Executive Employment & Non-competition Agreement

Exhibit 10.1


EXECUTIVE EMPLOYMENT AND NON-COMPETITION AGREEMENT

AGREEMENT made this 7th day of October, 2005, by and between Lippert Components Manufacturing, Inc., a Delaware corporation (the " Corporation" ) and Jason D. Lippert (the " Executive" ).

W I T N E S S E T H:

WHEREAS, the Executive has served as President and Chief Executive Officer of the Corporation, Lippert Components, Inc. (" LCI" ), parent of the Corporation, and all other entities of which LCI is a direct or indirect parent or partner, excluding Lippert Components Holding, Inc. (collectively, the " LCI Entities" ), all of which are direct or indirect subsidiaries of Drew Industries Incorporated (" Drew" ), and has had extensive business and financial experience with the business conducted by the LCI Entities, and the Corporation desires to continue to utilize the Executive' s experience, knowledge and abilities in connection with the operations of the LCI Entities; and

WHEREAS, the Corporation does not wish the Executive to compete against the LCI Entities,

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, it is agreed as follows:

1. Employment . The Corporation hereby employs the Executive and the Executive hereby agrees to serve the LCI Entities, excluding Lippert Components Holding, Inc., as President and Chief Executive Officer. The Executive will perform his duties on behalf of the LCI Entities at the principal executive offices of the Corporation in Goshen, Indiana; provided, however, that relocation of the Corporation' s executive offices shall be subject to approval of the


Board of Directors of the Corporation, and the Executive shall at no time be required to change his residence without his consent.

2. Term . The term of this Agreement shall be for the five (5) year period commencing January 1, 2006 and terminating December 31, 2010 (the " Term" ).

3. Duties . During the Term, the Executive shall exert his best efforts, and, subject to the terms and provisions hereof, shall devote substantially all of his time, attention, skills and efforts to the business and affairs of the LCI Entities and will use his best efforts to promote the interests thereof. Consistent with the foregoing, the Executive shall not be precluded from giving appropriate attention to his personal and financial affairs. The Executive shall act in accordance with the policies of the LCI Entities as determined from time-to-time by their respective Boards of Directors consistent with this Agreement, and shall perform such services and duties as such Boards of Directors may from time-to-time direct consistent with this Agreement, including, but not limited to, the duty to hire and discharge employees of the LCI Entities and to determine the compensation paid to such employees, including bonuses paid to such employees from the annual 18% incentive bonus pools maintained by the LCI Entities (the " Bonus Pools" ).

4.

Compliance.

4.1 The Corporation and the Executive intend that the provisions of this Agreement shall comply in all respects with the requirements of section 409A of the Internal Revenue Code of 1986, as amended (the " Code). Accordingly, notwithstanding anything in this Agreement to the contrary, all elections to defer, distributions, and all other aspects of this Agreement shall be made in compliance Section 409A of the Code and any regulations or other guidance thereunder. To the extent required, this Agreement will be revised and amended in


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order to comply with the provisions of Section 409A of the Code and any regulations or guidance thereunder.

4.2 All compensation, in whatever form, payable pursuant to this Agreement shall be subject in all respects to the terms, provisions and conditions of the Drew Industries Incorporated 2002 Equity Award and Incentive Plan, as amended from time to time.


5. Compensation . The Corporation agrees to pay the Executive for his services to the LCI Entities a salary (" Base Salary" ) of Four Hundred Thousand ($400,000) Dollars for each year of the Term, payable according to the customary payroll practice of the Corporation. Performance of the Executive' s services will be reviewed annually by the Compensation Committee of the Board of Directors of Drew (the " Compensation Committee" ).

6.

Incentive Compensation .

6.1 In addition to the Base Salary, and subject to Section 6.3 hereof, the Executive shall be entitled to receive, for each year during the Term commencing with the year ending December 31, 2006, performance-based incentive compensation (the " Bonus" ), equal to five (5%) percent of (i) the excess of operating profits of the LCI Entities over (ii) $14.0 million; provided, however, that if any of the LCI Entities shall acquire additional business operations or dispose of any existing business operations, the performance goals pursuant to which the Bonus is paid may be modified upon agreement between the Executive and the Corporation. The Bonus shall be paid from, and applied against, the Bonus Pools.

6.2 For purposes of this Agreement, the term " operating profits of the LCI Entities" means the consolidated income of the LCI Entities (A) before (i) interest expense, (ii) interest or dividend income, (iii) impairment of goodwill, (iv) intercompany administrative fees charged to any of the LCI Entities by Drew, (v) taxes based upon income, (vi) extraordinary


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items determined in accordance with generally accepted accounting principles, and (vii) the cumulative effect of a change in accounting principles, and (B) after giving effect (positive or negative) to a capital charge equal to 6% of the increase or decrease in (i) the average net assets employed by the LCI Entities during the year for which the Bonus is being determined over (ii) $114 million. For purposes of this Agreement, the term " net assets" means: (a) total assets, excluding cash, minus (b) total liabilities, excluding (i) current and long-term debt, (ii) intercompany balances, and (iii) income taxes payable or deferred, all as reflected on the monthly Consolidating Balance Sheet of Drew and its subsidiaries.

6.3 Notwithstanding anything to the contrary contained herein, the following shall apply to payment of the Bonus:

6.3.1 at least 60% of the amount of Bonus in excess of $600,000 for any year during the Term shall be paid in shares of Drew Restricted Stock, and the balance of 40% shall be paid in such proportions of shares of Drew Restricted Stock and cash as the Executive shall elect in his sole discretion. All such shares of Drew Restricted Stock shall be subject only to the restriction on transferability for a period of two years from the date of grant;

6.3.2 the amount of Bonus in excess of five times the Base Salary for any year during the Term shall be paid in shares of Drew Deferred Stock. The shares shall ...