Document:

Exhibit
10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is
made as of December 11, 2006, between WII Merger Corporation, a Delaware
corporation (the “Company”), WII Holding, Inc., a Delaware corporation (“Parent”)
and Dale Herbst (“Executive”) and shall become effective as of the
Effective Date (as defined below).

WHEREAS, the Company is party to that certain
Agreement and Plan of Merger, dated as of the date hereof, by and among the
Company, WII Components, Inc., a Delaware corporation (“WII Components”),
Parent and Behrman Capital III, L.P. (the “Merger Agreement”);

WHEREAS, Executive is currently employed by Woodcraft
Industries, Inc., a Minnesota corporation and a Subsidiary of WII Components,
pursuant to the terms of that certain Amended and Restated Employment
Agreement, dated as of April 9, 2003 (the “Existing Agreement”); and

WHEREAS, upon the closing of the transactions
contemplated by the Merger Agreement (the “Effective Date”), the Company
desires to employ Executive, and Executive desires to accept such employment,
on the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

1.             Employment. The Company
shall employ Executive, and Executive hereby accepts employment with the
Company, upon the terms and conditions set forth in this Agreement for the
period beginning on the Effective Date and ending as provided in Paragraph
4 hereof (the “Employment Period”).

2.             Position and Duties.

(a)           Executive
shall initially serve as the Chief Financial Officer of the Company and shall
have the normal duties, responsibilities, functions and authority of the Chief
Financial Officer (or of such other position as is held by Executive as
determined by the Board from time to time), subject to the power and authority
of the Company’s board of directors (the “Board”) to expand or limit
such duties, responsibilities, functions and authority and to overrule actions
of officers of the Company.  During the
Employment Period, Executive shall render such administrative, financial and
other executive and managerial services to the Company and its Subsidiaries
which are consistent with Executive’s positions as the Board (and/or such other
person or persons as the Board may designate) may from time to time direct.

(b)           During
the Employment Period, Executive shall devote his best efforts and his full
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Company and its Subsidiaries. Executive shall perform his duties,
responsibilities and functions to the Company and its Subsidiaries hereunder to
the best of his abilities in a diligent, trustworthy, professional and
efficient manner and shall comply with the Company’s and its Subsidiaries’
policies and procedures in all material respects. So long as Executive is
employed by the Company, Executive shall not, without the prior written consent
of the Board, accept other employment or perform other services for
compensation.

(c)           It
is understood that Executive shall undertake such business travel as reasonably
required by the Company to perform his duties and responsibilities.

(d)           For
purposes of this Agreement, “Subsidiaries” shall mean any corporation or
other entity of which the securities or other ownership interests having the
voting power to elect a majority of the board of directors or other governing
body are, at the time of determination, owned by Parent, directly or through
one of more Subsidiaries (including, without limitation, the Company).

3.             Compensation and Benefits.

(a)           During
the Employment Period, Executive’s base salary shall be $142,000 per annum or
such other rate as the Board may determine from time to time (the “Base
Salary”).  Executive’s Base Salary
(as in effect from time to time) shall be reviewed on no less than an annual
basis, and, without the prior written consent of Executive, it shall not be
reduced during the Employment Period (except as part of a general reduction in
the base salaries for all executive officers of the Company).  Executive’s Base Salary shall be payable by
the Company in regular installments in accordance with the Company’s general
payroll practices (as in effect from time to time).

(b)           During
the Employment Period, the Company shall reimburse Executive for all reasonable
business expenses incurred by him in the course of performing his duties and
responsibilities under this Agreement which are consistent with the Company’s
policies in effect from time to time with respect to travel, entertainment and
other business expenses, subject to the Company’s requirements with respect to
reporting and documentation of such expenses.

(c)           In
addition to the Base Salary, Executive shall be eligible to receive a
performance bonus with respect to each year during the Employment Period in an
aggregate target amount of up to 80% of Executive’s Base Salary; provided
that for the fiscal year ended December 31, 2006 (to the extent not
already paid prior to the effective date hereof) and the fiscal year ended
December 31, 2007, such bonus shall be based on the measures set forth on Exhibit
B hereto and provided  further  that for each fiscal
year of the Company beginning after December 31, 2007, such bonus shall be
based on the terms of the Company’s management incentive plan in effect from
time to time as determined by the Board after consultations with members of the
Company’s senior management team.

(d)           All
amounts payable to Executive as compensation hereunder shall be subject to all
required and customary withholding by the Company.

(e)           During the Employment Period, Executive shall
be included in all employee benefit plans, programs, arrangements (including,
without limitation, any plans, programs or arrangements providing for
disability benefits, health insurance, vacation and paid holidays) to the
extent established by the Company for, or made available to all its senior
executives, subject to Executive’s satisfaction of all applicable eligibility
requirements.

4.             Term.

(a)           The
Employment Period shall continue from the Effective Date and (i) will terminate
immediately upon Executive’s resignation for any reason (with or without Good
Reason (as defined below)), death or Disability (as defined below) and (ii) may
be terminated by the Company at any time for Cause (as defined below) or
without Cause.

(b)           Subject
to the other terms and conditions of this Paragraph 4, if (1) the
Employment Period is terminated by the Company or its successors in interest
without Cause, (2) Executive resigns with Good Reason or (3) the Employment
Period is terminated upon Executive’s Disability, Executive shall be entitled to receive (i)
his Base Salary through the date of such termination, (ii) any portion of a
bonus from a prior period (i.e., from a prior year) that has been fully earned
and was fully payable prior to 

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the
date on which the Employment Period is terminated but that had not yet been
paid, (iii) a pro rata portion (based on the number of calendar days of
employment during such fiscal year) of any annual bonus that would have payable
to Executive during any year in which his Employment Period is terminated, provided
that any such amount shall only be payable if Executive was employed by the
Company for six months or more of such fiscal year and provided further that
any such payment will be due and payable at such time as any such bonus amounts
would have been paid had Executive remained employed throughout the entire
fiscal year and (iv) twelve months Base Salary (provided that it is
expressly understood that included in this sum is such severance and other
payments that may be due to Executive); provided further that upon any termination or resignation of the
type set forth above in (1), (2) and (3), Executive shall be entitled to
continue to participate (at the Company’s cost) in employee benefit plans for
senior executive employees (other than bonus and incentive compensation plans)
to the extent not prohibited under the terms of such programs as of the date of
termination or required under applicable law, for a period of twelve months
after such termination or resignation. 
The severance payments contemplated by the preceding sentence shall be
payable by the Company in regular installments in accordance with the Company’s
general payroll practices (as in effect on the date of termination) from the
date of termination for a period of twelve months thereafter (the “Severance
Period”).  The severance
payments described in clause (iv) of the first sentence of this paragraph shall
become due and owing if, and only if, Executive has executed and delivered to
the Company and Parent a general release in favor of them in the form attached
hereto as Exhibit A (the “General Release”) and the General
Release has become effective, and only so long as Executive has not revoked or
breached the provisions of the General Release or breached the provisions of Paragraphs
5, 6 and 7 hereof and does not apply for unemployment
compensation chargeable to the Company or any Subsidiary during the Severance
Period.  Executive shall not be entitled
to any other salary, compensation or benefits after termination of the
Employment Period, except as expressly required by applicable law.  The Company shall be entitled to deduct from
any payment otherwise payable to Executive pursuant to this Paragraph 4(b),
any amount received by Executive after termination of the Employment Period
under any short-term or long-term disability insurance plan or program provided
to him by the Company; and provided  that Executive shall promptly
and fully disclose to the Company in writing the amount of any such disability
insurance payments.

(c)           If
the Employment Period is terminated for any other reason (including (1) by the
Company for Cause, (2) due to Executive’s death or (3) by Executive’s
resignation for any reason without Good Reason), Executive shall only be entitled to receive
(i) his Base Salary through the date of such termination and (ii) any portion
of a bonus from a prior period (i.e., from a prior year) that has been fully
earned and was fully payable prior to the date on which the Employment Period
is terminated but that had not yet been paid, and Executive shall not be
entitled to any other salary, compensation or benefits from the Company, Parent
and/or any of its Subsidiaries thereafter, except as otherwise expressly
required by applicable law.

(d)           Except
as otherwise expressly provided herein, all of Executive’s rights to salary,
bonuses, employee benefits and other compensation hereunder (if any) which
would have accrued or become payable after the termination of the Employment
Period shall cease upon such termination, other than those expressly required
under applicable law (such as COBRA). 
Termination of Executive’s employment with the Company for any reason
shall be deemed to automatically remove Executive, without further action, from
any and all offices held by Executive with the Company or any of its
affiliates.

(e)           The
Company may offset any amounts Executive owes it or its affiliates against any
amounts it or its affiliates owes Executive.

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(f)            For
purposes of this Agreement, “Cause” shall mean with respect to Executive
one or more of the following: (i) the commission of a felony or other crime
involving moral turpitude, (ii) the commission of any act or the omission to
take an act, either of which results in disloyalty or fraud toward the Company
or any of its Subsidiaries, or involving dishonesty in connection with the
Company or any of its Subsidiaries, which is materially detrimental to the
Company or any of its Subsidiaries, (iii) reporting to the workplace under the
influence of alcohol or illegal drugs, the use of illegal drugs (whether or not
at the workplace) or other repeated conduct causing the Company or any of its
Subsidiaries substantial public disgrace or disrepute or substantial economic
harm, (iv) failure to perform duties as reasonably directed by the Board and/or
the Company’s chief executive officer, and such failure is not cured within
twenty (20) days after the Executive receives written notice thereof from the
Board, (v) unlawful conduct or gross misconduct that is willful and deliberate
on Executive’s part and that, in either event, is materially injurious to the
Company or any of its Subsidiaries, or (vi) any other material breach of this
Agreement or of any other agreement between Executive and the Company, which
breach has not been cured by Executive within ten days after written notice
thereof to Executive from the Board.

(g)           For
purposes of this Agreement, “Disability” shall mean the inability of Executive to
perform on a full-time basis the duties and responsibilities of his employment
with the Company by reason of his illness or other physical or mental
impairment or condition, if such inability continues for an uninterrupted
period of 180 days or more during any 360-day period.  A period of inability shall be “uninterrupted”
unless and until Executive returns to full-time work for a continuous period of
at least 30 days.

(h)           For
purposes of this Agreement, “Good Reason” shall mean (i) any requirement
by the Company that Executive’s principal office be moved by more than fifty
(50) miles from the St. Cloud metropolitan area without Executive’s consent,
(ii) a reduction of Executive’s base salary or aggregate target bonus amount
(except as part of a general reduction in the base salaries or aggregate target
bonus amounts for all executive officers of the Company) or (iii) the material
breach of any terms and conditions of this Agreement by the Company not caused
by Executive; provided that no such occurrence shall constitute the
basis for a termination with “Good Reason” unless Executive notifies the
Company in writing within 30 days of such occurrence that Executive considers
such occurrence to be the basis for a termination with “Good Reason” and the
Company fails to cure such occurrence within 30 days following receipt of such
notice; provided  further that if the Company fails to cure such
occurrence within such 30 day period, Executive shall have period of 15 days
following the expiration of such 30 day period to terminate his employment with
“Good Reason” on the basis of such occurrence and if Executive thereafter remains
in the employ of the Company or any of its Subsidiaries, Executive’s continued
employment shall constitute a waiver of all rights hereunder to terminate his
employment for “Good Reason” on the basis of such occurrence.  Notwithstanding any provision herein to the
contrary, in the event that the Company provides Executive with written notice
of its intent to move Executive’s principal office by more than fifty (50)
miles from the St. Cloud metropolitan area (a “Relocation Notice”), and
Executive does not notify the Company in writing within 30 days following his
receipt of any such Relocation Notice that Executive would consider such a move
to be the basis for a termination with “Good Reason”, then Executive shall be
deemed to waive any and all rights to terminate his employment for “Good Reason”
in connection with any such move as described in such Relocation Notice (it
also being understood and agreed that the Company’s abandonment of any such
contemplated move described in any such Relocation Notice shall be deemed to
cure any and all bases for Executive to claim that any such proposed move would
constitute the basis for a termination with “Good Reason”).

5.             Confidential Information.  Executive acknowledges that the information,
observations and data (including trade secrets) obtained by him during the
course of his employment with the Company and/or any of its affiliates
(including those obtained by him while employed by the Company and/or its
affiliates (including Woodcraft Industries, Inc.) prior to the date of this
Agreement) concerning 

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the business or affairs
of the Company or any affiliate (“Confidential Information”) are the
property of the Company or such affiliate. 
Therefore, Executive agrees that he shall not disclose to any person or
entity or use for any purpose (other than for the benefit of the Company and
its affiliates) any Confidential Information or any confidential or proprietary
information of other persons or entities in the possession of the Company and
its affiliates (“Third Party Information”), without the prior written
consent of the Board, unless and to the extent that the Confidential
Information or Third Party Information becomes generally known to and available
for use by the public other than as a result of Executive’s acts or
omissions.  Executive shall deliver to
the Company at the termination or expiration of the Employment Period, or at
any other time the Company may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other documents and data
(and copies thereof) embodying or relating to the Confidential Information,
Work Product (as defined below) or the business of the Company or any affiliate
which he may then possess or have under his control.

6.             Intellectual Property.  Executive acknowledges that all discoveries,
concepts, ideas, inventions, innovations, improvements, developments, methods,
designs, analyses, drawings, reports, patent applications, copyrightable work
and mask work (whether or not including any confidential information) and all
registrations or applications related thereto, all other proprietary
information and all similar or related information (whether or not patentable)
which relate to the Company’s or any of its affiliates’ actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive (whether alone or
jointly with others) while employed by the Company or its predecessor and its
affiliates, whether before or after the date of this Agreement (“Work
Product”), belong to the Company or such affiliate.  Executive shall promptly disclose such Work
Product to the Board and, at the Company’s expense, perform all actions
reasonably requested by the Board (whether during or after the Employment
Period) to establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments). Executive
acknowledges that all Work Product shall be deemed to constitute “works made for
hire” under the U.S. Copyright Act of 1976, as amended.

7.             Non-Compete. Non-Solicitation.

(a)           Executive
hereby acknowledges that, during the course of his employment with the Company
he has and shall become familiar with the Company’s and its affiliates’ trade
secrets and other Confidential Information. Executive acknowledges and agrees
that the Company and its affiliates would be irreparably damaged if he were to
provide services to or otherwise participate in the business of any person or
entity competing with the Company or its Subsidiaries or providing services
similar to the Company and its Subsidiaries and that any such competition or
provision of services by Executive would result in a significant loss of
goodwill by the Company and its Subsidiaries. 
Executive further acknowledges and agrees that the covenants and
agreements set forth in this Paragraph  7 were a material
inducement to the Company to enter into this Agreement and to perform its
obligations hereunder, and that the Company would not obtain the benefit of the
bargain set forth in this Agreement as specifically negotiated by the parties
hereto if Executive breached the provisions of this Paragraph  7.
Therefore, Executive agrees that, during the Employment Period and for 12
months thereafter (the “Noncompete Period”), he shall not directly or
indirectly own any interest in, manage, control, participate in (whether as an
officer, director, employee, partner, agent, representative or otherwise),
consult with, render services for, or in any other manner engage in any
business competing with the businesses of the Company or its Subsidiaries, as
such businesses exist or are or were in the process of being developed during
the Employment Period within North America or any other geographical area in
which the Company or its Subsidiaries engage or plan to engage in such
businesses.  Nothing herein shall
prohibit Executive from being a passive owner of not more than 2% of the
outstanding stock of any class of a corporation which is publicly traded so
long as he does not have any active participation in the business of such
corporation.  Notwithstanding the
foregoing, the Company hereby acknowledges that Executive’s ownership at its 

 5
 

current levels of his brother’s lumber company from which the Company
purchases lumber shall not be deemed a violation or breach of this Paragraph
7.

(b)           During
the Noncompete Period, Executive shall not directly or indirectly through
another person or entity (i) induce or attempt to induce any employee of the
Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company
or any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time during the twelve month
period prior to the date of hire, (iii) call on, solicit, or service any customer,
supplier, licensee, licensor or other business relation or prospective client
of the Company or any of its Subsidiaries with respect to products and/or
services that are or have been provided by the Company or such Subsidiary
during the twelve-month period prior to the termination of the Employment
Period, or which the Company or any of its Subsidiaries is currently in the
process of developing or (iv) induce or attempt to induce any customer,
supplier, licensee, licensor, franchisee or other business relation of the
Company or any Subsidiary to cease doing (or reduce its) business with the
Company or such Subsidiary, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any Subsidiary (including, without limitation, making any negative
or disparaging statements or communications regarding the Company or its
Subsidiaries).

(c)           In
the event of a breach or a threatened breach by Executive of any of the
provisions of this Paragraph  7, the Company would suffer
irreparable harm, and in addition and supplementary to other rights and
remedies existing in its favor, the Company shall be entitled to specific
performance and/or injunctive or other equitable relief from a court of
competent jurisdiction in order to enforce or prevent any violations of the
provisions hereof  In addition, in the
event of a breach or violation by Executive of this Paragraph  7,
the Noncompete Period shall be automatically extended by the amount of time
between the initial occurrence of the breach or violation and when such breach
or violation has been duly cured. Executive acknowledges that the restrictions
contained in this Paragraph  7 are reasonable and that he has
reviewed the provisions of this Agreement with his legal counsel.

(d)           Executive agrees that Executive shall not at
any time, whether during or after Executive ceases to provide services to the
Company or any of its Subsidiaries, make or publish any untruthful statement
(orally or in writing) that intentionally libels, slanders, disparages or
otherwise defaces the goodwill or reputation (whether or not such disparagement
legally constitutes libel or slander) of the Company, any Subsidiary or any of
their affiliates, or its other officers, managers, directors, partners or
investment professionals.  Executive
acknowledges that he, as part of his employment hereunder, is responsible for
preserving the goodwill or reputation of the aforementioned parties.

8.             Enforcement.  If, at the time of enforcement of Paragraph
5, 6 or 7 of this Agreement, a court holds that the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area and that the court shall be allowed to revise the restrictions
contained herein to cover the maximum period, scope and area permitted by
law.  Because Executive’s services are
unique and because Executive has access to Confidential Information and Work
Product, the parties hereto agree that the Company could suffer irreparable
harm from a breach of Paragraph  5, 6 or 7 by
Executive and that money damages would not be an adequate remedy for any such
breach of this Agreement.  Therefore, in
the event a breach or threatened breach of this Agreement, the Company or its
successors or assigns, in addition to other rights and remedies existing in
their favor, shall be entitled to specific performance and/or injunctive or
other equitable relief from a court of competent jurisdiction in order to
enforce, or prevent any violations of, the provisions hereof.

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9.             Executive’s Representations.

(a)           Executive
acknowledges that the provisions of Paragraphs  5, 6 and 7
are in consideration of his employment with the Company and additional good and
valuable consideration set forth in this Agreement.  In addition, Executive agrees and
acknowledges that the restrictions contained in Paragraphs  5, 6
and 7 do not preclude Executive from earning a livelihood, nor do they
unreasonably impose limitations on Executive’s ability to earn a living.  In addition, Executive acknowledges (a) that
the business of the Company and its Subsidiaries will include all of North
America, (b) notwithstanding the state of incorporation or principal office of
the Company or its Subsidiaries, or any of their respective executives or
employees (including Executive), it is expected that the Company will have
business activities and have valuable business relationships within its
industry throughout North America, and (c) as part of his responsibilities,
Executive may travel around North America in furtherance of the Company’s
business and its relationships.

(b)           Executive
hereby represents and warrants to the Company and Parent that (i) the
execution, delivery and performance of this Agreement by Executive do not and
shall not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which Executive is a party
or by which he is bound, (ii) except for the Existing Agreement (which shall be
deemed to be superceded and preempted effective as of the Effective Date,
Executive is not a party to or bound by any employment agreement, noncompete
agreement or confidentiality agreement with any other person or entity and
(iii) upon the execution and delivery of this Agreement by the Company and Parent,
this Agreement shall be the valid and binding obligation of Executive,
enforceable in accordance with its terms. 
Executive hereby acknowledges and represents that he has consulted with
independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.

10.           Call.

(a)   In the event (i) Executive’s employment with the Company and its
Subsidiaries is terminated by the Company for Cause, (ii) Executive’s
employment with the Company and its Subsidiaries is terminated by Executive for
any reason (other than a termination of employment by Executive for Good
Reason) or (iii) the Employment Period is terminated due to Executive’s Death
or Disability, then in the case of any termination of Executive’s employment
described above, 100% of the shares of Common Stock and 100% of the shares of
Series A Preferred Stock acquired by Executive pursuant to the Stock Purchase
Agreement (collectively, the “Call Option Shares”) held by Executive (or any of his transferees)
shall be subject to repurchase by Parent and the Investor pursuant to
the terms and conditions set forth in this Paragraph  10 (the “Call
Option”).  For purposes hereof, “Investor”
shall mean Olympus Growth Fund IV, L.P. and its affiliates.  For
purposes of this Agreement, the term “Original Cost” for (1) each
share of Common Stock shall be equal to the original price per share paid
therefor by Investor under the Stock Purchase Agreement, and (2) for each share
of Series A Preferred Stock shall be equal to the original price per share paid
therefor by Investor under the Stock Purchase Agreement, in each case as such
amounts may from time to time be proportionately adjusted by Parent in good
faith to reflect any stock split, stock dividend, reclassification or
recapitalization affecting any such shares.

(b)   In
the event of an exercise of the Call Option pursuant to Paragraph  10(a)(i)
or (ii) above, (x) the purchase price for each share of Series A
Preferred Stock subject to the Call Option shall be equal the lower of (A) the
Original Cost thereof and (B) the fair market value thereof as determined in
good faith by the Parent Board without regard to any minority discount
(provided that Executive shall have the 15-day right to object to the Parent
Board’s determination of fair market value and demand an Independent Valuation
in accordance with the terms provided in Paragraph 10(b)) and (y) the
purchase price for each share of Common Stock subject to the Call Option shall
be equal to the lower of (A) the Original Cost thereof and (B) the fair market
value thereof as determined in good faith by the Parent Board.  If Executive objects in writing to the Parent
Board’s determination of fair market value within 15 days after 

 7
 

delivery thereof to Executive, the Parent Board shall engage an
independent investment banking or other professional valuation firm (which firm
must be mutually agreed upon by Executive) to conduct a valuation (the “Independent
Valuation”) of the fair market value, and such investment banking or other
professional valuation firm’s determination of fair market value shall be
delivered to the Parent Board and used instead of the fair market value
previously asserted by the Parent Board. 
Parent or the Company, on the one hand, and Executive, on the other
hand, shall bear equally the costs and fees of such independent investment
banking or other professional valuation firm. 
In the event of an exercise of the Call Option pursuant to Paragraph
10(a)(iii) above, (1) the purchase price for each share of Series A
Preferred Stock subject to such applicable Call Option shall be the fair
market value for such share as determined in good faith by the Parent Board and (2) the purchase price for each share of
Common Stock subject to such applicable Call Option shall be the fair market
value for such share as determined in good faith by the Parent Board (provided,
in the case of each of (1) and (2), that Executive shall have the 15-day right
to object to the Parent Board’s determination of fair market value and demand
an Independent Valuation in accordance with the procedure and terms described
above).

(c)   Parent
(as directed by the Parent Board)
may elect to purchase all or any portion of the Call Option Shares subject to
the applicable Call Option by delivering written notice (the “Call Option
Notice”) to the holder or holders of the Call Option Shares subject to such
applicable Call Option at any time after 30 days after the effective date of the termination of Executive’s
employment with the Company and its Subsidiaries but within 120 days after such
date.  The Call Option Notice
shall set forth the number and class of Call Option Shares subject to the
applicable Call Option to be acquired from each holder of Call Option Shares
subject to the applicable Call Option, the aggregate consideration to be paid
for such shares and the time and place for the closing of the transaction.  The number of shares of each class of Call
Option Shares subject to the applicable Call Option to be repurchased by Parent shall first be satisfied to the
extent possible from the Call Option Shares subject to the applicable Call
Option held by Executive at the time of delivery of the Call Option Notice. If
the number of such class of Call Option Shares subject to the applicable Call
Option then held by Executive is less than the total number of shares of such
class of Call Option Shares subject to the applicable Call Option which Parent has elected to purchase,
Parent shall purchase the
remaining shares elected to be purchased from the other holder(s) of such class
of Call Option Shares subject to the applicable Call Option under this
Agreement pro rata according to the number of shares of such class of Call
Option Shares subject to the applicable Call Option held by such other
holder(s) at the time of delivery of such Call Option Notice (determined as
close as practicable to the nearest whole shares).  The number of each class of Call Option
Shares subject to the applicable Call Option to be repurchased hereunder shall
be allocated among Executive and the other holders of such class of Call Option
Shares (if any) subject to the applicable Call Option pro rata according to the
number of shares of  such class of Call
Option Shares to be purchased from such persons.

(d)   If for any reason Parent does not elect to purchase all of the Call Option Shares
pursuant to the applicable Call Option, the Investor shall be entitled to
exercise the applicable Call Option for the Call Option Shares subject thereto
which Parent has not elected to
purchase (the “Available Shares”). 
As soon as practicable after Parent
has determined that there will be Available Shares, but in any event within 150
days after the termination of Executive’s employment with the Company and its
Subsidiaries, Parent shall give
written notice (the “Investor Call Notice”) to the Investor setting
forth the number of Available Shares and the purchase price for each class of
the Available Shares. The Investor may elect to purchase any or all of the
Available Shares by giving written notice to Parent within 30 days after the Investor Call Notice has been
given by Parent.  As soon as practicable, and in any event
within ten days after the expiration of the 30-day period set forth above, Parent shall notify each holder of
Call Option Shares subject to the applicable Call Option as to the number of
each class of Call Option Shares being purchased from such holder by the
Investor (the “Supplemental Call Option Notice”).  At the time Parent delivers the Supplemental Call Option Notice to the
holder(s) of Call Option Shares subject to the applicable Call Option, Parent shall also deliver written
notice to the Investor setting forth the number of 

 8
 

each class of Call Option Shares subject to
the applicable Call Option the Investor is entitled to purchase, the aggregate
purchase price and the time and place of the closing of the transaction. The
number of each class of Call Option Shares subject to the applicable Call
Option to be repurchased hereunder shall be allocated among Parent and the Investor pro rata
according to the number of shares of each class of Call Option Shares to be
purchased by each of them.  In the event
that Parent and the Investor collectively elect
to repurchase less than 100% of the Call Option Shares subject to the
applicable Call Option, such Call
Option must be proportionately exercised with respect to the Call Option Shares
subject to the applicable Call Option (i.e., if Parent and the Investor collectively desire to repurchase
50% of the shares of Common Stock subject to the applicable Call Option, Parent
and the Investor collectively must also repurchase 50% of the shares of Series
A Preferred Stock subject to the applicable Call Option).

(e)   The closing of the purchase of the Call Option Shares pursuant to
a particular Call Option shall take place on the date designated by Parent in the Call Option Notice or
Supplemental Call Option Notice, which date shall not be more than 60 days nor
less than 15 days after the delivery of the later of either such notice to be
delivered (or, if applicable, from the date on which the independent investment
banking or other professional valuation firm has presented its fair market
value determination to the Parent Board). 
Parent and/or the Investor (as
applicable) shall each pay the portion of the aggregate purchase price for the
Call Option Shares subject to the applicable Call Option to be purchased pursuant to such Call Option
by Parent or the Investor (as applicable) by immediately available funds.  In addition, Parent and/or the Investor (as applicable) may pay the purchase
price for such shares by offsetting bona fide debts owed by Executive to either
of them or any of their respective affiliates. 
Parent and its Affiliates shall be entitled to receive customary representations
and warranties (and there shall be no other representations and warranties and
there shall be no indemnification other than as a result of the breach of such
agreement) from Executive regarding good title to such shares, that the shares
are free and clear of any liens, security interests, mortgages, pledges or
other encumbrances, that Executive has the capacity and all necessary authority
to enter into such agreement, that the agreement is not in violation or
contravention of any other agreement and that Executive has consulted with
counsel.  There shall be no
representations or warranties other than described in the previous sentence and
the only indemnification obligation shall be for a breach of such representations
and warranties.  Executive shall further
agree to release and discharge any and all claims related to such repurchase.

(f)    The right of Parent and the Investor to repurchase Call Option Shares
pursuant to this Paragraph  10 shall terminate upon an underwritten public offering of Parent’s
Common Stock, registered under the Securities Act of 1933, as amended from time
to time.

(g)   Notwithstanding anything to the contrary contained in this
Agreement, all repurchases of Call Option Shares hereunder shall be subject to
applicable restrictions contained in the Delaware General Corporation Law and
in Parent’s
and its Subsidiaries’ debt financing agreements with unaffiliated third
parties. If any such restrictions prohibit the repurchase of Call Option Shares
hereunder which Parent and/or the
Investor is otherwise entitled to make, the time periods provided in this Paragraph
10 shall be suspended, and Parent and
the Investor may make such repurchases as soon as it is permitted to do so
under such restrictions.

11.           Purchase Obligation.  On the Effective Date and concurrently with
the closing of the transactions contemplated by the Merger Agreement, Executive
shall (i) execute and deliver to Parent a counterpart signature page to the
stock purchase agreement attached hereto in the form of Exhibit C (the “Stock
Purchase Agreement”) and (ii) on and subject to the terms set forth in the
Stock Purchase Agreement, make an investment in Parent in an aggregate amount
in cash (and/or, provided that the Parent has consented to such exchange and
agreed to the number of shares to be exchanged, a number of exchanged shares of
voting common stock of WII Components each having a value equal to the Price
Per Common Share (as defined in the Merger Agreement)) equal to $225,000 in the
aggregate (the “Cash

 9
 

Investment Amount”)
to purchase (x) a number of shares of Parent’s Common Stock (as defined in the
Stock Purchase Agreement) equal to the quotient determined by dividing
(1) the product of (A) the Common Investment Percentage (as defined below) and
(B) the Cash Investment Amount, by (2) the per share purchase price for
the Common Stock set forth therein (which shall be the same per share purchase
price for the Common Stock to be paid by the other purchasers thereof on the
Effective Date pursuant to the Stock Purchase Agreement) and (y) a number of
shares of Parent’s Series A Preferred Stock (as defined in the Stock Purchase
Agreement) equal to the quotient determined by dividing (1) the product
of (A) the Preferred Investment Percentage (as defined below) and (B) the Cash
Investment Amount, by (2) the per share purchase price for the Series A
Preferred Stock set forth therein (which shall be the same per share purchase
price for the Series A Preferred Stock to be paid by the other purchasers
thereof on the Effective Date pursuant to the Stock Purchase Agreement).  For purposes hereof, (1) the term “Common
Investment Percentage” shall mean the quotient (expressed as a decimal)
determined by dividing (A) the aggregate purchase price to be paid by
Investor on the Effective Date under the Stock Purchase Agreement in exchange
for the shares of Common Stock to be purchased by the Investor thereunder on
the Effective Date, by (B) the aggregate purchase prices to be paid by
Investor on the Effective Date under the Stock Purchase Agreement in exchange
for the shares of Common Stock and the shares of Series A Preferred Stock to be
purchased by the Investor thereunder on the Effective Date and (2) the term “Preferred
Investment Percentage” shall mean the quotient (expressed as a decimal)
determined by dividing (A) the aggregate purchase price to be paid by
Investor on the Effective Date under the Stock Purchase Agreement in exchange
for the shares of Series A Preferred Stock to be purchased by the Investor
thereunder on the Effective Date, by (B) the aggregate purchase prices
to be paid by Investor on the Effective Date under the Stock Purchase Agreement
in exchange for the shares of Common Stock and the shares of Series A Preferred
Stock to be purchased by the Investor thereunder on the Effective Date.

For purposes hereof, the term “Common Stock” shall
have the meaning ascribed to such term in the Stock Purchase Agreement and the
term “Series A Preferred Stock” shall have the meaning ascribed to such term in
the Stock Purchase Agreement.

12.           Survival.  Paragraphs  5 through 26,
inclusive, shall survive and continue in full force in accordance with their
terms notwithstanding the expiration or termination of the Employment Period.

13.           Notices.  Any notice provided for in this Agreement
shall be in writing and shall be either personally delivered, sent by reputable
overnight courier service or mailed by first class mail, return receipt
requested, to the recipient at the address below indicated:

	
  Notices to Executive:

  
	
   

  
	
  Dale Herbst

  
	
  13205 Hwy. 23 NE

  
	
  Foley, MN 56329

  
	
   

  
	
   

  
	
  Notices to the
  Company:

  
	
   

  
	
  WII Merger
  Corporation

  
	
  c/o WII
  Components, Inc.

  
	
  525 Lincoln
  Avenue SE 

  
	
  St. Cloud, MN
  56304

  
	
  Attn: Chief
  Executive Officer

  

 

 10
 

 

	
  With a copy (which
  shall not constitute notice) to:

  
	
   

  
	
  WII Merger
  Corporation 

  
	
  c/o Olympus
  Partners

  
	
  One Station
  Place, 4th Floor 

  
	
  Stamford, CT
  06902

  
	
  Attn: L. David
  Cardenas

  
	
   

  
	
  With a copy
  (which shall not constitute notice) to:

  
	
   

  
	
  Kirkland & Ellis
  LLP

  
	
  200 East
  Randolph Drive 

  
	
  Chicago, IL
  60601 

  
	
  Attn: John A
  Schoenfeld, P.C.

  
	
   

  
	
  Notices to
  Parent

  
	
   

  
	
  WII Holding,
  Inc. 

  
	
  c/o Olympus
  Partners

  
	
  One Station
  Place, 4th Floor 

  
	
  Stamford, CT
  06902

  
	
  Attn: L. David
  Cardenas

  
	
   

  
	
   

  
	
  With a copy
  (which shall not constitute notice) to:

  
	
   

  
	
  Kirkland &
  Ellis LLP

  
	
  200 East
  Randolph Drive

  
	
  Chicago, IL
  60601

  
	
  Attn: John A
  Schoenfeld, P.C.

  

 

or such other address or to the attention of such
other person as the recipient party shall have specified by prior written notice
to the sending party. Any notice under this Agreement shall be deemed to have
been given when so delivered, sent or mailed.

14.           Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement or any action in any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

15.           Complete Agreement.  This Agreement contains the complete
agreement and understanding among the parties relating to the subject matter
hereof and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way (including the Existing
Agreement).

 11
 

16.           No Strict Construction. The
language used in this Agreement shall be deemed to be the language chosen by
the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.

17.           Counterparts. This Agreement
may be executed in separate counterparts, each of which is deemed to be an
original and all of which taken together constitute one and the same agreement.

18.           Successors and Assigns. This
Agreement is intended to bind and inure to the benefit of and be enforceable by
Executive, Parent, the Company and their respective heirs, successors and
assigns, except that Executive may not assign his rights or delegate his duties
or obligations hereunder without the prior written consent of the Company and
Parent.  Investor and each of the Company’s
Subsidiaries are intended third party beneficiaries of the covenants and
agreements made by Executive in this Agreement.

19.           Choice of Law.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of Minnesota, without giving effect to
any choice of law or conflict of law rules or provisions (whether of the State
of Minnesota or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Minnesota.

20.           Amendment and Waiver. The
provisions of this Agreement may be amended or waived only with the prior
written consent of the Company (as approved by the Board), Parent (as approved
by the Parent Board), Investor and Executive, and no course of conduct or
course of dealing or failure or delay by any party hereto in enforcing or
exercising any of the provisions of this Agreement (including, without
limitation, the Company’s right to terminate the Employment Period for Cause)
shall affect the validity, binding effect or enforceability of this Agreement
or be deemed to be an implied waiver of any provision of this Agreement.

21.           Insurance. The Company may, at
its discretion, apply for and procure in its own name and for its own benefit
life and/or disability insurance on Executive in any amount or amounts
considered advisable. Executive agrees to cooperate in any medical or other
examination, supply any information and execute and deliver any applications or
other instruments in writing as may be reasonably necessary to obtain and
constitute such insurance. Executive hereby represents that he has no reason to
believe that his life is not insurable at rates now prevailing for healthy men
of his age.

22.           Corporate Opportunity.  During the Employment Period, Executive shall
submit to the Board all business, commercial and investment opportunities or
offers presented to Executive or of which Executive becomes aware which relate
to the business of the Company at any time during the Employment Period (“Corporate
Opportunities”). Unless approved by the Board, Executive shall not accept
or pursue, directly or indirectly, any Corporate Opportunities on Executive’s
own behalf.

23.           Executive’s Cooperation.
During the Employment Period and thereafter for a period of six (6) years,
Executive shall cooperate with the Company and its Subsidiaries in any internal
investigation, any administrative, regulatory or judicial proceeding or any
dispute with a third party as reasonably requested by the Company (including,
without limitation, Executive being available to the Company upon reasonable
notice for interviews and factual investigations, appearing at the Company’s
request to give testimony without requiring service of a subpoena or other
legal process, volunteering to the Company all pertinent information and
turning over to the Company all relevant documents which are or may come into
Executive’s possession, all at times and on schedules that are reasonably
consistent with Executive’s other permitted activities and commitments). In the
event the Company requires Executive’s 

 12
 

cooperation in accordance
with this paragraph after the Employment Period, the Company shall reimburse
Executive for reasonable travel expenses (including lodging and meals) upon
submission of receipts.

24.           Tax Disclosures.
Notwithstanding anything herein to the contrary, the Company and Executive and
each other party to the transaction contemplated hereby (and each affiliate and
person acting on behalf of any such party) agree that each party (and each employee,
representative and other agent of such party) may disclose to any and all
persons, without, limitation of any kind, the tax treatment and tax structure
of the transaction and all materials of any kind (including opinions or other
tax analyses) that are provided to such party or such person relating to such
tax treatment and tax structure, except to the extent necessary to comply with
any applicable federal or state securities laws. This authorization is not
intended to permit disclosure of any other information, including, without
limitation (i) any portion of any materials to the extent not related to the
tax treatment or tax structure of the transaction, (ii) the identities of
participants or potential participants in the transaction, (iii) the existence
or status of any negotiations, (iv) any pricing or financial information
(except to the extent such pricing or financial information is related to the
tax treatment or tax structure of the transaction) or (v) any other term or
detail not relevant to the tax treatment or the tax structure of the
transaction.

25.           Arbitration.

(a)           Except
with respect to disputes and claims under Paragraphs  5, 6
and 7 hereof (which the parties hereto may pursue in any court of
competent jurisdiction and which may be pursued in any court of competent
jurisdiction as specified below and with respect to which each party shall bear
the cost of its own attorneys’ fees and expenses, except to the extent
otherwise required by applicable law), each party hereto agrees that arbitration,
pursuant to the procedures set forth in the National Rules for the Resolution
of Employment Disputes of the American Arbitration Association (as adopted and
effective as of June 1, 1997 or such later version as may then be in effect)
(the “AAA Rules”), shall be the sole and exclusive method for resolving
any claim or dispute (“Claim”) arising out of or relating to the rights
and obligations of the parties under this Agreement and the employment of
Executive by the Company (including, without limitation, claims and disputes
regarding employment discrimination, sexual harassment, termination and
discharge), whether such claim arose or the facts on which such Claim is based
occurred prior to or after the execution and delivery of this Agreement.  The parties hereto agree that (i) one
arbitrator shall be appointed pursuant to the AAA Rules to conduct any such
arbitration, (ii) all meetings of the parties and all hearings with respect to
any such arbitration shall take place in Minneapolis, Minnesota, (iii) each
party to the arbitration shall bear its own costs and expenses (including,
without limitation, all attorneys’ fees and expenses, except to the extent
otherwise provided by applicable law), (iv) all costs and expenses of the
arbitration proceeding (such as filing fees, the arbitrator’s fees, hearing
expenses, etc.) shall be borne equally by the parties hereto. The parties agree
that the judgment, award or other determination of any arbitration under the
AAA Rules shall be final, conclusive and binding on all of the parties hereto.
Nothing in this Paragraph  25 shall prohibit any party hereto from
instituting litigation to enforce any final judgment, award or determination of
the arbitration. Each party hereto hereby irrevocably submits to the
jurisdiction of the appropriate state courts sitting in Minneapolis, Minnesota,
and agrees that either court shall be the exclusive forum for the enforcement
of any such final judgment, award or determination of the arbitration.  Each party hereto irrevocably consents to
service of process by registered mail or personal service and waives any
objection on the grounds of personal jurisdiction, venue or inconvenience of
the forum.  Each party hereto further
agrees that each other party hereto may initiate litigation in any court of
competent jurisdiction to execute any judicial judgment enforcing or not
enforcing any award, judgment or determination of the arbitration.

(b)           Notwithstanding
the foregoing, prior to any party hereto instituting any arbitration proceeding
hereunder to resolve any Claim, such party first shall submit the Claim to a
mediation proceeding between the parties hereto which shall be governed by the
prevailing procedures of the 

 13
 

American Arbitration Association and shall be conducted in Minneapolis,
Minnesota. If the parties hereto have not agreed in writing to a resolution of
the Claim pursuant to the mediation within 45 days after the commencement
thereof of if any party refuses to participate in the mediation process, then
the Claim may ‘be submitted to arbitration under Paragraph  25(a)
above.  Each party hereto shall bear its
own costs and expenses incurred in connection with the mediation, and all costs
and expenses of the mediation proceeding shall be borne equally by the parties
hereto.

26.           Effect of the Merger.  From and after the Effective Date, by virtue
of the merger contemplated by the Merger Agreement whereupon the Company shall
merge with and into WII Components, with WII Components as the surviving
corporation and a Subsidiary of Parent, and without any action on the part of
any party hereto, all references herein to the “Company” shall be deemed to
refer to “WII Components, Inc.”

27.           Effectiveness.  In the event that the transactions
contemplated by the Merger Agreement (including the merger contemplated
thereby) do not close for any reason, this Agreement shall be nullified and
shall have no further force and effect.

*  * 
*  *  *  *

 14

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.

	
  

  	
  WII MERGER CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WII HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Dale Herbst

  

 

Exhibit A

GENERAL RELEASE

I,                                 ,
in  consideration of and subject to the
performance by                     ,
a Delaware corporation (together with its subsidiaries, the “Company”)
of its obligations under the Employment Agreement, dated as of                       
(the “Agreement”), do hereby release and forever discharge as of the
date hereof the Company and its affiliates and all present and former
directors, officers, agents, representatives, employees, successors and assigns
of the Company and its affiliates and the Company’s direct or indirect owners
(collectively, the “Released Parties”) to the extent provided below.

1.     I understand that any payments or benefits
paid or granted to me under Paragraph 4(b) of the Agreement represent,
in part, consideration for signing this General Release and are not salary,
wages or benefits to which I was or may have been already entitled. I
understand and agree that I will not receive the payments and benefits
specified in Paragraph 4(b) of the Agreement unless I execute this
General Release and do not revoke this General Release within the time period
permitted hereafter or breach this General Release.  Such payments and benefits will not be
considered compensation for purposes of any employee benefit plan, program,
policy or arrangement maintained or hereafter established by the Company or its
affiliates.  I also acknowledge and
represent that I have received all payments and benefits that I am entitled to
receive (as of the date hereof) by virtue of any employment by the Company
and/or any of its affiliates.

2.     Except (i) as provided in paragraph 4
below, (ii) as provided in the Merger Agreement, (iii) as to such
indemnification rights provided by the Company to its directors and officers,
in their capacity as such, to the maximum extent allowed by applicable law (iv)
as to claims with respect to any earned but unpaid vacation and paid-time off
that has been accrued prior to Executive’s termination pursuant to the Company’s
benefits plans and policies and (v) for the provisions of the Agreement which
expressly survive the termination of my employment with the Company and/or any
of its affiliates, I knowingly and voluntarily (for myself, my heirs,
executors, administrators and assigns) release and forever discharge the
Company and the other Released Parties from any and all claims, suits,
controversies, actions, causes of action, cross-claims, counter-claims,
demands, debts, compensatory damages, liquidated damages, punitive or exemplary
damages, other damages, claims for costs and attorneys’ fees, or liabilities of
any nature whatsoever in law and in equity, both past and present (through the
date this General Release becomes effective and enforceable) and whether known
or unknown, suspected, or claimed against the Company or any of the Released
Parties which I, my spouse, or any of my heirs, executors, administrators or
assigns, may have, which arise out of or are connected with my employment with,
or my separation or termination from, the Company (including, but not limited
to, any allegation, claim or violation, arising under: Title VII of the Civil
Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age
Discrimination in Employment Act of 1967, as amended (including the Older
Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the
Americans with Disabilities Act of 1990; the Family and Medical Leave Act of
1993; the Worker Adjustment Retraining and Notification Act; the Employee
Retirement Income Security Act of 1974; any applicable Executive Order
Programs; the Fair Labor Standards Act; or their state or local counterparts;
or under any other federal, state or local civil or human rights law, or under
any other local, state, or federal law, regulation or ordinance; or under any
public policy, contract or tort, or under common law; or arising under any
policies, practices or procedures of the Company and/or any of its affiliates;
or any claim for wrongful discharge, breach of contract, infliction of
emotional distress, defamation; or any claim for costs, fees, or other
expenses, including attorneys’ fees incurred in these matters) (all of the
foregoing collectively referred to herein as the “Claims”).

3.     I represent that I have made no assignment
or transfer of any right, claim, demand, cause of action, or other matter
covered by paragraph 2 above.

4.     I agree that this General Release does not
waive or release any rights or claims that I may have under the Age
Discrimination in Employment Act of 1967 which arise after the date I execute
this General Release. I acknowledge and agree that my separation from
employment with the Company and/or any of its affiliates in compliance with the
terms of the Agreement shall not serve as the basis for any claim or action
(including, without limitation, any claim under the Age Discrimination in
Employment Act of 1967).

5.     In signing this General Release, I
acknowledge and intend that it shall be effective as a bar to each and every
one of the Claims hereinabove mentioned or implied. I expressly consent that
this General Release shall be given full force and effect according to each and
all of its express terms and provisions, including those relating to unknown
and unsuspected Claims (notwithstanding any state statute that expressly limits
the effectiveness of a general release of unknown, unsuspected and
unanticipated Claims), if any, as well as those relating to any other Claims
hereinabove mentioned or implied. I acknowledge and agree that this waiver is
an essential and material term of this General Release and that without such
waiver the Company would not have agreed to the terms of the Agreement.  I further agree that in the event I should
bring a Claim seeking damages against the Company or any of the other Released
Parties, or in the event I should seek to recover against the Company or any of
the Other Released Parties in any Claim brought by a governmental agency on my
behalf, this General Release shall serve as a complete defense to such Claims.
I further agree that I am not aware of any pending claim of the type described
in paragraph 2 as of the execution of this General Release.

6.     [I represent that I am not aware of any
claim by me other than the claims that are released by this Agreement.  I acknowledge that I may hereafter discover
claims or facts in addition to or different than those which I now know or
believe to exist with respect to the subject matter of this General Release and
which,  if known or suspected at the time
of entering into this General Release, may have materially affected this
General Release and my decision to enter into it.  Nevertheless, I hereby waive any right, claim
or cause of action that might arise as a result of such different or additional
claims or facts and I hereby expressly waive any and all rights and benefits
confirmed upon me by the provisions of California Civil Code Section 1542,
which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR.”

Being aware of such
provisions of law, I agree to expressly waive any rights I may have thereunder,
as well as under any other statute or common law principles of similar effect.](1)

7.     I agree that neither this General Release,
nor the furnishing of the consideration for this General Release, shall be
deemed or construed at any time to be an admission by the Company, any Released
Party or myself of any improper or unlawful conduct.

(1)          To
be included as applicable.

8.     I agree that I will forfeit all amounts
payable by the Company pursuant to the Agreement if I challenge the validity of
this General Release. I also agree that if I violate this General Release by
suing the Company or the other Released Parties, I will pay all costs and
expenses of defending against the suit incurred by the Released Parties,
including reasonable attorneys’ fees, and return all payments received by me
pursuant to the Agreement.

9.     I agree that this General Release and the
Agreement are confidential and agree not to disclose any information regarding
the terms of this General Release or the Agreement, except to my immediate
family and any tax, legal or other counsel I have consulted regarding the
meaning or effect hereof or as required by law, and I will instruct each of the
foregoing not to disclose the same to anyone. 
Notwithstanding anything herein to the contrary, each of the parties (and
each affiliate and person acting on behalf of any such party) agree that each
party (and each employee, representative, and other agent of such party) may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of this transaction contemplated in the Agreement
and all materials of any kind (including opinions or other tax analyses) that
are provided to such party or such person relating to such tax treatment and
tax structure, except to the extent necessary to comply with any applicable
federal or state securities laws.  This
authorization is not intended to permit disclosure of any other information
including (without limitation) (i) any portion of any materials to the
extent not related to the tax treatment or tax structure of this transaction, (ii) the
identities of participants or potential participants in the Agreement,
(iii) any financial information (except to the extent such information is
related to the tax treatment or tax structure of this transaction), or
(iv) any other term or detail not relevant to the tax treatment or the tax
structure of this transaction.

10.   Any non-disclosure provision in this General
Release does not prohibit or restrict me (or my attorney) from responding to
any inquiry about this General Release or its underlying facts and
circumstances by the Securities and Exchange Commission (SEC), the National
Association of Securities Dealers, Inc. (NASD), any other self-regulatory
organization or governmental entity.

11.   I agree to reasonably cooperate with the
Company and its affiliates in any internal investigation, any administrative,
regulatory, or judicial proceeding or any dispute with a third party. I
understand and agree that my cooperation may include, but not be limited to,
making myself available to the Company and its affiliates upon reasonable
notice for interviews and factual investigations; appearing at the Company’s
request to give testimony without requiring service of a subpoena or other
legal process; volunteering to the Company pertinent information; and turning
over to the Company all relevant documents which are or may come into my
possession all at times and on schedules that are reasonably consistent with my
other permitted activities and commitments. I understand that in the event the
Company asks for my cooperation in accordance with this provision, the Company
will reimburse me solely for reasonable travel expenses, (including lodging and
meals), upon my submission of receipts, and for my time, to the extent rendered
at the Company’s request, at a reasonable consulting fee.

12.   I agree not to disparage the Company, its
past and present investors, officers, directors or employees or its affiliates
and to keep all confidential and proprietary information about the past or
present business affairs of the Company and its affiliates confidential unless
a prior written release from the Company is obtained.  I further agree that as of the date hereof, I
have returned to the Company any and all property, tangible or intangible,
relating to its business, which I possessed or had control over at any time
(including, but not limited to, company-provided credit cards, building or
office access cards, keys, computer equipment, manuals, files, documents,
records, software, customer data base and other data) and that I shall not
retain any copies, compilations, extracts, excerpts, summaries or other notes
of any such manuals, files, documents, records, software, customer data base or
other data.

13.   Notwithstanding anything in this General
Release to the contrary, this General Release shall not relinquish, diminish,
or in any way affect any rights or claims arising out of any breach by the
Company or by any Released Party of the Agreement after the date hereof.

14.   Whenever possible, each provision of this
General Release shall be interpreted in, such manner as to be effective and
valid under applicable law, but if any provision of this General Release is
held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other
jurisdiction, but this General Release shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE
THAT:

(i)                                     I
HAVE READ IT CAREFULLY;

(ii)                                  I
UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS,
INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED;
THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

(iii)                               I
VOLUNTARILY CONSENT TO EVERYTHING IN IT;

(iv)                              I
HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE
DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO
OF MY OWN VOLITION;

(v)                                 I
HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON                   
    ,         TO
CONSIDER IT AND THE CHANGES MADE SINCE THE                    
    ,         VERSION OF
THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD;

(vi)                              THE
CHANGES TO THE AGREEMENT SINCE                   
     ,          
EITHER ARE NOT MATERIAL OR WERE MADE AT MY REQUEST.

(vii)                           I
UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE
IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
REVOCATION PERIOD HAS EXPIRED;

(viii)                        I
HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE
OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

(ix)                                I
AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED,
CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF THE COMPANY AND BY ME.

 

	
  DATE: 

  	
   

  	
   

  	
   

  	
   

  

 

Exhibit B

Bonus Target Methodologies
for Years Ended December 31, 2006 and December 31, 2007

INCENTIVE
COMPENSATION

For each fiscal
year of the Company beginning after December 31, 2005, Executive shall earn, as
incentive compensation, a percentage of his base salary, up to a maximum of
80%. The incentive compensation will be determined on the basis of EBITDA of
the Company.  Incentive compensation
shall be determined as follows:

A.           For each percentage
point (rounded up or down to the nearest whole number) that the Company’s
EBITDA is greater than 85% of the Company’s projected aggregate EBITDA, up to
and including 100%, Executive shall earn the product of 2.666% of his base
salary not to exceed 40%; and

B.             For each percentage
point (rounded up or down to the nearest whole number) that the Company’s
EBITDA is greater than 100% of the Company’s projected aggregate EBITDA, up to
and including 125%, Executive shall earn 1.6% of his base salary not to exceed
40%.

All calculations
that are required to determine the amount of Executive’s incentive compensation
for a fiscal year shall be calculated as of December 31.  The Company shall pay Executive the amount of
incentive compensation that he has earned for a fiscal year, if any, within 75
days after the end of the year.

For purposes of
determining Executive’s incentive compensation, the terms used in this exhibit
have the following meanings:

“Base Salary”
shall mean the total base salary paid to Executive in accordance with Paragraph
3(a) of this Agreement during the applicable full fiscal year.

“Projected
Aggregate EBITDA” shall mean, for any year, the amount proposed by management
and approved by the Company’s Board of Directors in the Company’s annual plan
for a fiscal year as the Company’s projected EBITDA.

Exhibit C

Form of Stock
Purchase AgreementExhibit
10.5

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is
made as of December 11, 2006, between WII Merger Corporation, a Delaware
corporation (the “Company”), WII Holding, Inc., a Delaware corporation (“Parent”)
and Joe Beyer (“Executive”) and shall become effective as of the
Effective Date (as defined below).

WHEREAS, the Company is party to that certain
Agreement and Plan of Merger, dated as of the date hereof, by and among the
Company, WII Components, Inc., a Delaware corporation (“WII Components”),
Parent and Behrman Capital III, L.P. (the “Merger Agreement”);

WHEREAS, Executive is currently employed by Woodcraft
Industries, Inc., a Minnesota corporation and a Subsidiary of WII Components,
pursuant to the terms of that certain Amended and Restated Employment
Agreement, dated as of April 9, 2003 (the “Existing Agreement”); and

WHEREAS, upon the closing of the transactions
contemplated by the Merger Agreement (the “Effective Date”), the Company
desires to employ Executive, and Executive desires to accept such employment,
on the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

1.             Employment. The Company
shall employ Executive, and Executive hereby accepts employment with the
Company, upon the terms and conditions set forth in this Agreement for the
period beginning on the Effective Date and ending as provided in Paragraph
4 hereof (the “Employment Period”).

2.             Position and Duties.

(a)           Executive
shall initially serve as the Vice President of Operations (PrimeWood Division)
of the Company and shall have the normal duties, responsibilities, functions
and authority of the Vice President of Operations (PrimeWood Division) (or of
such other position as is held by Executive as determined by the Board from
time to time), subject to the power and authority of the Company’s board of
directors (the “Board”) to expand or limit such duties,
responsibilities, functions and authority and to overrule actions of officers
of the Company.  During the Employment
Period, Executive shall render such administrative, financial and other
executive and managerial services to the Company and its Subsidiaries which are
consistent with Executive’s positions as the Board (and/or such other person or
persons as the Board may designate) may from time to time direct.

(b)           During
the Employment Period, Executive shall devote his best efforts and his full
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Company and its Subsidiaries. Executive shall perform his duties, responsibilities
and functions to the Company and its Subsidiaries hereunder to the best of his
abilities in a diligent, trustworthy, professional and efficient manner and
shall comply with the Company’s and its Subsidiaries’ policies and procedures
in all material respects. So long as Executive is employed by the Company,
Executive shall not, without the prior written consent of the Board, accept
other employment or perform other services for compensation.

(c)           It
is understood that Executive shall undertake such business travel as reasonably
required by the Company to perform his duties and responsibilities.

(d)           For
purposes of this Agreement, “Subsidiaries” shall mean any corporation or
other entity of which the securities or other ownership interests having the
voting power to elect a majority of the board of directors or other governing
body are, at the time of determination, owned by Parent, directly or through
one of more Subsidiaries (including, without limitation, the Company).

3.             Compensation and Benefits.

(a)           During
the Employment Period, Executive’s base salary shall be $140,000 per annum or
such other rate as the Board may determine from time to time (the “Base
Salary”).  Executive’s Base Salary
(as in effect from time to time) shall be reviewed on no less than an annual
basis, and, without the prior written consent of Executive, it shall not be
reduced during the Employment Period (except as part of a general reduction in
the base salaries for all executive officers of the Company).  Executive’s Base Salary shall be payable by
the Company in regular installments in accordance with the Company’s general
payroll practices (as in effect from time to time).

(b)           During
the Employment Period, the Company shall reimburse Executive for all reasonable
business expenses incurred by him in the course of performing his duties and
responsibilities under this Agreement which are consistent with the Company’s
policies in effect from time to time with respect to travel, entertainment and
other business expenses, subject to the Company’s requirements with respect to
reporting and documentation of such expenses.

(c)           In
addition to the Base Salary, Executive shall be eligible to receive a
performance bonus with respect to each year during the Employment Period in an
aggregate target amount of up to 75% of Executive’s Base Salary; provided
that for the fiscal year ended December 31, 2006 (to the extent not
already paid prior to the effective date hereof) and the fiscal year ended
December 31, 2007, such bonus shall be based on the measures set forth on Exhibit
B hereto and provided  further  that for each fiscal
year of the Company beginning after December 31, 2007, such bonus shall be
based on the terms of the Company’s management incentive plan in effect from
time to time as determined by the Board after consultations with members of the
Company’s senior management team.

(d)           All
amounts payable to Executive as compensation hereunder shall be subject to all
required and customary withholding by the Company.

(e)           During the Employment Period, Executive shall
be included in all employee benefit plans, programs, arrangements (including,
without limitation, any plans, programs or arrangements providing for
disability benefits, health insurance, vacation and paid holidays) to the extent
established by the Company for, or made available to all its senior executives,
subject to Executive’s satisfaction of all applicable eligibility requirements.

4.             Term.

(a)           The
Employment Period shall continue from the Effective Date and (i) will terminate
immediately upon Executive’s resignation for any reason (with or without Good
Reason (as defined below)), death or Disability (as defined below) and (ii) may
be terminated by the Company at any time for Cause (as defined below) or
without Cause.

(b)           Subject
to the other terms and conditions of this Paragraph 4, if (1) the
Employment Period is terminated by the Company or its successors in interest
without Cause, (2) Executive resigns with Good Reason or (3) the Employment
Period is terminated upon Executive’s Disability, Executive shall be entitled to receive (i)
his Base Salary through the date of such termination, (ii) any portion of a
bonus from a prior period (i.e., from a prior year) that has been fully earned
and was fully payable prior to 

 2
 

the
date on which the Employment Period is terminated but that had not yet been
paid, (iii) a pro rata portion (based on the number of calendar days of
employment during such fiscal year) of any annual bonus that would have payable
to Executive during any year in which his Employment Period is terminated,
provided that any such amount shall only be payable if Executive was employed
by the Company for six months or more of such fiscal year and provided further
that any such payment will be due and payable at such time as any such bonus
amounts would have been paid had Executive remained employed throughout the
entire fiscal year and (iv) twelve months Base Salary (provided that it
is expressly understood that included in this sum is such severance and other
payments that may be due to Executive); provided further that upon any termination or resignation of the
type set forth above in (1), (2) and (3), Executive shall be entitled to
continue to participate (at the Company’s cost) in employee benefit plans for
senior executive employees (other than bonus and incentive compensation plans)
to the extent not prohibited under the terms of such programs as of the date of
termination or required under applicable law, for a period of twelve months
after such termination or resignation. 
The severance payments contemplated by the preceding sentence shall be
payable by the Company in regular installments in accordance with the Company’s
general payroll practices (as in effect on the date of termination) from the
date of termination for a period of twelve months thereafter (the “Severance
Period”).  The severance
payments described in clause (iv) of the first sentence of this paragraph shall
become due and owing if, and only if, Executive has executed and delivered to
the Company and Parent a general release in favor of them in the form attached
hereto as Exhibit A (the “General Release”) and the General
Release has become effective, and only so long as Executive has not revoked or
breached the provisions of the General Release or breached the provisions of Paragraphs
5, 6 and 7 hereof and does not apply for unemployment
compensation chargeable to the Company or any Subsidiary during the Severance
Period.  Executive shall not be entitled
to any other salary, compensation or benefits after termination of the
Employment Period, except as expressly required by applicable law.  The Company shall be entitled to deduct from
any payment otherwise payable to Executive pursuant to this Paragraph 4(b),
any amount received by Executive after termination of the Employment Period
under any short-term or long-term disability insurance plan or program provided
to him by the Company; and provided  that Executive shall promptly
and fully disclose to the Company in writing the amount of any such disability
insurance payments.

(c)           If
the Employment Period is terminated for any other reason (including (1) by the
Company for Cause, (2) due to Executive’s death or (3) by Executive’s
resignation for any reason without Good Reason), Executive shall only be entitled to receive
(i) his Base Salary through the date of such termination and (ii) any portion
of a bonus from a prior period (i.e., from a prior year) that has been fully
earned and was fully payable prior to the date on which the Employment Period is
terminated but that had not yet been paid, and Executive shall not be entitled
to any other salary, compensation or benefits from the Company, Parent and/or
any of its Subsidiaries thereafter, except as otherwise expressly required by
applicable law.

(d)           Except
as otherwise expressly provided herein, all of Executive’s rights to salary,
bonuses, employee benefits and other compensation hereunder (if any) which
would have accrued or become payable after the termination of the Employment
Period shall cease upon such termination, other than those expressly required
under applicable law (such as COBRA). 
Termination of Executive’s employment with the Company for any reason
shall be deemed to automatically remove Executive, without further action, from
any and all offices held by Executive with the Company or any of its
affiliates.

(e)           The
Company may offset any amounts Executive owes it or its affiliates against any
amounts it or its affiliates owes Executive.

 3
 

(f)            For
purposes of this Agreement, “Cause” shall mean with respect to Executive
one or more of the following: (i) the commission of a felony or other crime
involving moral turpitude, (ii) the commission of any act or the omission to
take an act, either of which results in disloyalty or fraud toward the Company
or any of its Subsidiaries, or involving dishonesty in connection with the
Company or any of its Subsidiaries, which is materially detrimental to the
Company or any of its Subsidiaries, (iii) reporting to the workplace under the
influence of alcohol or illegal drugs, the use of illegal drugs (whether or not
at the workplace) or other repeated conduct causing the Company or any of its
Subsidiaries substantial public disgrace or disrepute or substantial economic
harm, (iv) failure to perform duties as reasonably directed by the Board and/or
the Company’s chief executive officer, and such failure is not cured within
twenty (20) days after the Executive receives written notice thereof from the
Board, (v) unlawful conduct or gross misconduct that is willful and deliberate
on Executive’s part and that, in either event, is materially injurious to the
Company or any of its Subsidiaries, or (vi) any other material breach of this
Agreement or of any other agreement between Executive and the Company, which
breach has not been cured by Executive within ten days after written notice
thereof to Executive from the Board.

(g)           For
purposes of this Agreement, “Disability” shall mean the inability of Executive to
perform on a full-time basis the duties and responsibilities of his employment
with the Company by reason of his illness or other physical or mental
impairment or condition, if such inability continues for an uninterrupted
period of 180 days or more during any 360-day period.  A period of inability shall be “uninterrupted”
unless and until Executive returns to full-time work for a continuous period of
at least 30 days.

(h)           For
purposes of this Agreement, “Good Reason” shall mean (i) any requirement
by the Company that Executive’s principal office be moved by more than fifty
(50) miles from the Wahpeton, North Dakota metropolitan area without Executive’s
consent, (ii) a reduction of Executive’s base salary or aggregate target bonus
amount (except as part of a general reduction in the base salaries or aggregate
target bonus amounts for all executive officers of the Company) or (iii) the
material breach of any terms and conditions of this Agreement by the Company
not caused by Executive; provided that no such occurrence shall
constitute the basis for a termination with “Good Reason” unless Executive
notifies the Company in writing within 30 days of such occurrence that
Executive considers such occurrence to be the basis for a termination with “Good
Reason” and the Company fails to cure such occurrence within 30 days following
receipt of such notice; provided  further that if the Company
fails to cure such occurrence within such 30 day period, Executive shall have
period of 15 days following the expiration of such 30 day period to terminate
his employment with “Good Reason” on the basis of such occurrence and if
Executive thereafter remains in the employ of the Company or any of its
Subsidiaries, Executive’s continued employment shall constitute a waiver of all
rights hereunder to terminate his employment for “Good Reason” on the basis of
such occurrence.  Notwithstanding any
provision herein to the contrary, in the event that the Company provides
Executive with written notice of its intent to move Executive’s principal
office by more than fifty (50) miles from the St. Cloud metropolitan area (a “Relocation
Notice”), and Executive does not notify the Company in writing within 30
days following his receipt of any such Relocation Notice that Executive would
consider such a move to be the basis for a termination with “Good Reason”, then
Executive shall be deemed to waive any and all rights to terminate his
employment for “Good Reason” in connection with any such move as described in
such Relocation Notice (it also being understood and agreed that the Company’s
abandonment of any such contemplated move described in any such Relocation
Notice shall be deemed to cure any and all bases for Executive to claim that
any such proposed move would constitute the basis for a termination with “Good
Reason”).

5.             Confidential Information.  Executive acknowledges that the information,
observations and data (including trade secrets) obtained by him during the
course of his employment with the Company and/or any of its affiliates
(including those obtained by him while employed by the Company and/or its
affiliates (including Woodcraft Industries, Inc.) prior to the date of this
Agreement) concerning 

 4
 

the business or affairs
of the Company or any affiliate (“Confidential Information”) are the
property of the Company or such affiliate. 
Therefore, Executive agrees that he shall not disclose to any person or
entity or use for any purpose (other than for the benefit of the Company and
its affiliates) any Confidential Information or any confidential or proprietary
information of other persons or entities in the possession of the Company and
its affiliates (“Third Party Information”), without the prior written
consent of the Board, unless and to the extent that the Confidential
Information or Third Party Information becomes generally known to and available
for use by the public other than as a result of Executive’s acts or
omissions.  Executive shall deliver to
the Company at the termination or expiration of the Employment Period, or at
any other time the Company may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other documents and data
(and copies thereof) embodying or relating to the Confidential Information,
Work Product (as defined below) or the business of the Company or any affiliate
which he may then possess or have under his control.

6.             Intellectual Property.  Executive acknowledges that all discoveries,
concepts, ideas, inventions, innovations, improvements, developments, methods,
designs, analyses, drawings, reports, patent applications, copyrightable work
and mask work (whether or not including any confidential information) and all
registrations or applications related thereto, all other proprietary
information and all similar or related information (whether or not patentable)
which relate to the Company’s or any of its affiliates’ actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive (whether alone or
jointly with others) while employed by the Company or its predecessor and its
affiliates, whether before or after the date of this Agreement (“Work
Product”), belong to the Company or such affiliate.  Executive shall promptly disclose such Work
Product to the Board and, at the Company’s expense, perform all actions
reasonably requested by the Board (whether during or after the Employment
Period) to establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments). Executive
acknowledges that all Work Product shall be deemed to constitute “works made
for hire” under the U.S. Copyright Act of 1976, as amended.

7.             Non-Compete. Non-Solicitation.

(a)           Executive
hereby acknowledges that, during the course of his employment with the Company
he has and shall become familiar with the Company’s and its affiliates’ trade
secrets and other Confidential Information. Executive acknowledges and agrees
that the Company and its affiliates would be irreparably damaged if he were to
provide services to or otherwise participate in the business of any person or
entity competing with the Company or its Subsidiaries or providing services
similar to the Company and its Subsidiaries and that any such competition or
provision of services by Executive would result in a significant loss of
goodwill by the Company and its Subsidiaries. 
Executive further acknowledges and agrees that the covenants and
agreements set forth in this Paragraph  7 were a material
inducement to the Company to enter into this Agreement and to perform its
obligations hereunder, and that the Company would not obtain the benefit of the
bargain set forth in this Agreement as specifically negotiated by the parties
hereto if Executive breached the provisions of this Paragraph  7.
Therefore, Executive agrees that, during the Employment Period and for 12
months thereafter (the “Noncompete Period”), he shall not directly or
indirectly own any interest in, manage, control, participate in (whether as an
officer, director, employee, partner, agent, representative or otherwise),
consult with, render services for, or in any other manner engage in any
business competing with the businesses of the Company or its Subsidiaries, as
such businesses exist or are or were in the process of being developed during
the Employment Period within North America or any other geographical area in
which the Company or its Subsidiaries engage or plan to engage in such
businesses.  Nothing herein shall
prohibit Executive from being a passive owner of not more than 2% of the
outstanding stock of any class of a corporation which is publicly traded so
long as he does not have any active participation in the business of such
corporation.

 5
 

(b)           During
the Noncompete Period, Executive shall not directly or indirectly through
another person or entity (i) induce or attempt to induce any employee of the
Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company
or any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time during the twelve month
period prior to the date of hire, (iii) call on, solicit, or service any customer,
supplier, licensee, licensor or other business relation or prospective client
of the Company or any of its Subsidiaries with respect to products and/or
services that are or have been provided by the Company or such Subsidiary
during the twelve-month period prior to the termination of the Employment
Period, or which the Company or any of its Subsidiaries is currently in the
process of developing or (iv) induce or attempt to induce any customer,
supplier, licensee, licensor, franchisee or other business relation of the
Company or any Subsidiary to cease doing (or reduce its) business with the
Company or such Subsidiary, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any Subsidiary (including, without limitation, making any negative
or disparaging statements or communications regarding the Company or its
Subsidiaries).

(c)           In
the event of a breach or a threatened breach by Executive of any of the
provisions of this Paragraph  7, the Company would suffer
irreparable harm, and in addition and supplementary to other rights and
remedies existing in its favor, the Company shall be entitled to specific
performance and/or injunctive or other equitable relief from a court of
competent jurisdiction in order to enforce or prevent any violations of the
provisions hereof  In addition, in the
event of a breach or violation by Executive of this Paragraph  7,
the Noncompete Period shall be automatically extended by the amount of time
between the initial occurrence of the breach or violation and when such breach
or violation has been duly cured. Executive acknowledges that the restrictions
contained in this Paragraph  7 are reasonable and that he has
reviewed the provisions of this Agreement with his legal counsel.

(d)           Executive agrees that Executive shall not at
any time, whether during or after Executive ceases to provide services to the
Company or any of its Subsidiaries, make or publish any untruthful statement
(orally or in writing) that intentionally libels, slanders, disparages or
otherwise defaces the goodwill or reputation (whether or not such disparagement
legally constitutes libel or slander) of the Company, any Subsidiary or any of
their affiliates, or its other officers, managers, directors, partners or
investment professionals.  Executive
acknowledges that he, as part of his employment hereunder, is responsible for
preserving the goodwill or reputation of the aforementioned parties.

8.             Enforcement.  If, at the time of enforcement of Paragraph
5, 6 or 7 of this Agreement, a court holds that the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area and that the court shall be allowed to revise the restrictions
contained herein to cover the maximum period, scope and area permitted by
law.  Because Executive’s services are
unique and because Executive has access to Confidential Information and Work
Product, the parties hereto agree that the Company could suffer irreparable
harm from a breach of Paragraph  5, 6 or 7 by
Executive and that money damages would not be an adequate remedy for any such
breach of this Agreement.  Therefore, in
the event a breach or threatened breach of this Agreement, the Company or its
successors or assigns, in addition to other rights and remedies existing in
their favor, shall be entitled to specific performance and/or injunctive or
other equitable relief from a court of competent jurisdiction in order to
enforce, or prevent any violations of, the provisions hereof.

9.             Executive’s Representations.

(a)           Executive
acknowledges that the provisions of Paragraphs  5, 6 and 7
are in consideration of his employment with the Company and additional good and
valuable consideration set forth in this 

 6
 

Agreement.  In addition,
Executive agrees and acknowledges that the restrictions contained in Paragraphs
5, 6 and 7 do not preclude Executive from earning a
livelihood, nor do they unreasonably impose limitations on Executive’s ability
to earn a living.  In addition, Executive
acknowledges (a) that the business of the Company and its Subsidiaries will
include all of North America, (b) notwithstanding the state of incorporation or
principal office of the Company or its Subsidiaries, or any of their respective
executives or employees (including Executive), it is expected that the Company
will have business activities and have valuable business relationships within
its industry throughout North America, and (c) as part of his responsibilities,
Executive may travel around North America in furtherance of the Company’s
business and its relationships.

(b)           Executive
hereby represents and warrants to the Company and Parent that (i) the
execution, delivery and performance of this Agreement by Executive do not and
shall not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which Executive is a party
or by which he is bound, (ii) except for the Existing Agreement (which shall be
deemed to be superceded and preempted effective as of the Effective Date,
Executive is not a party to or bound by any employment agreement, noncompete
agreement or confidentiality agreement with any other person or entity and
(iii) upon the execution and delivery of this Agreement by the Company and
Parent, this Agreement shall be the valid and binding obligation of Executive,
enforceable in accordance with its terms. 
Executive hereby acknowledges and represents that he has consulted with
independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.

10.           Call.

(a)   In the event (i) Executive’s employment with the Company and its
Subsidiaries is terminated by the Company for Cause, (ii) Executive’s
employment with the Company and its Subsidiaries is terminated by Executive for
any reason (other than a termination of employment by Executive for Good
Reason) or (iii) the Employment Period is terminated due to Executive’s Death
or Disability, then in the case of any termination of Executive’s employment
described above, 100% of the shares of Common Stock and 100% of the shares of
Series A Preferred Stock acquired by Executive pursuant to the Stock Purchase
Agreement (collectively, the “Call Option Shares”) held by Executive (or any of his transferees)
shall be subject to repurchase by Parent and the Investor pursuant to
the terms and conditions set forth in this Paragraph  10 (the “Call
Option”).  For purposes hereof, “Investor”
shall mean Olympus Growth Fund IV, L.P. and its affiliates.  For
purposes of this Agreement, the term “Original Cost” for (1) each
share of Common Stock shall be equal to the original price per share paid
therefor by Investor under the Stock Purchase Agreement, and (2) for each share
of Series A Preferred Stock shall be equal to the original price per share paid
therefor by Investor under the Stock Purchase Agreement, in each case as such
amounts may from time to time be proportionately adjusted by Parent in good
faith to reflect any stock split, stock dividend, reclassification or
recapitalization affecting any such shares.

(b)   In
the event of an exercise of the Call Option pursuant to Paragraph  10(a)(i)
or (ii) above, (x) the purchase price for each share of Series A
Preferred Stock subject to the Call Option shall be equal the lower of (A) the
Original Cost thereof and (B) the fair market value thereof as determined in
good faith by the Parent Board without regard to any minority discount
(provided that Executive shall have the 15-day right to object to the Parent
Board’s determination of fair market value and demand an Independent Valuation
in accordance with the terms provided in Paragraph 10(b)) and (y) the
purchase price for each share of Common Stock subject to the Call Option shall
be equal to the lower of (A) the Original Cost thereof and (B) the fair market
value thereof as determined in good faith by the Parent Board.  If Executive objects in writing to the Parent
Board’s determination of fair market value within 15 days after delivery
thereof to Executive, the Parent Board shall engage an independent investment
banking or other professional valuation firm (which firm must be mutually
agreed upon by Executive) to conduct a 

 7
 

valuation (the “Independent Valuation”) of the fair market
value, and such investment banking or other professional valuation firm’s
determination of fair market value shall be delivered to the Parent Board and
used instead of the fair market value previously asserted by the Parent
Board.  Parent or the Company, on the one
hand, and Executive, on the other hand, shall bear equally the costs and fees
of such independent investment banking or other professional valuation
firm.  In the event of an exercise of the
Call Option pursuant to Paragraph  10(a)(iii) above, (1) the
purchase price for each share of Series A Preferred Stock subject to such
applicable Call Option shall be the fair market value for such share as
determined in good faith by the Parent Board and (2) the purchase price for each share of Common Stock subject to
such applicable Call Option shall be the fair market value for such share as
determined in good faith by the Parent Board (provided, in the case of each of
(1) and (2), that Executive shall have the 15-day right to object to the Parent
Board’s determination of fair market value and demand an Independent Valuation
in accordance with the procedure and terms described above).

(c)   Parent
(as directed by the Parent Board)
may elect to purchase all or any portion of the Call Option Shares subject to
the applicable Call Option by delivering written notice (the “Call Option
Notice”) to the holder or holders of the Call Option Shares subject to such
applicable Call Option at any time after 30 days after the effective date of the termination of Executive’s
employment with the Company and its Subsidiaries but within 120 days after such
date.  The Call Option Notice
shall set forth the number and class of Call Option Shares subject to the
applicable Call Option to be acquired from each holder of Call Option Shares
subject to the applicable Call Option, the aggregate consideration to be paid
for such shares and the time and place for the closing of the transaction.  The number of shares of each class of Call
Option Shares subject to the applicable Call Option to be repurchased by Parent shall first be satisfied to the
extent possible from the Call Option Shares subject to the applicable Call
Option held by Executive at the time of delivery of the Call Option Notice. If
the number of such class of Call Option Shares subject to the applicable Call
Option then held by Executive is less than the total number of shares of such
class of Call Option Shares subject to the applicable Call Option which Parent has elected to purchase,
Parent shall purchase the
remaining shares elected to be purchased from the other holder(s) of such class
of Call Option Shares subject to the applicable Call Option under this
Agreement pro rata according to the number of shares of such class of Call
Option Shares subject to the applicable Call Option held by such other
holder(s) at the time of delivery of such Call Option Notice (determined as
close as practicable to the nearest whole shares).  The number of each class of Call Option Shares
subject to the applicable Call Option to be repurchased hereunder shall be
allocated among Executive and the other holders of such class of Call Option
Shares (if any) subject to the applicable Call Option pro rata according to the
number of shares of  such class of Call
Option Shares to be purchased from such persons.

(d)   If for any reason Parent does not elect to purchase all of the Call Option Shares
pursuant to the applicable Call Option, the Investor shall be entitled to
exercise the applicable Call Option for the Call Option Shares subject thereto
which Parent has not elected to
purchase (the “Available Shares”). 
As soon as practicable after Parent
has determined that there will be Available Shares, but in any event within 150
days after the termination of Executive’s employment with the Company and its
Subsidiaries, Parent shall give
written notice (the “Investor Call Notice”) to the Investor setting
forth the number of Available Shares and the purchase price for each class of
the Available Shares. The Investor may elect to purchase any or all of the
Available Shares by giving written notice to Parent within 30 days after the Investor Call Notice has been
given by Parent.  As soon as practicable, and in any event
within ten days after the expiration of the 30-day period set forth above, Parent shall notify each holder of
Call Option Shares subject to the applicable Call Option as to the number of
each class of Call Option Shares being purchased from such holder by the
Investor (the “Supplemental Call Option Notice”).  At the time Parent delivers the Supplemental Call Option Notice to the
holder(s) of Call Option Shares subject to the applicable Call Option, Parent shall also deliver written
notice to the Investor setting forth the number of each class of Call Option
Shares subject to the applicable Call Option the Investor is entitled to
purchase, the aggregate purchase price and the time and place of the closing of
the transaction. The number of each 

 8
 

class of Call Option Shares subject to the
applicable Call Option to be repurchased hereunder shall be allocated among Parent and the Investor pro rata
according to the number of shares of each class of Call Option Shares to be
purchased by each of them.  In the event
that Parent and the Investor collectively elect
to repurchase less than 100% of the Call Option Shares subject to the
applicable Call Option, such Call
Option must be proportionately exercised with respect to the Call Option Shares
subject to the applicable Call Option (i.e., if Parent and the Investor collectively desire to repurchase
50% of the shares of Common Stock subject to the applicable Call Option, Parent
and the Investor collectively must also repurchase 50% of the shares of Series
A Preferred Stock subject to the applicable Call Option).

(e)   The closing of the purchase of the Call Option Shares pursuant to
a particular Call Option shall take place on the date designated by Parent in the Call Option Notice or
Supplemental Call Option Notice, which date shall not be more than 60 days nor
less than 15 days after the delivery of the later of either such notice to be
delivered (or, if applicable, from the date on which the independent investment
banking or other professional valuation firm has presented its fair market
value determination to the Parent Board). 
Parent and/or the Investor (as
applicable) shall each pay the portion of the aggregate purchase price for the
Call Option Shares subject to the applicable Call Option to be purchased pursuant to such Call Option
by Parent or the Investor (as applicable) by immediately available funds.  In addition, Parent and/or the Investor (as applicable) may pay the purchase
price for such shares by offsetting bona fide debts owed by Executive to either
of them or any of their respective affiliates. 
Parent and its Affiliates shall be entitled to receive customary
representations and warranties (and there shall be no other representations and
warranties and there shall be no indemnification other than as a result of the
breach of such agreement) from Executive regarding good title to such shares,
that the shares are free and clear of any liens, security interests, mortgages,
pledges or other encumbrances, that Executive has the capacity and all
necessary authority to enter into such agreement, that the agreement is not in
violation or contravention of any other agreement and that Executive has
consulted with counsel.  There shall be
no representations or warranties other than described in the previous sentence
and the only indemnification obligation shall be for a breach of such
representations and warranties. 
Executive shall further agree to release and discharge any and all
claims related to such repurchase.

(f)    The right of Parent and the Investor to repurchase Call Option Shares
pursuant to this Paragraph  10 shall terminate upon an underwritten public offering of Parent’s
Common Stock, registered under the Securities Act of 1933, as amended from time
to time.

(g)   Notwithstanding anything to the contrary contained in this
Agreement, all repurchases of Call Option Shares hereunder shall be subject to
applicable restrictions contained in the Delaware General Corporation Law and
in Parent’s
and its Subsidiaries’ debt financing agreements with unaffiliated third
parties. If any such restrictions prohibit the repurchase of Call Option Shares
hereunder which Parent and/or
the Investor is otherwise entitled to make, the time periods provided in this Paragraph
10 shall be suspended, and Parent and
the Investor may make such repurchases as soon as it is permitted to do so
under such restrictions.

11.           Purchase Obligation.  On the Effective Date and concurrently with
the closing of the transactions contemplated by the Merger Agreement, Executive
shall (i) execute and deliver to Parent a counterpart signature page to the
stock purchase agreement attached hereto in the form of Exhibit C (the “Stock
Purchase Agreement”) and (ii) on and subject to the terms set forth in the
Stock Purchase Agreement, make an investment in Parent in an aggregate amount
in cash (and/or, provided that the Parent has consented to such exchange and
agreed to the number of shares to be exchanged, a number of exchanged shares of
voting common stock of WII Components each having a value equal to the Price
Per Common Share (as defined in the Merger Agreement)) equal to $180,000 in the
aggregate (the “Cash Investment Amount”) to purchase (x) a number of
shares of Parent’s Common Stock (as defined in the Stock Purchase Agreement)
equal to the quotient determined by dividing (1) the product of (A) the 

 9
 

Common Investment
Percentage (as defined below) and (B) the Cash Investment Amount, by (2)
the per share purchase price for the Common Stock set forth therein (which
shall be the same per share purchase price for the Common Stock to be paid by
the other purchasers thereof on the Effective Date pursuant to the Stock
Purchase Agreement) and (y) a number of shares of Parent’s Series A Preferred
Stock (as defined in the Stock Purchase Agreement) equal to the quotient
determined by dividing (1) the product of (A) the Preferred Investment
Percentage (as defined below) and (B) the Cash Investment Amount, by (2)
the per share purchase price for the Series A Preferred Stock set forth therein
(which shall be the same per share purchase price for the Series A Preferred
Stock to be paid by the other purchasers thereof on the Effective Date pursuant
to the Stock Purchase Agreement).  For
purposes hereof, (1) the term “Common Investment Percentage” shall mean the
quotient (expressed as a decimal) determined by dividing (A) the
aggregate purchase price to be paid by Investor on the Effective Date under the
Stock Purchase Agreement in exchange for the shares of Common Stock to be
purchased by the Investor thereunder on the Effective Date, by (B) the
aggregate purchase prices to be paid by Investor on the Effective Date under
the Stock Purchase Agreement in exchange for the shares of Common Stock and the
shares of Series A Preferred Stock to be purchased by the Investor thereunder
on the Effective Date and (2) the term “Preferred Investment Percentage” shall
mean the quotient (expressed as a decimal) determined by dividing (A)
the aggregate purchase price to be paid by Investor on the Effective Date under
the Stock Purchase Agreement in exchange for the shares of Series A Preferred
Stock to be purchased by the Investor thereunder on the Effective Date, by
(B) the aggregate purchase prices to be paid by Investor on the Effective Date
under the Stock Purchase Agreement in exchange for the shares of Common Stock
and the shares of Series A Preferred Stock to be purchased by the Investor
thereunder on the Effective Date.

For purposes hereof, the term “Common Stock” shall
have the meaning ascribed to such term in the Stock Purchase Agreement and the
term “Series A Preferred Stock” shall have the meaning ascribed to such term in
the Stock Purchase Agreement.

12.           Survival.  Paragraphs  5 through 26,
inclusive, shall survive and continue in full force in accordance with their
terms notwithstanding the expiration or termination of the Employment Period.

13.           Notices.  Any notice provided for in this Agreement
shall be in writing and shall be either personally delivered, sent by reputable
overnight courier service or mailed by first class mail, return receipt
requested, to the recipient at the address below indicated:

	
  Notices to Executive:

  
	
   

  
	
  Joe Beyer

  
	
  2273 - 135th
  Avenue

  
	
  Kent, MN 56553

  
	
   

  
	
  Notices to the
  Company:

  
	
   

  
	
  WII Merger
  Corporation

  
	
  c/o WII
  Components, Inc.

  
	
  525 Lincoln
  Avenue SE 

  
	
  St. Cloud, MN
  56304

  
	
  Attn: Chief
  Executive Officer

  

 

 10
 

 

	
  With a copy (which
  shall not constitute notice) to:

  
	
   

  
	
  WII Merger
  Corporation 

  
	
  c/o Olympus
  Partners

  
	
  One Station
  Place, 4th Floor 

  
	
  Stamford, CT
  06902

  
	
  Attn: L. David
  Cardenas

  
	
   

  
	
  With a copy
  (which shall not constitute notice) to:

  
	
   

  
	
  Kirkland &
  Ellis LLP

  
	
  200 East
  Randolph Drive 

  
	
  Chicago, IL
  60601 

  
	
  Attn: John A
  Schoenfeld, P.C.

  
	
   

  
	
  Notices to
  Parent

  
	
   

  
	
  WII Holding,
  Inc. 

  
	
  c/o Olympus
  Partners

  
	
  One Station
  Place, 4th Floor 

  
	
  Stamford, CT
  06902

  
	
  Attn: L. David
  Cardenas

  
	
   

  
	
  With a copy
  (which shall not constitute notice) to:

  
	
   

  
	
  Kirkland &
  Ellis LLP

  
	
  200 East
  Randolph Drive

  
	
  Chicago, IL
  60601

  
	
  Attn: John A
  Schoenfeld, P.C.

  

 

or such other address or to the attention of such
other person as the recipient party shall have specified by prior written
notice to the sending party. Any notice under this Agreement shall be deemed to
have been given when so delivered, sent or mailed.

14.           Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement or any action in any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

15.           Complete Agreement.  This Agreement contains the complete
agreement and understanding among the parties relating to the subject matter
hereof and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way (including the Existing
Agreement).

 11
 

16.           No Strict Construction. The
language used in this Agreement shall be deemed to be the language chosen by
the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.

17.           Counterparts. This Agreement
may be executed in separate counterparts, each of which is deemed to be an
original and all of which taken together constitute one and the same agreement.

18.           Successors and Assigns. This
Agreement is intended to bind and inure to the benefit of and be enforceable by
Executive, Parent, the Company and their respective heirs, successors and
assigns, except that Executive may not assign his rights or delegate his duties
or obligations hereunder without the prior written consent of the Company and
Parent.  Investor and each of the Company’s
Subsidiaries are intended third party beneficiaries of the covenants and
agreements made by Executive in this Agreement.

19.           Choice of Law.  All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of Minnesota, without giving effect to
any choice of law or conflict of law rules or provisions (whether of the State
of Minnesota or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Minnesota.

20.           Amendment and Waiver. The
provisions of this Agreement may be amended or waived only with the prior
written consent of the Company (as approved by the Board), Parent (as approved
by the Parent Board), Investor and Executive, and no course of conduct or
course of dealing or failure or delay by any party hereto in enforcing or
exercising any of the provisions of this Agreement (including, without
limitation, the Company’s right to terminate the Employment Period for Cause)
shall affect the validity, binding effect or enforceability of this Agreement
or be deemed to be an implied waiver of any provision of this Agreement.

21.           Insurance. The Company may, at
its discretion, apply for and procure in its own name and for its own benefit
life and/or disability insurance on Executive in any amount or amounts
considered advisable. Executive agrees to cooperate in any medical or other
examination, supply any information and execute and deliver any applications or
other instruments in writing as may be reasonably necessary to obtain and
constitute such insurance. Executive hereby represents that he has no reason to
believe that his life is not insurable at rates now prevailing for healthy men
of his age.

22.           Corporate Opportunity.  During the Employment Period, Executive shall
submit to the Board all business, commercial and investment opportunities or
offers presented to Executive or of which Executive becomes aware which relate
to the business of the Company at any time during the Employment Period (“Corporate
Opportunities”). Unless approved by the Board, Executive shall not accept
or pursue, directly or indirectly, any Corporate Opportunities on Executive’s
own behalf.

23.           Executive’s Cooperation.
During the Employment Period and thereafter for a period of six (6) years,
Executive shall cooperate with the Company and its Subsidiaries in any internal
investigation, any administrative, regulatory or judicial proceeding or any
dispute with a third party as reasonably requested by the Company (including,
without limitation, Executive being available to the Company upon reasonable
notice for interviews and factual investigations, appearing at the Company’s
request to give testimony without requiring service of a subpoena or other
legal process, volunteering to the Company all pertinent information and
turning over to the Company all relevant documents which are or may come into
Executive’s possession, all at times and on schedules that are reasonably
consistent with Executive’s other permitted activities and commitments). In the
event the Company requires Executive’s 

 12
 

cooperation in accordance
with this paragraph after the Employment Period, the Company shall reimburse
Executive for reasonable travel expenses (including lodging and meals) upon
submission of receipts.

24.           Tax Disclosures.
Notwithstanding anything herein to the contrary, the Company and Executive and
each other party to the transaction contemplated hereby (and each affiliate and
person acting on behalf of any such party) agree that each party (and each
employee, representative and other agent of such party) may disclose to any and
all persons, without, limitation of any kind, the tax treatment and tax
structure of the transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to such party or such person relating
to such tax treatment and tax structure, except to the extent necessary to
comply with any applicable federal or state securities laws. This authorization
is not intended to permit disclosure of any other information, including,
without limitation (i) any portion of any materials to the extent not related
to the tax treatment or tax structure of the transaction, (ii) the identities
of participants or potential participants in the transaction, (iii) the
existence or status of any negotiations, (iv) any pricing or financial
information (except to the extent such pricing or financial information is
related to the tax treatment or tax structure of the transaction) or (v) any
other term or detail not relevant to the tax treatment or the tax structure of
the transaction.

25.           Arbitration.

(a)           Except
with respect to disputes and claims under Paragraphs  5, 6
and 7 hereof (which the parties hereto may pursue in any court of competent
jurisdiction and which may be pursued in any court of competent jurisdiction as
specified below and with respect to which each party shall bear the cost of its
own attorneys’ fees and expenses, except to the extent otherwise required by
applicable law), each party hereto agrees that arbitration, pursuant to the
procedures set forth in the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association (as adopted and effective as
of June 1, 1997 or such later version as may then be in effect) (the “AAA
Rules”), shall be the sole and exclusive method for resolving any claim or
dispute (“Claim”) arising out of or relating to the rights and
obligations of the parties under this Agreement and the employment of Executive
by the Company (including, without limitation, claims and disputes regarding
employment discrimination, sexual harassment, termination and discharge),
whether such claim arose or the facts on which such Claim is based occurred
prior to or after the execution and delivery of this Agreement.  The parties hereto agree that (i) one
arbitrator shall be appointed pursuant to the AAA Rules to conduct any such
arbitration, (ii) all meetings of the parties and all hearings with respect to
any such arbitration shall take place in Minneapolis, Minnesota, (iii) each
party to the arbitration shall bear its own costs and expenses (including,
without limitation, all attorneys’ fees and expenses, except to the extent
otherwise provided by applicable law), (iv) all costs and expenses of the
arbitration proceeding (such as filing fees, the arbitrator’s fees, hearing
expenses, etc.) shall be borne equally by the parties hereto. The parties agree
that the judgment, award or other determination of any arbitration under the
AAA Rules shall be final, conclusive and binding on all of the parties hereto.
Nothing in this Paragraph  25 shall prohibit any party hereto from
instituting litigation to enforce any final judgment, award or determination of
the arbitration. Each party hereto hereby irrevocably submits to the
jurisdiction of the appropriate state courts sitting in Minneapolis, Minnesota,
and agrees that either court shall be the exclusive forum for the enforcement
of any such final judgment, award or determination of the arbitration.  Each party hereto irrevocably consents to
service of process by registered mail or personal service and waives any
objection on the grounds of personal jurisdiction, venue or inconvenience of
the forum.  Each party hereto further
agrees that each other party hereto may initiate litigation in any court of
competent jurisdiction to execute any judicial judgment enforcing or not
enforcing any award, judgment or determination of the arbitration.

(b)           Notwithstanding
the foregoing, prior to any party hereto instituting any arbitration proceeding
hereunder to resolve any Claim, such party first shall submit the Claim to a
mediation proceeding between the parties hereto which shall be governed by the
prevailing procedures of the 

 13
 

American Arbitration Association and shall be conducted in Minneapolis,
Minnesota. If the parties hereto have not agreed in writing to a resolution of
the Claim pursuant to the mediation within 45 days after the commencement
thereof of if any party refuses to participate in the mediation process, then
the Claim may ‘be submitted to arbitration under Paragraph  25(a)
above.  Each party hereto shall bear its
own costs and expenses incurred in connection with the mediation, and all costs
and expenses of the mediation proceeding shall be borne equally by the parties
hereto.

26.           Effect of the Merger.  From and after the Effective Date, by virtue
of the merger contemplated by the Merger Agreement whereupon the Company shall
merge with and into WII Components, with WII Components as the surviving
corporation and a Subsidiary of Parent, and without any action on the part of
any party hereto, all references herein to the “Company” shall be deemed to
refer to “WII Components, Inc.”

27.           Effectiveness.  In the event that the transactions
contemplated by the Merger Agreement (including the merger contemplated
thereby) do not close for any reason, this Agreement shall be nullified and
shall have no further force and effect.

*  * 
*  *  *  *

 14

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.

	
  

  	
  WII MERGER CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WII HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Joe Beyer

  
					

 

Exhibit A

GENERAL RELEASE

I,                                         ,
in  consideration of and subject to the
performance by                             ,
a Delaware corporation (together with its subsidiaries, the “Company”)
of its obligations under the Employment Agreement, dated as of                             
(the “Agreement”), do hereby release and forever discharge as of the
date hereof the Company and its affiliates and all present and former
directors, officers, agents, representatives, employees, successors and assigns
of the Company and its affiliates and the Company’s direct or indirect owners
(collectively, the “Released Parties”) to the extent provided below.

1.     I understand that any payments or benefits
paid or granted to me under Paragraph 4(b) of the Agreement represent,
in part, consideration for signing this General Release and are not salary,
wages or benefits to which I was or may have been already entitled. I
understand and agree that I will not receive the payments and benefits
specified in Paragraph 4(b) of the Agreement unless I execute this
General Release and do not revoke this General Release within the time period
permitted hereafter or breach this General Release.  Such payments and benefits will not be considered
compensation for purposes of any employee benefit plan, program, policy or
arrangement maintained or hereafter established by the Company or its
affiliates.  I also acknowledge and
represent that I have received all payments and benefits that I am entitled to
receive (as of the date hereof) by virtue of any employment by the Company
and/or any of its affiliates.

2.     Except (i) as provided in paragraph 4
below, (ii) as provided in the Merger Agreement, (iii) as to such
indemnification rights provided by the Company to its directors and officers,
in their capacity as such, to the maximum extent allowed by applicable law (iv)
as to claims with respect to any earned but unpaid vacation and paid-time off
that has been accrued prior to Executive’s termination pursuant to the Company’s
benefits plans and policies and (v) for the provisions of the Agreement which
expressly survive the termination of my employment with the Company and/or any
of its affiliates, I knowingly and voluntarily (for myself, my heirs,
executors, administrators and assigns) release and forever discharge the
Company and the other Released Parties from any and all claims, suits,
controversies, actions, causes of action, cross-claims, counter-claims,
demands, debts, compensatory damages, liquidated damages, punitive or exemplary
damages, other damages, claims for costs and attorneys’ fees, or liabilities of
any nature whatsoever in law and in equity, both past and present (through the
date this General Release becomes effective and enforceable) and whether known
or unknown, suspected, or claimed against the Company or any of the Released
Parties which I, my spouse, or any of my heirs, executors, administrators or
assigns, may have, which arise out of or are connected with my employment with,
or my separation or termination from, the Company (including, but not limited
to, any allegation, claim or violation, arising under: Title VII of the Civil
Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age
Discrimination in Employment Act of 1967, as amended (including the Older
Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the
Americans with Disabilities Act of 1990; the Family and Medical Leave Act of
1993; the Worker Adjustment Retraining and Notification Act; the Employee
Retirement Income Security Act of 1974; any applicable Executive Order
Programs; the Fair Labor Standards Act; or their state or local counterparts;
or under any other federal, state or local civil or human rights law, or under
any other local, state, or federal law, regulation or ordinance; or under any
public policy, contract or tort, or under common law; or arising under any
policies, practices or procedures of the Company and/or any of its affiliates;
or any claim for wrongful discharge, breach of contract, infliction of
emotional distress, defamation; or any claim for costs, fees, or other
expenses, including attorneys’ fees incurred in these matters) (all of the
foregoing collectively referred to herein as the “Claims”).

3.     I represent that I have made no assignment
or transfer of any right, claim, demand, cause of action, or other matter
covered by paragraph 2 above.

4.     I agree that this General Release does not
waive or release any rights or claims that I may have under the Age
Discrimination in Employment Act of 1967 which arise after the date I execute
this General Release. I acknowledge and agree that my separation from
employment with the Company and/or any of its affiliates in compliance with the
terms of the Agreement shall not serve as the basis for any claim or action
(including, without limitation, any claim under the Age Discrimination in
Employment Act of 1967).

5.     In signing this General Release, I
acknowledge and intend that it shall be effective as a bar to each and every
one of the Claims hereinabove mentioned or implied. I expressly consent that
this General Release shall be given full force and effect according to each and
all of its express terms and provisions, including those relating to unknown
and unsuspected Claims (notwithstanding any state statute that expressly limits
the effectiveness of a general release of unknown, unsuspected and
unanticipated Claims), if any, as well as those relating to any other Claims
hereinabove mentioned or implied. I acknowledge and agree that this waiver is
an essential and material term of this General Release and that without such
waiver the Company would not have agreed to the terms of the Agreement.  I further agree that in the event I should
bring a Claim seeking damages against the Company or any of the other Released
Parties, or in the event I should seek to recover against the Company or any of
the Other Released Parties in any Claim brought by a governmental agency on my
behalf, this General Release shall serve as a complete defense to such Claims.
I further agree that I am not aware of any pending claim of the type described
in paragraph 2 as of the execution of this General Release.

6.     [I represent that I am not aware of any
claim by me other than the claims that are released by this Agreement.  I acknowledge that I may hereafter discover
claims or facts in addition to or different than those which I now know or
believe to exist with respect to the subject matter of this General Release and
which,  if known or suspected at the time
of entering into this General Release, may have materially affected this
General Release and my decision to enter into it.  Nevertheless, I hereby waive any right, claim
or cause of action that might arise as a result of such different or additional
claims or facts and I hereby expressly waive any and all rights and benefits
confirmed upon me by the provisions of California Civil Code Section 1542,
which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.”

Being aware of such
provisions of law, I agree to expressly waive any rights I may have thereunder,
as well as under any other statute or common law principles of similar effect.](1)

7.     I agree that neither this General Release,
nor the furnishing of the consideration for this General Release, shall be
deemed or construed at any time to be an admission by the Company, any Released
Party or myself of any improper or unlawful conduct.

(1)                                  To
be included as applicable.

8.     I agree that I will forfeit all amounts
payable by the Company pursuant to the Agreement if I challenge the validity of
this General Release. I also agree that if I violate this General Release by
suing the Company or the other Released Parties, I will pay all costs and
expenses of defending against the suit incurred by the Released Parties,
including reasonable attorneys’ fees, and return all payments received by me
pursuant to the Agreement.

9.     I agree that this General Release and the
Agreement are confidential and agree not to disclose any information regarding
the terms of this General Release or the Agreement, except to my immediate
family and any tax, legal or other counsel I have consulted regarding the
meaning or effect hereof or as required by law, and I will instruct each of the
foregoing not to disclose the same to anyone. 
Notwithstanding anything herein to the contrary, each of the parties
(and each affiliate and person acting on behalf of any such party) agree that
each party (and each employee, representative, and other agent of such party)
may disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of this transaction contemplated in the Agreement
and all materials of any kind (including opinions or other tax analyses) that
are provided to such party or such person relating to such tax treatment and
tax structure, except to the extent necessary to comply with any applicable
federal or state securities laws.  This
authorization is not intended to permit disclosure of any other information
including (without limitation) (i) any portion of any materials to the
extent not related to the tax treatment or tax structure of this transaction,
(ii) the identities of participants or potential participants in the
Agreement, (iii) any financial information (except to the extent such
information is related to the tax treatment or tax structure of this
transaction), or (iv) any other term or detail not relevant to the tax
treatment or the tax structure of this transaction.

10.   Any non-disclosure provision in this General
Release does not prohibit or restrict me (or my attorney) from responding to
any inquiry about this General Release or its underlying facts and
circumstances by the Securities and Exchange Commission (SEC), the National
Association of Securities Dealers, Inc. (NASD), any other self-regulatory
organization or governmental entity.

11.   I agree to reasonably cooperate with the
Company and its affiliates in any internal investigation, any administrative,
regulatory, or judicial proceeding or any dispute with a third party. I
understand and agree that my cooperation may include, but not be limited to,
making myself available to the Company and its affiliates upon reasonable
notice for interviews and factual investigations; appearing at the Company’s
request to give testimony without requiring service of a subpoena or other
legal process; volunteering to the Company pertinent information; and turning
over to the Company all relevant documents which are or may come into my
possession all at times and on schedules that are reasonably consistent with my
other permitted activities and commitments. I understand that in the event the
Company asks for my cooperation in accordance with this provision, the Company
will reimburse me solely for reasonable travel expenses, (including lodging and
meals), upon my submission of receipts, and for my time, to the extent rendered
at the Company’s request, at a reasonable consulting fee.

12.   I agree not to disparage the Company, its
past and present investors, officers, directors or employees or its affiliates
and to keep all confidential and proprietary information about the past or
present business affairs of the Company and its affiliates confidential unless
a prior written release from the Company is obtained.  I further agree that as of the date hereof, I
have returned to the Company any and all property, tangible or intangible,
relating to its business, which I possessed or had control over at any time
(including, but not limited to, company-provided credit cards, building or
office access cards, keys, computer equipment, manuals, files, documents,
records, software, customer data base and other data) and that I shall not
retain any copies, compilations, extracts, excerpts, summaries or other notes
of any such manuals, files, documents, records, software, customer data base or
other data.

13.   Notwithstanding anything in this General
Release to the contrary, this General Release shall not relinquish, diminish,
or in any way affect any rights or claims arising out of any breach by the
Company or by any Released Party of the Agreement after the date hereof.

14.   Whenever possible, each provision of this
General Release shall be interpreted in, such manner as to be effective and
valid under applicable law, but if any provision of this General Release is
held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other
jurisdiction, but this General Release shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE
THAT:

(i)                                     I
HAVE READ IT CAREFULLY;

(ii)                                  I
UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS,
INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED;
THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

(iii)                               I
VOLUNTARILY CONSENT TO EVERYTHING IN IT;

(iv)                              I
HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE
DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO
OF MY OWN VOLITION;

(v)                                 I
HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON                              
    ,             
TO CONSIDER IT AND THE CHANGES MADE SINCE THE                                
    ,            
VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED
21-DAY PERIOD;

(vi)                              THE
CHANGES TO THE AGREEMENT SINCE                           
     ,            
EITHER ARE NOT MATERIAL OR WERE MADE AT MY REQUEST.

(vii)                           I
UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE
IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
REVOCATION PERIOD HAS EXPIRED;

(viii)                        I
HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE
OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

(ix)                                I
AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED,
CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF THE COMPANY AND BY ME.

 

	
  DATE: 

  	
   

  	
   

  	
   

  	
   

  

 

Exhibit B

Bonus Target
Methodologies for Years Ended December 31, 2006 and December 31, 2007

INCENTIVE
COMPENSATION

For each fiscal
year of the Company beginning after December 31, 2005, Executive shall earn, as
incentive compensation, a percentage of his base salary, up to a maximum of
75%.  The incentive compensation will be
determined, in part on the basis of EBITDA of the Company and, in part (the “Division
Portion”), on the basis of EBITDA of the subsidiary division, which portions
shall be determined by the Chief Executive Officer of Woodcraft.  Incentive compensation shall be determined as
follows:

A.           For each percentage
point (rounded up or down to the nearest whole number) that the Company’s
EBITDA is greater than 85% of the Company’s projected aggregate EBITDA, up to
and including 100%, Executive shall earn the product of .5% of his base salary
multiplied by the Company portion as incentive compensation, together with the
Division Portion at 86 – 100% will not exceed 37.5%; and

B.             For each percentage
point (rounded up or down to the nearest whole number) that the Company’s
EBITDA is greater than 100% of the Company’s projected aggregate EBITDA, up to
and including 125%, Executive shall earn .3% of his base salary multiplied by
the Company portion as incentive compensation, together with the Division
portion at 101 – 125 % will not exceed 37.5%; and

C.             For each percentage
point (rounded up of down to the nearest whole number) that the Division’s
EBITDA is greater than 85% of the Division’s projected aggregate EBITDA, up to
and including 100%, Executive shall earn the product of 2% of his base salary
multiplied by the Division portion as incentive compensation, together with the
Company portion at 86 – 100% will not exceed 37.5%; and

D.            For each percentage
point (rounded up or down to the nearest whole number) that the Division’s
EBITDA is greater than 100% of the Division’s projected aggregate EBITDA, up to
and including 125%, Executive shall earn 1.2% of his base salary multiplied by
the Division portion as incentive compensation, together with the Company
portion at 101 – 125% will not exceed 37.5%.

All calculations
that are required to determine the amount of Executive’s incentive compensation
for a fiscal year shall be calculated as of December 31.  The Company shall pay Executive the amount of
incentive compensation that he has earned for a fiscal year, if any, within 75
days after the end of the year.

For purposes of
determining Executive’s incentive compensation, the terms used in this exhibit
have the following meanings:

“Base Salary”
shall mean the total base salary paid to Executive in accordance with Paragraph
3(a) of this Agreement during the applicable full fiscal year.

“Projected
Aggregate EBITDA” shall mean, for any year, the amount proposed by management
and approved by the Company’s Board of Directors in the Company’s annual plan
for a fiscal year as the Company’s projected EBITDA and the Division’s
projected EBITDA.

Exhibit C

Form of Stock
Purchase Agreement

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