Document:

exv4w1

Exhibit 4.1

2005 Executive Incentive Compensation Plan

Huttig Building Products, Inc.

Second Amendment and Restatement Effective December 8, 2009

 

 

Contents

	 	 	 
	Article 1. Establishment, Purpose, and Duration

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	Article 2. Definitions

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	Article 3. Administration

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	Article 4. Shares Subject to This Plan and Maximum Awards

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	Article 5. Eligibility and Participation

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	Article 6. Stock Options

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	Article 7. Stock Appreciation Rights

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	Article 8. Restricted Stock and Restricted Stock Units

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	Article 9. Performance Units/Performance Shares

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	Article 10. Other Stock-Based Awards

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	Article 11. Transferability of Awards

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	Article 12. Performance Measures

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	Article 13. Covered Employee Incentive Award

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	Article 14. Dividend Equivalents

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	Article 15. Beneficiary Designation

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	Article 16. Rights of Participants

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	Article 17. Change of Control

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	Article 18. Amendment, Modification, Suspension, and Termination

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	Article 19. Withholding

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	Article 20. Successors

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	Article 21. General Provisions

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Huttig Building Products, Inc.

2005 Executive Incentive Compensation Plan

Article 1. Establishment, Purpose, and Duration

     1.1 Establishment. Huttig Building Products, Inc., a Delaware corporation (hereinafter
referred to as the “Company”), has established an incentive compensation plan known as the Huttig
Building Products, Inc. 2005 Executive Incentive Compensation Plan (hereinafter referred to as the
“Plan”), effective originally as of March 15, 2005 (the “Effective Date”). This Plan permits the
grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Performance Shares, Performance Units, Covered Employee Incentive
Awards, and Other Stock-Based Awards. The Plan, as amended and restated herein, has been approved
to be effective as of December 8, 2009, and shall remain in effect as provided in Section 1.3
hereof.

     1.2 Purpose of this Plan. The purpose of this Plan is to provide a means whereby Eligible
Persons develop a sense of proprietorship and personal involvement in the development and financial
success of the Company, and to encourage them to devote their best efforts to the business of the
Company, thereby advancing the interests of the Company and its stockholders. A further purpose of
this Plan is to provide a means through which the Company may attract able Eligible Persons as
service providers and to provide a means whereby those individuals upon whom the responsibilities
of the successful administration and management of the Company are of importance, can acquire and
maintain stock ownership, thereby strengthening their concern for the welfare of the Company.

     1.3 Duration of this Plan. Unless sooner terminated as provided herein, this Plan shall
terminate ten (10) years from the Effective Date. After this Plan is terminated, no Awards may be
granted but Awards previously granted shall remain outstanding in accordance with their applicable
terms and conditions and this Plan’s terms and conditions.

Article 2. Definitions

     Whenever used in this Plan, the following terms shall have the meanings set forth below, and
when the meaning is intended, the initial letter of the word shall be capitalized.

	 	2.1	 	“Affiliate” shall mean any corporation or other entity (including, but not limited
to, a partnership or a limited liability company) that is affiliated with the Company
through stock or equity ownership or otherwise, and is designated as an Affiliate for
purposes of this Plan by the Committee.
	 
	 	2.2	 	“Annual Award Limit” or “Annual Award Limits” have the meaning set forth in Section
4.3.
	 
	 	2.3	 	“Award” means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock, Restricted
Stock Units, Performance Shares, Performance Units, Covered Employee Incentive Awards, or
Other Stock-Based Awards, in each case subject to the terms of this Plan.
	 
	 	2.4	 	“Award Agreement” means either: (i) a written agreement entered into by the Company
and a Participant setting forth the terms and provisions applicable to an Award granted
under this Plan, or (ii) a written or electronic statement issued by the Company to a
Participant describing the terms and provisions of such Award, including any amendment or
modification thereof.
	 
	 	2.5	 	“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to
such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
	 
	 	2.6	 	“Board” or “Board of Directors” means the Board of Directors of the Company.
	 
	 	2.7	 	“Change in Control” of the Company means, and shall be deemed to have occurred
upon, the first to occur of any of the following events after the Effective Date: (a) the
first purchase of shares pursuant to a tender offer or exchange offer (other than a
tender offer or exchange offer by the Company) for all or part of the Shares or any
securities convertible into such Shares, (b) the receipt by the Company of a Schedule 13D
or other advice indicating that a person is the “beneficial owner” (as that term is
defined

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	 	 	 	in Rule 13d-3 under the Exchange Act) of 20% or more of the Shares calculated as provided
in paragraph (d) of said Rule 13d-3, (c) the date of consummation of any merger,
reorganization, consolidation, share exchange, transfer of assets or other transaction
having similar effect involving the Company (“Business Transaction”) in which the Company
will not be the continuing or surviving corporation or pursuant to which Shares would be
converted into cash, securities or other property, other than a Business Transaction in
which the holders of the Shares immediately prior to the Business Transaction would own
more than 50% of the common stock of the surviving corporation immediately after the
Business Transaction, (d) the date of consummation of any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or substantially
all the assets of the Company, (e) the adoption of any plan or proposal for the
liquidation (but not a partial liquidation) or dissolution of the Company, or (f) the
date upon which the individuals who constitute the Board as of the Effective Date (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to such date whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of the Directors of the
Company) shall, for purposes of this Plan, be considered as though such person were a
member of the Incumbent Board.
	 
	 	2.8	 	“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time,
or any successor thereto. For purposes of this Plan, references to sections of the Code
shall be deemed to include references to any applicable regulations thereunder and any
successor or similar provision.
	 
	 	2.9	 	“Committee” means the Compensation Committee of the Board or a subcommittee
thereof, or any other committee designated by the Board to administer this Plan. The
members of the Committee shall be appointed from time to time by and shall serve at the
discretion of the Board. If the Committee does not exist or cannot function for any
reason, the Board may take any action under the Plan that would otherwise be the
responsibility of the Committee.
	 
	 	2.10	 	“Company” means Huttig Building Products, Inc., a Delaware corporation, and any
successor thereto as provided in Article 20 herein.
	 
	 	2.11	 	“Consolidated Operating Earnings” means the consolidated earnings before income
taxes of the Company, computed in accordance with generally accepted accounting
principles, but shall exclude the effects of Extraordinary Items.
	 
	 	2.12	 	“Covered Employee” means any key Employee who is or may become (as determined by
the Committee in its discretion) a “Covered Employee,” as defined in Section 162(m) of
the Code, or any successor statute.
	 
	 	2.13	 	“Covered Employee Incentive Award” means an Award granted to a Covered Employee as
described in Article 13.
	 
	 	2.14	 	“Effective Date” has the meaning set forth in Section 1.1.
	 
	 	2.15	 	“Eligible Person” means any person designated as an employee of the Company, its
Affiliates, and/or its Subsidiaries on the payroll records thereof or any individual who
is classified or treated by the Company, Affiliate, and/or Subsidiary as an independent
contractor or consultant.
	 
	 	2.16	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, or any successor act thereto.
	 
	 	2.17	 	“Extraordinary Items” means (i) extraordinary, unusual, and/or nonrecurring items
of gain or loss; (ii) gains or losses on the disposition of a business; (iii) changes in
tax or accounting regulations or laws; or (iv) the effect of a merger or acquisition, all
of which must be identified in the audited financial statements, including footnotes, or
Management Discussion and Analysis section of the Company’s annual report.

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	 	2.18	 	“Fair Market Value” or “FMV” means a price that is based on the opening, closing,
actual, high, low, or average selling prices of a Share reported on the New York Stock
Exchange (“NYSE”) or other established stock exchange (or exchanges) on the applicable
date, the preceding trading day, the next succeeding trading day, or an average of
trading days, as determined by the Committee in its discretion. Unless the Committee
determines otherwise, if the Shares are traded over the counter at the time a
determination of its Fair Market Value is required to be made hereunder, its Fair Market
Value shall be deemed to be equal to the average between the reported high and low,
closing bid and asked, or opening and closing prices of a Share on the most recent date
on which Shares were publicly traded. In the event Shares are not publicly traded at the
time a determination of their value is required to be made hereunder, the determination
of their Fair Market Value shall be made by the Committee in such manner as it deems
appropriate. Such definition(s) of FMV shall be specified in each Award Agreement and may
differ depending on whether FMV is in reference to the grant, exercise, vesting,
settlement, or payout of an Award.
	 
	 	2.19	 	“Freestanding SAR” means an SAR that is granted independently of any Options, as
described in Article 7.
	 
	 	2.20	 	“Full Value Award” means an Award other than in the form of an ISO, NQSO, or SAR,
and which is settled by the issuance of Shares.
	 
	 	2.21	 	“Grant Price” means the price established at the time of grant of a SAR pursuant to
Article 7, used to determine whether there is any payment due upon exercise of the SAR.
	 
	 	2.22	 	“Incentive Stock Option” or “ISO” means an Option to purchase Shares granted under
Article 6 to an Employee and that is designated as an Incentive Stock Option and that is
intended to meet the requirements of Code Section 422, or any successor provision.
	 
	 	2.23	 	“Insider” shall mean an individual who is, on the relevant date, an officer, or
Director of the Company, or a more than ten percent (10%) Beneficial Owner of any class
of the Company’s equity securities that is registered pursuant to Section 12 of the
Exchange Act, as determined by the Board in accordance with Section 16 of the Exchange
Act.
	 
	 	2.24	 	“Net Income” means the consolidated net income before taxes for this Plan Year, as
reported in the Company’s annual report to stockholders or as otherwise reported to
stockholders.
	 
	 	2.25	 	“Nonqualified Stock Option” or “NQSO” means an Option that is not intended to meet
the requirements of Code Section 422, or that otherwise does not meet such requirements.
	 
	 	2.26	 	“Operating Cash Flow” means cash flow from operating activities as defined in SFAS
Number 95, Statement of Cash Flows.
	 
	 	2.27	 	“Option” means an Incentive Stock Option or a Nonqualified Stock Option, as
described in Article 6.
	 
	 	2.28	 	“Option Price” means the price at which a Share may be purchased by a Participant
pursuant to an Option.
	 
	 	2.29	 	“Other Stock-Based Award” means an equity-based or equity-related Award not
otherwise described by the terms of this Plan, granted pursuant to Article 10.
	 
	 	2.30	 	“Participant” means any Eligible Person as set forth in Article 5 to whom an Award
is granted.
	 
	 	2.31	 	“Performance-Based Compensation” means compensation under an Award that satisfies
the requirements of Section 162(m) of the Code and the applicable treasury regulations
thereunder for certain performance-based compensation paid to Covered Employees.
Notwithstanding the foregoing, nothing in this Plan shall be construed to mean that an
Award which does not satisfy the requirements for performance-based compensation under
Code Section 162(m) does not constitute performance-based compensation for other
purposes, including Code Section 409A.

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	 	2.32	 	“Performance Measures” means measures as described in Article 12 on which the
performance goals are based and which are approved by the Company’s stockholders pursuant
to this Plan in order to qualify Awards as Performance-Based Compensation.
	 
	 	2.33	 	“Performance Period” means the period of time during which the performance goals
must be met in order to determine the amount payable to, and/or the Participant’s vested
interest with respect to an Award.
	 
	 	2.34	 	“Performance Share” means an Award under Article 9 herein and subject to the terms
of this Plan, denominated in Shares, the value of which at the time it is payable is
determined as a function of the extent to which corresponding performance criteria have
been achieved.
	 
	 	2.35	 	“Performance Unit” means an Award under Article 9 herein and subject to the terms
of this Plan, denominated in units, the value of which at the time it is payable is
determined as a function of the extent to which corresponding performance criteria have
been achieved.
	 
	 	2.36	 	“Period of Restriction” means the period when Restricted Stock or Restricted Stock
Units are subject to a substantial risk of forfeiture (based on the passage of time, the
achievement of performance goals, or upon the occurrence of other events as determined by
the Committee, in its discretion), as provided in Article 8.
	 
	 	2.37	 	“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined
in Section 13(d) thereof.
	 
	 	2.38	 	“Plan” means the Huttig Building Products, Inc. 2005 Executive Incentive
Compensation Plan, as it may be amended from time to time.
	 
	 	2.39	 	“Plan Year” means the calendar year.
	 
	 	2.40	 	“Prior Plans” means the Huttig Building Products, Inc. 1999 Stock Incentive Plan,
as amended, and the Huttig Building Products, Inc. 2001 Stock Incentive Plan, as amended.
	 
	 	2.41	 	“Restricted Stock” means an Award granted to a Participant pursuant to Article 8.
	 
	 	2.42	 	“Restricted Stock Unit” means an Award granted to a Participant pursuant to Article
8, with respect to which Shares are awarded upon the satisfaction or lapse of the
restrictions applicable thereto.
	 
	 	2.43	 	“Share” means a share of common stock of the Company, $.01 par value per share.
	 
	 	2.44	 	“Stock Appreciation Right” or “SAR” means an Award, designated as a SAR, pursuant
to the terms of Article 7 herein.
	 
	 	2.45	 	“Subsidiary” means any corporation or other entity, whether domestic or foreign, in
which the Company has or obtains, directly or indirectly, a proprietary interest of more
than fifty percent (50%) by reason of stock ownership or otherwise.
	 
	 	2.46	 	“Tandem SAR” means an SAR that is granted in connection with a related Option
pursuant to Article 7 herein, the exercise of which shall require forfeiture of the right
to purchase a Share under the related Option (and when a Share is purchased under the
Option, the Tandem SAR shall similarly be canceled).

Article 3. Administration

     3.1 General. The Committee shall be responsible for administering this Plan, subject to this
Article 3 and the other provisions of this Plan. The Committee may employ attorneys, consultants,
accountants, agents, and other individuals, any of whom may be an Employee, and the Committee, the
Company, and its officers and Directors shall be entitled to rely upon the advice, opinions, or
valuations of any such individuals. All actions taken and all

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interpretations and determinations made by the Committee shall be final and binding upon the
Participants, the Company, and all other interested individuals.

     3.2 Authority of the Committee. The Committee shall have full and exclusive discretionary
power to interpret the terms and the intent of this Plan and any Award Agreement or other agreement
or document ancillary to or in connection with this Plan, to determine eligibility for Awards and
to adopt such rules, regulations, forms, instruments, and guidelines for administering this Plan as
the Committee may deem necessary or proper. Such authority shall include, but not be limited to,
selecting Award recipients, establishing all Award terms and conditions, including the terms and
conditions set forth in Award Agreements, granting Awards as an alternative to or as the form of
payment for grants or rights earned or due under compensation plans or arrangements of the Company,
and, subject to Article 18, adopting modifications and amendments to this Plan or any Award
Agreement, including without limitation, any that are necessary to comply with the laws of the
countries and other jurisdictions in which the Company, its Affiliates, and/or its Subsidiaries
operate.

     3.3 Delegation. To the extent permitted under applicable law, the Committee may delegate to
one or more of its members or to one or more officers or employees of the Company, and/or its
Subsidiaries and Affiliates or to one or more agents or advisors such administrative duties or
powers as it may deem advisable, and the Committee or any individuals to whom it has delegated
duties or powers as aforesaid may employ one or more individuals to render advice with respect to
any responsibility the Committee or such individuals may have under this Plan. The Committee may,
by resolution, authorize one or more officers of the Company to do one or both of the following on
the same basis as can the Committee: (a) designate Employees to be recipients of Awards; and (b)
determine the size of any such Awards; provided, however, (i) the Committee shall not delegate such
responsibilities to any such officer for Awards granted to an Employee who is considered an
Insider; (ii) the resolution providing such authorization sets forth the total number of Awards
such officer(s) may grant; and (iii) the officer(s) shall report periodically to the Committee
regarding the nature and scope of the Awards granted pursuant to the authority delegated. In the
event of any delegation of authority under this Section 3.3, or exercise of authority by the Board,
references in the Plan to the Committee shall be deemed to refer, as applicable, to the delegate of
the Committee or to the Board.

Article 4. Shares Subject to This Plan and Maximum Awards

     4.1 Number of Shares Available for Awards.

	 	(a)	 	Subject to adjustment as provided in Section 4.4 herein, the maximum
number of Shares available for issuance to Participants under this Plan on or after
the Effective Date (the “Share Authorization”) shall be 3,425,000.
	 
	 	(b)	 	Of the Shares reserved for issuance under Section 4.1(a) of this Plan,
all of the reserved Shares may be issued pursuant to Full Value Awards.
	 
	 	(c)	 	Subject to the limit set forth in Section 4.1(a) on the number of
Shares that may be issued in the aggregate under this Plan, the maximum number of
Shares that may be issued pursuant to ISOs shall be 1,425,000.

     4.2 Share Usage. Shares covered by an Award shall only be counted as used to the extent they
are actually issued. Any Shares related to Awards which terminate by expiration, forfeiture,
cancellation, or otherwise without the issuance of such Shares, are settled in cash in lieu of
Shares, or are exchanged with the Committee’s permission, prior to the issuance of Shares, for
Awards not involving Shares, shall be available again for grant under this Plan. Moreover, if the
Option Price of any Option granted under this Plan or the tax withholding requirements with respect
to any Award granted under this Plan are satisfied by tendering Shares to the Company (by either
actual delivery or by attestation), or if an SAR is exercised, only the number of Shares issued,
net of the Shares tendered, if any, will be deemed delivered for purposes of determining the
maximum number of Shares available for delivery under this Plan. Shares covered by awards granted
under the Prior Plans that after the Effective Date are terminated unexercised, forfeited or
otherwise surrendered shall be available for subsequent Awards under this Plan. The Shares
available for issuance under this Plan may be authorized and unissued Shares or treasury Shares.

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     4.3 Annual Award Limits. Unless and until the Committee determines that an Award to a Covered
Employee shall not be designed to qualify as Performance-Based Compensation, the following limits
(each an “Annual Award Limit” and, collectively, “Annual Award Limits”) shall apply to grants of
such Awards under this Plan:

	 	(a)	 	Options. The maximum aggregate number of Shares subject to Options
granted in any one Plan Year to any one Participant shall be 200,000 plus the
amount of the Participant’s unused applicable Annual Award Limit for Options as of
the close of the previous Plan Year.
	 
	 	(b)	 	SARs. The maximum number of Shares subject to Stock Appreciation Rights
granted in any one Plan Year to any one Participant shall be 200,000 plus the
amount of the Participant’s unused applicable Annual Award Limit for SARs as of the
close of the previous Plan Year.
	 
	 	(c)	 	Restricted Stock or Restricted Stock Units. The maximum aggregate grant
with respect to Awards of Restricted Stock or Restricted Stock Units in any one
Plan Year to any one Participant shall be 100,000 plus the amount of the
Participant’s unused applicable Annual Award Limit for Restricted Stock or
Restricted Stock Units as of the close of the previous Plan Year.
	 
	 	(d)	 	Performance Units or Performance Shares. The maximum aggregate Award of
Performance Units or Performance Shares that a Participant may receive in any one
Plan Year shall be 100,000 Shares, or equal to the value of 100,000 Shares
determined as of the date of vesting or payout, as applicable plus the amount of
the Participant’s unused applicable Annual Award Limit for Performance Units or
Performance Shares as of the close of the previous Plan Year.
	 
	 	(e)	 	Covered Employee Incentive Award. The maximum aggregate amount awarded
or credited in any one Plan Year with respect to a Covered Employee Incentive Award
shall be determined in accordance with Article 13.
	 
	 	(f)	 	Other Stock-Based Awards. The maximum aggregate grant with respect to
other Stock-Based Awards pursuant to Section 10.2 in any one Plan Year to any one
Participant shall be 100,000 plus the amount of the Participant’s unused applicable
Annual Award Limit for Other Stock-Based Awards as of the close of the previous
Plan Year.

     4.4 Adjustments in Authorized Shares. In the event of any corporate event or transaction
(including, but not limited to, a change in the Shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization, separation, stock
dividend, stock split, reverse stock split, split up, spin-off, or other distribution of stock or
property of the Company, combination of Shares, exchange of Shares, dividend in kind, or other like
change in capital structure or distribution (other than normal cash dividends) to stockholders of
the Company, or any similar corporate event or transaction, the Committee, in its sole discretion,
in order to prevent dilution or enlargement of Participants’ rights under this Plan, shall
substitute or adjust, in an equitable manner, as applicable, the number and kind of Shares that may
be issued under this Plan or under particular forms of Awards, the number and kind of Shares
subject to outstanding Awards, the Option Price or Grant Price applicable to outstanding Awards,
the Annual Award Limits, and other value determinations applicable to outstanding Awards.

     The Committee, in its sole discretion, may also make appropriate adjustments in the terms of
any Awards under this Plan to reflect or related to such changes or distributions and to modify any
other terms of outstanding Awards, including modifications of performance goals and changes in the
length of Performance Periods. The determination of the Committee as to the foregoing adjustments,
if any, shall be conclusive and binding on Participants under this Plan.

     Subject to the provisions of Article 20 and any applicable law or regulatory requirement,
without affecting the number of Shares reserved or available hereunder, the Committee may authorize
the issuance, assumption, substitution, or conversion of Awards under this Plan in connection with
any merger, consolidation, acquisition of property or stock, or reorganization upon such terms and
conditions as it may deem appropriate, subject to compliance with the ISO rules under Section 422
of the Code, where applicable.

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Article 5. Eligibility and Participation

     5.1 Eligibility. Individuals eligible to participate in this Plan include all Eligible
Persons.

     5.2 Actual Participation. Subject to the provisions of this Plan, the Committee may, from time
to time, select from all Eligible Persons, those individuals to whom Awards shall be granted and
shall determine, in its sole discretion, the nature of, any and all terms permissible by law, and
the amount of each Award.

Article 6. Stock Options

     6.1 Grant of Options. Subject to the terms and provisions of this Plan, Options may be granted
to Participants in such number, and upon such terms, and at any time and from time to time as shall
be determined by the Committee, in its sole discretion; provided that ISOs may be granted only to
Eligible Persons who are employees of the Company or of any parent or subsidiary corporation (as
permitted by Section 422 of the Code and the treasury regulations thereunder). However, an Eligible
Person who is employed by an Affiliate and/or Subsidiary and is subject to Code Section 409A, may
only be granted Options to the extent the Affiliate and/or Subsidiary is part of the Company’s
consolidated group for United States federal tax purposes.

     6.2 Award Agreement. Each Option grant shall be evidenced by an Award Agreement that shall
specify the Option Price, the maximum duration of the Option, the number of Shares to which the
Option pertains, the conditions upon which an Option shall become vested and exercisable, and such
other provisions as the Committee shall determine which are not inconsistent with the terms of this
Plan. The Award Agreement also shall specify whether the Option is intended to be an ISO or a NQSO.

     6.3 Option Price. The Option Price for each grant of an Option under this Plan shall be
determined by the Committee, in its discretion, and shall be specified in the Award Agreement;
provided, however, the Option Price on the date of grant must be at least equal to one hundred
percent (100%) of the FMV of the Shares on the date of grant.

     6.4 Term of Options. Each Option granted to a Participant shall expire at such time as the
Committee shall determine at the time of grant; provided, however, no Option shall be exercisable
later than the tenth (10th) anniversary date of its grant.

     6.5 Exercise of Options. Options granted under this Article 6 shall be exercisable at such
times and be subject to such restrictions and conditions as the Committee shall in each instance
approve, which terms and restrictions need not be the same for each grant or for each Participant.

     6.6 Payment. Options granted under this Article 6 shall be exercised by the delivery of a
notice of exercise to the Company or an agent designated by the Company in a form specified or
accepted by the Committee, or by complying with any alternative procedures which may be authorized
by the Committee, setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.

     A condition of the issuance of the Shares as to which an Option shall be exercised shall be
the payment of the Option Price. The Option Price of any Option shall be payable to the Company in
full either: (a) in cash or its equivalent; (b) by tendering (either by actual delivery or
attestation) previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the Option Price (provided that except as otherwise determined by the Committee,
the Shares that are tendered must have been held by the Participant for at least six (6) months (or
such other period, if any, as the Committee may permit) prior to their tender to satisfy the Option
Price if acquired under this Plan or any other compensation plan maintained by the Company or have
been purchased on the open market); (c) by a combination of (a) and (b); or (d) any other method
approved or accepted by the Committee in its sole discretion, including, without limitation, if the
Committee so determines, a cashless (broker-assisted) exercise.

     Subject to any governing rules or regulations, as soon as practicable after receipt of written
notification of exercise and full payment (including satisfaction of any applicable tax
withholding), the Company shall deliver to the Participant evidence of book entry Shares, or upon
the Participant’s request, Share certificates in an appropriate amount based upon the number of
Shares purchased under the Option(s).

     Unless otherwise determined by the Committee, all payments under all of the methods indicated
above shall be paid in United States dollars.

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     6.7 Restrictions on Share Transferability. The Committee may impose such restrictions on any
Shares acquired pursuant to the exercise of an Option granted under this Article 6 as it may deem
advisable, including, without limitation, minimum holding period requirements, restrictions under
applicable federal securities laws, under the requirements of any stock exchange or market upon
which such Shares are then listed and/or traded, or under any blue sky or state securities laws
applicable to such Shares.

     6.8 Termination of Employment. Each Participant’s Award Agreement shall set forth the extent
to which the Participant shall have the right to exercise the Option following termination of the
Participant’s employment or provision of services to the Company, its Affiliates, and/or its
Subsidiaries, as the case may be. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each Participant, need not be
uniform among all Options issued pursuant to this Article 6, and may reflect distinctions based on
the reasons for termination.

     6.9 Notification of Disqualifying Disposition. If any Participant shall make any disposition
of Shares acquired pursuant to the exercise of an ISO under the circumstances described in Section
421(b) of the Code (relating to certain disqualifying dispositions), such Participant shall notify
the Company of such disposition within ten (10) days thereof.

Article 7. Stock Appreciation Rights

     7.1 Grant of SARs. Subject to the terms and conditions of this Plan, SARs may be granted to
Participants at any time and from time to time as shall be determined by the Committee. The
Committee may grant Freestanding SARs, Tandem SARs, or any combination of these forms of SARs.
However, an Employee who is employed by an Affiliate and/or Subsidiary and is subject to Code
Section 409A, may only be granted SARs to the extent the Affiliate and/or Subsidiary is part of the
Company’s consolidated group for United States federal tax purposes.

     Subject to the terms and conditions of this Plan, the Committee shall have complete discretion
in determining the number of SARs granted to each Participant and, consistent with the provisions
of this Plan, in determining the terms and conditions pertaining to such SARs.

     The Grant Price for each grant of a Freestanding SAR shall be determined by the Committee and
shall be specified in the Award Agreement; provided, however, the Grant Price on the date of grant
must be at least equal to one hundred percent (100%) of the FMV of the Shares on the date of grant.
The Grant Price of Tandem SARs shall be equal to the Option Price of the related Option.

     7.2 SAR Agreement. Each SAR Award shall be evidenced by an Award Agreement that shall specify
the Grant Price, the term of the SAR, and such other provisions as the Committee shall determine.

     7.3 Term of SAR. The term of an SAR granted under this Plan shall be determined by the
Committee, in its sole discretion, and except as determined otherwise by the Committee and
specified in the SAR Award Agreement, no SAR shall be exercisable later than the tenth
(10th) anniversary date of its grant.

     7.4 Exercise of Freestanding SARs. Freestanding SARs may be exercised upon whatever terms and
conditions the Committee, in its sole discretion, imposes.

     7.5 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares
subject to the related Option upon the surrender of the right to exercise the equivalent portion of
the related Option. A Tandem SAR may be exercised only with respect to the Shares for which its
related Option is then exercisable.

     Notwithstanding any other provision of this Plan to the contrary, with respect to a Tandem SAR
granted in connection with an ISO: (a) the Tandem SAR will expire no later than the expiration of
the underlying ISO; (b) the value of the payout with respect to the Tandem SAR may be for no more
than one hundred percent (100%) of the excess of the Fair Market Value of the Shares subject to the
underlying ISO at the time the Tandem SAR is exercised over the Option Price of the underlying ISO;
and (c) the Tandem SAR may be exercised only when the Fair Market Value of the Shares subject to
the ISO exceeds the Option Price of the ISO.

     7.6 Settlement of SAR Amount. Upon the exercise of an SAR, a Participant shall be entitled to
receive payment from the Company in an amount determined by multiplying:

A-8

 

	 	(a)	 	The excess of the Fair Market Value of a Share on the date of exercise
over the Grant Price; by
	 
	 	(b)	 	The number of Shares with respect to which the SAR is exercised.

     The payment upon SAR exercise shall be in Shares.

     7.7 Termination of Employment. Each Award Agreement shall set forth the extent to which the
Participant shall have the right to exercise the SAR following termination of the Participant’s
employment with or provision of services to the Company, its Affiliates, and/or its Subsidiaries,
as the case may be. Such provisions shall be determined in the sole discretion of the Committee,
shall be included in the Award Agreement entered into with Participants, need not be uniform among
all SARs issued pursuant to this Plan, and may reflect distinctions based on the reasons for
termination.

     7.8 Other Restrictions. The Committee shall impose such other conditions and/or restrictions
on any Shares received upon exercise of a SAR granted pursuant to this Plan as it may deem
advisable or desirable. These restrictions may include, but shall not be limited to, a requirement
that the Participant hold the Shares received upon exercise of a SAR for a specified period of
time.

Article 8. Restricted Stock and Restricted Stock Units

     8.1 Grant of Restricted Stock or Restricted Stock Units. Subject to the terms and provisions
of this Plan, the Committee, at any time and from time to time, may grant Shares of Restricted
Stock and/or Restricted Stock Units to Participants in such amounts as the Committee shall
determine. Restricted Stock Units shall be similar to Restricted Stock except that no Shares are
actually awarded to the Participant on the date of grant. Restricted Stock Units represent the
right to receive Shares in the future subject to the achievement of one or more goals relating to
the completion of service by the Participant and/or the achievement of performance or other
objectives.

     8.2 Restricted Stock or Restricted Stock Unit Agreement. Each Restricted Stock and/or
Restricted Stock Unit grant shall be evidenced by an Award Agreement that shall specify the
Period(s) of Restriction, the number of Shares of Restricted Stock or the number of Restricted
Stock Units granted, and such other provisions as the Committee shall determine.

     8.3 Other Restrictions. The Committee shall impose such other conditions and/or restrictions
on any Shares of Restricted Stock or Restricted Stock Units granted pursuant to this Plan as it may
deem advisable including, without limitation, a requirement that Participants pay a stipulated
purchase price for each Share of Restricted Stock or each Restricted Stock Unit, restrictions based
upon the achievement of specific performance goals, time-based restrictions on vesting following
the attainment of the performance goals, time-based restrictions, and/or restrictions under
applicable laws or under the requirements of any stock exchange or market upon which such Shares
are listed or traded, or holding requirements or sale restrictions placed on the Shares by the
Company upon vesting of such Restricted Stock or Restricted Stock Units.

     To the extent deemed appropriate by the Committee, the Company may retain the certificates
representing Shares of Restricted Stock in the Company’s possession until such time as all
conditions and/or restrictions applicable to such Shares have been satisfied or lapse.

     Except as otherwise provided in this Article 8, Shares of Restricted Stock covered by each
Restricted Stock Award shall become freely transferable by the Participant after all conditions and
restrictions applicable to such Shares have been satisfied or lapse (including satisfaction of any
applicable tax withholding obligations), and Restricted Stock Units shall be paid in cash, Shares,
or a combination of cash and Shares as the Committee, in its sole discretion shall determine.

     8.4 Certificate Legend. In addition to any legends placed on certificates pursuant to Section
8.3, each certificate representing Shares of Restricted Stock granted pursuant to this Plan may
bear a legend such as the following or as otherwise determined by the Committee in its sole
discretion:

The sale or transfer of Shares of stock represented by this certificate, whether
voluntary, involuntary, or by operation of law, is subject to certain restrictions on
transfer as set forth in the Huttig Building

A-9

 

Products, Inc. 2005 Executive Incentive Compensation Plan, and in the associated Award
Agreement. A copy of this Plan and such Award Agreement may be obtained from Huttig
Building Products, Inc.

     8.5 Voting Rights. Unless otherwise determined by the Committee and set forth in a
Participant’s Award Agreement, to the extent permitted or required by law, as determined by the
Committee, Participants holding Shares of Restricted Stock granted hereunder may be granted the
right to exercise full voting rights with respect to those Shares during the Period of Restriction.
A Participant shall have no voting rights with respect to any Restricted Stock Units granted
hereunder.

     8.6 Termination of Employment. Each Award Agreement shall set forth the extent to which the
Participant shall have the right to retain Restricted Stock and/or Restricted Stock Units following
termination of the Participant’s employment with or provision of services to the Company, its
Affiliates, and/or its Subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Shares of Restricted Stock or Restricted Stock Units
issued pursuant to this Plan, and may reflect distinctions based on the reasons for termination.

     8.7 Section 83(b) Election. The Committee may provide in an Award Agreement that the Award of
Restricted Stock is conditioned upon the Participant making or refraining from making an election
with respect to the Award under Section 83(b) of the Code. If a Participant makes an election
pursuant to Section 83(b) of the Code concerning a Restricted Stock Award, the Participant shall be
required to file promptly a copy of such election with the Company.

Article 9. Performance Units/Performance Shares

     9.1 Grant of Performance Units/Performance Shares. Subject to the terms and provisions of this
Plan, the Committee, at any time and from time to time, may grant Performance Units and/or
Performance Shares to Participants in such amounts and upon such terms as the Committee shall
determine.

     9.2 Value of Performance Units/Performance Shares. Each Performance Unit shall have an initial
value that is established by the Committee at the time of grant. Each Performance Share shall have
an initial value equal to the Fair Market Value of a Share on the date of grant. The Committee
shall set performance goals in its discretion which, depending on the extent to which they are met,
will determine the value and/or number of Performance Units/Performance Shares that will be paid
out to the Participant.

     9.3 Earning of Performance Units/Performance Shares. Subject to the terms of this Plan, after
the applicable Performance Period has ended, the holder of Performance Units/Performance Shares
shall be entitled to receive payout on the value and number of Performance Units/Performance Shares
earned by the Participant over the Performance Period, to be determined as a function of the extent
to which the corresponding performance goals have been achieved.

     9.4 Form and Timing of Payment of Performance Units/Performance Shares. Payment of earned
Performance Units/Performance Shares shall be as determined by the Committee and as evidenced in
the Award Agreement. Subject to the terms of this Plan, the Committee, in its sole discretion, may
pay earned Performance Units/Performance Shares in the form of cash or in Shares (or in a
combination thereof) equal to the value of the earned Performance Units/Performance Shares at the
close of the applicable Performance Period, or as soon as practicable after the end of the
Performance Period. Any Shares may be granted subject to any restrictions deemed appropriate by the
Committee. The determination of the Committee with respect to the form of payout of such Awards
shall be set forth in the Award Agreement pertaining to the grant of the Award.

     9.5 Termination of Employment. Each Award Agreement shall set forth the extent to which the
Participant shall have the right to retain Performance Units and/or Performance Shares following
termination of the Participant’s employment with or provision of services to the Company, its
Affiliates, and/or its Subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Awards of Performance Units or Performance Shares issued
pursuant to this Plan, and may reflect distinctions based on the reasons for termination.

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Article 10. Other Stock-Based Awards

     10.1 Other Stock-Based Awards. The Committee may grant other types of equity-based or
equity-related Awards not otherwise described by the terms of this Plan (including the grant or
offer for sale of unrestricted Shares) in such amounts and subject to such terms and conditions, as
the Committee shall determine. Such Awards may involve the transfer of actual Shares to
Participants, or payment in cash or otherwise of amounts based on the value of Shares and may
include, without limitation, Awards designed to comply with or take advantage of the applicable
local laws of jurisdictions other than the United States.

     10.2 Value of Other Stock-Based Awards. Each Other Stock-Based Award shall be expressed in
terms of Shares or units based on Shares, as determined by the Committee. The Committee may
establish performance goals in its discretion. If the Committee exercises its discretion to
establish performance goals, the number and/or value of Other Stock-Based Awards that will be paid
out to the Participant will depend on the extent to which the performance goals are met.

     10.3 Payment of Other Stock-Based Awards. Payment, if any, with respect to an Other
Stock-Based Award shall be made in accordance with the terms of the Award, in cash or Shares as the
Committee determines.

     10.4 Termination of Employment. The Committee shall determine the extent to which the
Participant shall have the right to receive Other Stock-Based Awards following termination of the
Participant’s employment with or provision of services to the Company, its Affiliates, and/or its
Subsidiaries, as the case may be. Such provisions shall be determined in the sole discretion of the
Committee, such provisions may be included in an Award Agreement entered into with each
Participant, but need not be uniform among all Awards of Other Stock-Based Awards issued pursuant
to this Plan, and may reflect distinctions based on the reasons for termination.

Article 11. Transferability of Awards

     11.1 Transferability. Except as provided in Section 11.2 below, during a Participant’s
lifetime, his or her Awards shall be exercisable only by the Participant. Awards shall not be
transferable other than by will or the laws of descent and distribution; no Awards shall be
subject, in whole or in part, to attachment, execution, or levy of any kind; and any purported
transfer in violation hereof shall be null and void.

     11.2 Committee Action. The Committee may, in its discretion, determine that notwithstanding
Section 11.1, any or all Awards (other than ISOs) shall be transferable to and exercisable by such
transferees, and subject to such terms and conditions, as the Committee may deem appropriate;
provided, however, that only the Participant to which the Award had been granted, a “family member”
(as defined below in Section 11.4 below) of such Participant, or a charity may be a transferee of
such Award. Such a determination may be made at the time an Award is granted or at any time
thereafter.

     11.3 Domestic Relations Orders. Without limiting the generality of Section 11.1, and
notwithstanding Section 11.2, no domestic relations order purporting to authorize a transfer of an
Award shall be recognized as valid.

     11.4 Family Member. For purposes of Section 11.2, “family member” shall mean a Participant’s
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the Participant’s household
(other than a tenant of the Participant), a trust in which these persons (or the Participant) have
more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or
the Participant) control the management of assets, and any other entity in which these persons (or
the Participant) own more than fifty percent (50%) of the voting interests.

Article 12. Performance Measures

     12.1 Performance Measures. Unless and until the Committee proposes for stockholder vote and
the stockholders approve a change in the general Performance Measures set forth in this Article 12,
the performance goals upon which the payment or vesting of an Award to a Covered Employee (other
than a Covered Employee Incentive Award awarded or credited pursuant to Article 13) that is
intended to qualify as Performance-Based Compensation shall be limited to the following Performance
Measures:

A-11

 

	 	(a)	 	Net earnings or net income (before or after taxes);
	 
	 	(b)	 	Earnings per share;
	 
	 	(c)	 	Net sales or revenue growth;
	 
	 	(d)	 	Net operating profit (before or after taxes);
	 
	 	(e)	 	Return measures (including, but not limited to, return on assets,
capital, invested capital, equity, sales, or revenue);
	 
	 	(f)	 	Cash flow (including, but not limited to, operating cash flow, free
cash flow, cash flow return on equity, and cash flow return on investment);
	 
	 	(g)	 	Earnings before or after taxes, interest, depreciation, and/or
amortization;
	 
	 	(h)	 	Gross or operating margins;
	 
	 	(i)	 	Productivity ratios;
	 
	 	(j)	 	Share price (including, but not limited to, growth measures and total
stockholder return);
	 
	 	(k)	 	Expense targets;
	 
	 	(l)	 	Margins;
	 
	 	(m)	 	Operating efficiency;
	 
	 	(n)	 	Market share;
	 
	 	(o)	 	Customer satisfaction;
	 
	 	(p)	 	Working capital targets; and
	 
	 	(q)	 	Economic value added or EVA® (net operating profit after tax
minus the sum of capital multiplied by the cost of capital).

     Any Performance Measure(s) may be used to measure the performance of the Company, Subsidiary,
and/or Affiliate as a whole or any business unit of the Company, Subsidiary, and/or Affiliate or
any combination thereof, as the Committee may deem appropriate, or any of the above Performance
Measures as compared to the performance of a group of comparator companies, or published or special
index that the Committee, in its sole discretion, deems appropriate, or the Company may select
Performance Measure (j) above as compared to various stock market indices. The Committee also has
the authority to provide for accelerated vesting of any Award based on the achievement of
performance goals pursuant to the Performance Measures specified in this Article 12.

     12.2 Evaluation of Performance. The Committee may provide in any such Award that any
evaluation of performance may include or exclude any of the following events that occurs during a
Performance Period: (a) asset write-downs, (b) litigation or claim judgments or settlements, (c)
the effect of changes in tax laws, accounting principles, or other laws or provisions affecting
reported results, (d) any reorganization and restructuring programs, (e) extraordinary nonrecurring
items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion
and analysis of financial condition and results of operations appearing in the Company’s annual
report to stockholders for the applicable year, (f) acquisitions or divestitures, and (g) foreign
exchange gains and losses. To the extent such inclusions or exclusions affect Awards to Covered
Employees, they shall be prescribed in a form that meets the requirements of Code Section 162(m)
for deductibility.

     12.3 Adjustment of Performance-Based Compensation. Awards that are intended to qualify as
Performance-Based Compensation may not be adjusted upward. The Committee shall retain the
discretion to adjust

A-12

 

such Awards downward, either on a formula or discretionary basis or any combination, as the
Committee determines.

     12.4 Committee Discretion. In the event that applicable tax and/or securities laws change to
permit Committee discretion to alter the governing Performance Measures without obtaining
stockholder approval of such changes, the Committee shall have sole discretion to make such changes
without obtaining stockholder approval. In addition, in the event that the Committee determines
that it is advisable to grant Awards that shall not qualify as Performance-Based Compensation, the
Committee may make such grants without satisfying the requirements of Code Section 162(m) and base
vesting on Performance Measures other than those set forth in Section 12.1.

Article 13. Covered Employee Incentive Award

     13.1 Eligibility. The Committee may designate Covered Employees who are eligible to receive a
monetary payment under this Article 13.

     13.2 Performance Targets. The Committee may establish objective performance targets for one or
more designated Performance Periods based on specified levels of one or more of the Performance
Measures. Such performance targets shall be established by the Committee on a timely basis to
ensure that the targets are considered “preestablished” for purposes of Section 162(m) of the Code.
The Committee may, in its discretion, make appropriate adjustments in the Performance Measures
established for a particular Performance Period to take account of the effect of any unforeseen
events that occur during such period. In addition to establishing the performance targets, the
Committee may establish such other terms and conditions applicable to Covered Employee Incentive
Awards as it may determine in its sole discretion.

     13.3 Amounts of Awards. In conjunction with the establishment of performance targets for a
Performance Period, the Committee shall adopt an objective formula (on the basis of percentages of
Covered Employees’ salaries, shares in a bonus pool or otherwise) for computing the respective
amounts payable under the Plan to Covered Employees if and to the extent that the performance
targets are attained. Such formula shall comply with the requirements applicable to
performance-based compensation plans under Section 162(m) of the Code and, to the extent based on
percentages of a bonus pool, such percentages shall not exceed 100% in the aggregate. For any
calendar year, no Covered Employee shall be granted a Covered Employee Incentive Award in respect
of more than $2 million in cash; provided, however, that any Covered Employee Incentive Award
earned or payable over a period of more than one calendar year shall be pro-rated over the
applicable Performance Period in determining the application of the foregoing limit to such Award.

     13.4 Payment of Awards. No Covered Employee Incentive Award shall be payable until the
Committee has certified in writing that the specified performance targets have been attained.
Covered Employee Incentive Awards will be payable to Covered Employees in cash following the end of
the applicable Performance Period at such time and in such form as the Committee shall determine.

     13.5 Negative Discretion. Notwithstanding the attainment by the Company of the specified
performance targets, the Committee shall have the discretion, which need not be exercised uniformly
among the Participants, to reduce or eliminate the Award that would be otherwise paid.

     13.6 Guidelines. The Committee may adopt from time to time written policies for its
implementation of this Article 13. Such guidelines shall reflect the intention of the Company that
all payments hereunder qualify as performance-based compensation under Section 162(m) of the Code.

     13.7 Non-Exclusive Arrangement. The adoption and operation of this Article 13 shall not
preclude the Board or the Committee from approving other incentive compensation arrangements for
the benefit of individuals who are Covered Employees hereunder as the Board or Committee, as the
case may be, deems appropriate and in the best interests of the Company.

Article 14. Dividend Equivalents

     Any Participant selected by the Committee may be granted dividend equivalents based on the
dividends declared on Shares that are subject to any Award, other than an Option or SAR, to be
credited as of dividend payment dates, during the period between the date the Award is granted and
the date the Award is exercised, vests or

A-13

 

expires, as determined by the Committee. The dividend equivalents may be subject to any
limitations and/or restrictions determined by the Committee. Such dividend equivalents shall be
converted to cash or additional Shares by such formula and at such time and subject to such
limitations as may be determined by the Committee.

Article 15. Beneficiary Designation

     Each Participant under this Plan may, from time to time, name any beneficiary or beneficiaries
(who may be named contingently or successively) to whom any benefit under this Plan is to be paid
in case of his death before he receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing with the Company
during the Participant’s lifetime. In the absence of any such beneficiary designation, benefits
remaining unpaid or rights remaining unexercised at the Participant’s death shall be paid or
exercised by the Participant’s executor, administrator, or legal representative.

Article 16. Rights of Participants

     16.1 Employment. Nothing in this Plan or an Award Agreement shall interfere with or limit in
any way the right of the Company, its Affiliates, and/or its Subsidiaries to terminate any
Participant’s employment at any time or for any reason not prohibited by law, nor confer upon any
Participant any right to continue his employment for any specified period of time.

     Neither an Award nor any benefits arising under this Plan shall constitute an employment
contract with the Company, its Affiliates, and/or its Subsidiaries and, accordingly, subject to
Articles 3 and 18, this Plan and the benefits hereunder may be terminated at any time in the sole
and exclusive discretion of the Committee without giving rise to any liability on the part of the
Company, its Affiliates, and/or its Subsidiaries.

     16.2 Participation. No individual shall have the right to be selected to receive an Award
under this Plan, or, having been so selected, to be selected to receive a future Award.

     16.3 Rights as a Stockholder. Except as otherwise provided herein, a Participant shall have
none of the rights of a stockholder with respect to Shares covered by any Award until the
Participant becomes the record holder of such Shares.

Article 17. Change of Control

     17.1 Change of Control of the Company. Notwithstanding any other provision of this Plan to the
contrary, the provisions of this Article 17 shall apply in the event of a Change of Control, unless
otherwise specifically prohibited under applicable laws, or by the rules and regulations of any
governing governmental agencies or national securities exchanges, or unless otherwise determined by
the Committee in connection with the grant of an Award as reflected in the applicable Award
Agreement.

     Upon a Change of Control, all then-outstanding Stock Options and Stock Appreciation Rights
shall become fully vested and exercisable, and all then-outstanding Restricted Stock and Restricted
Stock Units shall vest in full and be free of restrictions. The treatment of any other Awards shall
be as determined by the Committee in connection with the grant thereof, as reflected in the
applicable Award Agreement.

Article 18. Amendment, Modification, Suspension, and Termination

     18.1 Amendment, Modification, Suspension, and Termination. Subject to Section 18.3, the
Committee or Board may, at any time and from time to time, alter, amend, modify, suspend, or
terminate this Plan and any Award Agreement in whole or in part; provided, however, that, without
the prior approval of the Company’s stockholders and except as provided in Section 4.4, (i) neither
the Option Price of an Option nor the Grant Price of an SAR may be lowered, (ii) a new Award may
not be granted in exchange for the cancellation of an outstanding Award, and (iii) no Option or SAR
for which the Option Price or Grant Price, as applicable, is less than the Fair Market Value of the
Shares underlying the Option or SAR, may be cancelled in exchange for a cash payment. In addition,
no amendment of this Plan shall be made without stockholder approval if stockholder approval is
required by law, regulation, or stock exchange rule, including, but not limited to, the Exchange
Act, the Code and, if applicable, the New York Stock Exchange Listed Company Manual.

A-14

 

     18.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The
Committee shall make equitable and appropriate adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring events (including, without
limitation, the events described in Section 4.4 hereof) affecting the Company or the financial
statements of the Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order to prevent
unintended dilution or enlargement of the benefits or potential benefits intended to be made
available under this Plan. The determination of the Committee as to the foregoing adjustments, if
any, shall be conclusive and binding on Participants under this Plan.

     18.3 Awards Previously Granted. Notwithstanding any other provision of this Plan to the
contrary (other than Section 18.4), no termination, amendment, suspension, or modification of this
Plan or an Award Agreement shall adversely affect in any material way any Award previously granted
under this Plan, without the written consent of the Participant holding such Award.

     18.4 Amendment to Conform to Law. Notwithstanding any other provision of this Plan to the
contrary, the Board of Directors may amend the Plan or an Award Agreement, to take effect
retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan
or an Award Agreement to any present or future law relating to plans of this or similar nature
(including, but not limited to, Code Section 409A), and to the administrative regulations and
rulings promulgated thereunder.

Article 19. Withholding

     19.1 Tax Withholding. The Company shall have the power and the right to deduct or withhold, or
require a Participant to remit to the Company, the minimum statutory amount to satisfy federal,
state, and local taxes, domestic or foreign, required by law or regulation to be withheld with
respect to any taxable event arising as a result of this Plan.

     19.2 Share Withholding. With respect to withholding required upon the exercise of Options or
SARs, upon the lapse of restrictions on Restricted Stock and Restricted Stock Units, or upon the
achievement of performance goals related to Performance Shares, or any other taxable event arising
as a result of an Award granted hereunder, Participants may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the
minimum statutory total tax that could be imposed on the transaction. All such elections shall be
irrevocable, made in writing, and signed by the Participant, and shall be subject to any
restrictions or limitations that the Committee, in its sole discretion, deems appropriate.

Article 20. Successors

     All obligations of the Company under this Plan with respect to Awards granted hereunder shall
be binding on any successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all
of the business and/or assets of the Company.

Article 21. General Provisions

     21.1 Forfeiture Events.

	 	(a)	 	The Committee may specify in an Award Agreement that the Participant’s
rights, payments, and benefits with respect to an Award shall be subject to
reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain
specified events, in addition to any otherwise applicable vesting or performance
conditions of an Award. Such events may include, but shall not be limited to,
termination of employment for cause, termination of the Participant’s provision of
services to the Company, Affiliate, and/or Subsidiary, violation of material
Company, Affiliate, and/or Subsidiary policies, breach of noncompetition,
confidentiality, or other restrictive covenants that may apply to the Participant,
or other conduct by the Participant that is detrimental to the business or
reputation of the Company, its Affiliates, and/or its Subsidiaries.

A-15

 

	 	(b)	 	If the Company is required to prepare an accounting restatement due to
the material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, if the Participant
knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly
negligently failed to prevent the misconduct, or if the Participant is one of the
individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley
Act of 2002, the Participant shall reimburse the Company the amount of any payment
in settlement of an Award earned or accrued during the twelve- (12-) month period
following the first public issuance or filing with the United States Securities and
Exchange Commission (whichever just occurred) of the financial document embodying
such financial reporting requirement.

     21.2 Legend. The certificates for Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer of such Shares.

     21.3 Gender and Number. Except where otherwise indicated by the context, any masculine term
used herein also shall include the feminine, the plural shall include the singular, and the
singular shall include the plural.

     21.4 Severability. In the event any provision of this Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining parts of this Plan, and
this Plan shall be construed and enforced as if the illegal or invalid provision had not been
included.

     21.5 Requirements of Law. The granting of Awards and the issuance of Shares under this Plan
shall be subject to all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.

     21.6 Delivery of Title. The Company shall have no obligation to issue or deliver evidence of
title for Shares issued under this Plan prior to:

	 	(a)	 	Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and
	 
	 	(b)	 	Completion of any registration or other qualification of the Shares
under any applicable national or foreign law or ruling of any governmental body
that the Company determines to be necessary or advisable.

     21.7 Inability to Obtain Authority. The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

     21.8 Investment Representations. The Committee may require any individual receiving Shares
pursuant to an Award under this Plan to represent and warrant in writing that the individual is
acquiring the Shares for investment and without any present intention to sell or distribute such
Shares.

     21.9 Employees Based Outside of the United States. Notwithstanding any provision of this Plan
to the contrary, in order to comply with the laws in other countries in which the Company, its
Affiliates, and/or its Subsidiaries operate or have Employees, the Committee, in its sole
discretion, shall have the power and authority to:

	 	(a)	 	Determine which Affiliates and Subsidiaries shall be covered by this
Plan;
	 
	 	(b)	 	Determine which Employees outside the United States are eligible to
participate in this Plan;
	 
	 	(c)	 	Modify the terms and conditions of any Award granted to Employees
outside the United States to comply with applicable foreign laws;
	 
	 	(d)	 	Establish subplans and modify exercise procedures and other terms and
procedures, to the extent such actions may be necessary or advisable. Any subplans
and modifications to Plan terms and

A-16

 

	 	 	 	procedures established under this Section 21.9 by the Committee shall be attached
to this Plan document as appendices; and
	 
	 	(e)	 	Take any action, before or after an Award is made, that it deems
advisable to obtain approval or comply with any necessary local government
regulatory exemptions or approvals.

     Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards
shall be granted, that would violate applicable law.

     21.10 Uncertificated Shares. To the extent that this Plan provides for issuance of
certificates to reflect the transfer of Shares, the transfer of such Shares may be effected on a
noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock
exchange.

     21.11 Unfunded Plan. Participants shall have no right, title, or interest whatsoever in or to
any investments that the Company, and/or its Subsidiaries, and/or its Affiliates may make to aid it
in meeting its obligations under this Plan. Nothing contained in this Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Participant, beneficiary, legal representative,
or any other individual. To the extent that any person acquires a right to receive payments from
the Company, its Subsidiaries, and/or its Affiliates under this Plan, such right shall be no
greater than the right of an unsecured general creditor of the Company, a Subsidiary, or an
Affiliate, as the case may be. All payments to be made hereunder shall be paid from the general
funds of the Company, a Subsidiary, or an Affiliate, as the case may be and no special or separate
fund shall be established and no segregation of assets shall be made to assure payment of such
amounts except as expressly set forth in this Plan.

     21.12 No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to this
Plan or any Award. The Committee shall determine whether cash, Awards, or other property shall be
issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto
shall be forfeited or otherwise eliminated.

     21.13 Retirement and Welfare Plans. Neither Awards made under this Plan nor Shares or cash
paid pursuant to such Awards, except pursuant to Covered Employee Incentive Awards, may be included
as “compensation” for purposes of computing the benefits payable to any Participant under the
Company’s or any Subsidiary’s or Affiliate’s retirement plans (both qualified and nonqualified) or
welfare benefit plans unless such other plan expressly provides that such compensation shall be
taken into account in computing a Participant’s benefit.

     21.14 No Deferred Compensation. No deferral of compensation (as defined under Code Section
409A or guidance thereto) shall be permitted under this Plan. However, the Committee may permit
deferrals of compensation pursuant to a separate plan or a subplan which meets the requirements of
Code Section 409A and the regulations thereunder. Additionally, to the extent any Award is subject
to Code Section 409A, notwithstanding any provision herein to the contrary, the Plan does not
permit the acceleration of the time or schedule of any distribution related to such Award, except
as permitted by Code Section 409A, the regulations thereunder, and/or the Secretary of the United
States Treasury.

     21.15 Nonexclusivity of this Plan. The adoption of this Plan shall not be construed as
creating any limitations on the power of the Board or Committee to adopt such other compensation
arrangements as it may deem desirable for any Participant.

     21.16 No Constraint on Corporate Action. Nothing in this Plan shall be construed to: (i)
limit, impair, or otherwise affect the Company’s or a Subsidiary’s or an Affiliate’s right or power
to make adjustments, reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of
its business or assets; or, (ii) limit the right or power of the Company or a Subsidiary or an
Affiliate to take any action which such entity deems to be necessary or appropriate.

     21.17 Governing Law. The Plan and each Award Agreement shall be governed by the laws of the
State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of this Plan to the substantive law of another jurisdiction.
Unless otherwise provided in the Award Agreement, recipients of an Award under this Plan are deemed
to submit to the exclusive jurisdiction and venue of the federal or state courts of Delaware, to
resolve any and all issues that may arise out of or relate to this Plan or any related Award
Agreement.

A-17

 

     21.18 Indemnification. Subject to requirements of Delaware law, each individual who is or
shall have been a member of the Board, or a Committee appointed by the Board, or an officer of the
Company to whom authority was delegated in accordance with Article 3, shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him in connection with or resulting from any claim, action, suit, or
proceeding to which he may be a party or in which he or she may be involved by reason of any action
taken or failure to act under this Plan and against and from any and all amounts paid by him in
settlement thereof, with the Company’s approval, or paid by him in satisfaction of any judgement in
any such action, suit, or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he undertakes to handle and
defend it on his own behalf, unless such loss, cost, liability, or expense is a result of his own
willful misconduct or except as expressly provided by statute. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to which such
individuals may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter
of law, or otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

     21.19 Merger or Acquisition. In the event that the Company is a party to a merger,
reorganization, consolidation, share exchange, transfer of assets, or other transaction having a
similar effect involving the Company, outstanding Awards shall be subject to the agreement of
merger or reorganization. Such agreement may provide, without limitation, for the continuation of
outstanding Awards by the Company (if the Company is a surviving corporation), for their assumption
by the surviving corporation or its parent or subsidiary, for the substitution by the surviving
corporation or its parent or subsidiary of its own awards for such Awards, for accelerated vesting
and accelerated expiration, or for settlement in cash or cash equivalents.

A-18exv4w2

Exhibit 4.2

2005 Nonemployee Directors’

Restricted Stock Plan

Huttig Building Products, Inc.

As Amended and Restated Effective December 8, 2009

 

Contents

	 	 	 	 	 	 	 
	Article 1.
	 	Establishment, Purpose, and Duration	 	 	2	 
	 
	 	 	 	 	 	 
	Article 2.
	 	Definitions	 	 	2	 
	 
	 	 	 	 	 	 
	Article 3.
	 	Administration	 	 	4	 
	 
	 	 	 	 	 	 
	Article 4.
	 	Shares Subject to the Plan and Maximum Awards	 	 	4	 
	 
	 	 	 	 	 	 
	Article 5.
	 	Eligibility and Participation	 	 	5	 
	 
	 	 	 	 	 	 
	Article 6.
	 	Restricted Stock and Restricted Stock Units	 	 	5	 
	 
	 	 	 	 	 	 
	Article 7.
	 	Beneficiary Designation	 	 	6	 
	 
	 	 	 	 	 	 
	Article 8.
	 	No Right of Nomination	 	 	6	 
	 
	 	 	 	 	 	 
	Article 9.
	 	Change in Control	 	 	7	 
	 
	 	 	 	 	 	 
	Article 10.
	 	Amendment, Modification, Suspension, and Termination	 	 	7	 
	 
	 	 	 	 	 	 
	Article 11.
	 	Successors	 	 	7	 
	 
	 	 	 	 	 	 
	Article 12.
	 	General Provisions	 	 	8	 
	 
	 	 	 	 	 	 
	Article 13.
	 	Legal Construction	 	 	8	 

 

 

Huttig Building Products, Inc.

2005 Nonemployee Directors’ Restricted Stock Plan

Article 1. Establishment, Purpose, and Duration

     1.1 Establishment of the Plan. Huttig Building Products, Inc., a Delaware corporation
(hereinafter referred to as the “Company”), establishes an incentive compensation plan to be known
as the Huttig Building Products, Inc. 2005 Nonemployee Directors’ Restricted Stock Plan
(hereinafter referred to as the “Plan”), as set forth in this document, effective originally as of
March 15, 2005 (the “Effective Date”). The Plan permits the grant of Restricted Stock and
Restricted Stock Units. The Plan, as amended and restated herein, has been approved to be
effective as of December 8, 2009, and shall remain in effect as provided in Section 1.3 hereof.

     1.2 Purpose of the Plan. The purpose of the Plan is to promote the achievement of long-term
objectives of the Company by linking the personal interests of the Participants to those of the
Company’s stockholders, and to attract and retain Nonemployee Directors of outstanding competence.

     1.3 Duration of the Plan. The Plan shall commence as of the Effective Date, as described in
Section 1.1 herein, and shall remain in effect, subject to the right of the Committee or the Board
of Directors to amend or terminate the Plan at any time pursuant to Article 10 herein, for a period
of ten (10) years from the Effective Date. After the Plan is terminated, no Awards may be granted
but Awards previously granted shall remain outstanding in accordance with their applicable terms
and conditions and the Plan’s terms and conditions.

Article 2. Definitions

     Whenever used in the Plan, the following terms shall have the meaning set forth below, and
when the meaning is intended, the initial letter of the word shall be capitalized.

	 	2.1	 	“Affiliate” shall mean any corporation or other entity (including, but not limited
to, a partnership or a limited liability company) that is affiliated with the Company
through stock or equity ownership or otherwise, and is designated as an Affiliate for
purposes of the Plan by the Committee.
	 
	 	2.2	 	“Award” means, individually or collectively, a grant under this Plan of Restricted
Stock or Restricted Stock Units, in each case subject to the terms of the Plan
	 
	 	2.3	 	“Award Agreement” means an agreement entered into by and between the Company and a
Nonemployee Director setting forth the terms and provisions applicable to an Award,
including any amendment or modification thereof, granted under this Plan.
	 
	 	2.4	 	“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such
term in rule 13d-3 of the General Rules and Regulations under the Exchange Act.
	 
	 	2.5	 	“Board” or “Board of Directors” means the Board of Directors of the Company.
	 
	 	2.6	 	“Change in Control” of the Company means, and shall be deemed to have occurred upon,
the first to occur of any of the following events after the Effective Date: (a) the first
purchase of shares pursuant to a tender offer or exchange offer (other than a tender offer
or exchange offer by the Company) for all or part of the Shares or any securities
convertible into such Shares, (b) the receipt by the Company of a Schedule 13D or other
advice indicating that a person is the “beneficial owner” (as that term is defined in Rule
13d-3 under the Exchange Act) of 20% or more of the Shares calculated as provided in
paragraph (d) of said Rule 13d-3, (c) the date of consummation of any merger,
reorganization, consolidation, share exchange, transfer of assets or other transaction
having similar effect involving the Company (“Business Transaction”) in which the Company
will not be the continuing or surviving corporation or pursuant to which Shares would be
converted into cash, securities or other property, other than a Business Transaction in
which the holders of the Shares immediately prior to the Business Transaction would own
more than 50% of the common stock of the surviving corporation immediately after the
Business Transaction, (d) the date of consummation of any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or substantially
all the assets of the Company, (e) the adoption of any plan or proposal for the
liquidation (but not a partial liquidation) or dissolution of the Company, or (f) the date
upon which the individuals who constitute the Board as of

2

 

	 	 	 	the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent to such
date whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least three-quarters of the directors comprising the Incumbent
Board (other than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating to the
election of the Directors of the Company) shall, for purposes of this Plan, be
considered as though such person were a member of the Incumbent Board.
	 
	 	2.7	 	“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time, or
any successor thereto. For purposes of the Plan, references to sections of the Code shall
be deemed to include references to any applicable regulations thereunder and any successor
or similar provision.
	 
	 	2.8	 	“Committee means the Organization and Compensation Committee of the Board or a
subcommittee thereof, or any other committee designated by the Board to administer this
Plan. The members of the Committee shall be appointed from time to time by and shall
serve at the discretion of the Board. If the Committee does not exist or cannot function
for any reason, the Board may take any action under the Plan that would otherwise be the
responsibility of the Committee.
	 
	 	2.9	 	“Company” means Huttig Building Products, Inc., a Delaware corporation, and any
successor thereto as provided in Article 11 herein.
	 
	 	2.10	 	“Director” means any individual who is a member of the Board of Directors of the
Company.
	 
	 	2.11	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, or any successor act thereto.
	 
	 	2.12	 	“Fair Market Value” or “FMV” means a price that is based on the opening, closing,
actual, high, low, or average selling prices of a Share reported on the New York Stock
Exchange (“NYSE”) or other established stock exchange (or exchanges) on the applicable
date, the preceding trading day, the next succeeding trading day, or an average of trading
days, as determined by the Committee in its discretion. Unless the Committee determines
otherwise, if the Shares are traded over the counter at the time a determination of its
Fair Market Value is required to be made hereunder, its Fair Market Value shall be deemed
to be equal to the average between the reported high and low, closing bid and asked, or
opening and closing prices of a Share on the most recent date on which Shares were
publicly traded. In the event Shares are not publicly determined at the time a
determination of their value is required to be made hereunder, the determination of their
Fair Market Value shall be made by the Committee in such manner as it deems appropriate.
Such definition(s) of FMV shall be specified in each Award Agreement and may differ
depending on whether FMV is in reference to the grant, exercise, vesting, settlement, or
payout of an Award.
	 
	 	2.13	 	“Insider” shall mean an individual who is, on the relevant date, an officer, or
Director of the Company, or a more than ten percent (10%) Beneficial Owner of any class of
the Company’s equity securities that is registered pursuant to Section 12 of the Exchange
Act, as determined by the Board in accordance with Section 16 of the Exchange Act.
	 
	 	2.14	 	“Nonemployee Director” means a Director who is not an employee of the Company.
	 
	 	2.15	 	“Participant” means a Nonemployee Director who has been selected to receive an Award
or who has an outstanding Award granted under the Plan.
	 
	 	2.16	 	“Period of Restriction” means the period when Awards are subject to a substantial
risk of forfeiture based on the passage of time and/or upon the occurrence of other events
as determined by the Committee, in its discretion, as provided in Article 6.
	 
	 	2.17	 	“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as provided
in Section 13(d) thereof.

3

 

	 	2.18	 	“Plan” means the Huttig Building Products, Inc. 2005 Nonemployee Directors’
Restricted Stock Plan, as it maybe amended from time to time.
	 
	 	2.19	 	“Plan Year” means the calendar year.
	 
	 	2.20	 	“Restricted Stock” means an Award granted to a Participant pursuant to Article 6.
	 
	 	2.21	 	“Restricted Stock Unit” means an Award granted to a Participant pursuant to Article
6, except no Shares are actually awarded to the Participant on the date of grant.
	 
	 	2.22	 	“Share” means a share of common stock of the Company, $.01 par value per share.
	 
	 	2.23	 	“Subsidiary” means any corporation or other entity, whether domestic or foreign, in
which the Company has or obtains, directly or indirectly, a proprietary interest of more
than fifty percent (50%) by reason of stock ownership or otherwise.

Article 3. Administration

     3.1 General. The Committee shall be responsible for administering the Plan, subject to this
Article 3 and the other provisions of the Plan. The Committee may employ attorneys, consultants,
accountants, agents, and other individuals, any of whom may be an Employee, and the Committee, the
Company, and its officers and Directors shall be entitled to rely upon the advice, opinions, or
valuations of any such individuals. All actions taken and all interpretations and determinations
made by the Committee shall be final and binding upon the Participants, the Company, and all other
interested individuals.

     3.2 Authority of the Committee. The Committee shall have full and exclusive discretionary
power to interpret the terms and the intent of the Plan and any Award Agreement or other agreement
or document ancillary to or in connection with the Plan, to determine eligibility for Awards and to
adopt such rules, regulations, and guidelines for administering the Plan as the Committee may deem
necessary or proper. Such authority shall include, but not be limited to, selecting Award
recipients, establishing all Award terms and conditions, including the terms and conditions set
forth in Award Agreements, and, subject to Article 10, adopting modifications and amendments to the
Plan or any Award Agreement, including without limitation, any that are necessary to comply with
the laws of the countries and other jurisdictions in which the Company, its Affiliates, and/or its
Subsidiaries operate.

     3.3 Delegation. To the extent permitted under applicable law, the Committee may delegate to
one or more of its members or to one or more officers of the Company and/or its Subsidiaries and
Affiliates, or to one or more agents or advisors such administrative duties or powers as it may
deem advisable, and the Committee or any person to whom it has delegated duties or powers as
aforesaid may employ one or more persons to render advice with respect to any responsibility the
Committee or such person may have under the Plan.

Article 4. Shares Subject to the Plan and Maximum Awards

     4.1 Number of Shares Available for Awards. Subject to adjustment as provided in Section 4.2
herein, the maximum number of Shares hereby reserved for issuance to Participants under the Plan on
or after the Effective Date (the “Share Authorization”) shall be two hundred seventy-five thousand
(275,000) Shares. Any Shares related to Awards which terminate by forfeiture, cancellation, or
otherwise without the issuance of such Shares, are settled in cash in lieu of Shares, or are
exchanged with the Committee’s permission for Awards not involving Shares, shall be available again
for grant under the Plan. The maximum number of Shares available for issuance under the Plan shall
not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional
Shares or credited as additional Restricted Stock or Restricted Stock Units. In addition, the
Committee, in its discretion, may establish any other appropriate methodology for calculating the
number of Shares issued pursuant to the Plan. The Shares available for issuance under the Plan may
be authorized and unissued Shares or treasury Shares.

     4.2 Adjustments in Authorized Shares. In the event of any corporate event or transaction
(including, but not limited to, a change in the Shares of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization, separation, stock
dividend, stock split, reverse stock split, split up, spin-off, or other distribution of stock or
property of the Company, combination of securities, exchange of securities,

4

 

dividend in kind, or other like change in capital structure or distribution (other than normal
cash dividends) to stockholders of the Company, or any similar corporate event or transaction, the
Committee, in its sole discretion, in order to prevent dilution or enlargement of Participants’
rights under the Plan, shall substitute or adjust, in an equitable manner, as applicable, the
number and kind of Shares that may be issued under the Plan, the number and kind of Shares subject
to outstanding Awards, and other value determinations applicable to outstanding Awards.

     Appropriate adjustments may also be made by the Committee in the terms of any Awards under the
Plan to reflect or related to such changes or distributions and to modify any other terms of
outstanding Awards on an equitable basis. The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on Participants under the Plan.

     Subject to the provisions of Article 9 and any applicable law or regulatory requirement,
without affecting the number of Shares reserved or available hereunder, the Committee may authorize
the issuance, assumption, substitution, or conversion of Awards under this Plan in connection with
any merger, consolidation, acquisition of property or stock, or reorganization, upon such terms and
conditions as it may deem appropriate.

Article 5. Eligibility and Participation

     5.1 Eligibility. Individuals eligible to participate in the Plan are limited to Nonemployee
Directors who are serving on the Board on the date of each scheduled grant under the Plan.

     5.2 Actual Participation. Subject to the provisions of the Plan, the Committee may, from time
to time, select from all eligible individuals, those individuals to whom Awards shall be granted
and shall determine, in its sole discretion, the nature of any and all terms permissible by law,
and the amount of each Award.

Article 6. Restricted Stock and Restricted Stock Units

     6.1 Grant of Restricted Stock or Restricted Stock Units. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock
and/or Restricted Stock Units to Participants in such amounts as the Committee shall determine.
Restricted Stock Units shall be similar to Restricted Stock except that no Shares are actually
issued to the Participant on the date of grant. Restricted Stock Units represent the right to
receive Shares in the future subject to the achievement of one or more goals relating to the
completion of service by the Participant and/or the achievement of performance or other objectives.

     6.2 Restricted Stock or Restricted Stock Unit Agreement. Each Restricted Stock and/or
Restricted Stock Unit grant shall be evidenced by an Award Agreement that shall specify the
Period(s) of Restriction, the number of Shares of Restricted Stock or the number of Restricted
Stock Units granted, and such other provisions as the Committee shall determine.

     6.3 Transferability. Except as provided in this Article 6, the Shares of Restricted Stock
and/or Restricted Stock Units granted herein may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the end of the applicable Period of Restriction
established by the Committee and specified in the Award Agreement (and in the case of Restricted
Stock Units, until the date of delivery or other payment), or upon earlier satisfaction of any
other conditions, as specified by the Committee, in its sole discretion, and set forth in the Award
Agreement. All rights with respect to the Restricted Stock and/or Restricted Stock Units granted
to a Participant under the Plan shall be available during his or her lifetime only to such
Participant.

     6.4 Other Restrictions. The Committee shall impose such other conditions and/or restrictions
on any Shares of Restricted Stock or Restricted Stock Units granted pursuant to the Plan as it may
deem advisable, including, without limitation, a requirement that Participants pay a stipulated
purchase price for each Share of Restricted Stock or each Restricted Stock Unit, time-based
restrictions, and/or restrictions under applicable laws or under the requirements of any stock
exchange or market upon which such Shares are listed or traded, or holding requirements or sale
restrictions placed on the Shares by the Company upon vesting of such Restricted Stock or
Restricted Stock Units.

5

 

     To the extent deemed appropriate by the Committee, the Company may retain the certificates
representing Shares of Restricted Stock in the Company’s possession until such time as all
conditions and/or restrictions applicable to such Shares have been satisfied or lapse.

     Except as otherwise provided in this Article 6, Shares of Restricted Stock covered by each
Restricted Stock Award shall become freely transferable by the Participant after all conditions and
restrictions applicable to such Shares have been satisfied or lapse, and Restricted Stock Units
shall be paid in cash, Shares, or a combination of cash and Shares as the Committee, in its sole
discretion, shall determine.

     6.5 Certificate Legend. In addition to any legends placed on certificates pursuant to Section
6.4, each certificate representing Shares of Restricted Stock granted pursuant to the Plan may bear
a legend such as the following or as otherwise determined by the Committee in its sole discretion:

The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is subject
to certain restrictions on transfer as set forth in the Huttig Building
Products, Inc. 2005 Nonemployee Directors’ Restricted Stock Plan and in the
associated Restricted Stock Award Agreement. A copy of the Plan and such
Restricted Stock Award Agreement may be obtained from Huttig Building Products,
Inc.

     6.6 Voting Rights. Unless otherwise determined by the Committee and set forth in a
Participant’s Award Agreement, to the extent permitted or required by law, as determined by the
Committee, Participants holding Shares of Restricted Stock granted hereunder may be granted the
right to exercise full voting rights with respect to those Shares during the Period of Restriction.
A Participant shall have no voting rights with respect to any Restricted Stock Units granted
hereunder.

     6.7 Dividends and Other Distributions. During the Period of Restriction, Participants holding
Shares of Restricted Stock or Restricted Stock Units granted hereunder may, if the Committee so
determines, be credited with dividends paid with respect to the underlying Shares or dividend
equivalents while they are so held in a manner determined by the Committee, in its sole discretion.
The Committee may apply any restrictions to the dividends or dividend equivalents that the
Committee deems appropriate. The Committee, in its sole discretion, may determine the form of
payment of dividends or dividend equivalents, including cash, Shares, Restricted Stock, or
Restricted Stock Units.

     6.8 Termination of Directorship. Unless otherwise designated by the Committee, all unvested
Shares of Restricted Stock or Restricted Stock Units will be forfeited upon termination of service
from the Board for any reason.

     6.9 Section 83(b) Election. The Committee may provide in an Award Agreement that the Award of
Restricted Stock is conditioned upon the Participant making or refraining from making an election
with respect to the Award under Section 83(b) of the Code. If a Participant makes an election
pursuant to Section 83(b) of the Code concerning a Restricted Stock Award, the Participant shall be
required to file promptly a copy of such election with the Company.

Article 7. Beneficiary Designation

     Each Participant under this Plan may, from time to time, name any beneficiary or beneficiaries
(who may be named contingently or successively) to whom any benefit under this Plan is to be paid
in case of his death before he receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing with the Company
during the Participant’s lifetime. In the absence of any such beneficiary designation, benefits
remaining unpaid or rights remaining unexercised at the Participant’s death shall be paid or
exercised by the Participant’s executor, administrator, or legal representative.

Article 8. No Right of Nomination

     8.1 Nomination. Nothing in the Plan shall be deemed to create any obligation on the part of
the Board to nominate any Director for reelection by the Company’s stockholders.

6

 

     8.2 Participation. No Participant shall have the right to be selected to receive an Award
under this Plan, or, having been so selected, to be selected to receive a future Award.

     8.3 Rights as a Stockholder. Except as otherwise provided herein, a Participant shall have
none of the rights of a stockholder with respect to Shares covered by any Award until the
Participant becomes the record holder of such Shares.

Article 9. Change in Control

     Notwithstanding any other provision of the Plan to the contrary, the provisions of this
Article 9 shall apply in the event of a Change in Control, unless otherwise specifically prohibited
under applicable laws, or by the rules and regulations of any governing governmental agencies or
national securities exchanges, or unless otherwise determined by the Committee in connection with
the grant of an Award as reflected in the applicable Award Agreement.

     Upon a Change in Control, any Period of Restriction for Restricted Stock and Restricted Stock
Units granted hereunder that have not previously vested shall end, and such Restricted Stock and
Restricted Stock Units shall become fully vested. Subject to Article 10, herein, the Committee
shall have the authority to make any modifications to the Awards as determined by the Committee to
be appropriate before the effective date of the Change in Control.

Article 10. Amendment, Modification, Suspension, and Termination

     10.1 Amendment, Modification, Suspension, and Termination. Subject to Section 10.3, the
Committee or Board may, at any time and from time to time, alter, amend, modify, suspend, or
terminate the Plan and any Award Agreement in whole or in part. No amendment of the Plan shall be
made without stockholder approval if stockholder approval is required by law, regulation, or stock
exchange rule, including, but not limited to, the Securities Exchange Act of 1934, as amended, the
Internal Revenue Code of 1986, as amended, and if applicable, the New York Stock Exchange Listed
Company Manual.

     10.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The
Committee may make adjustments in the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events (including, without limitation, the events
described in Section 4.2 hereof) affecting the Company or the financial statements of the Company
or of changes in applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent unintended dilution or
enlargement of the benefits or potential benefits intended to be made available under the Plan. The
determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and
binding on Participants under the Plan.

     10.3 Awards Previously Granted. Notwithstanding any other provision of the Plan to the
contrary (other than Section 10.4), no termination, amendment, suspension, or modification of the
Plan or an Award Agreement shall adversely affect in any material way any Award previously granted
under the Plan, without the written consent of the Participant holding such Award.

     10.4 Amendment to Conform to Law. Notwithstanding any other provision of the Plan to the
contrary, the Board of Directors may amend the Plan or an Award Agreement, to take effect
retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan
or an Award Agreement to any present or future law relating to plans of this or a similar nature
(including, but not limited to, Code Section 409A), and to the administrative regulations and
rulings promulgated thereunder.

Article 11. Successors

     All obligations of the Company under the Plan with respect to Awards granted hereunder shall
be binding on any successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all
of the business and/or assets of the Company.

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Article 12. General Provisions

     12.1 Forfeiture Events. The Committee may specify in an Award Agreement that the
Participant’s rights, payments, and benefits with respect to an Award shall be subject to
reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events,
in addition to any otherwise applicable vesting conditions of an Award. Such events shall include,
but shall not be limited to, violation of material Company policies, or other conduct by the
Participant that is detrimental to the business or reputation of the Company and/or its
Subsidiaries and Affiliates.

     12.2 Legend. The certificates for Shares may include any legend that the Committee deems
appropriate to reflect any restrictions on transfer of such Shares.

     12.3 Delivery of Title. The Company shall have no obligation to issue or deliver evidence of
title for Shares issued under the Plan prior to:

	 	(a)	 	Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and
	 
	 	(b)	 	Completion of any registration or other qualification of the Shares
under any applicable national or foreign law or ruling of any governmental body
that the Company determines to be necessary or advisable.

     12.4 Investment Representations. The Committee may require each Participant receiving Shares
pursuant to an Award under this Plan to represent and warrant in writing that the Participant is
acquiring the Shares for investment and without any present intention to sell or distribute such
Shares.

     12.5 Uncertificated Shares. To the extent that the Plan provides for issuance of certificates
to reflect the transfer of Shares, the transfer of such Shares may be effected on a noncertificated
basis, to the extent not prohibited by applicable law or the rules of any stock exchange.

     12.6 Unfunded Plan. Participants shall have no right, title, or interest whatsoever in or to
any investments that the Company and/or its Subsidiaries and/or its Affiliates may make to aid it
in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and/or its Subsidiaries and/or its Affiliates and any
Participant, beneficiary, legal representative, or any other individual. To the extent that any
person acquires a right to receive payments from the Company and/or its Subsidiaries and/or its
Affiliates under the Plan, such right shall be no greater than the right of an unsecured general
creditor of the Company. All payments to be made hereunder shall be paid from the general funds of
the Company, a Subsidiary, or an Affiliate, and no special or separate fund shall be established
and no segregation of assets shall be made to assure payment of such amounts except as expressly
set forth in the Plan.

     12.7 No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the
Plan or any Award. The Committee shall determine whether cash, Awards, or other property shall be
issued or paid in lieu of fractional Shares, or whether such fractional Shares or any rights
thereto shall be forfeited or otherwise eliminated.

Article 13. Legal Construction

     13.1 Gender and Number. Except where otherwise indicated by the context, any masculine term
used herein also shall include the feminine, the plural shall include the singular, and the
singular shall include the plural.

     13.2 Severability. In the event any provision of the Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and
the Plan shall be construed and enforced as if the illegal or invalid provision had not been
included.

     13.3 Requirements of Law. The granting of Awards and the issuance of Shares under the Plan
shall be subject to all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.

8

 

     13.4 Inability to Obtain Authority. The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

     13.5 Securities Law Compliance. The Company may use reasonable endeavors to register Shares
allotted pursuant to the exercise of an Award with the United States Securities and Exchange
Commission or to effect compliance with the registration, qualification, and listing requirements
of any national or foreign securities laws, stock exchange, or automated quotation system. With
respect to Insiders, transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed null and void to the
extent permitted by law and deemed advisable by the Committee.

     13.6 No Deferred Compensation. No deferral of compensation (as defined under Code Section
409A or guidance thereto) shall be permitted under this Plan. However, the Committee may permit
deferrals of compensation pursuant to a separate plan or a subplan which meets the requirements of
Code Section 409A and the regulations thereunder. Additionally, to the extent any Award is subject
to Code Section 409A, notwithstanding any provision herein to the contrary, the Plan does not
permit the acceleration of the time or schedule of any distribution related to such Award, except
as permitted by Code Section 409A, the regulations thereunder, and/or the Secretary of the United
States Treasury.

     13.7 Nonexclusivity of this Plan. The adoption of this Plan shall not be construed as
creating any limitations on the power of the Board or Committee to adopt such other compensation
arrangements as it may deem desirable for any Participant.

     13.8 No Constraint on Corporate Action. Nothing in this Plan shall be construed to: (i)
limit, impair, or otherwise affect the Company’s or a Subsidiary’s or an Affiliate’s right or power
to make adjustments, reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of
its business or assets; or, (ii) limit the right or power of the Company or a Subsidiary or an
Affiliate to take any action which such entity deems to be necessary or appropriate.

     13.9 Governing Law. The Plan and each Award Agreement shall be governed by the laws of the
state of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of the Plan to the substantive law of another jurisdiction.
Unless otherwise provided in the Award Agreement, recipients of an Award under the Plan are deemed
to submit to the exclusive jurisdiction and venue of the federal or state courts of Delaware, to
resolve any and all issues that may arise out of or relate to the Plan or any related Award
Agreement.

     13.10 Indemnification. Subject to requirements of Delaware law, each individual who is or
shall have been a member of the Board, or a Committee appointed by the Board, or an officer of the
Company to whom authority was delegated in accordance with Article 3, shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him in connection with or resulting from any claim, action, suit, or
proceeding to which he may be a party or in which he or she may be involved by reason of any action
taken or failure to act under this Plan and against and from any and all amounts paid by him in
settlement thereof, with the Company’s approval, or paid by him in satisfaction of any judgment in
any such action, suit, or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he undertakes to handle and
defend it on his own behalf, unless such loss, cost, liability, or expense is a result of his own
willful misconduct or except as expressly provided by statute.

     The foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such individuals may be entitled under the Company’s Certificate of
Incorporation of Bylaws, as a matter of law, or otherwise, or any power that the Company may have
to indemnify them or hold them harmless.

9

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