Exhibit 10.2
SEVERANCE AND NON-COMPETITION
AGREEMENT
THIS SEVERANCE AND NON-COMPETITION
AGREEMENT, dated as of February 3, 2009 (the
“Agreement”), is by and between Quixote Corporation, a
Delaware corporation having its principal offices at 35 East
Wacker Drive, Chicago, IL 60601 (“Quixote”), and Bruce
Reimer, an Executive of the Company
(“Executive”).
WHEREAS, the Executive is a key
employee of Quixote who possesses valuable proprietary knowledge of
Quixote, its business and operations and the markets in which
Quixote competes; and
WHEREAS, the Board of Directors of
Quixote (the “Board”) has recognized and continues to
recognize that the Executive’s contribution to the growth and
success of Quixote has been, and is expected to continue to be,
substantial and desires to assure Quixote of the Executive’s
continued employment by assuring him of fair treatment if that
relationship is terminated; and
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)
Good Reason . “Good Reason” shall mean
either of the events described in (i) and (ii) of this
subsection 1(a) occurring 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 Quixote 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) Quixote 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 Quixote within fifteen (15) days after
end of the Cure Period:
(i)
the
Executive’s base compensation and fringe benefits are
reduced, in the aggregate, by 20% or more; or
(ii)
Quixote fails to
obtain the assumption of the obligation to perform this Agreement
by any successor as contemplated in Section 12
hereof.
(b)
Cause . Quixote shall have “Cause” to
terminate the Executive’s employment upon:
(i)
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;
(ii)
the willful
engaging by the Executive in gross misconduct materially and
demonstrably injurious to Quixote or its subsidiaries;
or
(iii)
the commission by
the Executive of a crime which is a felony.
For the purpose of this
subsection (b), 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 Quixote or its subsidiaries.
(c)
Disability . An Executive’s
“Disability” shall occur if the Executive is absent
from his duties as an Executive of Quixote on a full-time basis for
six (6) consecutive months and if he qualifies for long-term
disability under Quixote’s long-term disability insurance
plan.
(d)
Salary Continuation Period . The “Salary
Continuation Period” shall mean one (1) year from the
date of a Termination of the Executive.
2.
Termination .
(a)
Termination of Employment . If the Executive’s
employment (x) is terminated for Good Reason, or (y) 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”), the
Executive will be entitled to receive:
(i)
His full base
salary through the date of Termination at the rate in effect at the
time Termination occurs;
(ii)
Any reimbursable
expenses which have been incurred but are unpaid;
(iii)
Payment for any
unexpired vacation days which have accrued but are unused;
and
(iv)
Subject to
Section 7(f), payment of the Executive’s base salary,
plus COBRA reimbursement and auto allowance for the Salary
Continuation Period which shall be paid in a lump sum (the
“Separation Benefit”).
(b)
Release Agreement . Prior to Executive obtaining the
right to receive, and in exchange for, the Separation Benefit
provided in Section 2(a)(iv), above, Executive will
first enter into and execute, and deliver to Quixote, a Release
Agreement substantially in the form attached hereto as
Exhibit A (the “Release”) upon
Executive’s Termination of employment. Unless the
Release is executed by Executive and delivered to Quixote within
the time period set
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forth in Paragraph 15 of the
Release, Executive will not receive the payments provided in
Section 2(a)(iv) above.
(c)
Termination of Severance and Non-Competition Agreement
. This Severance and Non-Competition Agreement shall
terminate on the tenth anniversary of this Agreement if the
employment of Executive has not been terminated prior to that
date.
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 Quixote (as such phrase
is defined in Section 409A of the Code) upon the first to
occur of: (i) the date which is first date of the
seventh month after the effective date of the Executive’s
separation from service, or (ii) the date of the
Executive’s death; provided however, Quixote 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.
5.
At-Will Employment . Notwithstanding this Agreement,
Executive’s relationship with Quixote continues to be an
at-will employment relationship. Quixote or Executive has the
right to terminate Executive’s employment with Quixote at any
time with or without Cause and with or without notice.
Nothing in this Agreement confers upon the Executive any right to
continue in the employ of Quixote, or in any way limits the rights
of Quixote, except as expressly stated herein, to discharge the
Executive at any time for any reason whatsoever, with or without
cause.
6.
Confidential Information . The Executive shall at all
times hold in a fiduciary capacity for the benefit of Quixote all
secret, confidential or proprietary information, knowledge or data
relating to Quixote and its respective businesses, which shall have
been obtained by the Executive during the Executive’s
employment by Quixote and which shall not be or become public
knowledge including, but not limited to, information regarding the
technology, proprietary methodologies and products, software, other
trade secrets, clients, suppliers, customers, consultants and
agents of Quixote (the “Confidential
Information”). During the Executive’s employment
with Quixote and after Termination of such employment at any time
or for any reason, and regardless of whether any payments are made
to the Executive under this Agreement as a result of such
termination, the Executive shall not, without the prior written
consent of
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Quixote or as may otherwise
be required by law or legal process, communicate or divulge any
Confidential Information to any person other than Quixote and those
designated by it or use any Confidential Information except for the
benefit of Quixote. Immediately upon Termination of the
Executive’s employment with Quixote at any time or for any
reason, the Executive shall return to Quixote all Confidential
Information, including, but not limited to, any and all copies,
reproductions, notes or extracts of Confidential Information.
The terms of this Section 6 shall be in addition to, and not a
replacement of, the provisions of any Executive confidentiality or
inventions agreement with Executive.
7.
Non-Competition .
(a)
Solicitation of Employees . During the
Executive’s employment with Quixote and for a period of
twelve (12) months after termination of such employment at any time
and for any reason, and regardless of whether any payments are made
to the Executive under this Agreement as a result of such
Termination, the Executive shall not solicit, participate in or
promote the solicitation of any person who was employed by
Quixote at the time of the Executive’s Termination of
employment with Quixote to leave the employ of Quixote or its
subsidiaries, or, on behalf of himself or any other person, hire,
employ or engage any such person; provided however that the
foregoing restriction shall not prohibit Executive or a firm with
which he is employed or affiliated from (i) publishing and
receiving responses to a general solicitation for employment in a
general circulation newspaper, magazine, website or similar medium,
or (ii) hiring a former employee of Quixote who has not been
employed by Quixote or its subsidiaries for a period of at least
six (6) months. The Executive further agrees that,
during such twelve (12) month period, if a current employee of
Quixote contacts the Executive about prospective employment, the
Executive will inform such employee that he cannot discuss the
matter further without informing Quixote.
(b)
Covenants During Employment . During the
Executive’s employment, the Executive will not compete with
Quixote anywhere that Quixote conducts its business. In
accordance with this restriction, but without limiting its terms,
during the Executive’s employment, the Executive will
not:
(i)
Enter into or
engage in any business which competes with the business of Quixote
or its subsidiaries;
(ii)
Solicit
customers, business, patronage or orders for, or sell, any products
and services in competition with, or for any business that competes
with, the business of Quixote or its subsidiaries;
(iii)
Divert, entice or
otherwise take away any customers, business, patronage or orders of
Quixote or its subsidiaries or attempt to do so; or
(iv)
Promote or
assist, financially or otherwise, any person, firm, association,
partnership, corporation or other entity engaged in any business
which competes with the business of Quixote or its
subsidiaries.
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(c)
Covenants Following Termination . For a period of one
(1) year following the Termination of the Executive’s
employment, the Executive will not:
(i)
Enter into or
engage in any business which competes with the business of Quixote
or its subsidiaries in any country where Quixote or its
subsidiaries are doing business as of the date of
Termination;
(ii)
Solicit
customers, business, patronage or orders for, or sell, any products
and services in competition with, or for any business, wherever
located, that competes with the business of Quixote or its
subsidiaries in any country where Quixote or its subsidiaries are
doing business as of the date of Termination;
(iii)
Divert, entice or
otherwise take away any customers, business, patronage or orders of
Quixote in any country where Quixote or its subsidiaries are doing
business as of the date of Termination, or attempt to do so;
or
(iv)
Promote or
assist, financially or otherwise, any person, firm, association,
partnership, corporation or other entity engaged in any business
which competes with Quixote or its subsidiaries in any country
where Quixote is doing business as of the date of
Termination.
(d)
Indirect Competition . For the purposes of Sections
7(b) and 7(c), but without limitation thereof, the Executive
will be in violation thereof if the Executive engages in any or all
of the activities set forth therein directly as an individual on
the Executive’s own account, or indirectly as a general
partner, joint venturer, employee, agent, salesperson, consultant,
officer and/or director of any firm, association, partnership,
corporation or other entity, or as a limited partner, member or
stockholder of any limited partnership, limited liability company,
or corporation in which the Executive or the Executive’s
spouse, child or parent owns, directly or indirectly, individually
or in the aggregate, more than five percent (5%) of the limited
partnership interests, limited liability company interests or
outstanding stock, as the case may be.
(e)
Application of Restrictions Respecting Confidential Information,
Solicitation and Competition . The requirements and
obligations of the Executive under Section 7 shall be in
addition to, and not a limitation under, any other requirements and
obligations of the Executive, at law or otherwise.
(f)
Consideration . The parties agree that for all
purposes of this Agreement and otherwise, Executive’s
continued employment with Quixote and Quixote’s continued
provision of confidential information to Executive are sufficient
consideration for this Section 7. In addition, to the
extent that Quixote has an obligation to pay the Separation Benefit
under the Agreement, fifty percent (50%) of the Separation Benefit
hereunder, or an aggregate amount equal to fifty percent (50%) of
such Separation Benefit paid hereunder (to the extent the
Separation Benefit is paid in installments), shall be considered
the consideration payable to Executive for the covenants in this
Section 7 (the “Noncompetition Consideration”),
and if the
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