Document:

Executive Agreement Jon P. Vrabely

 Exhibit 10.38 
 EXECUTIVE AGREEMENT 
 This Executive Agreement (“Agreement”) between Huttig Building
Products, Inc., a Delaware corporation, with its principal office located at 555 Maryville University Drive, Suite 240, St. Louis, Missouri 63141, (the “Company”) and Jon Vrabely (“Executive”) is effective as of the 4th day
of December, 2006. 
 In consideration of the premises and the representations, warranties, covenants and agreements contained herein, the
Company and Executive agree as follows: 
 1. Employment. Provided that he remains employed with the Company as of such date,
effective January 1, 2007, the Company shall employ Executive as its President and Chief Executive Officer (“CEO”), and, Executive agrees to be employed by the Company in such capacity, subject to the terms and conditions of this
Agreement. In Executive’s capacity as President and CEO, he shall render such services as are consistent with such position and shall report directly to the Company’s Board of Directors (the “Board”). During the Term (defined
below), Executive shall devote all of his working time and efforts to the business and affairs of the Company and its subsidiaries and shall not engage in activities that interfere in any way with such performance. 
 2. Term of Employment. If not earlier terminated in accordance with the terms of this Agreement, this Agreement and Executive’s
employment shall begin on January 1, 2007 (“Commencement Date”) and shall continue through December 31, 2008 (the “Term”); notwithstanding the foregoing, the Term shall be extended and this Agreement shall remain in
effect during the Protected Period (as defined in Paragraph 4(c)(i) below). 
 3. Compensation and Benefits. 
 (a) Base Compensation. 
 (i) In general, for all services rendered by Executive under this Agreement on behalf of the Company, the Company shall pay to Executive a base salary of Four Hundred Thousand and No/100 Dollars ($400,000.00) per year, as such salary may be
increased from time to time by the Board, payable in accordance with the Company’s normal payroll practices. 
 (ii) In
no way limiting the foregoing, at all times during the Protected Period, Executive’s annual base salary shall be at least equal to twelve times the highest monthly base salary paid or payable to Executive by the Company during the twelve-month
period immediately preceding the month in which the Protected Period Effective Date occurs. 
 (iii) In this Agreement,
“Base Salary” shall be as determined in accordance with Paragraph 3(a)(i) or 3(a)(ii), as applicable. 

 (b) Restricted Stock. On the Commencement
Date, Executive shall be granted 75,000 shares of restricted stock of the Company, granted under and subject to the terms of the 2005 Executive Incentive Compensation Plan. The restricted stock shall be also granted pursuant to a restricted stock
agreement which shall provide, among other things, that the Company’s right of forfeiture shall lapse 1/3rd on
each of the first, second and third anniversaries of the Commencement Date, subject to the terms of this Agreement and the restricted stock agreement. 
 (c) EVA Plan. Executive shall be entitled to continue to participate, as of the Commencement Date, in the Company’s EVA Incentive Compensation Plan (“EVA Plan”) and to be eligible to earn up to
30% of the EVA bonus pool each year during the Term, subject to and in accordance with its terms, as it may be amended from time to time. Such bonus referred to herein as the “Annual Bonus.” 
 (d) Vacation and Other Benefit Plans and Arrangements. Executive shall be entitled to participate in such other vacation and benefit plans and
arrangements as may be offered by the Company to similarly situated executive officers of the Company; provided that, nothing contained herein shall or shall be deemed to require the Company to develop or continue to maintain any particular plan or
arrangement. 
 (e) Automobile. During the Term, the Company shall lease on Executive’s behalf an automobile, in accordance with
the Company’s standard practices and procedures. 
 4. Termination. 
 (a) Termination, In General. This Agreement may terminate prior to the end of the Term specified in Paragraph 2 above for any reason, including
upon Executive’s death or Disability (as defined in Paragraph 4(d)(v)). The provisions of this Paragraph 4(a) shall apply prior to the Protected Period Effective Date (defined below), and payments and benefits provided under this Paragraph 4(a)
shall be in lieu of any payment or benefit provided under Paragraph 4(d). In the event of a termination for any reason, the Company shall pay to Executive (or his estate, in the event of his death) upon the last date of employment (the
“Termination Date”) all amounts of accrued and owing compensation, including Base Salary through the Termination Date, accrued but unpaid or unused vacation as may be required under applicable law, and any other amounts of compensation or
timely submitted reimbursements accrued and owing as of the Termination Date (the “Accrued Obligations”). 
 (i)
Termination by the Company Without Cause. If the Company terminates Executive’s employment without Cause, or fails to renew Executive’s employment at the end of the Term for reasons that do not constitute Cause, in exchange for a
release of all claims Executive may have against the Company, its affiliates, and its or their officers, directors, employees and agents, Executive shall receive an amount equal to two times his then current Base Salary plus two times the Average
Annual Bonus (“Severance Payment”). The “Average Annual Bonus” shall be the average bonus paid or payable to Executive by the Company and its affiliated companies in respect of the three fiscal years immediately preceding the
fiscal year in which the termination occurs. 
  

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 (ii) The Severance Payment shall be paid to Executive in 24 equal monthly
installments, beginning with the first month following the month in which employment terminates. Payments made pursuant to this Paragraph 4(a) shall be in lieu of, and non-duplicative of, payments under any other agreement between Executive and the
Company. The right to payments contemplated in this Paragraph 4(a) shall cease if Executive breaches any material provision of any agreement between Executive and the Company, including without limitation Paragraph 5 or any other material term of
this Agreement. This paragraph shall survive termination of this Agreement. 
 (iii) Definition of Cause. For purposes
of this Agreement, Cause shall constitute either (i) personal dishonesty or breach of fiduciary duty involving personal profit at the expense of the Company; (ii) repeated failure of Executive to perform his duties hereunder which are
demonstrably willful and deliberate on his part and which are not remedied in a reasonable period of time after receipt of written notice from the Company; (iii) the commission of a criminal act related to the performance of duties, or the
furnishing of proprietary confidential information about the Company to a competitor, or potential competitor, or third party whose interests are adverse to those of the Company; (iv) intoxication by alcohol or drugs during work hours;
(v) conviction of a felony; or (vi) any breach of any material Company policy or any material term of this Agreement or any other agreement by and between Executive and the Company. 
 (b) Termination During the Protected Period. The provisions of this Paragraph 4(b) shall apply on and after the Protected Period Effective Date
(defined below) and shall remain in effect during the Protected Period, and payments and benefits provided under this Paragraph 4(b) shall be in lieu of any payment or benefit provided under Paragraph 4(a). If Executive’s employment terminates
after the Protected Period Effective Date, the following shall apply: 
 (i) Cause; Other Than for Good Reason. If
Executive’s employment shall be terminated for Cause during the Protected Period, this Agreement shall terminate without further obligations to Executive other than the obligation to pay to Executive his Base Salary through the Date of
Termination plus the amount of any compensation previously deferred by Executive (together with accrued interest thereon, if any). If Executive terminates employment other than for Good Reason during the Protected Period, this Agreement shall
terminate without further obligations to Executive, other than those obligations accrued or earned and vested (if applicable) by Executive through the Date of Termination, including for this purpose, all Accrued Obligations. All such payments
hereunder shall be paid to Executive in a lump sum in cash within 30 days of the Date of Termination. 
 (ii) Death or
Disability. If Executive’s employment is terminated by reason of Executive’s death or Disability during the Protected Period, Executive or his beneficiary or estate (as the case may be) shall be paid 

  

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(A) Executive’s full annual Base Salary through the Date of Termination at the rate in effect on the Date of Termination or, if higher, at the highest
annual rate in effect at any time from the 90-day period preceding the Protected Period Effective Date through the Date of Termination (the “Highest Base Salary”), (B) the product of the Annual Bonus paid to Executive for the last
full fiscal year and a fraction, the numerator of which is the number of days in the then current fiscal year through the Date of Termination, and the denominator of which is 365 and (C) any compensation previously deferred by Executive
(together with accrued interest thereon, if any) and not yet paid by the Company and any accrued vacation pay not yet paid by the Company (such amounts specified in clauses (A), (B) and (C) are hereinafter referred to as “Protected
Period Accrued Obligations”). 
 (1) All such Protected Period Accrued Obligations shall be paid to Executive or his
estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. 
 (2) Anything in
this Agreement to the contrary notwithstanding, Executive or his estate or beneficiary, as applicable, shall be entitled to receive death or disability benefits at least equal to the most favorable benefits provided by the Company and any of its
subsidiaries to surviving families of employees (in the case of death) of the Company and such subsidiaries, or, in the case of Disability, to disabled employees and/or their families, under such plans, programs, practices and policies relating to
disability or family death benefits, if any, in accordance with the most favorable plans, programs, practices and policies of the Company and its subsidiaries in effect at any time during the 90-day period immediately preceding the Effective Date
or, if more favorable to Executive and/or Executive’s family, as in effect on the date of Executive’s death or Disability with respect to other key employees of the Company and its subsidiaries and their families. 
 (iii) Without Cause or for Good Reason. If Executive terminates his employment for Good Reason or his employment is terminated by
the Company without Cause during the Protected Period, Executive shall receive: 
 (1) To the extent not theretofore paid,
Executive’s Highest Base Salary through the Date of Termination; and 
 (2) The product of (x) the greater of the
Annual Bonus paid or payable (annualized for any fiscal year consisting of less than twelve full months or for which Executive has been employed for less than twelve full months) to Executive for the most recently completed fiscal year during the
Employment Period, if any, or the Average Annual Bonus, such greater amount being hereafter referred to as the “Highest Annual Bonus,” and (y) a fraction, the numerator of which is the number of days in the current fiscal year through
the Date of Termination, and the denominator of which is 365; 
  

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 (3) The product of (x) two and (y) the sum of (i) the Highest Base Salary
and (ii) the Average Annual Bonus; and 
 (4) In the case of compensation previously deferred by Executive, all amounts
previously deferred (together with accrued interest thereon, if any) and not yet paid by the Company, and any accrued vacation pay not yet paid by the Company; and 
 (5) For two years after the Date of Termination, or such longer period as any plan, program, practice or policy may provide, the Company
shall continue benefits to Executive and/or Executive’s family at least equal to those which would have been provided to them as if Executive’s employment had not been terminated, in accordance with the most favorable employee welfare
benefit plans (as such term is defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) of the Company and its subsidiaries (including health insurance and life insurance) during the 90-day period immediately
preceding the Effective Date or, if more favorable to Executive, as in effect at any time thereafter with respect to other key employees and their families, and for purposes of eligibility for retiree benefits pursuant to such employee welfare
benefit plans, Executive shall be considered to have remained employed for such two-year period and to have retired on the last day of such period. 
 (6) All such payments under this Paragraph 4(b)(iii) shall be paid to Executive in a lump sum in cash within 30 days of the Date of Termination. 
 (c) Notwithstanding any other provision to the contrary, with respect to the timing of payments under Paragraph 4(a) or 4(b), if, at the time of
Executive’s termination, Executive is deemed to be a “specified employee” (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and any successor statute, regulation and
guidance thereto) of the Company, then only to the extent necessary to comply with the requirements of Code Section 409A, any payments to which Executive may become entitled under Paragraph 4(b) which are subject to Code
Section 409A (and not otherwise exempt from its application) will be withheld until the first business day of the seventh month following the termination of Executive’s employment, at which time Executive shall be paid an
aggregate amount of payments otherwise due to the Executive under the terms of Paragraph 4(a) or 4(b) for the preceding 6-month period, as applicable. 
 (d) Definitions. 
 (i) Protected Period, Protected Period Effective Date. The
“Protected Period” shall begin on the closing date of a transaction constituting a 

  

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Change of Control (defined below) (the “Protected Period Effective Date”) and ending upon the first to occur of the date that is 36 months from the
Protected Period Effective Date and the first day of the month next following Executive’s normal retirement date (“Normal Retirement Date”) under the Huttig Building Products, Inc. Savings & Investment Plan, or any successor
retirement plan (the “Retirement Plan”); provided that, if Executive’s employment with the Company is terminated prior to the date on which a Change of Control occurs, and it is reasonably demonstrated that such termination
(A) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (B) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement, and
specifically without limitation, the “Protected Period Effective Date” shall mean the date immediately prior to the date of Executive’s termination. 
 (ii) Cause. Cause during the Protected Period shall have the same meaning as set forth in Paragraph 4(a)(iii) above. 
 (iii) Good Reason. “Good Reason” means Executive’s good faith determination that any of the following has occurred:

 (1) Executive’s Base Salary is (A) less than twelve times the highest monthly base salary paid or payable to him
by the Company during the twelve-month period immediately preceding the month in which the Protected Period Effective Date occurs, (B) not reviewed at least annually or has not been increased at any time and from time to time in a manner
substantially consistent with increases in base salary awarded in the ordinary course of business to other key employees of the Company and its subsidiaries, or (C) is reduced after any such increase; 
 (2) Executive is not eligible to receive, an annual bonus (either pursuant to any incentive compensation plan maintained by the Company
or otherwise) in cash on the same basis as in the fiscal year immediately preceding the fiscal year in which the Protected Period Effective Date occurs or, if more favorable to Executive, on the same basis as awarded at any time thereafter to other
key employees of the Company and its subsidiaries; 
 (3) The Company fails to offer to Executive (and his eligible spouse
and dependents, as applicable) incentive, savings and retirement plans, practices, policies and programs as may be applicable to other key employees of the Company and its subsidiaries and welfare benefit plans and policies (including without
limitation including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs), which shall provide Executive (and his eligible
spouse and dependents) with compensation, benefits and reward 

  

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opportunities, and welfare benefits, as applicable, at least as favorable in the aggregate as the most favorable of such compensation, benefits and reward
opportunities and welfare benefits as provided by the Company for Executive (and his spouse and dependents, as applicable) under such plans, practices, policies and programs as in effect at any time during the 90-day period immediately preceding the
Protected Period Effective Date or, if more favorable to Executive, as provided at any time thereafter with respect to other key employees of the Company and its subsidiaries; 
 (4) The Company does not provide (A) prompt reimbursement for reasonable expenses, (B) paid vacation, (C) fringe benefits,
including use of an automobile and payment of related expenses, or (D) provide an office or offices of a size and with furnishings and other appointments, and to secretarial an other assistance, at least equal in all cases to the most favorable
of the foregoing provided under any policies or practices, or provided to Executive by the Company and its subsidiaries at any time during the 90-day period immediately preceding the Protected Period Effective Date or, if more favorable to
Executive, as provided at any time thereafter with respect to other key employees of the Company and its subsidiaries; 
 (5)
The assignment of Executive of any duties inconsistent in any respect with Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as they were constituted at any time during
the 90-day period immediately preceding the Protected Period Effective Date, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities; 
 (6) The Company requires Executive to perform his services at a location other than where he was employed immediately preceding the
Protected Period Effective Date or any office or location more than thirty-five (35) miles from such location, except for travel reasonably required in the performance of Executive’s responsibilities; 
 (7) Any purported termination by the Company of Executive’s employment otherwise than as expressly permitted by this Agreement; or

 (8) Any failure by the Company to comply with and satisfy Paragraph 10 of this Agreement. 
 Notwithstanding the foregoing, for purposes of items (1) – (5) above there shall be excluded from the definition of
“Good Reason” any isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive. Any good faith determination of “Good
Reason” made by Executive shall be conclusive. 
  

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 (iv) Change of Control. “Change of Control” shall mean: 
 (1) 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 more than 50% 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 
 (2) A majority of members of the Board is replaced
during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.; or 
 (3) 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, at least 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 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. 
  

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 For purposes of this Agreement, in all respects, the definition of “Change of
Control” hereunder shall be interpreted, and limited to the extent necessary, to comply with Code Section 409A, and the provisions of Treasury Notice 2005-1, Proposed Treasury Regulation Section 1.409A and any successor statute,
regulation and guidance thereto. 
 (v) Disability. “Disability” means 
 (1) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. 
 (2) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than 3 months under an accident and health plan covering employees of the Company. 
 (vi)
Date of Termination. “Date of Termination” means the date of receipt of the Notice of Termination (as defined in Paragraph 4(f) below) 
 (vii) or any later date specified therein, as the case may be; provided, however, that (i) if Executive’s employment is terminated by the Company other than for Cause or Disability, the Date of Termination
shall be the date on which the Company notifies Executive of such termination and (ii) if Executive’s employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of Executive or the date
the Disability is determined, as the case may be. 
 (e) Certain Limitations on Payments by the Company. Notwithstanding any other
provision of this Agreement to the contrary, if tax counsel selected by the Company and reasonably acceptable to Executive determines that any portion of any payment under this Agreement would constitute an “excess parachute payment” under
Section 280G of the Code, then the payments to be made to Executive under this Agreement shall be reduced (but not below zero) such that the value of the aggregate payments that Executive is entitled to receive under this Agreement and any
other agreement or plan or program of the Company shall be one dollar ($1) less than the maximum amount of payments which Executive may receive without becoming subject to the tax imposed by Section 4999 of the Code. 
 (f) Notice of Termination. Any termination by the Company for Cause or by Executive for Good Reason shall be communicated by Notice of Termination
to the other party hereto given in accordance with Paragraph 8 of this Agreement. If Executive terminates this Agreement for any reason or the Company terminates this Agreement without Cause, he or it shall provide to the other not less than thirty
(30) days prior written notice. The Company shall 

  

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not be required to provide any advance notice in the event of a termination for Cause, except as may be specifically provided herein as a result of a
“cure” provision, nor shall the thirty (30) day notice requirement apply to either party for a termination as a result of non-renewal of employment at the end of the Term. For purposes of this Agreement, a “Notice of
Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than sixty
(60) days after the giving of such notice). The failure by Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude
Executive from asserting such fact or circumstance in enforcing his rights hereunder. 
 5. Executive Covenants. 
 (a) Confidential Information. Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its subsidiaries, and their respective businesses, which shall have been obtained by Executive during Executive’s employment by the Company or any of its subsidiaries and which shall not be or
become public knowledge (other than by acts by Executive or his representatives in violation of this Agreement). After termination of Executive’s employment with the Company, Executive shall not, without the prior written consent of the
Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this subparagraph (a) constitute a basis for
deferring or withholding any amounts otherwise payable to Executive under this Agreement. 
 (b) Covenant Not to Compete. At all times
during Executive’s employment by the Company or any of its subsidiaries and for one year following termination of Executive’s employment, Executive shall not, unless acting with the prior written consent of the Company, directly or
indirectly (i) own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing or control of, or be associated as an officer, director, employee, partner, principal, agent, representative,
consultant or otherwise with, or use or permit his name to be used in connection with, any profit or not-for-profit business or enterprise which at any time during such period designs, manufactures, assembles, sells, distributes or provides products
(or related services) in competition with those designed, manufactured, assembled, sold, distributed, or provided, or under active development, by the Company (including all future developments in and improvements on such products and services) in
any part of the world; (ii) offer or provide employment to, interfere with or attempt to entice away from the Company, either on a full-time or part-time or consulting basis, any person who then currently is, or who within one year prior
thereto had been, employed by the Company; or (iii) directly or indirectly, solicit the business of, or do business with, any customer, supplier, or prospective customer or supplier of the Company with whom Executive had direct or indirect
contact or about whom Executive may have acquired any knowledge while employed by the Company; provided, however, that this provision shall not be construed to prohibit the ownership by Executive of not more than 2% of any class of
securities of any corporation which 

  

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is engaged in any of the foregoing businesses that has a class of securities registered pursuant to the Securities Exchange Act of 1934. If Executive’s
spouse engages in any of the restricted activities set forth in the preceding sentence, Executive shall be deemed to have indirectly engaged in such activities in violation of this covenant. This provision shall be extended at the option of the
Company, for a period of time equal to all periods during which Executive is in violation of the foregoing covenant not to compete and to extend the covenant not to compete to run from the date any injunction may be issued against Executive, should
that occur, to enable the Company to receive the full benefit of the covenant not to compete agreed to herein by Executive. 
 (c) Rights
and Remedies Upon Breach. It is recognized that the services to be rendered under this Agreement by Executive are special, unique and of extraordinary character. If Executive breaches, or threatens to commit a breach of, any of the provisions of
Paragraph 5(a) or 5(b) (the “Covenants”), then the Company and/or any of its affiliates shall have the following rights and remedies, each of which shall be independent of the other and severally enforceable, and all of which rights
and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity: 
 (d) Specific Performance. The right and remedy to have the Covenants specifically enforced by any court having equity jurisdiction, including obtaining an injunction to prevent any continuing violation thereof, it being acknowledged
and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will be difficult to ascertain and will not provide adequate remedy to the Company. 
 (e) Severability of Covenants. If any of the Covenants, or any part thereof, are hereafter construed to be invalid or unenforceable in any
jurisdiction, the same shall not affect the remainder of the Covenants or the enforceability thereof in any other jurisdiction, which shall be given full effect, without regard to the invalidity or unenforceability in such other jurisdiction.

 (f) Blue-Pencilling. If any of the Covenants, or any part thereof, are held to be unenforceable because of the duration of such
provision or the geographical scope covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration or geographical scope of such provision and, in its reduced form, such provision shall then
be enforceable and shall be enforced; provided, however, that the determination of such court shall not affect the enforceability of the Covenants in any other jurisdiction. 
 (g) Assignability. Executive specifically acknowledges and agrees that in the event the Company should undergo any change in ownership or change
in structure or control, or should the Company transfer some or all of its assets to another entity, the Covenants contained herein and the right to enforce the Covenants may be assigned by the Company to any company, business, partnership,
individual or entity, and that Executive will continue to remain bound by the Covenants. 
 (h) Survival. This Paragraph 5 shall
survive termination of this Agreement. 
  

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 6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices, provided by the Company or any of its subsidiaries and for which Executive may qualify, nor shall anything herein
limit or otherwise affect such rights as Executive may have under any stock option, restricted stock, stock appreciation right, or other agreements with the Company or any of its subsidiaries. Amounts which are vested benefits or which Executive is
otherwise entitled to receive under any plan, policy, practice or program of the Company or any of its subsidiaries at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program provided,
however, that in the event the terms of any such plan, policy, practice or program concerning the payment of benefits thereunder shall conflict with any provision of this Agreement, the terms of this Agreement shall take precedence but only if and
to the extent the payment would not adversely affect the tax exempt status (if applicable) of any such plan, policy, practice or program and only if the employee agrees in writing that such payment shall be in lieu of any corresponding payment from
such plan, policy, practice or program. 
 7. Full Settlement. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against Executive or others. In no
event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement. The Company agrees to pay, to the full extent permitted by
law, all legal fees and expenses which Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or enforceability of, or liability under, any provision of Paragraph 4(b)
of this Agreement or any guarantee of performance thereof, plus in each case interest at the applicable Federal rate provided for in Code Section 7872(f)(2). 
 8. 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.
		  		    	555 Maryville University Drive, Suite 240
		  		    	St. Louis, Missouri 63141
		  		    	Attention: General Counsel
			
	 (b)
	  	If to Executive:	    	Jon Vrabely
		  		    	2039 Wilson Ridge Lane
		  		    	Chesterfield, MO 63005

  

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 9. Waiver of Breach. The waiver of either the Company or Executive of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by either the Company or Executive. 
 10.
Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of both the Company and Executive and their respective successors, assigns, heirs and legal representatives, but neither this Agreement nor any rights
hereunder shall be assigned by either the Company or Executive without the consent in writing of the other party. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

 11. Governing Law and Venue. This Agreement 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 Agreement, the venue of such action shall not lie exclusively within Missouri but may lie in any court having proper jurisdiction over such matter. 
 12. Enforcement Costs. Except as specifically provided herein, if any party hereto institutes any action or proceeding to enforce this
Agreement 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. 
 13. Amendment; Integration. No change or modification of this Agreement shall be valid unless the same is in writing and signed by the
person or party to be charged. The Company and Executive agree that they will negotiate in good faith and jointly execute an amendment to modify this Agreement to the extent necessary to comply with the requirements of Code Section 409A, or any
successor statute, regulation and guidance thereto; provided, however, under no circumstances shall the Company be obligated to increase its financial obligations to Executive in connection with any such amendment. Effective as of the Commencement
Date, this Agreement shall supersede any and all other agreements, either oral or written, between the parties hereto with respect to the subject matter hereof; including, without limitation, the 2006 Amended and Restated Change of Control Agreement
by and between the Executive and the Company, dated October 25, 2006, except this Agreement shall not supersede the Indemnification Agreement by and between Executive and the Company, dated October 10, 2005, or any restricted stock or
option agreement entered into prior to the Commencement Date. 
 14. Severability. If any portion of this Agreement 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.

  

 - 13 - 

 15. Tax Consequences. Executive hereby acknowledges and agrees that the Company makes no
representations or warranties regarding the tax treatment or tax consequences of any compensation, benefits or other payments under this Agreement, including, without limitation, by operation of Code Section 409A, or any successor statute,
regulation and guidance thereto. 
 16. Headings. The headings of this Agreement 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 Agreement to be executed by its duly authorized
officers, and Executive has hereunto set his hand, as of the day and year first above written. 
  

			
	 Huttig Building Products, Inc.

		
	 By:
	 	 /s/ Robert S. Evans

	 Name:
	 	 Robert S. Evans

	 Title:
	 	 Chairman

	
	 EXECUTIVE:

	
	 /s/ Jon Vrabely

	 Jon Vrabely

  

 - 14 -Compensation Arrangements with Executive Officers

 Exhibit 10.40 
 Compensation Arrangements for 
 Certain Named Executive Officers 
 Set forth below is a summary of the compensation arrangements of the executive officers to be named in the Company’s 2007 Proxy Statement for the Annual Meeting of
Stockholders, other than Mr. Jon P. Vrabely, who was appointed as the Company’s President and Chief Executive Officer effective January 1, 2007, and Mr. Michael A. Lupo, the Company’s former President and Chief
Executive Officer, each of whom is covered by a written employment agreement filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 (the “Form 10-K”), and Mr. Hank Krey, the
Company’s former Vice President, Chief Information Officer who resigned effective March 30, 2006. 
 Each of the executive officers named below is
an employee at will whose compensation and employment status may be changed at any time in the discretion of the Company’s Board of Directors. 
 Base Salaries. On February 28, 2007, the base salaries of the executive officers are as set forth below: 
  

				
	 Name and Position
	  	Base Salary Amount
	 David L. Fleisher, Vice President, Chief Financial Officer and Secretary
	  	$	275,000
		
	 Brian D. Robinson, Vice President, Chief Information Officer
	  	$	190,000
		
	 Darlene K. Schroeder, Vice President, Human Resources
	  	$	175,000

 Base salaries are adjusted from time to time, generally annually. Any such adjustments are approved by the
Management Organization and Compensation Committee. 
 Bonuses and Equity Awards. These executive officers are also eligible to participate in the
Company’s annual incentive compensation plans and equity incentive compensation plans, as provided in the terms of such plans. Such plans, and any forms of awards thereunder providing for material terms, are included as exhibits to the Form
10-K.

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