Exhibit 10.1


WII
Components, Inc.

525 Lincoln Avenue SE

St. Cloud, MN 56304


May 31, 2006


John Fitzpatrick

1710 Shadywood Road

Wayzata, MN  55391


Re:                     Bonus
Payments and Acceleration of Vesting


Dear John:


In recognition of your contributions to the growth of WII
Components, Inc. (together with its subsidiaries, the “Company”), the Board of
Directors of the Company (the “Board”) has decided to make you eligible to
receive (i) a cash bonus (the “Bonus”) and (ii) acceleration (the “Acceleration”)
of the vesting of your options granted to you pursuant to those certain
Incentive Stock Option Agreements between you and the Company, dated as of May
9, 2003 and April 22, 2004 (the “Existing Option Agreements”) in the event of a
sale of the Company.  Your right to receive
the Bonus and the Acceleration is subject in its entirety to the terms and
conditions set forth herein and the approval, if required, of the payment of
the Bonus by the Company’s senior lender.


1.             Definitions.  For the purposes of this letter agreement,
the following terms shall have the following respective meanings.


“Cause” shall have
the meaning set forth in the Existing Option Agreements.


“Good Reason”
shall have the meaning set forth in the Existing Option Agreements.


“Person” shall
mean any individual, corporation, partnership (limited or general), limited
liability company, limited liability partnership, association, trust, joint
venture, unincorporated organization or any similar entity.


“Sale Event” shall
mean, regardless of form thereof, consummation of (i) the sale of all or
substantially all of the assets of the Company on a consolidated basis to an
unrelated Person, (ii) a merger, reorganization or consolidation in which the
outstanding shares of Stock are converted into or exchanged for securities of
the successor entity and the holders of the Company’s outstanding voting power
immediately prior to such transaction do not own a majority of the outstanding
voting power of the successor entity immediately upon completion of such
transaction, (iii) the sale of all or a majority of the outstanding capital
stock of the Company to an unrelated person or entity or (iv) any other
transaction in which the owners of the Company’s outstanding voting power
immediately prior to such transaction do not own at least a majority of the
outstanding voting power of the successor entity immediately upon completion of










 



 


the transaction or (v) the liquidation or dissolution
of the Company if effected in connection with any of the foregoing.


“Service Relationship”  shall mean any relationship as an employee or
part-time employee with the Company or one of its subsidiaries (or their
successors) such that, for example, a Service Relationship shall be deemed to
continue without interruption in the event that your status changes from
employee to part-time employee.


2.             Payment
of Bonus.


(a)           Aggregate Amounts
Payable.  The amount payable
hereunder shall be $658,800 (which shall be subject to withholding under
applicable law).


(b)           Payment on Sale
Event.  If the right to receive the
Bonus has vested pursuant to subparagraph (c) (ii) or (iii) below, the Bonus
shall be payable only upon the consummation of a Sale Event, if your Service
Relationship has not previously terminated and you are so requested by the
Board, you execute an agreement to continue your Service Relationship with the
Company (or its successor) for a period of two (2) years following the
consummation of the Sale Event in a substantially similar capacity as you
served the Company immediately prior to the date of the consummation of the
Sale Event.


(c)           Vesting of Bonus.  Your right to receive the Bonus shall vest on
the earliest to occur of (i) June 30, 2009, (ii) the consummation of a Sale
Event or (iii) in the event that your Service Relationship with the Company has
terminated prior to either of the events described in (i) or (ii), pursuant to
the provisions of subparagraph (e) below.


(d)           Timing of Payment. 
The Bonus, if any, shall be paid within five (5) days of the consummation
of the Sale Event.


(e)           Termination.  In the event of the termination of your Service
Relationship by the Company with Cause or by you without Good Reason, unless
already vested pursuant to subparagraph (c) above, your entitlement to receive any
payments hereunder shall terminate immediately. 
In the event of the termination of your Service Relationship by the
Company without Cause or by you with Good Reason, unless already vested
pursuant to subparagraph (c) above, you will be entitled to receive all or a
portion of the Bonus upon the subsequent consummation of a Sale Event as set
forth below:




	
  Determination Date

  	
   

  	
   

  	
   

  	
  % of Bonus Amount Payable

  	
   

  
	
  0-365 days after
  termination date

  	
   

  	
  100

  	
  %

  
	
  366-546 days after termination date

  	
   

  	
  50

  	
  %

  
	
  547-730 days after termination date

  	
   

  	
  25

  	
  %

  
	
  thereafter

  	
   

  	
  0

  	
  %

  






 









 



The Determination Date
used in the table above shall be either (i) the date that a letter of intent
regarding a bona fide acquisition of the Company (an “LOI”) has been approved
by the Board and executed by the Company and the relevant third party or (ii)
if no LOI is executed but a Sale Event is consummated, the date that the
Company and the third party acquiror agree in principle to the basic terms and
conditions of such Sale Event.  By way of
illustration only, if your Service Relationship is terminated by the Company
without Cause on February 9, 2007 and the Company executes an LOI on February
14, 2008, then, upon consummation of the Sale Event described in the LOI, you
shall receive 50% of the Bonus amount.


(f)            No Assignments.  Your
rights and interest, if any, in the Bonus may not be assigned or transferred,
and are not subject to attachment, garnishment, judicial order, execution or
other creditors’ processes.  The rights
and obligations of the Company hereunder may be assigned by the Partnership to
a successor to all or substantially all of its business and thereupon the Company
will be relieved of any obligation it may have hereunder.  All references to the Company herein shall,
unless otherwise indicated, be construed to include a successor to all or
substantially all of the Company’s business.


3.             Agreement
Regarding Chairman Position.  By executing this agreement on the signature
block provided below, you hereby agree that the Board may, in its sole
discretion, appoint you to the position of Chairman, with no reduction
in your annual cash compensation or incentive compensation and such appointment
shall not be deemed to constitute Good Reason under (i) that certain Amended
and Restated Employment Agreement, dated as of April 9, 2003 by and between you
and Woodcraft Industries, Inc., a wholly-owned subsidiary of the Company (the “Employment
Agreement”) or (ii) the Existing Option Agreements.  The Company acknowledges and hereby agrees
that, in the event you are appointed to the position of Chairman, your
responsibilities and obligations will be reduced and that such reduction shall
not in any way be deemed to constitute “Cause” under the Employment Agreement
or the Existing Option Agreements.


4.             Agreement
Regarding Stockholder Approval.  If requested by the Board, you hereby agree
to execute a written waiver of (i) the payment of the Bonus and (ii) any
amounts payable to you in connection with a Sale Event in respect of any stock
options that vest as a result of such Sale Event (collectively, the “Change in
Control Payment”).  Upon receipt of such
written waiver, the Company hereby agrees to submit the Change in Control
Payment to the stockholders of the Company for approval pursuant to Section
280G of the Internal Revenue Code of 1986, as amended (the “Code”).









 



5.             Agreement
Regarding Acceleration.  In the event your Service Relationship is
terminated by the Company without Cause or by you with Good Reason and an LOI
is executed within sixty (60) days of such termination, then, notwithstanding
anything to the contrary contained in the Existing Option Agreements, your
option to purchase shares of the Company’s Voting Common Stock under the Existing
Option Agreements shall become fully vested and exercisable immediately prior
to the consummation of the Sale Event (if and only if such Sale Event is
consummated) described in the LOI; provided, however that no such acceleration
shall occur unless in connection with such Sale Event, the actual aggregate
return on the Investment (as defined in the Existing Option Agreements)
represents an internal rate of return (as calculated in good faith by Behrman
Capital III, L.P.) of at least 24%.


6.             Acknowledgement Regarding
Severance Pay.  The Company hereby acknowledges that pursuant
to the terms of the Employment Agreement, you will be entitled to severance pay
in an amount equal to two times your then current base salary in the event the
term of your employment is not renewed by the Company.


7.             Miscellaneous Provisions.


(a)           Change and
Modifications.  This Agreement may
not be orally changed, modified or terminated, nor shall any oral waiver of any
of its terms be effective.  This
Agreement may be changed, modified or terminated only by an agreement in writing
signed by the Company and you.


(b)           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard
to conflict of law principles.


(c)           Headings.  The headings are intended only for
convenience in finding the subject matter and do not constitute part of the
text of this Agreement and shall not be considered in the interpretation of
this Agreement.


(d)           Saving Clause.  If any provision(s) of this Agreement shall
be determined to be illegal or unenforceable, such determination shall in no
manner affect the legality or enforceability of any other provision hereof.


(e)           Notices.  All notices, requests, consents and other
communications shall be in writing and be deemed given when delivered
personally, by telex or facsimile transmission or when received if mailed by
first class registered or certified mail, postage prepaid.  Notices to the Company or to you shall be
addressed as set forth underneath their signatures below, or to such other
address or addresses as may have been furnished by such party in writing to the
other.


(f)            Benefit and
Binding Effect.  This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto, their
respective successors, permitted assigns, and legal representatives.  The Company has the right to assign this
Agreement, and such assignee shall become entitled to all the rights of the
Company hereunder to the extent of such assignment.


(g)           Dispute
Resolution.  Except as provided
below, any dispute arising out of or relating to this Agreement or the breach,
termination or validity hereof shall be finally settled 









 



by binding arbitration conducted expeditiously in
accordance with the J.A.M.S./Endispute Comprehensive Arbitration Rules and
Procedures (the “J.A.M.S. Rules”).  The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
§§1-16, and judgment upon the award rendered by the arbitrators may be
entered by any court having jurisdiction thereof.  The place of arbitration shall be Minneapolis, MN.


The parties covenant and agree that the arbitration
shall commence within 60 days of the date on which a written demand for
arbitration is filed by any party hereto. 
In connection with the arbitration proceeding, the arbitrator shall have
the power to order the production of documents by each party and any
third-party witnesses.  In addition, each
party may take up to three (3) depositions as of right, and the arbitrator may
in his or her discretion allow additional depositions upon good cause shown by
the moving party.  However, the
arbitrator shall not have the power to order the answering of interrogatories
or the response to requests for admission. 
In connection with any arbitration, each party shall provide to the
other, no later than seven (7) business days before the date of the
arbitration, the identity of all persons that may testify at the arbitration
and a copy of all documents that may be introduced at the arbitration or
considered or used by a party’s witness or expert.  The arbitrator’s decision and award shall be made
and delivered within six (6) months of the selection of the arbitrator.  The arbitrator’s decision shall set forth a
reasoned basis for any award of damages or finding of liability.  The arbitrator shall not have power to award
damages in excess of actual compensatory damages and shall not multiply actual
damages or award punitive damages or any other damages that are specifically
excluded under this Agreement, and each party hereby irrevocably waives any
claim to such damages.


The parties covenant and agree that they will
participate in the arbitration in good faith. 
This Section 7(g) applies equally to requests for temporary,
preliminary or permanent injunctive relief, except that in the case of
temporary or preliminary injunctive relief any party may proceed in court
without prior arbitration for the limited purpose of avoiding immediate and
irreparable harm.


Each of the parties hereto (i) hereby irrevocably
submits to the jurisdiction of any United States District Court of competent
jurisdiction for the purpose of enforcing the award or decision in any such
proceeding, (ii) hereby waives, and agrees not to assert, by way of motion, as
a defense, or otherwise, in any such suit, action or proceeding, any claim that
it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or execution
(except as protected by applicable law), that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this Agreement or the subject matter hereof may
not be enforced in or by such court, and hereby waives and agrees not to seek
any review by any court of any other jurisdiction which may be called upon to
grant an enforcement of the judgment of any such court.  Each of the parties hereto hereby consents to
service of process by registered mail at the address to which notices are to be
given.  Each of the parties hereto agrees
that its, his or her submission to jurisdiction and its, his or her consent to
service of process by mail is made for the express benefit of the other parties
hereto.  Final judgment against any party
hereto in any such action, suit or proceeding may be enforced in other
jurisdictions by suit, action or proceeding on the judgment, or in any other
manner provided by or pursuant to the laws of such other jurisdiction.









 



(h)           Counterparts.  For the convenience of the parties and to
facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.


[SIGNATURE PAGE
FOLLOWS]









 



The foregoing Agreement is hereby accepted and the
terms and conditions thereof hereby agreed to by the undersigned as of the date
first above written.


	
  

  	
  WII
  COMPONENTS, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Rodney Cohen

  
	
   

  	
   

  	
  Name: Rodney
  Cohen

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
  The foregoing
  Agreement is hereby accepted and the terms and conditions thereof hereby
  agreed to by the undersigned as of the date first above written.

  
	
   

  	
   

  	
   

  
	
  

  	
  /s/ John
  Fitzpatrick

  
	
   

  	
  Name: John
  Fitzpatrick

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  1710 Shadywood
  Road

  
	
   

  	
  Wayzata, MN
  55391