements and understandings with respect thereto. Any modification, amendment
or waiver to this Agreement will be effective only if it in writing signed by
the Company and the Employee. The failure of any party to enforce at any time
any provision of this Agreement shall not be construed to be a waiver of that or
any other provision of this Agreement.

 

In the event of any conflict between the terms of this Agreement and the terms
of the Plan, as amended from time to time, the terms of such Plan shall be
controlling. Capitalized terms appearing but not defined herein shall have the
meanings ascribed to them in the Plan.

 

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