Exhibit 10.1
AMENDED AND
RESTATED
CHANGE OF CONTROL
AGREEMENT
THIS AMENDED AND RESTATED CHANGE OF
CONTROL AGREEMENT, dated as of July 25, 2008 (the
“Agreement”), is by and between Quixote Corporation, a
Delaware corporation having its principal offices at 35 East Wacker
Drive, Chicago, IL 60601 (the “Company”), and Leslie J.
Jezuit, an Executive of the Company
(“Executive”).
WHEREAS, the Executive is a key
employee and elected officer of the Company who possesses valuable
proprietary knowledge of the Company, its business and operations
and the markets in which the Company competes; and
WHEREAS, the Board of Directors of
the Company (the “Board”) has recognized and continues
to recognize that the Executive’s contribution to the growth
and success of the Company has been, and is expected to continue to
be, substantial and desires to assure the Company of the
Executive’s continued employment by assuring him of fair
treatment if that relationship is terminated; and
WHEREAS, the Company and the
Executive are parties to that certain change of Control Agreement
dated December 1, 1997, and desire to amend and restate that
agreement to encourage the Executive to continue to devote the
Executive’s full attention to the success of the Company by
maximizing the value of the Company for its stockholders, and to
provide specified compensation and benefits to the Executive in the
event of a termination of employment after a Change of
Control;
NOW, THEREFORE, in consideration of
the foregoing, the mutual covenants and conditions contained herein
and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1.
Certain
Defined Terms .
(a)
Change of
Control . “Change of
Control,” as used herein, shall mean a change in control of a
nature that would be required to be reported in response to Item
6(e) of Schedule 14A promulgated under the Securities Exchange
Act of 1934 (“Exchange Act”); provided that, without
limitation, such a change in control shall be deemed to have
occurred if:
(i)
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any Person is or becomes the
beneficial owner, directly or indirectly, of securities of the
Company representing twenty percent (20%) or more of the combined
voting power of the Company’s then outstanding securities;
or
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(ii)
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during any period of two
consecutive years, individuals who at the beginning of such period
constitute all members of the Board who are not employed by the
Company (the Outside Directors) shall cease for any reason to
constitute at least a majority of the Outside
Directors,
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unless the election of each
Outside Director, who was not an Outside Director at the beginning
of such period, was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the
beginning of such period, or,
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(iii)
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there shall be consummated
(A) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant
to which shares of the Company’s common stock would be
converted into cash, securities or other property, other than a
merger of the Company in which the holders of the Company’s
common stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving
corporation immediately after the merger, or (B) any sale,
lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the
assets of the Company, or
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(iv)
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the stockholders of the
Company approve a plan or proposal for the liquidation or
dissolution of the Company.
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As used in this Section, the
term “person” has the meaning ascribed thereto in
Section 3(a) of the Exchange Act, as modified and used in
Sections 13(d)(3) and 14(d)(2) thereof, and includes a
“group,” as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, except that such
term shall not include (A) the Company, (B) any trustee
or other fiduciary holding securities under an employee benefit
plan of the Company, (C) an underwriter temporarily holding
securities pursuant to an offering of such securities, or
(D) any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions
as their ownership of common stock of the Company.
(b)
Good
Reason . “Good
Reason,” as used herein, shall mean any one or more of the
events described in (i) through (iv) of this subsection
1(b) occurring within three (3) years following the
Effective Date of a Change of Control without the Executive’s
written consent. The Executive’s termination of
employment hereunder shall not be treated as a termination for Good
Reason unless (1) the Executive provides notice to the Company
of the existence of the Good Reason no later than sixty (60) days
after the occurrence of the event which forms the basis for any
termination for Good Reason, and (2) the Company fails to
remedy the Good Reason within thirty (30) days after receipt of
notice from the Executive of the existence of the Good Reason (the
“Cure Period”), and (3) the Executive tenders his
resignation in writing to the Company within fifteen (15) days
after the end of the Cure Period:
(i)
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the Executive is assigned
any duties inconsistent in any material adverse respect with the
Executive’s position, authority, duties or responsibilities
immediately prior to the Effective Date of the Change of Control
referred to above, or any other action by the Company which results
in a diminution in any material adverse respect of the
Executive’s position, authority, duties or responsibilities
as the same existed immediately prior to the Effective Date of the
Change of Control referred to above; or
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(ii)
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the Executive’s total
compensation (when taken as a whole including fringe benefits and
the manner of determining incentive compensation) is changed in a
material adverse way; or
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(iii)
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the Company fails to obtain
the assumption of the obligation to perform this Agreement by any
successor as contemplated in Section 11 hereof; or
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(iv)
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the Company requires the
Executive to be based outside of a radius of thirty (30) miles from
the location of the Company’s present corporate offices
(except for required travel on Company business to an extent
substantially consistent with the Executive’s business travel
obligations immediately prior to such change in control); provided,
however, that none of the foregoing shall be a Good Reason if any
of the foregoing actions are taken by the Company for Cause (as
defined in subsection 1(d) hereof).
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(c)
Effective
Date . “Effective
Date,” shall mean the first date on which a Change of Control
as defined in Section 1(a) occurs.
(d)
Cause . The Company shall
have “Cause” to terminate the Executive’s
employment upon:
(i)
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the willful failure by the
Executive to substantially perform his duties, other than when such
failure resulting from the Executive’s incapacity is due to
physical or mental illness;
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(ii)
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the willful engaging by the
Executive in gross misconduct materially and demonstrably injurious
to the Company or its subsidiaries; or
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(iii)
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the commission by the
Executive of a crime which is a felony.
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For the purpose of this
subsection (d), no act, or the failure to act, on the
Executive’s part shall be considered “willful”
unless done, or omitted to be done, by him not in good faith and
without reasonable belief that his action or omission was in the
best interest of the Company or subsidiaries.
Notwithstanding
the foregoing, the Executive shall not be deemed to have been
terminated for Cause under subsections (i), (ii) or
(iii) of the first sentence of this subsection (d), unless and
until there shall have been delivered to the Executive a copy of a
resolution, duly adopted by the affirmative vote of not less than
two-thirds (2/3) of the entire membership of the Company’s
Board of Directors at a meeting of the Board called and held for
that purpose (after reasonable notice to the Executive and an
opportunity for him, together with his counsel, to be heard before
the Board), finding that in the good faith opinion of the Board,
the Executive was guilty of conduct set forth above in clause (i),
(ii) or (iii) of the first sentence of this subsection
(d) and specifying the particulars thereto in
detail.
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(e)
Disability
. An
Executive’s “Disability” shall occur if the
Executive is absent from his duties as an Executive of the Company
on a full-time basis for six (6) consecutive months following
a Change of Control of the Company and if he qualifies for
long-term disability under the Company’s long-term disability
insurance plan.
(f)
Salary
Continuation Period . The “Salary
Continuation Period” shall mean three (3) years from the
date of a Termination of the Executive.
2.
Termination
.
(a)
Termination of
Employment . If the
Executive’s employment: (i) is subject to a termination
for Good Reason, or (ii) is terminated for a reason other than
death, Disability, Cause or voluntary resignation not constituting
a Good Reason (a Good Reason termination, or termination for a
reason other than death, Disability, Cause or voluntary resignation
not constituting a Good Reason is referred to herein as a
“Termination”), within three (3) years following
the Effective Date of a Change of Control, the Executive will be
entitled to receive the benefits provided in this
Section 2.
(b)
Accelerated Vesting
. If a Termination of the
Executive occurs within three (3) years following the Effective
Date of a Change of Control, the vesting of all rights listed on
Exhibit A , whether by accelerating the exercise or issue
date or the lapse of forfeiture and transfer restrictions, or both,
shall be accelerated to the date on which the Executive’s
employment is terminated or is subject to a termination for Good
Reason; provided however, if the event that will result in the
Change of Control is defined by Section 1 (a)(iii) or Section
1(a)(iv), then the vesting of all rights shall be accelerated to
the date that is one day before the date of the Change of Control
such that the Executive is able to benefit from his ownership of
all shares of the Company that would be subject to the acceleration
of the exercise or issue date or the lapse of forfeiture and
transfer restrictions.
(c)
Compensation
. If a
Termination of the Executive occurs within three (3) years
following the Effective Date of a Change of Control:
(i)
The Executive
shall have a right to receive his full base salary through the date
of Termination at the rate in effect at the time Termination
occurs, any reimbursable expenses which have been incurred but are
unpaid, and payment for any unexpired vacation days which have
accrued but are unused.
(ii)
In lieu of any
further salary payment to the Executive for periods subsequent to
the date of Termination, the Company shall pay to the Executive in
cash an amount (the “Separation Benefit”) equal to
three (3) times the sum of (A) the higher of the
Executive’s base salary at the date of Termination or on the
date when a Change of Control of the Company occurs, plus
(B) the average of any bonus payments and other incentive
compensation made to the Executive for the two (2) full fiscal
years preceding the fiscal year in which a Change of Control of the
Company occurs.
(iii)
The Company shall
continue to provide at no cost to Executive all benefits he was
entitled to immediately prior to the date of Termination during
the
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Salary
Continuation Period, including but not limited to all group
insurance plans, including life insurance and any executive medical
reimbursement plans such as Exec-U-Care, in which the Executive was
entitled to participate immediately prior to the date of the
Termination, provided that the Executive’s continued
participation is possible under the terms of such plans, failing
which the Company shall arrange to provide the Executive with
alternative benefits and/or insurance substantially similar to
those provided under the then current benefits and insurance
plans.
(d)
Release
Agreement . Prior to Executive
obtaining the right to receive, and in exchange for, the Separation
Benefit, benefits, accelerated vesting, and removal of resale and
transfer restrictions provided in Section 2(b) and
2(c)(ii)(iii), above, Executive will first enter into and execute,
and deliver to the Company, a Release Agreement substantially in
the form attached hereto as Exhibit B (the
“Release”) upon Executive’s termination of
employment. Unless the Release is executed by Executive and
delivered to the Company within the time period set forth in
Paragraph 15 of the Release, (i) Executive will not receive
the Separation Benefit, (ii) acceleration, if any, of
Executive’s stock and option awards or removal of
restrictions on resale as provided in this Agreement will not
apply, and (iii) Executive’s rights in such stock and
option awards following the date of Executive’s Termination
will only be to the extent provided under their original terms in
accordance with the applicable stock option or stock incentive plan
and award agreements or as determined by the Company’s Board
of Directors.
3.
Withholding
Taxes; Code Section 409A . All payments made
under this Agreement shall be subject to reduction to reflect all
federal, state, local and other taxes required to be withheld by
applicable law. Notwithstanding anything to the contrary
contained in Section 2, if any payment to the Executive under
Section 2 would constitute a “deferral of
compensation” under Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), (such
compensation does not, for example, qualify for the
“short-term deferral exception” under Section 409A
of the Code) and the Executive is a “specified
employee” (as such phrase is defined in Section 409A of
the Code), the Executive (or the Executive’s beneficiary)
will receive payment of such amounts described in this
Section 3 which would otherwise be payable hereunder during
the first six (6) months following the Executive’s
“separation from service” with the Company (as such
phrase is defined in Section 409A of the Code) upon the first
to occur of: (i) the date which is the first day of the
seventh month after the effective date of the Executive’s
separation from service; or (ii) the Executive’s death;
provided however, the Company shall immediately upon Termination
pay such amounts described in this Section 3 into a domestic
“rabbi trust” to be held by a mutually-acceptable bank
or other third party until the Executive is entitled to receive
such payments.
4.
Mitigation
. The
Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment
or otherwise, nor shall the amount of any payment provided for in
this Agreement be reduced by any compensation earned by the
Executive as a result of employment by another employer after the
date of Termination, or otherwise.
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5.
Limitation on
Amount of Severance Payment .
(a)
Application of
Limit . In the event that any
amount or benefit paid or distributed to the Executive pursuant to
this Agreement, taken together with any amounts or benefits
otherwise paid or distributed to the Executive by the Company
(collectively, the “Covered Payments”), would be an
“excess parachute payment” as defined in
Section 280G of the Code, and would thereby subject the
Executive to the Excise Tax of Section 4999 of the Code (or
any similar tax that may hereafter be imposed), the provisions of
this Section 5 of this Agreement shall apply to determine the
amounts payable to Executive pursuant to this
Agreement.
(b)
Calculation of
Benefits . The Company within
five working days following the Executive’s termination shall
notify the Executive of the aggregate present value of all
termination benefits to which he would be entitled under this
Agreement and any other agreement, plan, program or arrangement,
together with the projected maximum payments, that could be paid
without the Executive being subject to the Excise Tax. In the
event that the Company and the Executive do not agree as to the
termination benefits to be provided, the aggregate present value of
such terminated benefits, or the projected maximum payments, the
parties agree that, during the pendency of the dispute, the
Executive
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