<PAGE>   1

                                                                    EXHIBIT 10.1


                                 August 20, 2001



Huttig Building Products, Inc.
14500 South Outer Forty Road
Chesterfield, MO 63017


                       Re: Huttig Stock Repurchase Program

Gentlemen:

                  In connection with the $15 million stock repurchase program
(the "Repurchase Program") authorized today by the board of directors of Huttig
Building Products, Inc. ("Huttig"), you have advised us that Huttig (i) wishes
to repurchase shares of its common stock, par value $.01 per share (the "Huttig
Stock") from its shareholders, including The Rugby Group Limited ("Rugby"), (ii)
proposes to repurchase from Rugby $4,735,000 (the "Repurchase Price") worth of
the Huttig Stock owned by Rugby, such dollar amount constituting Rugby's pro
rata share, in dollars, of the Repurchase Program, and (iii) may effect the
purchases under the Repurchase Program from time to time in the public markets
or in private transactions during the ensuing year.

                  Accordingly, in consideration of the foregoing and our mutual
covenants and agreements herein contained, Huttig and Rugby hereby agree as
follows:

                  1. Purchase and Sale of Huttig Stock. Subject to the terms and
conditions herein, Huttig agrees to purchase from Rugby, and Rugby agrees to
sell to Huttig, as part of the Repurchase Program and at a per share price equal
to $5.99, which price is the closing price of the Huttig Stock on the New York
Stock Exchange on the date hereof, 790,484 shares of Huttig Stock (the
"Repurchased Rugby Shares").

                  2. Closing. The closing of the purchase and sale of the
Repurchased Rugby Shares shall take place at 10:00 a.m., Eastern Standard Time,
on the sixth business day in New York City following Huttig's public
announcement of the Repurchase Program (the "Closing Date"), or at such other
time as the parties hereto may agree in writing. On the Closing Date, (i) Rugby
shall deliver to Huttig or its authorized representatives the share certificate
(the "Original Certificate") representing the Huttig Stock held by Rugby, duly
endorsed in blank or accompanied by stock powers duly executed in blank in
proper form, for the transfer of a portion thereof representing the Repurchased
Rugby Shares, and (b) Huttig shall (i) deliver to Rugby, by wire transfer of
immediately available funds to a bank account previously designated by Rugby,
the Repurchase Price for the Repurchased Rugby Shares and (ii) cause to be
delivered to Rugby a new share certificate, in definitive form and registered in
the name of Rugby, for




<PAGE>   2

the number of shares of Huttig Stock evidenced by the Original Certificate, less
the Repurchased Rugby Shares.

                  3. Board Designation Right. The parties acknowledge and agree
that Huttig intends to repurchase from Rugby Huttig Stock constituting Rugby's
pro rata portion of the aggregate dollar amount authorized for the Repurchase
Program. Accordingly, the parties agree that the purchase by Huttig of the
Repurchased Rugby Shares from Rugby pursuant to this letter agreement will not
cause Rugby to lose its right to designate for nomination three directors to be
elected to the Board of Directors of Huttig pursuant to Section 16 of the
Registration Rights Agreement between Huttig and Rugby dated as of December 16,
1999 (the "Registration Rights Agreement"). Accordingly, if, solely as a result
of the sale by Rugby of the Repurchased Rugby Shares, the Huttig Stock
beneficially owned by Rugby and its affiliates at any time constitutes less than
30% of the outstanding Huttig Stock (such new ownership percentage, as it may
increase from time to time as a result of Huttig's repurchases of Huttig Stock
pursuant to the Repurchase Program, the "New Rugby Holding Percentage"), Section
16 of the Registration Rights Agreement shall be deemed to have been amended so
that Rugby has the right to designate for nomination three directors to be
elected to the Board of Directors of Huttig, so long as the Huttig Stock held by
Rugby and its affiliates in the aggregate constitutes at least the New Rugby
Holding Percentage of the outstanding Huttig Stock. Except as amended by this
letter agreement, the Registration Rights Agreement shall continue in full force
and effect in accordance with its terms.

                  4. Representations and Warranties of Huttig. Huttig represents
and warrants to Rugby as follows:

                           (a) Huttig is a corporation duly incorporated and
presently existing in good standing under the laws of the State of Delaware.

                           (b) Huttig has the corporate power and authority to
execute, deliver and carry out the terms and provisions of this Agreement and
consummate the transactions contemplated hereby, and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement.

                           (c) This Agreement has been duly and validly
authorized, executed and delivered by Huttig and constitutes a legal, valid and
binding agreement of Huttig, enforceable in accordance with its terms.

                           (d) The execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated hereby will not, (i)
violate or conflict with any provision of the certificate of incorporation or
by-laws of Huttig, (ii) result in the imposition of any lien under, cause or
permit the acceleration of any obligation under, or violate or conflict with the
provisions of, any material contract, agreement or instrument to which Huttig is
a party or by which Huttig or its assets is bound, or (iii) result in a breach
or violation by Huttig of any securities law, rule or regulation or any order,
injunction, judgment or decree of any court, governmental authority or
regulatory agency.



                                       2


<PAGE>   3


                  5. Representations and Warranties of Rugby. Rugby hereby
represents and warrants to Huttig as follows:

                           (a) Rugby is a limited corporation duly organized and
presently existing under the laws of England and Wales.

                           (b) Rugby has the corporate power and authority to
execute, deliver and carry out the terms and provisions of this Agreement and to
consummate the transactions contemplated hereby, and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement.

                           (c) This Agreement has been duly and validly
authorized, executed and delivered by Rugby and constitutes a legal, valid and
binding obligation of Rugby, enforceable in accordance with its terms.

                           (d) Rugby will, upon payment of the aggregate
Repurchase Price in accordance with the terms of this Agreement, transfer and
convey to Huttig, good, valid and marketable title to the Repurchased Rugby
Shares and the Repurchased Rugby Shares will be transferred and conveyed to
Huttig free and clear of all liens, security interests, mortgages, charges,
pledges, retention of title agreements and adverse claims regarding title.

                  6. Miscellaneous.

                           (a) This Agreement shall be binding upon and inure to
the benefit of Huttig and Rugby and their respective successors and assigns.

                           (b) All representations, warranties and covenants
contained herein shall survive the execution and delivery of this Agreement and
the delivery of the Repurchased Rugby Shares.

                           (c) This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and cannot be
modified or amended except in writing signed by the parties hereto.

                           (d) This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such state.

                           (e) This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.





                                       3

<PAGE>   4

                  If the foregoing correctly sets forth our mutual agreement on
the matter set forth herein, please sign this letter as indicated below and
return a copy to the attention of the undersigned.



                                            Very truly yours,

                                            THE RUGBY GROUP LIMITED


                                            By:   /s/ Alan Durant
                                                ----------------------------
                                            Name:  Alan Durant
                                            Title:  Authorized Signatory


Accepted and Agreed
on this 20th day of August, 2001


HUTTIG BUILDING PRODUCTS, INC.


By:   /s/ Barry J. Kulpa
    --------------------------------------
Name:  Barry J. Kulpa
Title:  President and Chief Executive Officer





                                       4