<PAGE>
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
______________________________
[X] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the period ended March 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from
__________ to __________
__________________________________
Commission file number 0-7903
I.R.S. Employer Identification Number 36-2675371
QUIXOTE CORPORATION
(a Delaware Corporation)
One East Wacker Drive
Chicago, Illinois 60601
Telephone: (312) 467-6755
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES XX NO
-------- --------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 7,882,501 shares of the
Company's Common Stock ($.01-2/3 par value) were outstanding as of March 31,
1996.
<PAGE>
PART I
FINANCIAL INFORMATION
QUIXOTE CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------
1996 1995
---- ----
<S> <C> <C>
Net sales.............................$ 26,426,000 $ 32,393,000
Cost of sales......................... 19,840,000 21,203,000
------------ ------------
Gross profit.......................... 6,586,000 11,190,000
Selling & administrative expenses..... 7,588,000 5,995,000
Research & development expenses....... 540,000 321,000
------------ ------------
8,128,000 6,316,000
Operating profit (loss)............... (1,542,000) 4,874,000
------------ ------------
Other income (expenses):
Interest income..................... 64,000 65,000
Interest expense.................... (1,604,000) (1,085,000)
Other............................... 178,000 (113,000)
------------ ------------
(1,362,000) (1,133,000)
------------ ------------
Earnings (loss) from continuing operations
before income taxes................... (2,904,000) 3,741,000
Provision for income taxes............ (1,103,000) 1,421,000
------------ ------------
Earnings (loss) from continuing
operations........................... (1,801,000) 2,320,000
------------ ------------
Loss from discontinued operations
(net of tax)........................ (611,000)
------------ ------------
Net earnings (loss)...................$ (1,801,000) $ 1,709,000
============ ============
Per share data:
Earnings (loss)from continuing
operations.........................$ (.23) $ .28
Loss from discontinued operations... (.07)
------------ ------------
Net earnings (loss)...................$ (.23) $ .21
============ ============
Weighted average common and common
equivalent shares outstanding......... 7,969,669 8,160,989
============ ============
<FN>
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
<PAGE>
QUIXOTE CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended March 31,
--------------------------------
1996 1995
---- ----
<S> <C> <C>
Net sales.............................$100,136,000 $100,476,000
Cost of sales......................... 72,122,000 65,057,000
------------ ------------
Gross profit.......................... 28,014,000 35,419,000
Selling & administrative expenses..... 21,418,000 18,598,000
Research & development expenses....... 1,115,000 1,158,000
------------ ------------
22,533,000 19,756,000
Operating profit...................... 5,481,000 15,663,000
------------ ------------
Other income (expenses):
Interest income..................... 229,000 167,000
Interest expense.................... (4,788,000) (2,865,000)
Other............................... (244,000) (299,000)
------------ ------------
(4,803,000) (2,997,000)
------------ ------------
Earnings from continuing operations
before income taxes................... 678,000 12,666,000
Provision for income taxes............ 258,000 4,813,000
------------ ------------
Earnings from continuing operations... 420,000 7,853,000
------------ ------------
Discontinued operations (net of tax):
Actual loss from operations......... (1,553,000) (3,179,000)
Estimated loss on disposition of
discontinued operations............. (10,913,000)
------------ ------------
Loss from discontinued operations..... (12,466,000) (3,179,000)
------------ ------------
Net earnings (loss)...................$(12,046,000) $ 4,674,000
============ ============
Per share data:
Earnings from continuing operations.$ .05 $ .96
Loss from discontinued operations... (1.56) (.39)
------------ ------------
Net earnings (loss)...................$ (1.51) $ .57
============ ============
Weighted average common and common
equivalent shares outstanding......... 7,964,706 8,158,897
============ ============
<FN>
See Notes to Consolidated Condensed Financial Statements
</TABLE>
<PAGE>
QUIXOTE CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
<TABLE>
<CAPTION>
March 31, June 30,
------------------------------------
ASSETS 1996 1995
- ------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash & cash equivalents.....................$ 2,355,000 $ 2,075,000
Accounts receivable, net of allowances
for doubtful accounts of $1,279,000 at
March 31 and $810,000 at June 30............ 21,593,000 24,564,000
Inventories:
Raw materials............................... 5,364,000 5,269,000
Work in process............................. 858,000 1,034,000
Finished goods.............................. 1,214,000 1,098,000
------------ ------------
7,436,000 7,401,000
Other current assets.......................... 3,409,000 2,361,000
------------ ------------
Total current assets.......................... 34,793,000 36,401,000
------------ ------------
Property, plant and equipment, at cost........ 144,291,000 130,822,000
Less accumulated depreciation................. (53,989,000) (43,791,000)
------------ ------------
90,302,000 87,031,000
------------ ------------
Other assets ................................. 11,602,000 21,502,000
Net assets of discontinued operations......... 1,678,000 19,901,000
------------ ------------
$138,375,000 $164,835,000
============ ============
<FN>
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
<PAGE>
QUIXOTE CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
<TABLE>
<CAPTION>
March 31, June 30,
---------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1995
- ------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Current liabilities:
Current portion of long-term debt..........$ 975,000 $ 975,000
Accounts payable........................... 4,544,000 16,576,000
Accrued expenses........................... 14,981,000 12,421,000
Income taxes payable....................... 580,000 4,110,000
------------ ------------
Total current liabilities.................... 21,080,000 34,082,000
------------ ------------
Long-term debt............................... 67,500,000 68,000,000
Deferred income taxes........................ 3,838,000 3,838,000
Shareholders' equity:
Common stock............................... 143,000 143,000
Capital in excess of par value of stock.... 29,299,000 29,268,000
Retained earnings.......................... 21,988,000 34,977,000
Treasury stock, at cost.................... (5,473,000) (5,473,000)
------------ ------------
45,957,000 58,915,000
------------ ------------
$138,375,000 $164,835,000
============ ============
<FN>
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
<PAGE>
QUIXOTE CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended March 31,
---------------------------
1996 1995
------------ -------------
<S> <C> <C>
Cash from operating activities:
Earnings from continuing operations......................$ 420,000 $ 7,853,000
Loss from discontinuing operations....................... (12,466,000) (3,179,000)
------------ -------------
Net Earnings (Loss)...................................... (12,046,000) 4,674,000
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation........................................... 10,198,000 9,146,000
Amortization........................................... 766,000 1,566,000
Provisions for losses on accounts receivable........... 469,000 237,000
Changes in operating assets and liabilities:
Decrease in accounts receivable....................... 2,502,000 148,000
Increase in inventories and other current assets...... (1,083,000) (859,000)
Increase in accounts payable and accrued expenses..... 615,000 3,250,000
Decrease in income taxes payable...................... (3,530,000) (1,535,000)
Discontinued operations-noncash charges and working
capital changes......................................... 12,242,000
Gain on sale of patent................................... (347,000)
------------ ------------
Net cash provided by operating activities............... 9,786,000 16,627,000
Investing activities:
Purchase of property, plant and equipment............... (22,694,000) (27,558,000)
Proceeds from sale of discontinued operations........... 5,981,000
(Increase) decrease in funds deposited with
Industrial Development Board............................ 2,323,000 (4,105,000)
Proceeds from the sale of patent........................ 1,960,000
Other................................................... (802,000) (593,000)
------------ ------------
Net cash used in investing activities................... (13,232,000) (32,256,000)
Financing activities:
Borrowings (payments) under revolving credit agreement.. (500,000) 17,875,000
Proceeds from redemption of certificate of deposit...... 6,000,000
Payment of semi-annual cash dividend.................... (1,805,000) (1,714,000)
Proceeds from exercise of stock options................. 31,000 254,000
Repurchase of company stock for treasury................ (100,000)
------------ ------------
Net cash provided by financing activities............... 3,726,000 16,315,000
Increase in cash and cash equivalents.................... 280,000 686,000
Cash and cash equivalents at beginning of period......... 2,075,000 1,021,000
------------ -----------
Cash and cash equivalents at end of period...............$ 2,355,000 $ 1,707,000
============ ===========
<FN>
Note: During the nine months ended March 31, 1996, the Company made cash payments of
$1,400,000 for income taxes and paid $4,014,000 for interest. During the same period
last year the Company made cash payments of $4,526,000 for income taxes and paid
$2,144,000 for interest.
See Notes to Consolidated Condensed Financial Statements.
</TABLE>
<PAGE>
QUIXOTE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
1. The interim financial statements are prepared pursuant to the requirements
for reporting on Form 10-Q. The June 30, 1995 balance sheet data was derived
from audited financial statements, adjusted for the reclassification of assets
and liabilities related to the discontinued operations discussed in Note 2
below, but does not include all disclosures required by generally accepted
accounting principles. The interim financial statements and notes thereto
should be read in conjunction with the financial statements and notes included
in the Company's latest annual report on Form 10-K. In the opinion of
management, the interim financial statements reflect all adjustments of a
normal recurring nature necessary for a fair presentation of the results for
interim periods. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal
year ending June 30, 1996.
2. On September 28, 1995, the measurement date, the Company adopted a plan to
dispose of Integrated Information Services, Inc., a document imaging and
computerized litigation support company, and Litigation Sciences, Inc., a
litigation consulting firm, and to abandon the concept of Legal Technologies,
Inc. as a full service provider to the legal community.
As a result, the Company recorded a loss during the first quarter of
$12,000,000 (net of income tax benefits of $8,000,000) for both the estimated
operating losses of these businesses as well as for the estimated losses on
their disposition. These results are presented as discontinued operations in
the Company's Consolidated Condensed Statements of Operations for the nine
months ended March 31, 1996.
On January 25, 1996, Stenograph sold certain assets of its Litigation Sciences
(LSI) division for the assumption by the purchaser of certain liabilities of
LSI. The remaining LSI assets and liabilities retained by Stenograph included
accounts receivable and accounts payable.
On February 16, 1996, the Company sold certain assets and liabilities of
Stenograph Corporation, a business not previously discontinued, which included
its Integrated Information Services division to Pettibone Corporation, for
approximately $7 million cash. The assets and liabilities retained by the
Company include Stenograph's repetitive stress injury cases as well as the LSI
net assets. The Company also acts as guarantor under certain lease
obligations. The Company used a substantial portion of the sale proceeds to
reduce long-term debt.
The previously issued Consolidated Condensed Statements of Operations for the
quarter and nine months ended March 31, 1995 have been restated to reflect
those results as discontinued operations. Net sales for the discontinued
businesses for the nine months ending March 31, 1996 and 1995 were $27,510,000
and $38,192,000 respectively. Net sales for the discontinued businesses for
the quarter ending March 31, 1996 and 1995 were $5,056,000 and $13,166,000
respectively. The assets of these businesses consist principally of accounts
receivable, inventories and equipment, and net of their liabilities have been
reflected separately in the Company's Consolidated Condensed Balance Sheets.
3. In December 1995, Disc Manufacturing, Inc. settled a lawsuit with three
former employees. The cost of the settlement, including legal fees was
$584,000 and was expensed in the Company's second quarter.
<PAGE>
4. On January 10, 1996, Energy Absorption entered into an agreement with
Barrier Systems, Inc., to sell and assign all of its rights to certain patents
related to the movable traffic barrier system. Energy sold the patents for
$1,960,000, which resulted in a gain of approximately $350,000 in the
Company's third quarter of fiscal 1996.
5. On March 26, 1996 the Madison County Alabama Circuit Court approved DMI's
substitution of a $6 million surety bond backed by a $2 million letter of
credit to replace a $6 million certificate of deposit posted as injunction
security. The Company used the proceeds of the certificate of deposit to
reduce its long term debt.
6. During the quarter, the Company suspended the development of its sewer
rehabilitation technology and recorded a loss of approximately $250,000 to
eliminate its investment in this project.
7. During the quarter, the Company violated certain covenants of its
revolving credit facility including the earnings and leverage covenants as of
March 31, 1996. Subsequent to quarter end, the Company reached an agreement
with the Bank Group to amend certain covenants for future periods and to reduce
the credit facility $5 million to $65 million and received a waiver for its
covenant violations.
Subsequent Events:
- --------------------
8. On April 25, 1996, the Company accepted an offer to sell its 40% interest
in Quantic Industries, Inc. from the majority shareholders of Quantic. The
purchase price of $9 million consists of $4.5 million in cash and $4.5 million
in a five year note with interest at 10%. Equal principal payments over the
term of the loan are due annually with interest payable quarterly. The loan
is secured by the common stock of Quantic. Subsequently, the parties have
discussed an all cash transaction for a reduced purchase price. The buyer has
until June 26, 1996 to obtain financing.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CURRENT YEAR TO DATE VERSUS PRIOR YEAR TO DATE
The Company's sales for the first nine months of fiscal 1996 decreased
slightly to $100,136,000 from $100,476,000 in the same period last year. Sales
at DMI decreased 1% in the nine month period to $66,895,000 from $67,478,000
in the same period last year. CD-ROM unit sales increased 92% during the nine
month period from the same period last year reflecting continued growth in
that market. Audio CD unit sales decreased 34% in the nine month period from
the same period last year. This was due principally to the loss of a major
customer, BMG Music during the Company's second quarter. BMG Music accounted
for 38% of DMI's total sales in fiscal 1995. As a result of declines in the
average unit selling price of these products, CD-ROM sales dollars increased
51% during the nine month period and CD audio sales dollars declined 37% from
the same period. Sales at Energy Absorption for the nine months were
$33,241,000 an increase of 1% from sales of $32,998,000 for the same period
last year.
The gross profit margin in the current nine month period decreased to 28.0%
from 35.3% in the same period last year due to margin reductions at DMI.
DMI's gross profit margin decreased as a result of a decrease in the selling
prices of its products, particularly CD-ROM products as well as from volume
inefficiencies. DMI also had a reduction in gross profit margin due to a
change in packaging sales mix. The Company expects to experience continued
pressure on disc selling prices which may have a limiting effect on its gross
profit margins. Energy Absorption's gross profit margin for the current nine
month period increased slightly due to a change in product mix.
Selling and administrative expenses in the current nine month period increased
15% to $21,418,000 from $18,598,000 in the same period last year. DMI's
selling and administrative expenses increased largely due to an increase in
legal expense and to a lesser extent an increase in CD-ROM selling and
marketing expenses. Energy Absorption's selling and administrative expenses
increased due to increased marketing expenses.
Research and development expenses in the current nine month period decreased
4% to $1,115,000 compared to $1,158,000 in the same period last year. This
decrease in R&D was due to the suspension of development on its sewer
rehabilitation technology which was offset somewhat by increases in other
projects at Energy Absorption.
Interest income in the current nine month period was $229,000 compared to
$167,000 in the same period last year due to an increase in the rate of
interest earned on its $6 million restricted certificate of deposit. Late in
the current quarter, this CD was redeemed and used to reduce long-term debt.
(See Note 5 to the Company's Consolidated Condensed Financial Statements.)
Interest expense in the current nine month period increased 67% o $4,788,000
from $2,865,000 in the same period last year. This was due to the increase
in the average long-term debt outstanding compared to the same period last
year. Other expenses in the current nine month period remained at a level
consistent with the same period last year.
<PAGE>
During the first quarter, the Company adopted a plan to dispose of Integrated
Information Services, Inc., a document imaging and computerized litigation
support company and Litigation Sciences, Inc., a litigation consulting firm,
and to abandon the concept of Legal Technologies, Inc. as a full service
provider to the legal community.
As a result, the Company recorded a loss of $12 million during the first
quarter consisting of $3.3 million (net of income tax benefits of $2.2
million) for the estimated operating losses of these businesses through the
date of disposition and $8.7 million (net of income tax benefits of $5.8
million) for the estimated loss on their disposition. These results are
presented as discontinued operations in the Company's Consolidated Condensed
Statement of Operations. The assets of these businesses consist principally
of accounts receivable, inventories and equipment and net of their liabilities
have been reflected separately in the Company's Consolidated Condensed
Balance Sheets.
On January 25, 1996 Stenograph sold certain assets of its Litigation Sciences
(LSI) division for the assumption by the purchaser of certain liabilities of
LSI. The remaining LSI assets and liabilities retained by Stenograph included
accounts receivable and accounts payable.
On February 16, 1996, the Company sold certain assets and liabilities of
Stenograph Corporation, a business not previously discontinued, which included
its Integrated Information Services division to Pettibone Corporation, for
approximately $7 million cash. The assets and liabilities retained by the
Company include Stenograph's repetitive stress injury cases as well as the LSI
net assets. The Company also acts as guarantor under certain lease
obligations. The Company used a substantial portion of the proceeds to reduce
long-term debt.
On April 25, 1996 the Company accepted an offer to sell its 40% interest in
Quantic Industries, Inc. from the majority shareholders of Quantic. The
purchase price of $9 million consists of $4.5 million in cash and $4.5 million
in a five year note with interest at 10%. Equal principal payments over the
term of the loan are due annually with interest payable quarterly.
Subsequently, the parties have discussed an all cash transaction for a reduced
purchase price. The buyers have until June 26, 1996 to obtain financing.
CURRENT YEAR QUARTER VERSUS PRIOR YEAR QUARTER
The Company's sales for the current quarter decreased 18% to $26,426,000 from
$32,393,000 in the same quarter last year. Sales at DMI decreased 28% in the
quarter to $15,473,000 from $21,605,000 in last year's quarter. This was due
principally to the loss of a major customer, BMG Music, during the Company's
second quarter. BMG Music accounted for 38% of DMI's total sales in fiscal
1995. Audio CD unit sales decreased 70% in the current quarter from the same
quarter last year. CD-ROM unit sales increased 68% during the quarter from
the same period last year reflecting continued growth in that market. As a
result of declines in the average unit selling price of both of these
products, CD-ROM sales dollars increased 37% during the quarter and CD audio
sales dollars declined 37% from the same quarter last year. Sales at Energy
<PAGE>
Absorption for the current quarter were $10,953,000, an increase of 2% from
sales of $10,788,000 for the same quarter last year.
The gross profit margin in the current quarter decreased to 24.9% from 34.6%
in the same quarter last year due to margin reductions at DMI. DMI's gross
profit margin decreased as a result of a decrease in the selling prices of its
products, particularly CD-ROM products as well as from volume inefficiencies.
DMI also had a reduction in gross profit margin due to a change in packaging
sales mix. The Company expects to experience continued pressure on disc
selling prices which may have a continued limiting effect on its gross profit
margins. Energy Absorption's gross profit margin for the current nine month
period increased due to a change in product mix.
Selling and administrative expenses in the current quarter increased 27% to
$7,588,000 from $5,995,000 in the same period last year. DMI's selling and
administrative expenses increased principally due largely to an increase in
legal expense and to a lesser extent an increase in CD-ROM selling and
marketing expenses. Energy Absorption's selling and administrative expenses
increased due principally to the write-off of its investment in a sewer
rehabilitation project of approximately $250,000.
Research and development expenses in the current quarter increased 68% to
$540,000 from $321,000 in the same quarter last year. This increase in R&D
was due to the increases in several development and testing projects at Energy
Absorption.
Interest income in the current quarter was $64,000 compared to $65,000 in the
same quarter last year. Interest expense in the current quarter increased 48%
to $1,604,000 from $1,085,000 in the same quarter last year. This was due to
the increase in the average long-term debt outstanding compared to the same
period last year. The Company earned other income of 178,000 in the current
quarter compared to other expense of $113,000 the same quarter last year due
to a $347,000 gain in the current quarter from the sale of a patent offset
somewhat by other expenses. (See Note 4 to the Consolidated Condensed
Financial Statements.)
LIQUIDITY AND CAPITAL RESOURCES
The Company has cash of $2,355,000 and additional funds of $16,500,000
available under its bank arrangements. Operating activities were a source of
cash for the Company providing cash of $9,786,000.
Cash of $13,232,000 was used during the nine month period for investing
activities. The Company's primary investing activity was the purchase of
$21,941,000 in plant and equipment. These capital expenditures were made
primarily at DMI for the final phase of its expansion program.
Financing activities provided cash of $3,726,000 principally from the
redemption of a $6 million certificate of deposit offset somewhat by, among
other things, the payments of two semiannual cash dividends of $1,805,000
<PAGE>
total. Borrowings under the Company's revolving credit facility decreased for
the period by $500,000.
During the quarter, the Company violated certain covenants of its revolving
credit facility including the earnings and leverage covenants as of March
31, 1996. Subsequent to quarter end, the Company reached an agreement with
the Bank Group to amend certain covenants for future periods and to reduce
the credit facility $5 million to $65 million and received a waiver for its
covenant violations.
During the balance of fiscal 1996, the Company anticipates the need for
approximately $2,000,000 in cash for capital expenditures. The Company may
also need additional cash as it considers acquiring additional businesses that
complement its existing operating segments. Also, each of the Company's
operating segments will require additional investments in working capital to
maintain growth. These expenditures will be financed either through cash
generated from operations or from borrowings on the Company's revolving credit
note. The Company believes its cash generated from operations and funds
available under its existing credit facility are sufficient for all planned
operating and capital requirements.
II
OTHER INFORMATION
ITEM 1. Legal Proceedings
- --------------------------
1. DISC MANUFACTURING, INC. ET AL. V. MASSEY ET AL., Case No. CV90-1214
(Madison County Circuit Court, Alabama). A court-ordered mediation was
conducted on February 20, 1996. No resolution of the matter was reached. On
March 26, 1996 the Court approved DMI's substitution of a bond/letter of
credit arrangement for the $6,000,000 certificate of deposit posted as
injunction security. See the Company's Form 10-K Report for the fiscal year
ended June 30, 1995, item 3, for additional information.
2. THOMSON S. A. V. TIME WARNER ET AL., Case No. 94-83 (U. S. District Court
for the District of Delaware). A trial date of July 22, 1996 has been set.
In early February, 1996, the judge held a hearing to construe the patent
claims as a matter of law; the judge's decision is pending. On February 27,
1996, the judge issued a ruling on pending summary judgment motions filed by
the parties, which included the grant of DMI's motion to limit Thomson's
recovery of damages and dismissal of several of defendants' defenses. See the
Company's Form 10-K Report for the fiscal year ended June 30, 1995, item 3,
for additional information.
3. SHERRELL SEARS V. ENERGY ABSORPTION SYSTEMS, Case No. CV-94-128 (Circuit
Court of St. Clair County, Alabama). The plaintiff has appealed the grant of
the Company's motion for summary judgment; a decision is pending. See the
Company's Form 10-K Report for the fiscal year ended June 30, 1995, item 3,
for additional information.
4. TEKLICON, INC. V. QUIXOTE CORPORATION, Case No. CV743993 (California
Superior Court). This case has been settled. The plaintiff has agreed to
voluntarily dismiss the case with each party to bear its own fees and costs
incurred in connection with the matter. See the Company's Form 10-K Report
for the fiscal year ended June 30, 1995, item 3, for additional information.
5. XEROTEX ET AL. V. INTEGRATED INFORMATION SERVICES, Case No. 96 Civ. 681
(U.S. District Court for the District of New Jersey). In February, 1996, the
<PAGE>
Company was served in this action which arises from the purchase of certain
software by Integrated Information Services, Inc. ("IIS") prior to the
Company's sale of IIS. The complaint alleges breach of contract by IIS for
its alleged failure to market the software and make contractual payments. IIS
has answered the complaint and asserted a counterclaim against plaintiffs for
breach of warranty, breach of contract, breach of the implied covenant of good
faith and fair dealing and breach of the purchase agreement.
6. ERNEST CHICO V. THE STATE OF INDIANA, ENERGY ABSORPTION SYSTEMS, INC. AND
HOOSIER COMPANY (Indiana Superior Court). On April 12, 1996 Energy Absorption
Systems, Inc. was served in this action which arises from an accident in which
the plaintiff hit one of Energy's crash cushions. The Company has referred
the case to its insurance carrier and at this time believes that liability
resulting from this case will be covered by its insurance policies.
ITEM 2. Changes in Securities
- -----------------------------
None.
ITEM 3. Default upon Senior Securities
- ---------------------------------------
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
None.
ITEM 5. Other Information
- --------------------------
None.
ITEM 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibit 11. Statement regarding Computation of Earnings per Share.
(b) Reports on Form 8-K.
On March 4, 1996, the Company filed a report on Form 8-K, dated the same
date, reporting under "Item 2 - Disposition of Assets", the sale of certain
assets of Stenograph Corporation and its divisions, Integrated Information
Services, Inc. and Litigation Sciences, Inc. On May 1, 1996 the Company filed
a Form 8-K/A amendment submitting the required pro forma financial
information.
(c) Exhibits
*Management contract, compensatory plan or agreement
3.(b) Restated By-Laws of the Company as amended through January 23,
1996.
10.(a) *Key Employee Severance Agreement dated as of April 30, 1996 by
and between the Company and Leslie J. Jezuit.
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996 to be signed on its behalf by the undersigned thereunto
duly authorized.
QUIXOTE CORPORATION
DATE: May 15, 1996 /s/ Myron R. Shain
---------------------- ---------------------------------
MYRON R. SHAIN
EXECUTIVE VICE PRESIDENT -FINANCE
(Chief Financial & Accounting
Officer)
<PAGE>
EXHIBIT 3 (b)
AMENDED AND
RESTATED
BY-LAWS
OF
QUIXOTE CORPORATION
(A Delaware Corporation)
as adopted on March 16, 1991,
and as amended through January 23, 1996
(the Corporation was named Energy Absorption Systems, Inc. from
July 14, 1969 to June 30, 1980)
ARTICLE I
OFFICES AND RECORDS
Section 1.1. Delaware Office. The principal office of the Corporation
in the State of Delaware shall be located in the City of Wilmington, County of
New Castle, and the name and address of its registered agent is The
Corporation Trust Company, No. 100 West Tenth Street, Wilmington, Delaware.
Section 1.2. Other Offices. The Corporation may have such other
offices, either within or without the State of Delaware, as the Board of
Directors may designate or as the business of the Corporation may from time to
time require.
Section 1.3. Books and Records. The books and records of the
Corporation may be kept outside the State of Delaware at such place or places
as may from time to time be designated by the Board of Directors.
ARTICLE II
STOCKHOLDERS
Section 2.1. Annual Meeting. The annual meeting of the stockholders of
the Corporation shall be held on such date and at such place and time during
the period commencing at 12:01 A.M. (Chicago Time) on October 1 and ending
11:59 P.M. (Chicago Time) on December 10 in each year as may be fixed by
resolution of the Board of Directors adopted at least ten days prior to the
date so fixed, for the purpose of electing directors and for the transaction
of such other business as may properly come before the meeting. If, in any
year the Board of Directors shall not fix an annual meeting date, place and
time by the end of the 10th day next preceding the third Friday of October in
that year, then the date, place and time of the annual meeting in such year
shall be on the third Friday of October at the principal office of the
Corporation in Chicago, Illinois at the hour of 10:30 A.M. (Chicago Time). If
the date of the annual meeting shall be a legal holiday in the State where
such meeting is to be held, such meeting shall be held on the next succeeding
business day.
<PAGE>
Section 2.2. Special Meetings. Special meetings of the stockholders
shall be called at any time by the Chairman, President or a majority of the
Board of Directors.
Section 2.3. Place of Meeting. The Board of Directors may designate the
place of meeting for any annual meeting or for any special meeting called by
the Board of Directors. If no designation is made by the Board of Directors
or if a special meeting be otherwise called, the place of meeting shall be the
principal office of the Corporation in Chicago, Illinois.
Section 2.4. Notice of Meeting. Written or printed notice stating the
date, place and time of the meeting, and, in the case of a special meeting,
the purpose and purposes for which the meeting is called, shall be given as
required by the General Corporation Law of the State of Delaware.
Section 2.5. Fixing of Record Date. For the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or stockholders entitled to receive payment of any
dividend, or in order to make a determination of stockholders for any other
proper purpose, the Board of Directors may fix in advance a date as the record
date for any such determination of stockholders, such date to be not less than
ten (10) days nor more than sixty (60) days prior to the date of the meeting
or of the payment of a dividend or such other event. If no record date is
fixed, the record date for such determination of stockholders shall be (a) the
close of business on the day next preceding the date on which notice of the
meeting is mailed, (b) the date on which the resolution of the Board of
Directors declaring such dividend is adopted, or (c) the date on which notice
is given to stockholders involving an event requiring a record date, as the
case may be. When a determination of stockholders entitled to vote at any
meeting of stockholders has been made as provided in this Section, such
determination shall apply to any adjournment thereof.
Section 2.6. Quorum. A majority of the outstanding shares entitled to
vote shall constitute a quorum at meetings of stockholders, except that when
specified business is to be voted on by a class or series, voting as a class,
the holders of a majority of the shares of such class or series shall
constitute a quorum for the transaction of such business. At all meetings of
stockholders all questions shall be determined by a majority vote of the
stockholders entitled to vote present in person or by proxy, except as
otherwise provided by law or the Certificate of Incorporation or these By-
Laws.
Section 2.7. Proxies. At all meetings of stockholders, a stockholder
may vote by proxy executed in writing by the stockholder, or by his duly
authorized attorney-in-fact. Such proxy must be filed with the Secretary of
the Corporation or his representative before the time of the meeting. No
proxy shall be valid after eleven (11) months from the date of its execution,
unless the proxy shall otherwise provide.
Section 2.8. Judges of Election. The Secretary of the Corporation, or
any Assistant Secretary of the Corporation in the absence of the Secretary,
shall serve as the Judge of each meeting of stockholders, provided, however,
that the Chairman of the Board of the Corporation at his discretion may
appoint, in place of the Secretary or any Assistant Secretary of the
<PAGE>
Corporation, three (3) judges of election to serve with respect to such
meeting of stockholders, and if any judge so appointed shall refuse to serve
or shall not be present at such stockholders' meeting, he shall be replaced by
the Chairman of the Board of Directors in advance of such meeting or in
advance of any voting at such meeting. All voting at stockholders' meetings
shall be conducted solely under the direction of the judge(s), and the
decision of the judge, or a majority of the judges if more than one, as to the
outcome of all voting at such meetings shall be binding upon the Corporation
and its stockholders in the absence of actual fraud in the decision of the
judge(s). Any competent person over the age of 21 may be appointed as a judge
of election.
(a) In fulfilling the obligations hereunder, the judge(s) shall have the
following responsibilities: (1) to determine whether the meeting itself is
legally constituted for the purpose of the stockholders' action; (2) to
determine the validity and effect of proxies and the authority of the person
or persons designated in such proxies to vote pursuant thereto; (3) to
determine the validity and effect of ballots cast for the matters to be voted
on by the stockholders; and (4) to do all other acts and make all other
determinations necessary or appropriate in connection with conducting the
voting and deciding the results thereof.
(b) In discharging any or all of the aforementioned responsibilities,
the judge(s) (1) shall not have the duty of determining the names or
addresses of the registered stockholders of the Corporation entitled to vote
at such meeting, but may rely on a dated list of such stockholders if
certified by either the transfer agent or the Secretary of the Corporation and
if the date of such list coincides with the record date as fixed pursuant to
these By-Laws, and (2) shall not have the duty of determining the date of
mailing of the notices of the meeting or the persons to whom notices were
sent, but may rely on a certificate of the transfer agent or the Secretary of
the Corporation containing such information.
(c) To aid them in carrying out any of the aforementioned duties, the
judge(s) shall have the authority, but not the obligation, to appoint agents,
including, but not necessarily limited to, accountants, attorneys and
custodians. Any such agents so appointed shall be responsible only to the
judge(s).
(d) The judge(s) shall be entitled to possession of all ballots,
together with any accompanying proxies, cast by the stockholders. The
judge(s) shall retain possession, but not necessarily the physical custody, of
such ballots and proxies until they have determined the results of the
election, at which time they shall deliver such ballots and proxies, and
certify the results of the election, to the secretary of the meeting.
(e) Judge(s) shall be entitled to reimbursement from the Corporation for
all expenses reasonably incurred by them in connection with the discharge of
their responsibilities as judges, including fees and expenses of any agents
appointed pursuant to the provisions of these By-Laws, and, in addition, the
Corporation shall pay the judge(s) a fee commensurate with the services
rendered and the responsibilities undertaken by them.
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
Section 3.1. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors. In addition to the
powers and authority expressly conferred upon them by these By-Laws, the
Board of Directors may exercise all such powers of the Corporation and do all
such lawful acts and things as are not by statute or by the Certificate of
Incorporation or by these By-Laws required to be exercised or done by the
stockholders.
Section 3.2. Number, Tenure and Qualifications. The number of directors
of the Corporation shall be six. Each director shall hold office until the
third succeeding annual meeting of stockholders or until his successor shall
have been elected and qualified. Directors need not be residents of the State
of Delaware or stockholders of the Corporation. Directors may be nominated
for office in advance of the annual meeting of stockholders.
Section 3.3. Classes of Directors. As provided in the Certificate of
Incorporation, the directors shall be divided into three classes, as nearly
equal in number as possible. At each annual meeting, directors to replace
those whose term expires at such annual meeting shall be elected to hold
office until the third succeeding annual meeting or until his successor shall
have been elected and qualified. If the number of directors is changed, any
newly created directorships or decrease in directorships shall be so
apportioned among the classes as to make all classes as nearly equal in number
as possible. No decrease in the Board shall shorten the term of any incumbent
director.
<PAGE>
As used in these By-Laws, "entire Board of Directors" means the total
number of directors which the Corporation would have if there were no
vacancies. Except as otherwise provided in the Certificate of Incorporation
or the By-Laws, vacancies occurring in the Board of Directors may be filled
for the unexpired term by a majority vote of the remaining directors.
Section 3.4. Conduct of Meetings. The Board of Directors shall adopt
such rules
and regulations for the conduct of the meetings and management of the affairs
of the Corporation as it may deem proper, not inconsistent with the laws of
the State of Delaware or these By-Laws. As soon as practicable after the
annual meeting of stockholders, the Board of Directors shall meet for the
purpose of organization and the transaction of business.
Section 3.5. Regular Meetings. The Board of Directors may, by
resolution, provide the time and place for the holding of regular meetings
without other notice than such resolution.
Section 3.6. Special Meetings. Special meetings of the Board of
Directors shall be called at the request of the Chairman of the Board, the
President or any two directors. The person or persons authorized to call
special meetings of the Board of Directors may fix the place and time for such
meetings.
Section 3.7. Notice. Notice of any special meeting shall be given to
each director at his business address in writing or by telegram or by
telephone communication. If mailed, such notice shall be deemed adequately
delivered when deposited in the United States mail so addressed, with postage
thereon prepaid at least five (5) days before such meeting. If by telegram,
such notice shall be deemed adequately delivered when the telegram is
delivered to the telegraph company at least twenty-four (24) hours before such
meeting. If by telephone, the notice shall be given at least twelve (12)
hours prior to the time set for the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice of such meeting, except for
amendments to these By-Laws as provided under Article VII. Notice of any
special or regular meeting shall be waived if the director is present at any
special or regular meeting.
Section 3.8. Quorum. A majority of the number of directors fixed by
Section 3.2 of this Article III shall constitute a quorum for the transaction
of business at any meeting of the Board of Directors, but if less than such
majority is present at the meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice. The act of a
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors. The directors present at a duly
organized meeting may continue to transact business until adjournment
notwithstanding the withdrawal of enough directors to leave less than a
quorum.
Section 3.9 Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be
filled by the affirmative vote of a majority of the remaining directors,
though less than a quorum of the Board of Directors. If the vacancy occurs
less than sixty days before the annual meeting of stockholders, the director
<PAGE>
shall serve until the annual meeting succeeding the next annual meeting of
stockholders, at which such meeting the stockholders shall appoint the
director to fill the term of director If the vacancy occurs greater than
sixty days before the annual meeting of stockholders, the director shall serve
until the next annual meeting of stockholders at which such meeting the
stockholders shall appoint the director to fill the term. If the size of the
Board of Directors is enlarged or increased and a director is appointed to
fill the new directorship, the Board of Directors may designate the term of
the director appointed to fill the new directorship. No decrease in the size
of the Board of Directors shall shorten the term of any incumbent director.
Section 3.10 Committees. The Board of Directors, by resolution or
resolutions passed by three-fourths of the entire Board of Directors, may
designate from among its members an executive committee and other committees,
each consisting of three or more directors, and each of which, to the extent
provided in the Certificate of Incorporation, the By-Laws and in such
resolution or resolutions, shall have the authority of the Board of Directors,
except as may be provided otherwise by law. The Chairman of the Board and the
President shall be members ex officio of any executive committee or finance
committee. An executive committee or any other committee shall act only at
such times as the Board of Directors is not in session and in no case to the
exclusion of the right of the Board of Directors at any time to act as a Board
upon any business of the Corporation. Each such committee shall cease to
exist and function in any capacity upon the termination of its authority by
resolution or resolutions passed by a majority of the entire Board of
Directors.
All action by any committee of the Board of Directors shall be referred
to the Board of Directors at its meeting next succeeding such action, and
shall be subject to revision or alteration by the Board of Directors, provided
that no rights or acts of third parties shall be affected by any such revision
or alteration. Subject to such applicable resolutions as may be adopted by
the Board, each committee shall fix its own rules of procedure and shall meet
where and as provided in such rules, but in any case the presence of a
majority shall be necessary to constitute a quorum.
ARTICLE IV
OFFICERS
Section 4.1. Elected Officers. The elected officers of the Corporation
shall be a Chairman of the Board, President, one or more Vice Presidents (the
number thereof to be determined by the Board of Directors and one or more of
whom may be designated as Executive Vice President), a Secretary, a Corporate
Record Keeper, a Treasurer, and one or more Assistant Secretaries and one or
more Assistant Treasurers (the number thereof to be determined by the Board of
Directors). Any two or more offices may be held by the same person, except
the offices of President and Secretary or Assistant Secretary. The Board of
Directors may create such other office or offices from time to time as shall
in its judgment be necessary or convenient and shall have power to prescribe
the duties and authority of the officers elected thereto by the Board of
Directors.
<PAGE>
Section 4.2. Election and Term of Office. The elected officers of the
Corporation shall be elected annually by the Board of Directors at the regular
meeting of the Board of Directors held after each annual meeting of the
stockholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as conveniently may be. Each
officer shall hold office until his successor shall have been duly elected and
shall have qualified or until his death or until he shall resign or shall have
been removed.
Section 4.3. Chairman of the Board. The Chairman of the Board shall be
the chief executive officer of the Corporation and shall preside at all
meetings of the Board of Directors and of the stockholders. He shall exercise
the powers and perform the duties usual to the chief executive officer and
have general responsibility for the business and affairs of the Corporation.
Subject to the control and direction of the Board of Directors, the Chairman
of the Board shall define the Corporation's long-term objectives, and consider
and evaluate particular markets for the Corporation's future activities, as
well as be generally responsible for the business and affairs of the
Corporation. He shall see that all orders and resolutions of the Board of
Directors are carried into effect and shall do and perform such other duties
as from time to time may be assigned to him by the Board of Directors or these
By-laws, and as are incident to the office of the chief executive officer.
The Chairman of the Board shall have the power to execute bonds, mortgages and
other contracts, agreements and instruments of the Corporation.
Section 4.4. President. The President shall be the chief operating and
administrative officer of the Corporation, and subject to the control and
direction of the Board of Directors and the Chairman of the Board, shall
direct, supervise and administer the affairs and daily operation of the
business of the Corporation, including but not limited to supervision of the
operations, performance and direction of the Corporation's subsidiaries and
their activities. In the absence or disability of the Chairman of the Board,
the President shall preside at all meetings of the Board of Directors and of
the stockholders, and otherwise shall exercise all of the duties of the
Chairman of the Board. The President shall have the power to execute bonds,
mortgages and other contracts, agreements and instruments of the Corporation
and to perform such other duties as from time to time may be assigned to him
by the Board of Directors, the Chairman of the Board, or these By-Laws and as
are incident to the office of President.
Section 4.5. Vice Presidents. The Vice Presidents, one or more of whom
may be designated Executive or Administrative Vice Presidents, shall perform
such duties in such capacities or as heads of their respective operating
divisions as may be assigned by the Board of Directors, the Chairman of the
Board or the President and shall report to such person or persons with respect
to the performance of such duties as the Board of Directors, the Chairman of
the Board or the President may from time to time specify. In the absence or
incapacity of the Chairman of the Board and the President, the duties of the
offices of the Chairman of the Board and President shall be performed by the
Vice Presidents in the order of priority established by the Board, and unless
and until the Board of Directors shall otherwise direct.
<PAGE>
Section 4.6. Secretary to the Board of Directors. The Secretary to the
Board of Directors shall have the duty to record the proceedings of the
meetings of the stockholders and directors in a book to be kept for that
purpose, and such other duties as the Board of Directors may delegate to
implement their activities.
Section 4.7. Corporate Record Keeper. The Corporate Record Keeper shall
(a) see that all notices are duly given in accordance with the provisions by
these By-Laws or as required by law; (b) be custodian of the corporate
records and of the seal of the Corporation and see that the seal of the
Corporation is affixed to all documents, the execution of which on behalf of
the Corporation under its seal is duly authorized; (c) keep a register of the
post office address of each stockholder which shall be furnished to the
Corporate Record Keeper by such stockholder; (d) sign with the President or
Vice President, certificates for shares of the Corporation, the issuance of
which shall have been authorized by resolution of the Board of Directors; (e)
have general charge of the stock transfer books of the Corporation; and (f)
in general perform all duties incident to the office of Corporate Record
Keeper and such other duties as from time to time may be assigned to him by
the President or the Board of Directors.
Section 4.8. Treasurer. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his duties in such
sum and with such surety or sureties as the Board of Directors shall
determine. He shall (a) have charge and custody of and be responsible for
all funds and securities of the Corporation, (b) receive and give receipts
for moneys due and payable to the Corporation from any source whatsover, and
deposit all such moneys in the name of the Corporation in such banks, trust
companies or other depositories as shall be selected by the Board of
Directors, and (c) in general perform all of the duties incident to the
office of Treasurer and such other duties as from time to time may be assigned
to him by the President or the Board of Directors.
Section 4.9. Controller. The Board of Directors may elect a Controller
who shall be responsible for all accounting and auditing functions of the
Corporation and who shall perform such other duties as may from time to time
be required of him by the Board of Directors.
Section 4.10. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretary, or any of them if there be more than one, may sign with
the Chairman or Vice-Chairman of the Board of Directors, President or a Vice
President certificates for shares of the Corporation, the issuance of which
shall have been authorized by resolution of the Board of Directors, and may
attest the execution of contracts and other documents on behalf of the
Corporation by duly authorized officers of the Corporation by affixing the
corporate seal to such contracts and other documents. The Assistant
Treasurer, or any of them if there be more than one, shall, if required by the
Board of Directors, give bond for the faithful discharge of his duties with
such sums and with such sureties as the Board of Directors shall determine.
In general, the Assistant Secretaries and Assistant Treasurers shall perform
such duties as shall be assigned to them by the Secretary or the Treasurer,
respectively, or by the President or the Board of Directors. The Assistant
Secretaries in the order of their election, shall, in the absence or
disability of the Secretary, perform the duties and exercise the powers of the
Secretary. The Assistant Treasurers, in order of their election, shall in the
<PAGE>
absence or disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer.
Section 4.11. Appointive Officers. Subject to the approval of the
Chairman of the Board, the President may appoint other officers and agents on
a division basis or otherwise, as such divisions or other operating units are
created by the Board of Directors, and such other officers and agents shall
receive such compensation, have such tenure and exercise such authority as the
President shall specify. All appointments made by the President hereunder and
all terms and conditions thereof must be reported to the Board of Directors.
No appointive officer shall have any contractual rights against the
corporation for compensation by virtue of such appointment beyond the date of
the appointment of his successor, his death, his resignation, or his removal,
whichever event shall first occur, except as otherwise provided in an
employment contract or under an employee deferred compensation plan.
Section 4.12. Salaries. The salaries of the elected officers shall be
fixed from time to time by the Board of Directors and no officer shall be
prevented from receiving such salary by reason of the fact that he is also a
director of the Corporation.
Section 4.13. Removal. Any officer elected by the Board of Directors
may be removed by the vote of three-fourths of the entire Board of Directors.
No elected officer shall have any contractual rights against the Corporation
for the compensation by virtue of such election beyond the date of the
election of his successor, his death, his resignation or his removal,
whichever event shall first occur, except as otherwise provided in an
employment contract or under an employee deferred compensation plan.
Section 4.14. Vacancies. A newly created office or a vacancy in any
office because of death, resignation, or removal may be filled by the Board of
Directors for the unexpired portion of the term at any meeting of the Board of
Directors.
ARTICLE V
STOCK CERTIFICATES AND TRANSFERS
Section 5.1. Certificates for Shares. Certificates representing shares
of the Corporation shall be in such form as shall be determined by the Board
of Directors. Such certificates shall be signed by the Chairman or Vice-
Chairman of the Board of Directors, or the President or a Vice President, and
by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary and sealed with the corporate seal. All certificates for shares
shall be consecutively numbered or otherwise identified. The name and address
of the person to whom the shares are issued and dates of issue, shall be
entered on the stock transfer books of the Corporation. All certificates
surrendered to the Corporation for transfer shall be canceled and no new
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and canceled, except that in case of a
lost, destroyed or mutilated certificate a new one may be issued therefor upon
<PAGE>
such terms and indemnity to the Corporation as the Board of Directors may
prescribe.
Section 5.2. Transfer of Shares. Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the
holder or record thereof or by his legal representative, who shall furnish
proper evidence of authority to transfer, or by his attorney thereunto
authorized by a power of attorney duly executed, and on surrender for
cancellation of the certificate for such shares. The person in whose name
shares stand on the books of the Corporation shall be deemed by the
Corporation to be the owner thereof for all purposes.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1. Fiscal Year. The fiscal year of the Corporation shall
begin on the first day of July and end on the thirtieth day of June of each
year.
Section 6.2. Dividends. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in
the manner and upon the terms and conditions provided by law and its
Certificate of Incorporation.
Section 6.3. Seal. The corporate seal may bear the emblem of some
object, and shall have inscribed thereunder the words "Corporation Seal" and
around the margin thereof the words "QUIXOTE CORPORATION, Delaware".
Section 6.4. Waiver of Notice. Whenever any notice is required to be
given to any stockholders or any director of the Corporation under the
provisions of the General Corporation Law of the State of Delaware, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. Neither the business to be transacted at, nor the
purpose of, any annual or special meeting of the stockholders or the Board of
Directors need be specified in any waiver of notice of such meeting.
Section 6.5. Audits. In the discretion of the Board of Directors the
accounts, books and records of the Corporation may be audited upon the
conclusion of each fiscal year by an independent certified public accountant
selected by the Board of Directors.
Section 6.6. Resignations. Any director or any officer, whether elected
or appointed, may resign at any time by serving written notice of such
resignation on the President or the Secretary, and such resignation shall be
deemed to be effective as of the close of business on the date said notice is
received by the President or Secretary. No formal action shall be required of
the Board of Directors or the stockholders to make any such resignation
effective.
Section 6.7. Public Contracts. The following officers of the
Corporation, or any of them, or any other person from time to time designated
in writing by any one of said officers, are authorized to offer, make, sign,
<PAGE>
execute, submit, deliver and perform for and on behalf of the Corporation, or
any operating divisions thereof, any bid or proposal or agreement or contract
of this Corporation in connection with the offer for sale or sale of products
or property to the United States, any state, any municipality, or any
political subdivision, department, division, authority, commission or agency
of any thereof, and to include in such bid, proposal, agreement or contract,
or in any or all of them, any certificate as to non-collusion required by
applicable law, as the act and deed of the Corporation, and for any
inaccuracies or misstatements in such certificate the Corporation shall be
liable under the penalties of perjury:
The Chairman of the Board, the President, any Vice President,
the Secretary, the Treasurer, any Assistant Secretary, any
Assistant Treasurer, or any appointed divisional President or
Vice President.
ARTICLE VII
AMENDMENTS
Section 7.1. Amendments. The Board of Directors may make, alter, amend
or repeal any of the By-Laws by the affirmative vote of at last a majority of
the members of the entire Board of Directors as fixed by Section 3.2 of
Article III of these By-Laws.
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
Section 8.1. Indemnification of Directors and Officers. Except as
prohibited by law, each person who was or is a party or threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative including an internal
corporation investigation or appeal ("Proceeding"), by reason of the fact that
he is or was a director or officer of the Corporation or is or was serving at
the request of the Corporation as a director, officer, fiduciary or trustee of
another corporation, partnership, joint venture, trust, employee benefit plan,
or any other enterprise, shall be indemnified against expenses, attorneys'
fees and disbursements, judgments, fines, excise taxes, other penalties, and
amounts paid in settlement actually and reasonably incurred by him in
connection with such Proceeding to the full extent permitted by law. Such
indemnification shall extend to the payment of judgments against the directors
and officers and to reimbursement of amounts paid in settlement of such claims
or actions, and may apply to judgments in favor of the Corporation or amounts
paid in settlement to the Corporation.
The foregoing right of indemnification shall inure to each such director and
officer, whether or not he is a director or officer at the time such cost or
expenses are imposed or incurred, and whether or not the claim asserted
against him is based on acts or omissions which occurred prior to or after the
adoption of this By-law if the Proceeding is commenced after the adoption
hereof, and in the event of his death, shall extend to his heirs, executors,
and administrators. If the director or officer is determined to be not
entitled to full indemnification, he shall have the right to partial
indemnification to the full extend permitted by law. The right of
<PAGE>
indemnification provided in this Article shall not be exclusive of any other
rights to which such director or officer may be entitled. The foregoing
provisions of this Section 8.1 shall be deemed to be a contract between the
Corporation and each director and officer who serves in such capacity at any
time while this Article VIII and the relevant provisions of the General
Corporation Law and other applicable law, if any, are in effect, and any
repeal or modification thereof shall not affect any rights or obligations then
existing, with respect to any state of facts then or theretofore existing, or
any Proceeding theretofore, or thereafter brought or threatened based in whole
or in part upon any such state of facts.
Section 8.2. Indemnification of Other Persons. Except as prohibited by
law, each person who was or is a party or threatened to be made a party to any
Proceeding by reason of the fact that he is or was an employee or agent of the
Corporation or is or was serving at the request of the Corporation as an
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise, may be entitled to indemnification
against expenses, attorneys' fees and disbursements, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with the expense or settlement of such Proceeding to the fullest
extent permitted by law; provided that such employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
interests of the Corporation or such other entity and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful.
Section 8.3. Advancement of Expenses. Expenses incurred with respect to
any Proceeding shall be paid by the Corporation to any person entitled to
indemnification pursuant to Sections 8.1 or 8.2 in advance of the final
disposition of such Proceeding, upon receipt of an undertaking by or on behalf
of the recipient to repay such amount if it is ultimately determined that he
is not entitled to be indemnified by the Corporation.
Section 8.4. Insurance and Funding. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
trustee, employee, or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, trustee, employee, or agent
of another corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability.
The Corporation may create a trust fund, grant a security interest or use
other means (including, without limitation, a letter of credit) to assure the
payment of such sums as may become necessary to effect the indemnification
provided herein.
<PAGE>
EXHIBIT 10 (a)
KEY EMPLOYEE SEVERANCE AGREEMENT
THIS AGREEMENT is made and entered into as of the 30th day of April,
1996, by and between QUIXOTE CORPORATION, a Delaware corporation (hereinafter
referred to as the "Company"), and LESLIE J. JEZUIT, of Chicago, Illinois
(hereinafter referred to as the "Executive").
RECITALS:
WHEREAS, the Executive is an elected officer of the Company and, by
reason of his age, experience and management record, is an attractive
candidate for recruitment by other business entities seeking highly qualified
management personnel; and
WHEREAS, the Executive is satisfied with his current position and future
opportunities with the Company under the current corporate management but, in
view of the increasing incidence of corporate takeovers and resultant changes
in corporate management, feels compelled to consider seriously alternative
opportunities outside the Company while he is at the optimum age for any such
change unless the Company is willing to provide adequate protection to the
Executive; and
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the Executive'0s contribution to the growth and success of the Company
has been, and is expected to continue to be, substantial and desires to assure
the Executive of fair treatment if that relationship is terminated after a
change in control of the Company; and
WHEREAS, the Company desires to provide such assurance by providing to
the Executive a lump sum payment if he is terminated after a change in control
of the Company;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, the parties hereto
do hereby agree as follows:
1. No Guaranty or Obligation of Employment. The Executive shall have
no rights under this Agreement unless and until there is a "change in control"
of the Company as defined in Section 4 hereof. Nothing in this Agreement
shall: (a) obligate the Executive to remain employed with the Company, (b)
confer upon the Executive any right to continue in the employ of the Company
or any of its subsidiaries, or (c) interfere with or restrict in any way the
rights of the Company, which are hereby expressly reserved, to discharge the
Executive at any time prior to the date of the change in control of the
Company (as defined below) for any reason whatsoever, with or without cause.
2. Term of Agreement. The term of this Agreement shall commence on
the date hereof and shall continue in effect through April 30, 1998
("Expiration Date"); provided, however, that commencing on April 30, 1997, and
each April 30 thereafter, the term of this Agreement shall automatically be
extended for one additional year, to a new Expiration Date, unless, not later
than the October 30 that shall occur approximately eighteen (18) months
preceding the Expiration Date, or any new Expiration Date, the Chairman of the
Board and Chief Executive Officer of the Company, with the approval of its
Board, shall have given notice that the Company does not wish to extend this
Agreement; and provided, further, that if a change in control of the Company,
as defined below, shall have occurred during the original or extended term of
this Agreement, the Expiration Date of this Agreement shall be a date not
earlier than the date twenty-four (24) months after the date on which such
change in control occurred.
3. Termination Following Change in Control.
(a) If any of the events described in Section 4 hereof
constituting a change in control of the Company shall have occurred during the
original or extended term of this Agreement, and subsequent to such change in
control of the Company, the Executive's employment with the Company is
terminated during such term, the Executive shall receive the benefits provided
in Section 5 hereof, provided, however, that the Executive shall not be
entitled to such benefits if such termination is (i) by the Company upon the
death of the Executive or the Executive's Disability, as defined in subsection
<PAGE>
(b) hereof, (ii) by the Company for Cause, as defined in subsection (c)
hereof, or (iii) by the Executive, other than for Good Reason, as defined in
subsection (d) hereof. The Executive shall not be entitled to any of the
payments provided hereunder if his employment is terminated for any reason
prior to the date on which a change in control of the Company, as defined
below, shall have occurred.
(b) Definition of "Disability". For purposes of this Agreement,
an Executive's "Disability" shall occur if the Executive is absent from his
duties as an employee of the Company on a full-time basis for six (6)
consecutive months following a change in control of the Company (as
hereinafter defined), and if he qualifies for long-term disability under the
Company's long-term disability insurance plan.
(c) Definition of "Cause". For purposes of this Agreement, the
Company shall have "Cause" to terminate the Executive's employment upon (i)
the willful failure by the Executive to substantially perform his duties,
other than such failure resulting from the Executive's incapacity due to
physical or mental illness, or (ii) the willful engaging by the Executive in
gross misconduct materially and demonstrably injurious to the Company or its
subsidiaries. For the purpose of this subsection (c), 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) and (ii),
above, 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) or
(ii) of the first sentence of this subsection (c) and specifying the
particulars thereto in detail.
(d) Good Reason. For purposes of this Agreement, "Good Reason"
shall mean any one of the following occurrences, but only if they occur after
a change in control of the Company:
(i) The Executive is assigned any duties which are inconsistent
with his position as President of the Company (the "Position"); or
(ii) The Executive is removed from, or the Executive is not re-
elected or re-appointed to, the Position, except in connection with
termination of the Executive's employment for Cause; or
(iii) The Executive's annual compensation is reduced below the
Executive's total compensation as reported to him on his Form W-2 for the
preceding year; or
(iv) The Company fails to obtain the assumption as well as the
agreement to perform this Agreement by any successor as contemplated in
Section 8 hereof; or
(v) Any purported termination of the Executive's employment is
not effected pursuant to a Notice of Termination satisfying the requirements
of subsection (e) below (and, if applicable, subsection (c), above); and for
purposes of this Agreement, no such purported termination shall be effective.
The Executive may terminate his employment for Good Reason only within twelve
(12) months of the action or condition which amounts to Good Reason, as
defined hereinabove.
(e) Notice of Termination. Any termination of the employment of
the Executive by the Company after a change in control of the Company or by
the Executive for Good Reason as defined in subsection (d) above shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the facts and circumstances which are claimed to provide
a basis for termination of the Executive's employment.
(f) Date of Termination. For purposes of this Agreement, "Date
of Termination" shall mean (i) if the Executive's employment is terminated by
the Executive for Good Reason, the date specified in the Notice of
Termination, and (ii) if the Executive's employment is terminated after a
<PAGE>
change in control in the Company for any other reason, the date on which a
Notice of Termination is delivered to the Executive provided that if within
fifteen (15) days after any Notice of Termination is given, or, if later,
prior to the Date of Termination (as determined without regard to this
proviso), the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, and if the disputed
termination occurs after a change in control of the Company, the Date of
Termination shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); provided
further that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendence of any such dispute, if the disputed termination
occurs after a change in control of the Company occurs, the Company will
continue to pay the Executive his full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited to, base
salary) and the Executive shall continue as a participant in all compensation,
benefit and insurance plans of the Company in which he was the Executive was
participating when the notice giving rise to the dispute was given, until the
dispute is finally resolved in accordance with this subsection. Amounts paid
under this subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due
under this Agreement.
4. Change in Control. For purposes of this Agreement, a "change
in control of the Company" 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 of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended ("Exchange Act"); provided, that, without limitation, such a change in
control shall be deemed to have occurred if:
(a) any "person" (as such term is used in Section 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 twenty percent (20%) or more of the combined voting
power of the Company's then outstanding securities; or
(b) during any period of two consecutive years, individuals who at
the beginning of such period constitute all members of the Board of Directors
of the Company 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 unless the election of each Outside Director, who was not an Outside
Director at the beginning of the period, was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who were Directors at
the beginning of the period; or
(c) there shall be consummated (i) 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 (ii) 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
(d) the stockholders of the Company approve a plan or proposal for
the liquidation or dissolution of the Company.
5. Compensation Upon Termination After A Change In Control. If,
following a change in control of the Company during the term of this
Agreement, the Executive's employment is terminated for any reason other than
those described in subsections (i), (ii) or (iii) of Section 3(a) above, then
the following provisions shall apply:
(a) The Company shall continue to pay to the Executive his full
Base Salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given (but only to the extent such amount is not
payable pursuant to Section 3(f) hereof) and, in lieu of any further salary
payments to the Executive for periods subsequent to the Date of Termination,
<PAGE>
the Company shall pay as liquidated damages to the Executive on the fifth
(5th) day following the Date of Termination, a lump sum amount equal to two
hundred percent (200%) of the sum of the Executive's annual base salary (at
the higher of the rates in effect on the date Notice of Termination is given,
or on the date on which a change in control of the Company occurs) plus the
average of the bonus payments made to the Executive by the Company for the two
(2) full fiscal years preceding the fiscal year in which the Notice of
Termination is given. Any amount payable pursuant to the preceding sentence
shall be reduced by the present value of any other payment or payments made
to, or on behalf of, the Employee 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 ("Code").
(b) The Company shall maintain in full force and effect at its
expense for a period of one (1) year after the Date of Termination all group
insurance plans in which the Executive was entitled to participate immediately
prior to the Date of 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,
substantially similar to those provided under such plans.
6. Mitigation of Damages. The Executive shall not be required to
mitigate the amount of any payment provided for in Section 5 by seeking other
employment or otherwise, nor shall the amount of any payment provided for in
Section 5 be reduced by any compensation earned by the Executive as a result
of employment by another employer after the Date of Termination, or otherwise.
7. Legal Fees. The Company shall pay, or reimburse the Executive
for, all legal fees and expenses incurred by the Executive as a result of any
termination of the Executive after a change in control of the Company
(including all such fees and expenses, if any, incurred contesting or
disputing in good faith any such termination or in seeking to obtain or
enforce any right or benefit provided by this Agreement).
8. Successors: Binding Agreement.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all, or
substantially all, of the business and/or assets of the Company, by agreement
in form and substance satisfactory to the Executive, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession has taken
place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in the same
amount and on the same terms as he would be entitled to hereunder if he
terminated his employment for Good Reason, except for purposes of implementing
the foregoing, the date on which any such succession becomes effective shall
be deemed the Date of Termination. As used in this Agreement, "Company" shall
mean the Company as hereinbefore defined and any successor to the business
and/or assets as of the Company which executes and delivers the agreement
provided for this Section 8, or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law.
(b) This Agreement and all rights of the Executive hereunder
shall inure to the benefit of, and be enforceable by the Executive's personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die after any
amounts shall become payable to him hereunder, all such amounts, unless
otherwise provided for herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee or other designee or, if
there be no such devisee, legatee or other designee, to the Executive's
estate.
9. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Chicago, Illinois, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award
in any court having jurisdiction; provided, however, that the Executive shall
be entitled to seek specific performance of his right to be paid until the
Date of Termination during the pendency of any dispute or controversy arising
under or in connection with this Agreement.
<PAGE>
10. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when mailed by United States certified
mail, return receipt requested, postage prepaid, addressed as follows:
If, to the Executive:
Leslie J. Jezuit
405 North Wabash
Apartment 3411
Chicago, IL 60611
If, to the Company:
Chairman
Quixote Corporation
One East Wacker Drive
Suite 3000
Chicago, Illinois 60601
or to such other address as either party may have furnished to the other in
writing at the address provided above, except that notices of change of
address shall be effective only upon receipt.
11. Miscellaneous. This Agreement constitutes the entire Key
Employee Severance Agreement between the Executive and the Company; provided,
however, this Agreement shall not amend, modify, or supersede in any way the
letter agreement between the Company and Executive as attached as Exhibit
10(d) to the Company's 10-Q report for the quarter ended December 31, 1995
filed with the Securities and Exchange Commission. No provisions of this
Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and is signed by the
Executive and by an authorized officer of the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or of
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the
substantive laws of the State of Illinois. All reference to sections of the
Exchange Act or the Code also shall be deemed to refer to any successor
provisions of such sections.
12. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
Executed as of this 30th day of April, 1996 in three (3) counterpart
originals.
QUIXOTE CORPORATION
By: Philip E. Rollhaus Jr.
----------------------------
/s/ Philip E. Rollhaus Jr.
Its: Chairman
----------------------------
ATTEST:
By: James H. DeVries
-------------------------------
/s/ James H. DeVries
Its: Secretary
-------------------------------
<PAGE>
EXECUTIVE
By: Leslie J. Jezuit
----------------------------
/s/ Leslie J. Jezuit
<PAGE>
EXHIBIT 11
QUIXOTE CORPORATION AND SUBSIDIARIES
Computation of Net Earnings Per Average Common
and Common Equivalent Share
<TABLE>
<CAPTION>
For the Three Months Ended
March 31, 1996
--------------------------
Fully
Primary Diluted
------------ ------------
<S> <C> <C>
Net loss as reported $ (1,801,000) $ (1,801,000)
Add interest expense and deferred charge
amortization (net of income taxes) 245,000 (1)
------------ ------------
Adjusted net loss for computation (A) $ (1,801,000) $ (1,556,000)
============ ============
Average common shares outstanding would be
adjusted for the additional shares that
would be issued assuming conversion of the
debentures and exercise of stock options
as follows:
Weighted average shares outstanding 7,870,501 7,870,501
Shares assumed issued upon conversion of
debentures 1,051,316
Incremental shares outstanding assuming
exercise of stock options using the
treasury stock method 99,168 99,168
----------- -----------
Average common and common equivalent shares
outstanding (B) 7,969,669 9,020,985
=========== ===========
Net loss per common and common
equivalent share (A/B) $ (.23) $ (.17)
=========== ===========
<FN>
Notes:
(1) The net loss for the fully diluted calculation is adjusted for interest expense
and deferred charge amortization, assuming exercise of the conversion privilege on
the 8% convertible debentures.
</TABLE>
<PAGE>
EXHIBIT 11
QUIXOTE CORPORATION AND SUBSIDIARIES
Computation of Net Earnings Per Average Common
and Common Equivalent Share
<TABLE>
<CAPTION>
For the Nine Months Ended
March 31, 1996
-----------------------------
Fully
Primary Diluted
------------- -------------
<S> <C> <C>
Net loss as reported $ (12,046,000) $ (12,046,000)
Add interest expense and deferred charge
amortization (net of income taxes) 735,000 (1)
------------- -------------
Adjusted net loss for computation (A) $ (12,046,000) $ (11,311,000)
============= =============
Average common shares outstanding would be
adjusted for the additional shares that
would be issued assuming conversion of the
debentures and exercise of stock options
as follows:
Weighted average shares outstanding 7,865,538 7,865,538
Shares assumed issued upon conversion of
debentures 1,051,316
Incremental shares outstanding assuming
exercise of stock options using the
treasury stock method 99,168 99,168
------------ -----------
Average common and common equivalent shares
outstanding (B) 7,964,706 9,016,022
============ ===========
Net loss per common and common
equivalent share (A/B) $ (1.51) $ (1.25)
============ ===========
<FN>
Notes:
(1) The net loss for the fully diluted calculation is adjusted for interest expense
and deferred charge amortization, assuming exercise privilege on the 8% convertible
debentures.
</TABLE>
<PAGE>
EXHIBIT 11
QUIXOTE CORPORATION AND SUBSIDIARIES
Computation of Net Earnings Per Average Common
and Common Equivalent Share
<TABLE>
<CAPTION>
For the Nine Months Ended
March 31, 1995
-------------------------
Fully
Primary Diluted
---------- ----------
<S> <C> <C>
Net earnings as reported $4,674,000 $4,674,000
Add interest expense and deferred charge
amortization (net of income taxes) 735,000 (1)
---------- ----------
Adjusted net earnings for computation (A) $4,674,000 $5,409,000
========== ==========
Average common shares outstanding would be
adjusted for the additional shares that
would be issued assuming conversion of the
debentures and exercise of stock options
as follows:
Weighted average shares outstanding 7,814,174 7,814,174
Shares assumed issued upon conversion of
debentures 1,051,316
Incremental shares outstanding assuming
exercise of stock options using the
treasury stock method 344,723 344,723
Shares issuable for retirement plan
--------- ---------
Average common and common equivalent shares
outstanding (B) 8,158,897 9,210,213
========= =========
Net earnings per common and common
equivalent share (A/B) $ .57 $ .59
======== =========
<FN>
Notes:
(1) Net earnings for the fully diluted calculation are adjusted for interest
expense and deferred charge amortization, assuming exercise of the conversion
privilege on the 8% convertible debentures.
</TABLE>
<PAGE>
EXHIBIT 11
QUIXOTE CORPORATION AND SUBSIDIARIES
Computation of Net Earnings Per Average Common
and Common Equivalent Share
<TABLE>
<CAPTION>
For the Three Months Ended
March 31, 1995
-------------------------
Fully
Primary Diluted
---------- ----------
<S> <C> <C>
Net earnings as reported $1,709,000 $1,709,000
Add interest expense and deferred charge
amortization (net of income taxes) 245,000 (1)
---------- ----------
Adjusted net earnings for computation (A) $1,709,000 $1,954,000
========== ==========
Average common shares outstanding would be
adjusted for the additional shares that
would be issued assuming conversion of the
debentures and exercise of stock options
as follows:
Weighted average shares outstanding 7,816,266 7,816,266
Shares assumed issued upon conversion of
debentures 1,051,316
Incremental shares outstanding assuming
exercise of stock options using the
treasury stock method 344,723 344,723
--------- ---------
Average common and common equivalent shares
outstanding (B) 8,160,989 9,212,305
========= =========
Net earnings per common and common
equivalent share (A/B) $ .21 $ .21
========== =========
<FN>
Notes:
(1) Net earnings for the fully diluted calculation are adjusted for interest
expense and deferred charge amortization, assuming exercise of the conversion
privilege on the 8% convertible debentures.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,355,000
<SECURITIES> 0
<RECEIVABLES> 22,872,000
<ALLOWANCES> 1,279,000
<INVENTORY> 7,436,000
<CURRENT-ASSETS> 3,409,000
<PP&E> 144,291,000
<DEPRECIATION> 53,989,000
<TOTAL-ASSETS> 138,375,000
<CURRENT-LIABILITIES> 21,080,000
<BONDS> 67,500,000
0
0
<COMMON> 143,000
<OTHER-SE> 45,814,000
<TOTAL-LIABILITY-AND-EQUITY> 138,375,000
<SALES> 100,136,000
<TOTAL-REVENUES> 100,136,000
<CGS> 72,122,000
<TOTAL-COSTS> 72,122,000
<OTHER-EXPENSES> 22,533,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,788,000
<INCOME-PRETAX> 678,000
<INCOME-TAX> 258,000
<INCOME-CONTINUING> 420,000
<DISCONTINUED> (12,466,000)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,046,000)
<EPS-PRIMARY> (1.51)
<EPS-DILUTED> (1.51)
</TABLE>
