<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
QUIXOTE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and how it is determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
QUIXOTE CORPORATION
ONE EAST WACKER DRIVE
CHICAGO, IL 60601
TELEPHONE 312/467-6755
FAX 312/467-1356
------------------------
NOTICE AND AGENDA OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, NOVEMBER 16, 1995
--------------------
TO THE STOCKHOLDERS OF QUIXOTE CORPORATION:
Notice is hereby given that the Annual Meeting of Stockholders of Quixote
Corporation (the "Company") will be held on Thursday, November 16, 1995, in the
Assembly Room at The Northern Trust Company, 50 South LaSalle Street, Chicago,
Illinois 60675. The meeting, which will commence at 10:00 a.m. Central Standard
Time, will consider:
1. The election of two (2) directors to serve for a three-year term
expiring at the Annual Meeting of Stockholders to be held in 1998; and
2. The approval of Coopers & Lybrand L.L.P. as independent auditors for the
Company.
The Annual Meeting will also transact such other business as may properly
come before it.
Only stockholders of record at the close of business on September 20, 1995,
will be entitled to notice of, and to vote at, the meeting.
Stockholders are encouraged to attend the meeting in person. To ensure that
your shares will be represented, we urge you to vote, date, sign and mail the
enclosed Proxy Card in the envelope which is provided, whether or not you expect
to be present at the meeting. The prompt return of your Proxy Card will be
appreciated. It will also save the Company the expense of a reminder mailing.
IT IS IMPORTANT TO YOU AND TO THE COMPANY THAT YOU VOTE YOUR SHARES BY
COMPLETING AND RETURNING THIS PROXY CARD.
WE APPRECIATE YOUR COOPERATION AND WE THANK YOU.
By order of the Board of Directors,
JAMES H. DEVRIES
SECRETARY
Chicago, Illinois
October 4, 1995
<PAGE>
I M P O R T A N T
A PROXY STATEMENT AND PROXY CARD ARE SUBMITTED WITH THIS NOTICE. ALL
STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND TO COMPLETE AND MAIL
THE PROXY CARD PROMPTLY. THE ENCLOSED ENVELOPE FOR THE RETURN OF THE PROXY
CARD REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. A LIST OF
STOCKHOLDERS ENTITLED TO VOTE AT THE ANNUAL MEETING WILL BE AVAILABLE FOR
INSPECTION BY ANY STOCKHOLDER FOR ANY PURPOSE GERMANE TO THE MEETING DURING
ORDINARY BUSINESS HOURS FOR A PERIOD OF TEN DAYS PRIOR TO THE MEETING AT THE
PRINCIPAL OFFICES OF THE COMPANY, ONE EAST WACKER DRIVE, 30TH FLOOR,
CHICAGO, ILLINOIS.
<PAGE>
[Quixote Logo]
OCTOBER 4, 1995
------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, NOVEMBER 16, 1995
--------------------
PROXY SOLICITATION
This Proxy Statement is furnished to stockholders of Quixote Corporation
(the "Company"), on or about October 4, 1995, in connection with the
solicitation of proxies on behalf of the Board of Directors to be voted at the
Annual Meeting of Stockholders on Thursday, November 16, 1995, at 10:00 a.m.,
Central Standard Time, in the Assembly Room at The Northern Trust Company, 50
South LaSalle Street, Chicago, Illinois 60675, and at any adjournment thereof.
The person voting the enclosed proxy may revoke it at any time before it is
exercised by writing to the Secretary of the Company at its principal office,
One East Wacker Drive, Chicago, Illinois 60601, or by attending the Annual
Meeting and voting in person, in which case any prior proxy given will be
automatically revoked.
Properly executed proxies received prior to the meeting will be voted at the
meeting. If a stockholder designates how the proxy is to be voted on any
business to come before the meeting, the signed proxy will be voted in
accordance with such designation. If a stockholder fails to designate how his
proxy should be voted, the signed proxy will be voted for the election of the
nominees named below as Directors and for the approval of Coopers & Lybrand
L.L.P. as the Company's independent auditors.
The Company will bear the cost of this proxy solicitation, including the
charges and expenses of brokerage firms and others which forward material to
beneficial owners. Proxies may be solicited in person or by mail, telephone or
telegraph. Proxies may also be solicited by certain Directors, officers and
regular Company employees.
VOTING AT THE ANNUAL MEETING
Stockholders of record owning the Company's common stock, $0.1 2/3 par value
("Common Stock"), at the close of business on September 20, 1995, will be
entitled to vote at the Annual Meeting. On that date, 7,862,495 shares of Common
Stock were outstanding. Each outstanding share of Common Stock entitles the
holder to one vote upon each matter presented at the Annual Meeting. Shares
voted as abstentions on any matter (or a "withhold vote for" as to directors)
will be counted as shares that are present and entitled to vote for purposes of
determining a quorum at
1
<PAGE>
the meeting and as unvoted, although present and entitled to vote, for purposes
of determining the approval of each matter as to which the shareholder has
abstained. Abstentions and withheld votes have the effect of votes against a
matter. If a broker submits a proxy that indicates the broker does not have
discretionary authority as to certain shares to vote on one or more matters,
those shares will be counted as shares that are present and entitled to vote for
purposes of determining a quorum at the meeting, but will not be considered as
present and entitled to vote with respect to such matters. Accordingly, broker
non-votes will have no effect on such matters.
While the Notice of Annual Meeting calls for the transaction of such other
business as may properly come before the meeting, management has no knowledge of
any matters to be presented for action by the stockholders except as already set
forth. The enclosed proxy gives discretionary authority to the persons holding
those proxies to vote in accordance with their best judgment as to any other
business.
ELECTION OF DIRECTORS
At the Annual Meeting, two (2) Directors are to be elected to serve three
year terms until the Annual Meeting to be held in 1998 and until their
successors are elected and qualified. The Company is soliciting proxies to vote
for its nominees, William G. Fowler and Robert D. van Roijen, Jr., as Directors
of the Company.
All proxies will be voted in accordance with the stated instructions. If any
nominee ceases to be a candidate for election for any reason, the proxy will be
voted for a substitute nominee designated by the Board. The Board of Directors
currently has no reason to believe that any nominee will be either unwilling or
unable to serve as a Director if elected. Proxies given by stockholders cannot
be voted for more than two (2) persons. The nominees for Director will be
elected if they receive the affirmative vote of at least sixty percent (60%) of
all votes entitled to be cast at this meeting.
INFORMATION CONCERNING NOMINEES FOR DIRECTOR AND DIRECTORS CONTINUING IN OFFICE.
The information appearing in this section in regard to age and principal
occupation or employment has been furnished to the Company by the respective
nominees for Director and by the respective Directors continuing in office.
Information relating to the beneficial ownership of the Company's Common Stock
by Directors and nominees for Director is set forth in the table on page 14.
NOMINEES FOR DIRECTOR FOR A THREE-YEAR TERM
EXPIRING IN 1998
WILLIAM G. FOWLER
Mr. Fowler, 67, is an attorney and a shareholder at the law firm of Van
Cott, Bagley, Cornwall & McCarthy of Salt Lake City, Utah. He joined the Board
in January, 1973. Mr. Fowler is the Chairman of the Audit/Compensation
Committee.
ROBERT D. VAN ROIJEN, JR.
Mr. van Roijen, 56, was elected to the Board in May, 1993 to fill the
vacancy created by the resignation of Francis S. Wilson, Jr. Mr. van Roijen has
been the President of T ox Financial Company, a private investment firm, since
1988. He was formerly associated with Control Laser Corporation, serving in
various capacities from 1977 to 1987, including as Chairman of the Board and as
President and Chief Executive Officer. Mr. van Roijen is also a director of
AMBAR Corp.; Sonex Research, Inc.; Commonwealth Scientific; Applied Digital
Technology; St. Leonard's Corporation; and Security Storage Company, and is a
former director of Proclosure, Inc.; Clinical Diagnostics Systems; Cynthia
Gibson, Inc.; KuwAm Corporation, and Secor Investments. Mr. van Roijen is a
member of the Audit/Compensation Committee.
2
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE ELECTION OF MR.
FOWLER AND MR. VAN ROIJEN AS DIRECTORS OF THE COMPANY.
DIRECTORS CONTINUING IN OFFICE
PHILIP E. ROLLHAUS, JR.
Mr. Rollhaus, 61, is Chairman of the Board, President, and the Chief
Executive Officer of the Company. Mr. Rollhaus has served in these capacities
and as a Director of the Company since the Company was founded in July, 1969.
Mr. Rollhaus serves as Chairman and Chief Executive Officer of Energy Absorption
Systems, Inc., Legal Technologies, Inc. and Disc Manufacturing, Inc., all
wholly-owned subsidiaries of the Company. His current term as Director expires
at the Annual Meeting to be held in 1996.
DAVID S. RUDER
Mr. Ruder, 66, is a professor of law at Northwestern University School of
Law in Chicago and a senior counsel with the law firm of Baker & McKenzie. Mr.
Ruder also serves as a director of Rodman and Renshaw Capital Group, Inc. From
1987 through 1989, he served as Chairman of the U.S. Securities and Exchange
Commission. Mr. Ruder has served as a Director of the Company since May, 1990
and is a member of the Audit/Compensation Committee. His current term as
Director expires at the Annual Meeting to be held in 1996.
JAMES H. DEVRIES
Mr. DeVries, 63, is Executive Vice President and Secretary of the Company.
Mr. DeVries has served as a Director of the Company since July, 1969. Mr.
DeVries serves as President of Legal Technologies, Inc., Vice Chairman and
Secretary of Disc Manufacturing, Inc., and as Secretary of Energy Absorption
Systems, Inc. His current term as Director expires at the Annual Meeting to be
held in 1997.
LAWRENCE C. MCQUADE
Mr. McQuade, 68, is Chairman of the Czech & Slovak American Enterprise Fund
(since August 1995) and Chairman of Qualitas International (since 1994). Mr.
McQuade also is a Director of Applied Bioscience International, Inc. (since
1995) and of Bunzl P.L.C. (since 1991). Mr. McQuade is the former Vice Chairman
of Prudential Mutual Fund Management, Inc. and Managing Director of Investment
Banking for Prudential Securities Incorporated, positions which he held from
1988 through April 1995. In 1987, he was Chairman and Chief Executive Officer of
Universal Money Centers, Inc. Mr. McQuade formerly served as Executive Vice
President and Director of W.R. Grace & Co. from 1975 to 1987 and as President
and Chief Executive Officer of Procon Incorporated, a subsidiary of Universal
Oil Products Co., from 1969 to 1975. He was formerly a Director of KaiserTech
Limited, and Kaiser Aluminum and Chemical Corp. (March 1987-November 1988) and
Crazy Eddie, Inc. (1987-1990). Mr. McQuade has served as a Director of the
Company since February, 1992 and is a member of the Audit/Compensation
Committee. His current term as Director expires at the Annual Meeting to be held
in 1997.
AUDIT/COMPENSATION COMMITTEE
The Audit/Compensation Committee recommends the accounting firm to be
employed as the Company's independent auditors to the Board; consults with the
auditors regarding the audit; reviews the auditors' report or proposed report
and resulting letter of comments to management; consults with the auditors and
management regarding the adequacy of internal controls; determines adjustments
to salaries, bonuses and other forms of compensation (including stock option
grants) afforded the principal officers of the Company and its subsidiaries; and
considers any other matter relating to the Company's affairs that the Committee,
in its discretion, deems appropriate. The Audit/Compensation Committee had four
meetings during fiscal 1995.
The Board of Directors does not have a nominating committee. The Board of
Directors as a whole performs the functions normally performed by nominating
committees.
3
<PAGE>
REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
In fiscal 1995, Directors who were also employees of the Company were paid a
fee of $1,000 for each day of scheduled meetings of the Board, plus expenses.
Non-employee Directors were paid a fee of $2,000 for each day of scheduled
meetings of the Board and the Audit/Compensation Committee, plus traveling and
related expenses, and $500 for each telephone conference meeting. There were
seven scheduled meetings (eleven meeting days) in fiscal 1995, and six telephone
conference meetings in fiscal 1995 of the Board and Audit Compensation
Committee.
Present and future Directors are eligible to receive stock options as
granted from time to time by the Board of Directors pursuant to the Company's
1991 Director Stock Option Plan (the "Director Plan"), subject to certain annual
and lifetime limits on the number of shares any individual Director may receive.
Options are granted under the Director Plan at 100% of fair market value on the
grant date and require continued service as a Director for at least a year from
the grant date as a condition of exercise. On August 22, 1994, the Company
granted each of the Directors options to purchase 10,000 shares of Common Stock
at $21.00 per share. On April 26, 1995, the Company granted each of the
Directors options to purchase 2,500 shares of Common Stock at $10.00 per share.
The Company maintains accidental death and disability insurance coverage in
the amount of $500,000 on behalf of each of the Directors, payable to the
designated beneficiary of each Director. The Company paid premiums of $398.00
for each Director to provide such insurance in fiscal 1995.
SUMMARY COMPENSATION TABLE
The following table summarizes the total compensation earned or paid for
services rendered in all capacities during each of the years ended June 30,
1995, 1994 and 1993, by the named Executive Officers.
4
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION AWARDS
-------------------------------------------
ANNUAL COMPENSATION RESTRICTED
------------------------------- OTHER ANNUAL STOCK OPTIONS/
SALARY BONUS COMPENSATION(1) AWARD(S)(2) SARS
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#)
- --------------------------------------- --------- --------- --------- ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Philip E. Rollhaus, Jr................. 1995 $ 425,000 $ 135,000 $ 180,825 $ 0 27,060
Chairman, President and Chief 1994 405,000 270,000 285,513 0 0
Executive Officer, Quixote 1993 385,000 225,000 190,204 1,304,302(3) 53,000
Corporation; Chairman and Chief
Executive Officer, Energy Absorption
Systems, Inc.; Disc Manufacturing,
Inc.; and Legal Technologies, Inc.
James H. DeVries....................... 1995 270,000 30,000 $ 71,134 0 22,210
Executive Vice President and 1994 257,000 145,000 105,619 0 0
Secretary, Quixote Corporation; 1993 245,000 135,000 67,350 461,842(3) 34,000
President, Legal Technologies, Inc.;
Vice Chairman and Secretary, Disc
Manufacturing, Inc.; Secretary, Energy
Absorption Systems, Inc.
Myron R. Shain......................... 1995 225,000 80,000 $ 42,674 0 7,765
Executive Vice President -- Finance 1994 212,800 175,000 69,986 0 0
and Treasurer, Quixote Corporation; 1993 190,000 140,000 47,795 655,500(3) 22,000
President, Chief Operating Officer,
and Treasurer, Disc Manufacturing,
Inc.;
Vice President and Treasurer, Energy
Absorption Systems, Inc. and Legal
Technologies, Inc..
George D. Ebersole..................... 1995 210,000 125,000 $ 49,085 0 9,710
President and Chief Operating 1994 199,500 145,000 80,499 0 0
Officer, Energy Absorption 1993 190,000 130,000 54,975 527,777(3) 24,000
Systems, Inc.
Michael J. La Forte.................... 1995 187,250 70,000 0 0 19,120
President and Chief Operating Officer,
Stenograph Corporation(5)
<CAPTION>
ALL OTHER
COMPENSATION(4)
NAME AND PRINCIPAL POSITION ($)
- --------------------------------------- -----------------
<S> <C>
Philip E. Rollhaus, Jr................. $ 3,000
Chairman, President and Chief 34,987
Executive Officer, Quixote 9,692
Corporation; Chairman and Chief
Executive Officer, Energy Absorption
Systems, Inc.; Disc Manufacturing,
Inc.; and Legal Technologies, Inc.
James H. DeVries....................... $ 3,008
Executive Vice President and 30,050
Secretary, Quixote Corporation; 3,592
President, Legal Technologies, Inc.;
Vice Chairman and Secretary, Disc
Manufacturing, Inc.; Secretary, Energy
Absorption Systems, Inc.
Myron R. Shain......................... $ 3,126
Executive Vice President -- Finance 26,370
and Treasurer, Quixote Corporation; 2,631
President, Chief Operating Officer,
and Treasurer, Disc Manufacturing,
Inc.;
Vice President and Treasurer, Energy
Absorption Systems, Inc. and Legal
Technologies, Inc..
George D. Ebersole..................... $ 3,105
President and Chief Operating 16,422
Officer, Energy Absorption 2,952
Systems, Inc.
Michael J. La Forte.................... 3,946
President and Chief Operating Officer,
Stenograph Corporation(5)
<FN>
- ------------------------------
(1) The amounts disclosed are cash paid to the named Executive Officers under
the Quixote Corporation Long-Term Stock Ownership Incentive Plan (the
"Long-Term Plan") to cover the federal and state taxes arising from the
restricted stock issued in a fiscal year to such persons pursuant to the
Long-Term Plan. The amounts disclosed for Philip E. Rollhaus, Jr. and James
H. DeVries also include compensation of $11,000 paid to each of them for
their services as Directors of the Company. The aggregate amount of
perquisites and other personal benefits did not exceed the lesser of
$50,000 or ten percent (10%) of the total annual salary and bonus reported
for any of the named Executive Officers, and is therefore not included.
(2) The number and value of restricted shares, respectively, as of June 30,
1995 were as follows: Mr. Rollhaus - 54,918 shares/$686,475; Mr. DeVries -
19,446 shares/$243,075; Mr. Shain - 13,800 shares/$172,500; and Mr.
Ebersole - 15,873 shares/$198,412. The officers receive all dividends paid
on these shares.
(3) The number of shares covered by these awards and the number of shares
vested, respectively, are as follows: Mr. Rollhaus - 91,530/54,918; Mr.
DeVries - 32,410/19,446; Mr. Shain - 46,000/13,800; and Mr. Ebersole -
37,037/15,873. Pursuant to the terms of the Long-Term Plan, the remaining
restricted stock covered by the awards granted to Mr. Rollhaus and Mr.
DeVries will be issued in two equal annual installments on June 30 of each
of the next two fiscal years, subject to the continuation of employment and
transferability restrictions described below. The remaining restricted
stock covered by the awards granted to Mr. Ebersole will be issued in four
equal annual installments and to Mr. Shain in seven equal annual
installments on June 30 of the next four and seven fiscal years,
respectively, subject to the continuation of employment and transferability
restrictions described below, and subject further to the Company's right to
terminate the agreement at any time after June 30, 1998. In order to
receive an annual issuance of restricted stock, the executive must be
employed by the Company or its subsidiaries on the last day of the fiscal
year in which such stock issued (except in the case of the executive's
death, disability or termination of employment other than for cause). The
executive may not sell or transfer any restricted stock received under the
Long-Term Plan until the earlier of the date his employment is terminated
or the date he reaches retirement age (whether he actually retires at that
time or not). Pursuant to the terms of the Long-Term Plan, dividends are
paid only on shares of restricted stock issued and delivered to the named
Executive Officer.
(4) Amounts shown for fiscal 1995 are matching contributions by the Company
under the Company's 401(k) Plan.
(5) Mr. La Forte began his employment with Stenograph Corporation on June 1,
1994.
</TABLE>
5
<PAGE>
STOCK OPTION GRANTS IN FISCAL YEAR 1995
The following table shows the options granted to the named Executive
Officers during fiscal 1995 and the potential realizable value of those grants
(on a pre-tax basis) determined in accordance with SEC rules. The information in
this table shows how much the named Executive Officers may eventually realize in
future dollars under three hypothetical situations: if the price of the
Company's Common Stock does not increase, and if the stock gains 5% or 10% in
value per year, compounded over the life of the options. These amounts represent
assumed rates of appreciation, and are not intended to forecast future
appreciation of the Company's Common Stock.
The options described in this table have exercise prices equal to the fair
market value of a share of Common Stock on the date they were granted. Unless
the Company's stock price appreciates and the recipient continues to be employed
until the options vest, the options will have no value.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
INDIVIDUAL GRANTS PRICE APPRECIATION FOR
---------------------------- OPTION TERM(2)
% OF TOTAL ------------------------------------------------
OPTIONS OPTIONS GRANTED EXERCISE OR
GRANTED TO EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#)(1) FISCAL YEAR ($/SH) DATE 0% 5%($) 10%($)
- -------------------------------------------------- --------- ---------------- ----------- ---------- --- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Philip E. Rollhaus Jr............................. 10,000 4.2% 21.00 08/22/04 0 132,068 334,686
14,560(3) 6.2% 10.50 02/07/98 0 24,098 50,603
2,500 1.1% 10.00 04/26/05 0 15,722 39,844
0
James H. DeVries.................................. 10,000 4.2% 21.00 08/22/04 0 132,068 334,686
9,710(3) 4.1% 10.50 02/07/98 0 16,071 33,747
2,500 1.1% 10.00 04/26/05 0 15,722 39,844
0
Myron R. Shain.................................... 7,765(3) 3.3% 10.50 02/07/98 0 12,852 26,987
George D. Ebersole................................ 9,710(3) 4.1% 10.50 02/07/98 0 16,071 33,747
Michael J. La Forte............................... 19,120(3) 8.1% 10.50 05/16/99 0 45,658 98,829
<FN>
- ------------------------------
(1) These options were granted on February 28, 1995 under the Long-Term Plan
and on August 22, 1994 and April 26, 1995 under the Director Plan at the
Current Market Price (as defined in the Plans) on each such date. The
options become exercisable on the first anniversary of the date of grant in
one-third increments on each anniversary date until fully exercisable. All
option rights under the Long-Term Plan lapse upon termination of employment
except for limited exercise periods. In the event of a change in control of
the Company (as defined in the Long-Term Plan and Director Plan), the Plans
give each optionee the right, within 30 days of such change in control, to
exercise his options, notwithstanding the other provisions of the Plans.
(2) The potential realizable value to all stockholders at the appreciation
rates of 0%, 5% and 10% would be $0, 27,153,280 and $60,000,648 (based on
shares outstanding at June 30, 1995 and assuming such shares were purchased
for $12.50 on June 30, 1995 and held until June 30, 2000).
(3) These options were granted on February 28, 1995 pursuant to a repricing
arrangement that offered all eligible optionees the opportunity to cancel
outstanding options with an exercise price equal to or greater than $13.00
for the grant of replacement options for a lesser number of shares at an
exercise price of $10.50. The number of options canceled for each of the
above named executive officers is as follows: Mr. Rollhaus - 15,000 shares;
Mr. DeVries - 10,000 shares; Mr. Shain - 8,000 shares; Mr. Ebersole -
10,000 shares; and Mr. La Forte - 20,000 shares. See "Report of The
Audit/Compensation Committee on Executive Compensation" at page 11.
</TABLE>
6
<PAGE>
AGGREGATED OPTION EXERCISES AND OPTION VALUES TABLE
The following table shows information concerning the exercise of stock
options by each of the named Executive Officers during fiscal 1995, and the
value of all remaining exercisable and unexercisable options at June 30, 1995,
on a pre-tax basis.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS/SARS
OPTIONS/SARS AT 6/30/95(#) AT 6/30/95($)(1)
SHARES ACQUIRED ON VALUE REALIZED ---------------------------- --------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------- --------------------- --------------- ----------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Philip E. Rollhaus, Jr............ 0 0 184,197 37,363 643,120 52,833
George D. Ebersole................ 5,599 80,190 10,542 7,902 12,048 4,722
James H. DeVries.................. 0 0 99,475 23,735 295,468 10,972
Myron R. Shain.................... 0 0 28,011 7,254 13,541 3,426
Michael J. La Forte............... 0 0 6,373 12,747 12,746 25,494
<FN>
- ------------------------------
(1) Based on the closing price of the Company's Common Stock as reported on the
NASDAQ-NMS on June 30, 1995 ($12.50).
</TABLE>
REPRICING OF OPTIONS
Set forth below is information with respect to repricings of stock options
held by all executive officers. No options granted by the Company have been
repriced within the past 10 years except for the repricing implemented in 1995.
The 1995 repricings were made at the then current market price for the common
stock. In connection with the grant of options in 1995, certain previously-
granted options with higher exercise prices were cancelled. See "Report of the
Audit/Compensation Committee on Executive Compensation" at page 11 for an
explanation of the details and basis for the repricing.
TEN-YEAR OPTION/SAR REPRICING
<TABLE>
<CAPTION>
LENGTH OF ORIGINAL
NUMBER OF MARKET PRICE OF EXERCISE PRICE NEW OPTION TERM
OPTIONS STOCK AT THE AT THE TIME EXERCISE REMAINING AT THE
NAME DATE REPRICED (#) TIME OF REPRICING ($) OF REPRICING ($) PRICE ($) DATE OF REPRICING
- ------------------------------------- ------- ------------ --------------------- ---------------- --------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Philip E. Rollhaus, Jr............... 2/28/95 15,000 10.50 14.875 10.50 2 years, 49 weeks
James H. DeVries..................... 2/28/95 10,000 10.50 14.875 10.50 2 years, 49 weeks
Myron R. Shain....................... 2/28/95 8,000 10.50 14.875 10.50 2 years, 49 weeks
George D. Ebersole................... 2/28/95 10,000 10.50 14.875 10.50 2 years, 49 weeks
Michael J. La Forte.................. 2/28/95 20,000 10.50 18.75 10.50 4 years, 11 weeks
</TABLE>
7
<PAGE>
EMPLOYMENT AGREEMENTS AND TERMINATION BENEFITS
The Company has employment agreements with Philip E. Rollhaus, Jr., James H.
DeVries and Myron R. Shain (the "Employment Agreements") that were entered into
in February, 1989. The Company also has separation agreements with George D.
Ebersole and with Michael J. La Forte, Jr., President of Stenograph Corporation,
(the "Severance Agreements") that were entered into in February, 1989 and June,
1994, respectively. The Employment Agreements and Severance Agreements are
collectively referred to as the "Agreements". Each Severance Agreement provides
for an initial two-year term and for automatic one-year extensions of such term
on each Agreement's anniversary unless the Board of Directors gives the
executive a required notice of the Company's intent not to extend his Severance
Agreement. Mr. Ebersole's Severance Agreement was automatically extended in
February, 1995 for one year. The Employment Agreements, amended in June, 1991,
provide for an initial three-year term with an automatic one-year extension of
such term each year on the Agreements' anniversary date unless the Board of
Directors should previously determine not to extend the term. The Employment
Agreements were automatically extended in June, 1995 for one year. The Board of
Directors believes that the Agreements assure fair treatment of the executive
officers in relation to their careers with the Company by assuring them of some
financial security. The Agreements also protect the stockholders by encouraging
the executive officers to continue their attention to their duties without
distraction in a potentially disturbing circumstance and neutralizing any bias
they might have in evaluating proposals for the acquisition of the Company.
In addition to providing for the payment of base annual salaries included in
the above summary compensation table and other employee fringe benefits, the
Employment Agreements provide for special separation pay and benefits in the
event of termination of an executive's employment under certain circumstances.
The Employment Agreements provide that upon termination, the executive will
receive his base salary through the termination date determined in accordance
with such Agreement. If the executive's employment is terminated due to
disability, the Employment Agreements provide for a separation payment equal to
two times the sum of the executive's annual base salary and the average of his
yearly bonus payments over the preceding two years. If, after a change in
control of the Company, the Company terminates the employment of the executive,
other than for cause or disability, or if the executive terminates his
employment for good reason, the Company will pay the executive a separation
payment equal to 300% of the sum of his then current base salary and average
yearly bonus payment for the last two years. Such payments will be made on a
semi-monthly basis over a period of 36 months following termination of
employment. If the Company fails to make an installment payment when due, the
executive has the right to accelerate all remaining compensation owed him. If
such termination occurs prior to a change in control of the Company, the
Employment Agreements provide that the Company will pay the executive a
separation payment equal to twice his base salary. Whether or not a change in
control has occurred, upon such termination the executive must be offered
continued participation in (or comparable replacement of) retirement and group
insurance benefits through the later of the expiration of the term of the
Employment Agreements or the date of termination. The Employment Agreements
further provide that if any excise tax is imposed pursuant to Section 4999 of
the Internal Revenue Code on any payments to be received by the executives in
connection with a change in control of the Company or termination of the
executive's employment pursuant to the Employment Agreements or otherwise (the
"Total Payments"), any severance payments will be reduced to the extent
necessary so that no portion of the Total Payments is subject to the excise tax.
The Severance Agreements provide if, after a change in control of the
Company, the employment of the executive is terminated other than (i) by death
or disability, (ii) by the Company or employing subsidiary for cause, or (iii)
by the executive for other than good reason, the Company will pay the executive
a separation payment equal to 200% of the sum of his base salary and average
yearly bonus payment for the last two years, with such payment being reduced by
the
8
<PAGE>
present value of any other payments made to, or on behalf of, the executive
which would constitute a "parachute payment" within the meaning of that term as
defined in Section 280G of the Internal Revenue Code of 1986, as amended.
The Agreements define a "change in control" as a change in the stock
ownership of a magnitude which requires the filing of reports under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). For the
purposes of the Agreements, a "change in control" shall be deemed to have
occurred if any of the following occur: (i) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities; (ii) if
during any period of two consecutive years, there is a change in the composition
of the Board of Directors of the Company such that 50% of the non-employee Board
members have not been slated by the Board; (iii) a consolidation or merger
occurs and the Company is not the surviving company or the Company sells all or
substantially all of its assets; or (iv) the Company is liquidated or dissolved.
The term "good reason" is generally defined by the Agreements to mean any
unfavorable change in the executive's or employee's position, duties,
compensation or benefits and "cause" is generally defined as willful conduct of
an executive or employee demonstrably injurious to the Company or employing
subsidiary. The Agreements also contain provisions for the payment of legal
expenses incurred by the executives and the employees as a result of any
termination of employment after a change in control.
REPORT OF THE AUDIT/COMPENSATION
COMMITTEE ON EXECUTIVE COMPENSATION
The Audit/Compensation Committee (the "Compensation Committee") of the Board
of Directors of the Company, which is composed of all independent, non-employee
Directors (see page 13), is responsible for reviewing the recommendations of the
Chief Executive Officer and determining the compensation and other remuneration
afforded the officers of the Company, including the persons who are listed in
the Summary Compensation Table on page 5 (hereinafter collectively referred to
as the "Executive Officers"). Compensation Committee determinations relating to
compensation are reviewed by the whole Board. Action regarding awards under the
1993 Long-Term Stock Ownership Incentive Plan (the "Plan") are made solely by
the Compensation Committee in compliance with Securities Exchange Act Rule
16b-3.
COMPENSATION PRINCIPLES AND POLICIES OF THE COMPANY
The Board has delegated to the Compensation Committee the responsibility to
be certain that the officers of the Company are compensated fairly and
effectively in a manner consistent with the compensation philosophy of the
Company.
The compensation philosophy of the Company has evolved over its 26-year
history and reflects the principles of growth and long-term vision which have
guided its management team under the direction of Philip E. Rollhaus, Jr.,
founder, President and Chief Executive Officer. In furtherance of its
philosophy, Quixote has identified, pursued and developed emerging technologies
into rewarding business enterprises. Although the Company's profit goals were
not met in fiscal 1995, during the year overall revenues have risen 5% to an
unprecedented level. This increase reflects a five-year compounded annual growth
in revenues in excess of 13%. Furthermore, the Company has continued to invest
in technology in each of its three core businesses, each of which is a leader in
its industry.
In addition to considering the Company's profitability for the year, the
Compensation Committee critically evaluates management's performance in dealing
with competitive and economic issues and business adversities as well as in
implementing the Company's long-term strategies. Each of these areas of
performance weigh heavily upon share values. Overall Company performance cannot
always be measured solely in terms of annual profits. The Company's progress in
the
9
<PAGE>
implementation of new ideas and strategies consistent with solid long-term
growth and expansion may result periodically in a decline in earnings. Thus, the
attainment of strategic objectives and enhanced long-term financial results will
be as significant in the Committee's evaluation process as will short-term
changes in profitability.
The Committee procedures in fixing compensation includes engaging the
services of an independent compensation consultant to evaluate compensation
levels and to advise it regarding competitive influences upon compensation
policies. Because the Company operates three diverse businesses, each senior
executive is required to perform multiple tasks with major responsibilities. For
example, Mr. Rollhaus serves as Chief Executive Officer of each subsidiary as
well as Chief Executive Officer and Chief Operating Officer of Quixote. Mr.
DeVries serves as Executive Vice President, Secretary and General Counsel for
the Company, President of Legal Technologies, Inc., Vice Chairman and Secretary
of DMI, and Secretary of Energy Absorption Systems, Inc. Mr. Shain is the
Company's Chief Financial Officer and also serves as President and Chief
Operating Officer of DMI.
The Company's compensation program includes base salary and the
consideration of annual bonus and stock option awards. The Compensation
Committee believes that the program provides incentives compatible with current
and long-term management goals of the Company and is competitive in the
marketplace while recognizing individual performance. The ultimate objective of
the program is the enhancement of shareholder value. An effective compensation
policy requires that a significant portion of each officer's compensation be at
risk in the form of bonuses and stock options. The Executive Officer group owned
approximately 424,207 shares of Company Common Stock on September 1, 1995, or an
average of about 84,841 common shares per Executive Officer. In particular, the
Committe believes that granting stock options and encouraging executive stock
ownership relates compensation to the enhancement of share value.
BASE SALARY
The annual review of each officer's base salary, which is subject to annual
adjustment, takes into account the officer's performance as well as the
enhancement or material modification of the officer's responsibilities. Based
upon a review of published survey data in each of the Company's lines of
business, the Committee believes that, in general, base salary levels are
competitive; and in view of the decline in earnings in fiscal 1995, the
Committee has determined that no salary increases will be made for fiscal 1996
for Mr. Rollhaus or other Executive Officers, except for Mr. La Forte.
ANNUAL BONUS
The Company historically has provided annual bonuses to its officers to
encourage sustained high performance. The use of such bonuses places a
significant portion of total annual compensation at risk.
Substantial bonuses were paid to the Executive Officers in fiscal 1994,
which reflected the Company's extraordinary performance in that year, including
a 22% growth in sales and a 23% increase in profitability over the prior year.
Because profit levels were not maintained in fiscal 1995, reductions were made
in the bonuses payable to each of the Executive Officers for that year
(including a 50% reduction for Mr. Rollhaus), except for Mr. La Forte, who
joined the Company in June, 1994. The Compensation Committee believes that the
responsibility for a decline in earnings rests, in part, upon the management
team, and an overall reduction in bonuses is consistent with the obligation of
the Committee to the shareholders. However, a portion of the decline from the
record levels of the prior year was attributable to market conditions and other
factors beyond the control of management. The Committee also considered the
profit performance of each individual operating unit in determining the annual
bonuses of those officers who were responsible for each unit.
10
<PAGE>
STOCK OPTIONS
Quixote Corporation utilizes stock options, granted pursuant to the Plan, as
one of the three components of the Company's management compensation package.
Historically, the Company has used stock options as an incentive to increase the
Company's value. Substantial stock ownership by its executives has been a
hallmark of the Company, and stock options are an important component of total
compensation. Options generally vest over a three-year period and are
exercisable over a specified period of time following the date of grant, which
is typically five years. Option recipients must be employed by the Company at
the time of vesting and at the time the options are exercised in order to be
able to exercise their options.
The Committee believes that without meaningful stock options the Company
would find it difficult to attract and retain highly talented and qualified
management employees. For the last three fiscal years, the Company has granted
options to employees to purchase an average of 172,970 shares at the market
price on the date of grant.
STOCK OPTION CANCELLATION AND NEW GRANTS
During the first half of fiscal year 1995, the Company's stock price was
substantially eroded from a high closing price of $22.25 (July 25, 1994) to a
low closing price of $10.93 (December 29, 1994). This decline was caused, in
part, by a decline in Company profits due partly to pricing pressures faced by
Disc Manufacturing, Inc., delays by states in project fundings for Energy
Absorption Systems, Inc.'s products, and continued difficulty in creating
profitability at Legal Technologies, Inc. The decline in stock price came at a
time when several new key employees had been hired with stock options as
incentives. The Compensation Committee believed that many outstanding stock
options no longer provided an incentive to these and other employees because the
stock market price was substantially less than the exercise price of outstanding
options. As these so-called "under-water" options were having a detrimental
effect on the employee morale, the Committee determined that this situation was
not in the Company's best interest.
In accordance with the Plan, the Committee approved on February 28, 1995 an
option exchange that offered all eligible optionees the opportunity to cancel
outstanding options with an exercise price of $13.00 or greater ("Original
Options") in exchange for the grant of replacement options for a lesser number
of shares at an exercise price of $10.50 ("New Options"). The expiration dates
and vesting provisions of the New Options remained the same as the Original
Options, but each New Option provided that it could not be exercised until March
1, 1996. A formula based upon the grant price of the Original Option was used to
determine the appropriate number of New Options offered to each optionee. No
adjustment was made to options granted under the 1991 Director Stock Option
Plan.
Under the option exchange, employees (including the five Executive Officers)
received New Options to purchase an aggregate of 175,010 shares of common stock
in cancellation of Original Options to purchase an aggregate of 181,368 shares
of common stock. The five Executive Officers canceled Original Options to
purchase 63,000 shares of Common Stock and received New Options to purchase
60,865 shares. Other employees canceled Original Options to purchase 118,368
shares and received New Options to purchase 114,145 shares. The exercise price
of the canceled Original Options ranged from $13.00 per share to $21.00 per
share. The balance of the shares under the Original Options have been
surrendered and are available for re-grant under the Plan. Except for options
granted to Messrs. Rollhaus and DeVries under the 1991 Director Stock Option
Plan, no Executive Officer who received New Options under the option exchange
arrangement received any other option award in fiscal 1995. The Committee
believes that this exchange arrangement has helped to restore the role of
long-term equity incentive compensation as a key component of the Company's
compensation program.
As part of this exchange arrangement, Mr. Rollhaus agreed to the
cancellation of an Original Option to purchase 15,000 shares at an exercise
price of $14.875 per share in exchange for the grant of a New Option to purchase
14,560 shares at an exercise price of $10.50 per share. Both the Original and
the New Options expire February 7, 1998. The New Option may not be exercised
until March 1, 1996.
11
<PAGE>
STOCK BASED RETIREMENT PLAN
The Company maintains a stock-based retirement plan (the "Retirement Plan"),
which is a component of its 1993 Long-Term Stock Ownership Plan, to provide its
executives with a competitive retirement program.
Under the Retirement Plan, which is in lieu of any supplemental executive
retirement program, the Compensation Committee makes annual awards of Company
stock to selected key executives who have completed at least ten years of
service with the Company. The share awards, together with a cash award intended
to cover the inherent income taxes, are calculated under accepted actuarial
principles as the number required to provide a targeted competitive retirement
benefit. The targeted benefit, however, will be achieved at retirement only if
the value of the Company's stock grows at a sustained compounded level
established by the Board. Furthermore, in order to receive each year's award the
executive must remain in the employ of the Company through the end of the fiscal
year in which it is awarded (except in the case of the officer's death,
disability or termination of employment other than for cause), and he or she
must have retained all shares previously awarded under the Retirement Plan. The
Compensation Committee believes that the Retirement Plan mutually benefits the
Company, its stockholders and its most senior executives.
OTHER COMPENSATION
The Company has an Incentive Savings Plan (the "Plan") which offers all
employees (subject to certain eligibility requirements), including the named
Executive Officers, tax advantages pursuant to Section 401(k) of the Internal
Revenue Code. During fiscal year 1995, the Company made a matching contribution
to the Plan of $.40 on each dollar of the first 5% of compensation contributed
by the participant, subject to legal maximums imposed by the Internal Revenue
Code. Contributions are made by participants by means of a payroll deduction
program. The total aggregate amount of the Company's matching contribution for
the named Executive Officers is included in the Summary Compensation Table on
page 5.
The Company maintains an Exec-U-Care Medical Reimbursement Plan which
provides additional health and life insurance protection for certain officers of
the Company and its subsidiaries, in addition to the group health and life
insurance policies provided all employees. The participants in the Exec-U-Care
Plan include Messrs. Rollhaus, DeVries, Shain and Ebersole. The total aggregate
cost to the Company during fiscal year 1995 under the Plan for those Executive
Officers was less than $30,000.
LIMITATION ON DEDUCTIBILITY OF COMPENSATION
In 1993, the tax laws were amended by the addition of Section 162(m) of the
Internal Revenue Code. Effective for fiscal years beginning after 1993, that
Section limits the deductibility of compensation paid by a publicly-held company
to its chief executive officer and to the four other officers who are most
highly compensated. Generally, amounts paid in excess of $1 million to a covered
executive, other than performance-based compensation, cannot be deducted. No
Executive Officer other than Mr. Rollhaus was affected by this limitation in
fiscal 1995. Because the tax-saving opportunity of full complaince with Section
162(m) is relatively small and would require a complete redesign of the
Company's compensation structure, the Company has not elected compliance for the
time being. The Company, however, intends to review this question following the
issuance of additional Treasury regulations clarifying the complex rules in this
area relative to the utilization of performance-based plans.
AUDIT/COMPENSATION COMMITTEE
William G. Fowler, Chairman
Lawrence C. McQuade
David S. Ruder
Robert D. van Roijen, Jr.
12
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are William G. Fowler, who
serves as Chairman, Lawrence C. McQuade, David S. Ruder and Robert D. van
Roijen, Jr.
COMMON STOCK PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG QUIXOTE CORPORATION, THE RUSSELL 2000 INDEX
AND THE S&P MANUFACTURING (DIVERSIFIED INDUSTRY) INDEX.
The following graph compares the five year cumulative total return of the
Company's Common Stock with the Russell 2000 Index and the Standard & Poor's
Manufacturing (Diversified Industry) Index assuming the investment of $100 on
June 30, 1990 and the reinvestment of dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
QUIXOTE CORPORATION RUSSELL 2000 S & P MANUFACTURING (DIVERSIFIED INDUSTRY)
<S> <C> <C> <C>
Jun-90 100 100 100
Jun-91 73 101 106
Jun-92 204 116 105
Jun-93 215 146 124
Jun-94 330 152 139
Jun-95 204 183 183
</TABLE>
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
See "Employment Agreements and Termination Benefits" above for a description
of certain transactions and business relationships involving management of the
Company.
13
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The chart below sets forth, as of September 1, 1995, information to the best
of the Company's knowledge with respect to the persons who beneficially owned in
excess of five percent of the Company's Common Stock; the total number of shares
of the Company's Common Stock beneficially owned by each Director and named
Executive Officer; and the total number of shares of the Company's Common Stock
beneficially owned by the Directors and Executive Officers of the Company, as a
group.
<TABLE>
<CAPTION>
APPROXIMATE
AMOUNT BENEFICIALLY PERCENTAGE OF CLASS
NAME OF BENEFICIAL OWNER OWNED (1) (1)
- ---------------------------------------------------------------------- ------------------- ---------------------
<S> <C> <C>
FMR Corp.(2).......................................................... 485,200 6.2%
Wisconsin State Investment Board(3)................................... 455,500 5.8%
Philip E. Rollhaus, Jr.(4)(5)......................................... 416,923 5.2%
James H. DeVries(5)................................................... 227,035 2.8%
Myron R. Shain........................................................ 76,541 *
George D. Ebersole.................................................... 67,673 *
Michael J. LaForte.................................................... 6,373 *
William G. Fowler(6).................................................. 168,067 2.1%
David S. Ruder........................................................ 63,333 *
Lawrence C. McQuade................................................... 30,333 *
Robert D. van Roijen, Jr.............................................. 21,000 *
Directors and Executive Officers as a group (10 persons including
those individuals named above)(5)(6)(7).............................. 2,017,978 25.7%
<FN>
- ------------------------
* Less than one percent (1%).
(1) The shares reported in the above table include shares of Common Stock which
can be acquired within 60 days of September 1, 1995, through the exercise
of options ("Option Shares") as follows: Mr. Rollhaus - 200,198 shares; Mr.
Ruder - 48,333 shares; Mr. DeVries - 107,474 shares; Mr. Shain - 31,676
shares; Mr. Ebersole - 15,208 shares; Mr. LaForte - 6,373 shares; Mr.
Fowler - 72,333 shares; Mr. McQuade - 28,333 shares; Mr. van Roijen -
10,000 shares; and Directors and Executive Officers as a group - 525,096
shares. Each individual's Option Shares are also included in the number of
shares of the Company issued and outstanding for purposes of calculating
the percentage ownership of each individual in accordance with the rules
and regulations of the Exchange Act. These persons also have options not
exercisable within 60 days of September 1, 1995, by which they can acquire
the following additional shares of Common Stock: Mr. Rollhaus - 21,362
shares; Mr. Ruder - 9,167 shares; Mr. DeVries - 15,736 shares; Mr. Fowler -
9,167 shares; Mr. McQuade - 9,167 shares; Mr. Shain - 2,589; Mr. Ebersole -
3,236; Mr. LaForte - 12,747; Mr. van Roijen - 12,500 shares; and Directors
and Executive Officers as a group - 95,671 shares. These shares are not
included in the above table or in the percentage ownership calculations.
(2) Based upon information as set forth in a Schedule 13F filing for the period
ending June 30, 1995. Shares owned by Fidelity Low-Priced Stock Fund, a
registered investment company managed by Fidelity Management & Research
Company, are included in the figures set forth for FMR Corp. FMR Corp.'s
address is 82 Devonshire Street, Boston, Massachusetts 02109.
(3) Based on information set forth in a Schedule 13F filing for the period
ending June 30, 1995. The address for the Wisconsin State Investment Board
is 121 E. Wilson Street, Madison, Wisconsin 53702.
(4) Mr. Rollhaus owns $166,000 in principal amount of the Company's 8%
convertible subordinated debentures due April 15, 2011 (the "Debentures").
The Debentures are convertible into an aggregate of approximately 8,736
shares of the Company's Common Stock. The shares
</TABLE>
14
<PAGE>
<TABLE>
<S> <C>
of Common Stock into which the Debentures are convertible are included in
the above table and are included in the number of shares of the Company
issued and outstanding for purposes of calculating percentage ownership.
(5) Messrs. Rollhaus and DeVries may be deemed to be the beneficial owner of
1,000 and 5,492 shares of Common Stock, respectively, owned by their family
members. These shares are not included in the above table. Messrs. Rollhaus
and DeVries disclaim beneficial ownership of these shares.
(6) Mr. Fowler has a beneficial interest in 890 shares of Common Stock held by
his retirement plan. These shares are not included in the above table.
(7) Mr. J. Garrett Fitzgibbons held the position of Vice Chairman, Stenograph
Corporation, until his employment ended on June 30, 1995.
</TABLE>
APPROVAL OF AUDITORS
The Directors have recommended that the stockholders approve Coopers &
Lybrand L.L.P., a certified public accounting firm, as independent auditors for
the Company. A representative of Coopers & Lybrand L.L.P. is expected to be
present at the Annual Meeting and will have an opportunity to make an
independent statement if he or she desires to do so. The representative is
expected to be available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the outstanding shares
of the Company's Common Stock represented at the meeting and entitled to vote is
necessary to approve Coopers & Lybrand L.L.P. as the Company's auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE APPROVING COOPERS & LYBRAND L.L.P.
AS THE COMPANY'S AUDITORS.
MISCELLANEOUS
STOCKHOLDER PROPOSALS FOR THE ANNUAL MEETING TO BE HELD IN 1996
Under the rules and regulations of the Securities and Exchange Commission,
proposals of stockholders intended to be presented at the Annual Meeting to be
held in 1996 must be received by the Company on or before June 1, 1996, to be
considered for inclusion in the Company's proxy statement relative to that
meeting. Such proposals should be in writing and sent to Mr. James H. DeVries,
Executive Vice President - Quixote Corporation, One East Wacker Drive, Chicago,
IL 60601.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and Executive Officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Officers,
Directors and greater than ten percent shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on review of the copies of such reports furnished to the
Company and written representations that no other reports were required during
fiscal year 1995, the Company believes that all Section 16(a) filing
requirements applicable to the Company's officers and Directors and ten percent
shareholders were complied with by such persons, except that one Form 4 report
covering one transaction was filed late by Mr. Rollhaus.
15
<PAGE>
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
The Company will be pleased to make its Annual Report on Form 10-K, as filed
with the Securities and Exchange Commission, available without charge to
interested parties. Written requests for the report should be directed to Mr.
James H. DeVries, Executive Vice President - Quixote Corporation, One East
Wacker Drive, Chicago, IL 60601.
16
<PAGE>
QUIXOTE CORPORATION
P ANNUAL MEETING OF STOCKHOLDERS
R
O THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X
Y
The undersigned hereby appoint(s) Philip E. Rollhaus, Jr. and James H.
DeVries as proxies with full power of substitution and hereby directs them to
vote the stock of the undersigned at the Annual Meeting of Stockholders of
Quixote Corporation to be held in the Assembly Room at The Northern Trust
Company, 50 South LaSalle Street, Chicago, Illinois, Thursday, November 16,
1995, at 10:00 a.m. Central Standard Time, and at any adjournments thereof,
as indicated on the proposals set forth on the reverse side of this Proxy.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED, OR IF NO
DIRECTION IS INDICATED, IT WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSAL 2. Discretionary authority is conferred by the Proxy to vote
on all matters, other than those specified on the reverse side, which may
properly come before the meeting or any adjournment thereof.
PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
-------------
SEE REVERSE
(CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE) SIDE
-------------
<PAGE>
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE.
1. Election of Directors
NOMINEES: William G. Fowler and Robert D. van Roijen, Jr.
FOR WITHHELD
/ / / /
/ /____________________________________
For both nominees except as noted above
FOR AGAINST ABSTAIN
2. Approving the selection of Coopers & Lybrand L.L.P. / / / / / /
as Independent Auditors of the Company.
3. Transaction of such other business as may properly come before the meeting
and any adjournments thereof.
MARK HERE MARK HERE
FOR ADDRESS / / IF YOU PLAN / /
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
Please date and sign as name is imprinted hereon, including designation as
executor, trustee, etc. if applicable. A corporation must sign in its name by
the president or other authorized officers. All co-owners must sign.
Signature:___________________________Date___________
Signature:___________________________Date___________
