<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
QUIXOTE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and how it is determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
------------------------
NOTICE AND AGENDA OF THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, NOVEMBER 14, 1996
--------------------
TO THE STOCKHOLDERS OF QUIXOTE CORPORATION:
Notice is hereby given that the Annual Meeting of Stockholders of Quixote
Corporation (the "Company") will be held on Thursday, November 14, 1996, in the
Assembly Room at The Northern Trust Company, 50 South LaSalle Street, Chicago,
Illinois 60675. The meeting, which will commence at 10:00 a.m. Central Standard
Time, will consider:
1. The election of two (2) directors to serve for a three-year term
expiring at the Annual Meeting of Stockholders to be held in 1999; and
2. The approval of Coopers & Lybrand L.L.P. as independent auditors for the
Company.
The Annual Meeting will also transact such other business as may properly
come before it.
Only stockholders of record at the close of business on September 18, 1996,
will be entitled to notice of, and to vote at, the meeting.
Stockholders are encouraged to attend the meeting in person. To ensure that
your shares will be represented, we urge you to vote, date, sign and mail the
enclosed Proxy Card in the envelope which is provided, whether or not you expect
to be present at the meeting. The prompt return of your Proxy Card will be
appreciated. It will also save the Company the expense of a reminder mailing.
IT IS IMPORTANT TO YOU AND TO YOUR COMPANY THAT YOU VOTE YOUR SHARES BY
COMPLETING AND RETURNING THE ENCLOSED PROXY CARD.
WE APPRECIATE YOUR COOPERATION AND WE THANK YOU.
By order of the Board of Directors,
JAMES H. DEVRIES
SECRETARY
Chicago, Illinois
October 2, 1996
<PAGE>
I M P O R T A N T
A PROXY STATEMENT AND PROXY CARD ARE SUBMITTED WITH THIS NOTICE. ALL
STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND TO COMPLETE AND MAIL
THE PROXY CARD PROMPTLY. THE ENCLOSED ENVELOPE FOR THE RETURN OF THE PROXY
CARD REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. A LIST OF
STOCKHOLDERS ENTITLED TO VOTE AT THE ANNUAL MEETING WILL BE AVAILABLE FOR
INSPECTION BY ANY STOCKHOLDER FOR ANY PURPOSE GERMANE TO THE MEETING DURING
ORDINARY BUSINESS HOURS FOR A PERIOD OF TEN DAYS PRIOR TO THE MEETING AT THE
PRINCIPAL OFFICES OF THE COMPANY, ONE EAST WACKER DRIVE, 30TH FLOOR,
CHICAGO, ILLINOIS.
<PAGE>
[Quixote Logo]
OCTOBER 2, 1996
------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, NOVEMBER 14, 1996
--------------------
PROXY SOLICITATION
This Proxy Statement is furnished to stockholders of Quixote Corporation
(the "Company"), on or about October 2, 1996, in connection with the
solicitation of proxies on behalf of the Board of Directors to be voted at the
Annual Meeting of Stockholders on Thursday, November 14, 1996, at 10:00 a.m.,
Central Standard Time, in the Assembly Room at The Northern Trust Company, 50
South LaSalle Street, Chicago, Illinois 60675, and at any adjournment thereof.
The person voting the enclosed proxy may revoke it at any time before it is
exercised by writing to the Secretary of the Company at its principal office,
One East Wacker Drive, Chicago, Illinois 60601, or by attending the Annual
Meeting and voting in person, in which case any prior proxy given will be
automatically revoked.
Properly executed proxies received prior to the meeting will be voted at the
meeting. If a stockholder designates how the proxy is to be voted on any
business to come before the meeting, the signed proxy will be voted in
accordance with such designation. If a stockholder fails to designate how his
proxy should be voted, the signed proxy will be voted for the election of the
nominees named below as Directors and for the approval of Coopers & Lybrand
L.L.P. as the Company's independent auditors.
The Company will bear the cost of this proxy solicitation, including the
charges and expenses of brokerage firms and others which forward material to
beneficial owners. Proxies may be solicited in person or by mail, telephone or
telegraph. Proxies may also be solicited by certain Directors, Officers and
regular Company employees.
VOTING AT THE ANNUAL MEETING
Stockholders of record owning the Company's common stock, $.01-2/3 par value
("Common Stock"), at the close of business on September 18, 1996, will be
entitled to vote at the Annual Meeting. On that date, 7,961,680 shares of Common
Stock were outstanding. Each outstanding share of Common Stock entitles the
holder to one vote upon each matter presented at the Annual Meeting. Shares
voted as abstentions on any matter (or a "withhold vote for" as to directors)
will be counted as shares that are present and entitled to vote for purposes of
determining a quorum at
1
<PAGE>
the meeting and as unvoted, although present and entitled to vote, for purposes
of determining the approval of each matter as to which the shareholder has
abstained. Abstentions and withheld votes have the effect of votes against a
matter. If a broker submits a proxy that indicates the broker does not have
discretionary authority as to certain shares to vote on one or more matters,
those shares will be counted as shares that are present and entitled to vote for
purposes of determining a quorum at the meeting, but will not be considered as
present and entitled to vote with respect to such matters. Accordingly, broker
non-votes will have no effect on such matters.
While the Notice of Annual Meeting calls for the transaction of such other
business as may properly come before the meeting, management has no knowledge of
any matters to be presented for action by the stockholders except as already set
forth. The enclosed proxy gives discretionary authority to the persons holding
those proxies to vote in accordance with their best judgment as to any other
business.
ELECTION OF DIRECTORS
At the Annual Meeting, two (2) Directors are to be elected to serve three
year terms until the Annual Meeting to be held in 1999 and until their
successors are elected and qualified. The Company is soliciting proxies to vote
for its nominees, Philip E. Rollhaus, Jr. and David S. Ruder, as Directors of
the Company.
All proxies will be voted in accordance with the stated instructions. If any
nominee ceases to be a candidate for election for any reason, the proxy will be
voted for a substitute nominee designated by the Board. The Board of Directors
currently has no reason to believe that any nominee will be either unwilling or
unable to serve as a Director if elected. Proxies given by stockholders cannot
be voted for more than two (2) persons. The nominees for Director will be
elected if they receive the affirmative vote of at least sixty percent (60%) of
all votes entitled to be cast at this meeting.
INFORMATION CONCERNING NOMINEES FOR DIRECTOR AND DIRECTORS CONTINUING IN OFFICE.
The information appearing in this section in regard to age and principal
occupation or employment has been furnished to the Company by the respective
nominees for Director and by the respective Directors continuing in office.
Information relating to the beneficial ownership of the Company's Common Stock
by Directors and nominees for Director is set forth in the table on page 13.
NOMINEES FOR DIRECTOR FOR A THREE-YEAR TERM
EXPIRING IN 1999
PHILIP E. ROLLHAUS, JR.
Mr. Rollhaus, 62, is Chairman of the Board and the Chief Executive Officer
of the Company. Mr. Rollhaus has served in these capacities and as a Director of
the Company since the Company was founded in July 1969. Mr. Rollhaus also served
as President of the Company from July 1969 until Mr. Leslie J. Jezuit's
appointment to that office in January 1996. Mr. Rollhaus is Chairman and Chief
Executive Officer of Energy Absorption Systems, Inc. and Disc Manufacturing,
Inc., both wholly-owned subsidiaries of the Company.
DAVID S. RUDER
Mr. Ruder, 67, is a professor of law at Northwestern University School of
Law in Chicago and a senior counsel with the law firm of Baker & McKenzie. Mr.
Ruder also serves as a director of Rodman and Renshaw Capital Group, Inc. From
1987 through 1989, he served as Chairman of the U.S. Securities and Exchange
Commission. Mr. Ruder has served as a Director of the Company since May 1990 and
is a member of the Audit/Compensation Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE ELECTION OF MR.
ROLLHAUS AND MR. RUDER AS DIRECTORS OF THE COMPANY.
2
<PAGE>
DIRECTORS CONTINUING IN OFFICE
JAMES H. DEVRIES
Mr. DeVries, 64, is Executive Vice President and Secretary of the Company.
Mr. DeVries has served as a Director of the Company since July 1969. Mr. DeVries
serves as Vice Chairman and Secretary of Disc Manufacturing, Inc. and as
Secretary of Energy Absorption Systems, Inc. His current term as Director
expires at the Annual Meeting to be held in 1997.
LAWRENCE C. MCQUADE
Mr. McQuade, 69, is Chairman of Qualitas International (since 1994). Mr.
McQuade also is a Director of Applied Bioscience International, Inc. (since
1995), of Bunzl P.L.C. (since 1991) and of Country Baskets Index Fund (since
February 1996). Mr. McQuade is the former Vice Chairman of Prudential Mutual
Fund Management, Inc. and Managing Director of Investment Banking for Prudential
Securities Incorporated, positions which he held from 1988 through April 1995.
In 1987, he was Chairman and Chief Executive Officer of Universal Money Centers,
Inc. Mr. McQuade formerly served as Executive Vice President and Director of
W.R. Grace & Co. from 1975 to 1987. He was formerly a Director of KaiserTech
Limited, and Kaiser Aluminum and Chemical Corp. (March 1987-November 1988) and
Crazy Eddie, Inc. (1987-1990). Mr. McQuade served as Chairman of the Czech &
Slovak American Enterprise Fund from August 1995 to March 1996. Mr. McQuade has
served as a Director of the Company since February 1992 and is a member of the
Audit/Compensation Committee. His current term as Director expires at the Annual
Meeting to be held in 1997.
WILLIAM G. FOWLER
Mr. Fowler, 68, is an attorney at, and a shareholder of, the law firm of Van
Cott, Bagley, Cornwall & McCarthy of Salt Lake City, Utah. He joined the Board
in January 1973. Mr. Fowler is the Chairman of the Audit/Compensation Committee.
His current term as Director expires at the Annual Meeting to be held in 1998.
ROBERT D. VAN ROIJEN, JR.
Mr. van Roijen, 57, has been the President of Tox Financial Company, a
private investment firm, since 1988. He was formerly associated with Control
Laser Corporation, serving in various capacities from 1977 to 1987, including as
Chairman of the Board and as President and Chief Executive Officer. Mr. van
Roijen is also a director of Sonex Research, Inc.; Commonwealth Scientific;
Applied Digital Technology; St. Leonard's Corporation; and Security Storage
Company, and is a former director of AMBAR Corp.; Proclosure, Inc.; Clinical
Diagnostics Systems; Cynthia Gibson, Inc.; KuwAm Corporation, and Secor
Investments. Mr. van Roijen has served as a Director of the Company since May
1993 and is a member of the Audit/Compensation Committee. His current term as
Director expires at the Annual Meeting to be held in 1998.
AUDIT/COMPENSATION COMMITTEE
The Audit/Compensation Committee recommends the accounting firm to be
employed as the Company's independent auditors to the Board; consults with the
auditors regarding the audit; reviews the auditors' report or proposed report
and resulting letter of comments to management; consults with the auditors and
management regarding the adequacy of internal controls; determines adjustments
to salaries, bonuses and other forms of compensation (including stock option
grants) afforded the principal Officers of the Company and its subsidiaries; and
considers any other matter relating to the Company's affairs that the Committee,
in its discretion, deems appropriate. The Audit/Compensation Committee had four
meetings during fiscal 1996.
The Board of Directors does not have a nominating committee. The Board of
Directors as a whole performs the functions normally performed by nominating
committees.
3
<PAGE>
REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
In fiscal 1996, Directors who were also employees of the Company were paid a
fee of $1,000 for each day of scheduled meetings of the Board, plus expenses.
Non-employee Directors were paid a fee of $2,000 for each day of scheduled
meetings of the Board and the Audit/Compensation Committee, plus traveling and
related expenses, and $500 for each telephone conference meeting. There were
nine scheduled meetings (ten meeting days) and five telephone conference
meetings of the Board in fiscal 1996. There was one scheduled meeting and three
telephone conference meetings in fiscal 1996 of the Audit/Compensation
Committee.
Present and future Directors are eligible to receive stock options as
granted from time to time by the Board of Directors pursuant to the Company's
1991 Director Stock Option Plan (the "Director Plan"), subject to certain annual
and lifetime limits on the number of shares any individual Director may receive.
Options are granted under the Director Plan at 100% of fair market value on the
grant date and require continued service as a Director for at least a year from
the grant date as a condition of exercise. On April 30, 1996, the Company
granted each of the Directors options to purchase 2,000 shares of Common Stock
at $6.875 per share.
The Company maintains accidental death and disability insurance coverage in
the amount of $500,000 on behalf of each of the non-employee Directors, payable
to the designated beneficiary of each Director. The Company paid premiums of
$341.00 for each Director to provide such insurance in fiscal 1996.
SUMMARY COMPENSATION TABLE
The following table summarizes the total compensation earned or paid for
services rendered in all capacities during each of the years ended June 30,
1996, 1995 and 1994, by the named Executive Officers.
4
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------------------
------------------------------------------------- RESTRICTED
OTHER ANNUAL STOCK OPTIONS/
SALARY BONUS COMPENSATION(1) AWARD(S)(2) SARS
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#)
- --------------------------------------- --------- --------- --------- ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Philip E. Rollhaus, Jr................. 1996 $ 425,000 $ 130,000 $ 101,706 $ 0 42,000
Chairman and Chief Executive 1995 425,000 135,000 180,825 0 27,060
Officer, Quixote Corporation, 1994 405,000 270,000 285,513 0 0
Energy Absorption Systems, Inc. and
Disc Manufacturing, Inc.
Leslie J. Jezuit....................... 1996 137,500 70,000 35,411 0 55,000
President and Chief Operating Officer,
Quixote Corporation; Vice Chairman,
Disc Manufacturing, Inc. (3)
James H. DeVries....................... 1996 270,000 35,000 74,821 0 2,000
Executive Vice President and 1995 270,000 30,000 71,134 0 22,210
Secretary, Quixote Corporation; 1994 257,000 145,000 105,619 0 0
Vice Chairman and Secretary, Disc
Manufacturing, Inc.; Secretary, Energy
Absorption Systems, Inc.
Myron R. Shain......................... 1996 225,000 35,000 60,369 0 10,000
Executive Vice President -- Finance 1995 225,000 80,000 42,674 0 7,765
and Treasurer, Quixote Corporation; 1994 212,800 175,000 69,986 0 0
President, Chief Operating Officer and
Treasurer, Disc Manufacturing, Inc.;
Vice President and Treasurer, Energy
Absorption Systems, Inc.
George D. Ebersole..................... 1996 215,000 100,000 26,506 0 15,000
President and Chief Operating 1995 210,000 125,000 49,085 0 9,710
Officer, Energy Absorption 1994 199,500 145,000 80,499 0 0
Systems, Inc.
<CAPTION>
ALL OTHER
COMPENSATION(4)
NAME AND PRINCIPAL POSITION ($)
- --------------------------------------- -----------------
<S> <C>
Philip E. Rollhaus, Jr................. $ 3,000
Chairman and Chief Executive 3,000
Officer, Quixote Corporation, 34,987
Energy Absorption Systems, Inc. and
Disc Manufacturing, Inc.
Leslie J. Jezuit....................... 0
President and Chief Operating Officer,
Quixote Corporation; Vice Chairman,
Disc Manufacturing, Inc. (3)
James H. DeVries....................... 3,083
Executive Vice President and 3,008
Secretary, Quixote Corporation; 30,050
Vice Chairman and Secretary, Disc
Manufacturing, Inc.; Secretary, Energy
Absorption Systems, Inc.
Myron R. Shain......................... 3,000
Executive Vice President -- Finance 3,126
and Treasurer, Quixote Corporation; 26,370
President, Chief Operating Officer and
Treasurer, Disc Manufacturing, Inc.;
Vice President and Treasurer, Energy
Absorption Systems, Inc.
George D. Ebersole..................... 3,000
President and Chief Operating 3,105
Officer, Energy Absorption 16,422
Systems, Inc.
</TABLE>
- ------------------------------
(1) The amounts disclosed for Messrs. Rollhaus, DeVries, Shain and Ebersole
include cash paid under the Quixote Corporation Long-Term Stock Ownership
Incentive Plan (the "Long-Term Plan") to cover the federal and state taxes
arising from the restricted stock issued in a fiscal year to such persons
pursuant to the Long-Term Plan. The amounts disclosed for Mr. Rollhaus and
Mr. DeVries also include compensation of $10,000 paid to each of them for
their services as Directors of the Company. Perquisites and other personal
benefits for Mr. Jezuit are disclosed, including $29,163 for certain
relocation expenses in moving from Richmond, Virginia to Chicago, Illinois.
In addition to the amount disclosed, Mr. Jezuit received a loan of $145,000
from the Company, also for relocation reasons. The loan, all of which is
outstanding, is due and payable, without interest, on the earlier of Mr.
Jezuit's sale of his former Virginia residence or June 27, 1997. Perquisites
and other personal benefits are disclosed for Mr. DeVries and Mr. Shain,
including an automobile allowance of $20,615 for Mr. DeVries and an
automobile allowance of $15,540 and Exec-U-Care reimbursement of $14,385 for
Mr. Shain. The aggregate amount of perquisites and other personal benefits
for Messrs. Rollhaus and Ebersole did not exceed the lesser of $50,000 or
ten percent (10%) of the total annual salary and bonus reported for each of
them and is therefore not included.
(2) Restricted stock awards were granted to Messrs. Rollhaus, DeVries, Shain and
Ebersole in 1993. The number of shares covered by the restricted stock
awards and the number of shares vested, respectively, are as follows: Mr.
Rollhaus-91,530/73,224; Mr. DeVries-32,410/25,928; Mr. Shain-46,000/18,400;
and Mr. Ebersole-37,037/21,164. The number and value of the restricted stock
holdings, respectively, as of June 30, 1996 were as follows: Mr.
Rollhaus-73,224 shares/$494,262; Mr. DeVries-25,928 shares/ $175,014; Mr.
Shain-18,400 shares/$124,200; and Mr. Ebersole-21,164 shares/$142,857.
Pursuant to the terms of the Long-Term Plan, the remaining restricted stock
covered by the awards granted to Mr. Rollhaus and Mr. DeVries will be issued
on June 30, 1997, subject to the continuation of employment and
transferability restrictions described below. The remaining restricted stock
covered by the awards granted to Mr. Ebersole will be issued in three equal
annual installments and to Mr. Shain in six equal annual installments on
June 30 of the next three and six fiscal years, respectively, subject to the
continuation of employment and transferability restrictions described below,
and subject further to the Company's right to terminate the agreement at any
time after June 30, 1998. In order to receive an annual issuance of
restricted stock, the executive must be employed by the Company or its
subsidiaries on the last day of the fiscal year in which such stock issued
(except in the case of the executive's death, disability or termination of
employment other than for cause). The executive may not sell or transfer any
restricted stock received under the Long-Term Plan until the earlier of the
date his employment is terminated or the date he reaches retirement age
(whether he actually retires at that time or not). Pursuant to the terms of
the Long-Term Plan, dividends are paid only on shares of restricted stock
issued and delivered to the named Executive.
(3) Mr. Jezuit began his employment with the Company on December 29, 1995. Mr.
Jezuit's annual salary is $275,000.
(4) Amounts shown for fiscal 1996 are matching contributions by the Company
under the Company's 401(k) Plan.
5
<PAGE>
STOCK OPTION GRANTS IN FISCAL YEAR 1996
The following table shows the options granted to the named Executive
Officers during fiscal 1996 and the potential realizable value of those grants
(on a pre-tax basis) determined in accordance with SEC rules. The information in
this table shows how much the named Executive Officers may eventually realize in
future dollars under three hypothetical situations: if the price of the
Company's Common Stock does not increase, and if the stock gains 5% or 10% in
value per year, compounded over the life of the options. These amounts represent
assumed rates of appreciation, and are not intended to forecast future
appreciation of the Company's Common Stock.
The options described in this table have exercise prices equal to the fair
market value of a share of Common Stock on the date they were granted. Unless
the Company's stock price appreciates and the recipient continues to be employed
until the options vest, the options will have no value.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF STOCK
--------------------------- PRICE APPRECIATION FOR
% OF TOTAL OPTION TERM(2)
OPTIONS ------------------------------------------------
OPTIONS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION 0%
NAME (#)(1) FISCAL YEAR ($/SH) DATE -- 5%($)
- -------------------------------------------- ----------- -------------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Philip E. Rollhaus, Jr...................... 40,000 20.7% 6.88 04/30/01 0 75,977
2,000 1.0% 6.88 04/30/06 0 8,654
Leslie J. Jezuit............................ 40,000(3) 20.7% 8.13 12/29/00 0 89,792
15,000 7.8% 6.88 04/30/01 0 28,512
James H. DeVries............................ 2,000 1.0% 6.88 04/30/06 0 8,654
Myron R. Shain.............................. 10,000 5.2% 6.88 04/30/01 0 19,008
George D. Ebersole.......................... 15,000 7.8% 6.88 04/30/01 0 28,512
<CAPTION>
NAME 10%($)
- -------------------------------------------- -----------
<S> <C>
Philip E. Rollhaus, Jr...................... 167,890
21,930
Leslie J. Jezuit............................ 198,416
63,005
James H. DeVries............................ 21,930
Myron R. Shain.............................. 42,003
George D. Ebersole.......................... 63,005
</TABLE>
- ------------------------------
(1) The options which expire on April 30, 2001 were granted on April 30, 1996
under the Long-Term Plan and the options which expire April 30, 2006 were
granted on the same date under the Director Plan. All options were granted
at the Current Market Price (as defined in the Plans) on such date. The
options become exercisable on the first anniversary of the date of grant in
one-third increments on each anniversary date until fully exercisable. All
option rights under the Long-Term Plan lapse upon termination of employment
except for limited exercise periods. In the event of a change in control of
the Company (as defined in the Long-Term Plan and Director Plan), the Plans
give each optionee the right, within 30 days of such change in control, to
exercise his options, notwithstanding the other provisions of the Plans.
(2) The potential realizable value to all stockholders at the appreciation rates
of 0%, 5% and 10% would be $0, $14,830,025 and $32,770,477 (based on shares
outstanding at June 30, 1996 and assuming such shares were purchased for
$6.75 on June 30, 1996 and held until June 30, 2001).
(3) These options were granted on December 29, 1995 under the Long-Term Plan.
Their terms are the same as those described in footnote (1).
AGGREGATED OPTION EXERCISES AND OPTION VALUES TABLE
The following table shows information concerning the exercise of stock
options by each of the named Executive Officers during fiscal 1996, and the
value of all remaining exercisable and unexercisable options at June 30, 1996,
on a pre-tax basis.
6
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS/SARS
OPTIONS/SARS AT 6/30/96(#) AT 6/30/96($)(1)
SHARES ACQUIRED ON VALUE REALIZED ---------------------------- --------------------------
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------- ------------------- --------------- ----------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Philip E. Rollhaus, Jr............ 35,000 $ 78,750 172,226 50,334 $ 5,220 $ 0
Leslie J. Jezuit.................. 0 0 0 55,000 0 0
George D. Ebersole................ 0 0 18,444 15,000 0 0
James H. DeVries.................. 0 0 108,043 11,167 67,720 0
Myron R. Shain.................... 1,000 8,750 34,265 10,000 0 0
</TABLE>
- ------------------------------
(1) Based on the closing price of the Company's Common Stock as reported on the
NASDAQ-NMS on June 30, 1996 ($6.75).
EMPLOYMENT AGREEMENTS AND TERMINATION BENEFITS
The Company has employment agreements with Philip E. Rollhaus, Jr., James H.
DeVries and Myron R. Shain (the "Employment Agreements") that were entered into
in February 1989. The Company also has separation agreements with George D.
Ebersole and with Leslie J. Jezuit, (the "Severance Agreements") that were
entered into in February 1989 and April 1996, respectively. The Employment
Agreements and Severance Agreements are collectively referred to as the
"Agreements". Each Severance Agreement provides for an initial two-year term and
for automatic one-year extensions of such term on each Agreement's anniversary
unless the Board of Directors gives the executive a required notice of the
Company's intent not to extend his Severance Agreement. Mr. Ebersole's Severance
Agreement was automatically extended in February 1996 for one year. The
Employment Agreements, amended in June 1991, provide for an initial three-year
term with an automatic one-year extension of such term each year on the
Agreements' anniversary date unless the Board of Directors should previously
determine not to extend the term. The Employment Agreements were automatically
extended in June 1996 for one year. The Board of Directors believes that the
Agreements assure fair treatment of the Executive Officers in relation to their
careers with the Company by assuring them of some financial security. The
Agreements also protect the stockholders by encouraging the Executive Officers
to continue their attention to their duties without distraction in a potentially
disturbing circumstance and neutralizing any bias they might have in evaluating
proposals for the acquisition of the Company.
In addition to providing for the payment of base annual salaries included in
the above summary compensation table and other employee fringe benefits, the
Employment Agreements provide for special separation pay and benefits in the
event of termination of an executive's employment under certain circumstances.
The Employment Agreements provide that upon termination, the executive will
receive his base salary through the termination date determined in accordance
with such Agreement. If the executive's employment is terminated due to
disability, the Employment Agreements provide for a separation payment equal to
two times the sum of the executive's annual base salary and the average of his
yearly bonus payments over the preceding two years. If, after a change in
control of the Company, the Company terminates the employment of the executive,
other than for cause or disability, or if the executive terminates his
employment for good reason, the Company will pay the executive a separation
payment equal to 300% of the sum of his then current base salary and average
yearly bonus payment for the last two years. Such payments will be made on a
semi-monthly basis over a period of 36 months following termination of
employment. If the Company fails to make an installment payment when due, the
executive has the right to accelerate all remaining compensation owned him. If
such termination occurs prior to a change in control of the Company, the
Employment Agreements provide that the Company will pay the executive a
separation payment equal to twice his base salary. Whether or not a change in
control has occurred, upon such termination the executive must be offered
continued participation in (or comparable replacement of) retirement and group
insurance benefits through the later of
7
<PAGE>
the expiration of the term of the Employment Agreements or the date of
termination. The Employment Agreements further provide that if any excise tax is
imposed pursuant to Section 4999 of the Internal Revenue Code on any payments to
be received by the executives in connection with a change in control of the
Company or termination of the executive's employment pursuant to the Employment
Agreements or otherwise (the "Total Payments"), any severance payments will be
reduced to the extent necessary so that no portion of the Total Payments is
subject to the excise tax.
The Severance Agreements provide if, after a change of control of the
Company, the employment of the executive is terminated other than (i) by death
or disability, (ii) by the Company or employing subsidiary for cause, or (iii)
by the executive for other than good reason, the Company will pay the executive
a separation payment equal to 200% of the sum of his base salary and average
yearly bonus payment for the last two years, with such payment being reduced by
the present value of any other payments made to, or on behalf of, the executive
which would constitute a "parachute payment" within the meaning of that term as
defined in Section 280G of the Internal Revenue Code of 1986, as amended.
The Agreements define a "change in control" as a change in the stock
ownership of a magnitude which requires the filing of reports under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). For the
purposes of the Agreements, a "change in control" shall be deemed to have
occurred if any of the following occur: (i) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities; (ii) if
during any period of two consecutive years, there is a change in the composition
of the Board of Directors of the Company such that 50% of the non-employee Board
members have not been slated by the Board; (iii) a consolidation or merger
occurs and the Company is not the surviving company or the Company sells all or
substantially all of its assets; or (iv) the Company is liquidated or dissolved.
The term "good reason" is generally defined by the Agreements to mean any
unfavorable change in the executive's or employee's position, duties,
compensation or benefits and "cause" is generally defined as willful conduct of
an executive or employee demonstrably injurious to the Company or employing
subsidiary. The Agreements also contain provisions for the payment of legal
expenses incurred by the executives and the employees as a result of any
termination of employment after a change in control.
REPORT OF THE AUDIT/COMPENSATION
COMMITTEE ON EXECUTIVE COMPENSATION
The Audit/Compensation Committee (the "Compensation Committee" or
"Committee") of the Board of Directors of the Company, which is composed of all
independent, non-employee Directors (see page 12), is responsible for reviewing
the recommendations of the Chief Executive Officer and determining the
compensation and other remuneration afforded the Officers of the Company,
including the persons who are listed in the Summary Compensation Table on page 5
(hereinafter collectively referred to as the "Executive Officers"). Compensation
Committee determinations relating to compensation are reviewed by the entire
Board. Action regarding awards under the 1993 Long-Term Stock Ownership
Incentive Plan (the "Plan") are made solely by the Compensation Committee in
compliance with Securities Exchange Act Rule 16b-3.
COMPENSATION PRINCIPLES AND POLICIES OF THE COMPANY
The Board has delegated to the Compensation Committee the responsibility to
be certain that the Officers of the Company are compensated fairly and
effectively in a manner consistent with the compensation philosophy and policies
of the Company. The compensation philosophy and its attributes are anchored in
solid concepts of responsible and productive growth. Philip E. Rollhaus, Jr.,
founder, Chairman of the Board and Chief Executive Officer, has been at the helm
and guided the management team through the 27 years of the Company's existence.
Fiscal 1996 has been a dramatic year of consolidation around Quixote's core
businesses, and although the Company
8
<PAGE>
suffered losses attributable to discontinued operations in fiscal 1996, the
Company, nonetheless, has made substantial progress by divesting its
unprofitable operations, while at the same time dramatically reducing debt.
Five-year compounded annual growth in revenues still remains in excess of 11%.
Furthermore, the Company has been able to continue to adhere to its basic policy
of investing in the technologies closely relating to its remaining core
businesses, each of which is a leader in its industry.
Fiscal 1996 presented the challenges of a difficult business environment and
redirection of the Company's near and long-term strategies. During the year, the
Company discontinued the operations of its Legal Technologies businesses,
reflecting management's decision to concentrate its energies and resources on
the Company's two subsidiaries offering the greatest potential for growth and
profit, Disc Manufacturing, Inc. and Energy Absorption Systems, Inc. Using
proceeds generated from the sale of Legal Technologies and other funds,
management reduced long-term debt by $25 million from its peak level in December
1995, ending the year with a stronger balance sheet to support future growth to
enhance shareholder value.
In addition to considering the Company's profitability for the year, the
Compensation Committee critically evaluates management's performance in dealing
with competitive and economic issues and business adversities as well as
performance in implementing the Company's long-term strategies. Each of these
areas of performance weigh heavily upon share values. The Company's progress in
the implementation of new ideas and strategies consistent with solid long-term
growth and expansion may result in periodic discontinuation of certain business
components causing temporary declines in earnings. Thus, the attainment of
strategic objectives and enhanced long-term financial results will be as
significant in the Committee's evaluation process as will short-term changes in
profitability.
The Committee procedures in fixing compensation include engaging the
services of an independent compensation consultant to evaluate compensation
levels and to advise it regarding competitive influences upon compensation
policies. Because the Company now operates two diverse businesses, each senior
executive is required to perform multiple tasks with major responsibilities. For
example, Mr. Rollhaus serves as Chairman and Chief Executive Officer of both
subsidiaries as well as Chairman and Chief Executive Officer of Quixote. Mr.
DeVries serves as Executive Vice President, Secretary and General Counsel for
the Company, Vice Chairman and Secretary of DMI, and Secretary of Energy
Absorption Systems, Inc. Mr. Shain is the Company's Chief Financial Officer and
also serves as President and Chief Operating Officer of DMI. The need to free
Mr. Rollhaus to concentrate on long-term growth and strategy dictated this past
year the employment of Leslie J. Jezuit as Chief Operating Officer and President
of Quixote Corporation and Vice Chairman of DMI. Quixote is fortunate to have
acquired an executive officer with extensive experience and skills, substantial
technical training and a personality well suited to his new office. Mr. Shain
and Mr. DeVries report directly to Mr. Jezuit.
The Company's compensation program includes base salary and the
consideration of annual bonus and stock option awards. The Compensation
Committee believes that the program provides incentives compatible with current
and long-term management goals of the Company and is competitive in the
marketplace while recognizing individual performance. The ultimate objective of
the program is the enhancement of shareholder value. An effective compensation
policy requires that a significant portion of each officer's compensation be at
risk in the form of bonuses and stock options. The Executive Officer group owned
approximately 511,680 shares of Company Common Stock on September 4, 1996, or an
average of about 102,336 common shares per Executive Officer. In particular, the
Committee believes that granting stock options and encouraging executive stock
ownership relates compensation to the enhancement of share value.
BASE SALARY
The annual review of each officer's base salary, which is subject to annual
adjustment, takes into account the officer's performance as well as such
enhancement or material modification as
9
<PAGE>
may have affected the officer's responsibilities. The decline in overall
earnings and the decline in earnings from continuing operations in fiscal 1996
oblige the Committee to resolve that no salary increases will be made for fiscal
1997 for the Executive or Operating Officers, excepting Mr. Ebersole, who is
entitled by his continuing and profitable leadership of Energy Absorption to a
modest increase. Based upon a review of published survey data in each of the
Company's lines of business and historical modifications of responsibilities,
the Committee believes that, even in the absence of increases, base salary
levels remain competitive.
ANNUAL BONUS
The Company historically has provided annual bonuses to its Officers to
encourage sustained high performance. The use of such bonuses places a
significant portion of total annual compensation at risk.
In fiscal 1996, as well as in fiscal 1995, reductions were made in the
bonuses payable to each of the Executive Officers for those years. The
Compensation Committee believes that the responsibility for a decline in
earnings rests, in part, upon the management team, and an overall reduction in
bonuses is consistent with the obligation of the Committee to the shareholders.
However, a portion of the decline from the record levels of 1994 was
attributable to factors beyond the control of management, including the
Company's determination to discontinue certain operations. The profit
performance of each individual operating unit, however, remains significant in
determining the annual bonuses of those Officers who were responsible for each
unit.
STOCK OPTIONS
Quixote Corporation utilizes stock options, granted pursuant to the Plan, as
one of the three components of the Company's management compensation package.
Historically, the Company has used stock options as an incentive to increase the
Company's value. Substantial stock ownership by its executives has been a
hallmark of the Company, and stock options are an important component of total
compensation. Options generally vest over a three-year period and are
exercisable over a specified period of time following the date of grant, which
is typically five years. Option recipients must be employed by the Company at
the time of vesting and at the time the options are exercised in order for them
to be able to exercise their options.
The Committee believes that without meaningful stock options the Company
would find it difficult to attract and retain highly talented and qualified
management employees. For the last three fiscal years, the Company has granted
options to employees to purchase an annual average of 183,136 shares at the
market price on the date of grant.
STOCK BASED RETIREMENT PLAN
The Company maintains a stock-based retirement plan (the "Retirement Plan"),
which is a component of its 1993 Long-Term Stock Ownership Plan, to provide its
executives with a competitive retirement program.
Under the Retirement Plan, which is in lieu of any supplemental executive
retirement program, the Compensation Committee makes annual awards of Company
stock to selected key executives who have completed at least ten years of
service with the Company. The share awards, together with a cash award intended
to cover the concomitant income tax burden, are calculated under accepted
actuarial principles as the number required to provide a targeted competitive
retirement benefit. The targeted benefit, however, will be achieved at
retirement only if the value of the Company's stock grows at a sustained
compounded level established by the Board. Furthermore, in order to receive each
year's award, the executive must remain in the employ of the Company through the
end of the fiscal year in which it is awarded (except in the case of the
Officer's death, disability or termination of employment other than for cause),
and he or she must have retained all shares previously awarded under the
Retirement Plan. The Compensation Committee believes that the Retirement Plan
mutually benefits the Company, its stockholders and its most senior executives.
10
<PAGE>
OTHER COMPENSATION
The Company has an Incentive Savings Plan (the "Plan") which offers all
employees (subject to certain eligibility requirements), including the named
Executive Officers, tax advantages pursuant to Section 401(k) of the Internal
Revenue Code. During fiscal year 1996, the Company made a matching contribution
to the Plan of $.40 on each dollar of the first 5% of compensation contributed
by the participant, subject to legal maximums imposed by the Internal Revenue
Code. Contributions are made by participants by means of a payroll deduction
program. The total aggregate amount of the Company's matching contribution for
the named Executive Officers is included in the Summary Compensation Table on
page 5.
The Company maintains an Exec-U-Care Medical Reimbursement Plan which
provides additional health and life insurance protection for certain Officers of
the Company and its subsidiaries, in addition to the group health and life
insurance policies provided to all employees. The participants in the
Exec-U-Care Plan include Messrs. Rollhaus, Jezuit, DeVries, Shain and Ebersole.
The total aggregate cost to the Company during fiscal year 1996 under the Plan
for those Executive Officers was less than $33,000.
LIMITATION ON DEDUCTIBILITY OF COMPENSATION
In 1993, the tax laws were amended by the addition of Section 162(m) of the
Internal Revenue Code. Effective for fiscal years beginning after 1993, that
Section limits the deductibility of compensation paid by a publicly-held company
to its chief executive officer and to the four other Officers who are most
highly compensated. Generally, amounts paid in excess of $1 million to a covered
executive, other than performance-based compensation, cannot be deducted. No
Executive Officer was affected by this limitation in fiscal 1996.
AUDIT/COMPENSATION COMMITTEE
William G. Fowler, Chairman
Lawrence C. McQuade
David S. Ruder
Robert D. van Roijen, Jr.
11
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are William G. Fowler, who
serves as Chairman, Lawrence C. McQuade, David S. Ruder and Robert D. van
Roijen, Jr.
COMMON STOCK PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG QUIXOTE CORPORATION, THE RUSSELL 2000 INDEX
AND THE S&P MANUFACTURING (DIVERSIFIED INDUSTRY) INDEX.
The following graph compares the five year cumulative total return of the
Company's Common Stock with the Russell 2000 Index and the Standard & Poor's
Manufacturing (Diversified Industry) Index assuming the investment of $100 on
June 30, 1991 and the reinvestment of dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
QUIXOTE CORPORATION RUSSELL 2000 S&P MANUFACTURING (DIVERSIFIED INDUSTRIALS)
<S> <C> <C> <C>
6/91 100 100 100
6/92 281 115 99
6/93 296 145 117
6/94 455 151 131
6/95 282 181 173
6/96 157 224 221
</TABLE>
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
See "Employment Agreements and Termination Benefits" and the "Summary
Compensation Table" above for a description of certain transactions and business
relationships involving management of the Company.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The chart below sets forth, as of September 6, 1996, information to the best
of the Company's knowledge with respect to the persons who beneficially owned in
excess of five percent of the
12
<PAGE>
Company's Common Stock; the total number of shares of the Company's Common Stock
beneficially owned by each Director and named Executive Officer; and the total
number of shares of the Company's Common Stock beneficially owned by the
Directors and Executive Officers of the Company, as a group.
<TABLE>
<CAPTION>
AMOUNT BENEFICIALLY APPROXIMATE PERCENTAGE
NAME OF BENEFICIAL OWNER OWNED (1) OF CLASS (1)
- -------------------------------------------------- -------------------- -----------------------
<S> <C> <C>
Heartland Advisors, Inc.(2)....................... 674,000 8.5%
Brinson Partners, Inc.(3)......................... 609,600 7.7%
Ryback Management Corp.(4)........................ 600,000 7.5%
Wisconsin State Investment Board(5)............... 506,100 6.4%
Dimensional Fund Advisors(6)...................... 469,700 5.9%
Philip E. Rollhaus, Jr.(7)(8)..................... 452,890 5.6%
Leslie J. Jezuit.................................. 0 *
James H. DeVries(8)............................... 222,600 2.8%
Myron R. Shain.................................... 83,730 1.0%
George D. Ebersole................................ 76,200 *
William G. Fowler(9).............................. 150,233 1.9%
David S. Ruder.................................... 67,499 *
Lawrence C. McQuade............................... 34,499 *
Robert D. van Roijen, Jr.......................... 25,499 *
Directors and Executive Officers as a group (9
persons including those individuals named
above)(8)(9)..................................... 1,113,150 14.0%
</TABLE>
- ------------------------
* Less than one percent (1%).
(1) The shares reported in the above table include shares of Common Stock which
can be acquired within 60 days of September 6, 1996, through the exercise of
options ("Option Shares") as follows: Mr. Rollhaus - 175,559 shares; Mr.
Ruder - 52,499 shares; Mr. DeVries - 86,376 shares; Mr. Shain - 34,265
shares; Mr. Ebersole - 18,444 shares; Mr. Fowler - 64,499 shares; Mr.
McQuade - 32,499 shares; Mr. van Roijen - 17,499 shares; Mr. Jezuit - 0
shares; and Directors and Executive Officers as a group - 481,640 shares.
Each individual's Option Shares are also included in the number of shares of
the Company issued and outstanding for purposes of calculating the
percentage ownership of each individual in accordance with the rules and
regulations of the Exchange Act. These persons also have options not
exercisable within 60 days of September 6, 1996, by which they can acquire
the following additional shares of Common Stock: Mr. Rollhaus - 47,001
shares; Mr. Ruder - 7,001 shares; Mr. DeVries - 7,834 shares; Mr. Fowler -
7,001 shares; Mr. McQuade - 7,001 shares; Mr. Shain - 10,000; Mr. Ebersole -
15,000; Mr. van Roijen - 7,001 shares; Mr. Jezuit - 55,000 shares; and
Directors and Executive Officers as a group - 162,839 shares. These shares
are not included in the above table or in the percentage ownership
calculations.
(2) Based upon information set forth in a Schedule 13F filing for the period
ending June 30, 1996. Shares held in Heartland Value Fund, an investment
advisory account of Heartland Advisors, Inc., are included in the figures
set forth for Heartland Advisors, Inc. The address of Heartland Advisors,
Inc. is 790 North Milwaukee Street, Milwaukee, Wisconsin 53202.
(3) Based upon information set forth in a Schedule 13G filing dated February 9,
1996. Shares owned by Brinson Trust Company, Brinson Holdings, Inc., SBC
Holding (USA), Inc. and Swiss Bank Corporation are included in the figures
set forth for Brinson Partners, Inc. The address for Brinson Partners, Inc.
is 209 South LaSalle, Chicago, Illinois 60604-1295.
13
<PAGE>
(4) Based upon information set forth in a Schedule 13G filing dated January 25,
1996. Shares held by Lindner Growth Fund, a registered investment company,
comprise the figure set forth for Ryback Management Corporation. The address
for Ryback Management Corporation is 7711 Carondelet Avenue, Box 16900, St.
Louis, Missouri 63105.
(5) Based on information set forth in a Schedule 13F filing for the period
ending June 30, 1996. The address for the Wisconsin State Investment Board
is P.O. Box 7842, Madison, Wisconsin 53707.
(6) Based upon information set forth in a Schedule 13F filing for the period
ending June 30, 1996. The address for Dimensional Fund Advisors is 1299
Ocean Avenue, Santa Monica, California 90401.
(7) Mr. Rollhaus owns $166,000 in principal amount of the Company's 8%
convertible subordinated debentures due April 15, 2011 (the "Debentures").
The Debentures are convertible into an aggregate of approximately 8,736
shares of the Company's Common Stock. The shares of Common Stock into which
the Debentures are convertible are included in the above table and are
included in the number of shares of the Company issued and outstanding for
purposes of calculating percentage ownership.
(8) Messrs. Rollhaus and DeVries may be deemed to be the beneficial owner of
1,000 and 5,492 shares of Common Stock, respectively, owned by their family
members. These shares are not included in the above table. Messrs. Rollhaus
and DeVries disclaim beneficial ownership of these shares.
(9) Mr. Fowler has a beneficial interest in 890 shares of Common Stock held by
his retirement plan. These shares are not included in the above table.
APPROVAL OF AUDITORS
The Directors have recommended that the stockholders approve Coopers &
Lybrand L.L.P., a certified public accounting firm, as independent auditors for
the Company. A representative of Coopers & Lybrand L.L.P. is expected to be
present at the Annual Meeting and will have an opportunity to make an
independent statement if he or she desires to do so. The representative is
expected to be available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the outstanding shares
of the Company's Common Stock represented at the meeting and entitled to vote is
necessary to approve Coopers & Lybrand L.L.P. as the Company's auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE APPROVING COOPERS & LYBRAND L.L.P.
AS THE COMPANY'S AUDITORS.
MISCELLANEOUS
STOCKHOLDER PROPOSALS FOR THE ANNUAL MEETING TO BE HELD IN 1997
Under the rules and regulations of the Securities and Exchange Commission,
proposals of stockholders intended to be presented at the Annual Meeting to be
held in 1997 must be received by the Company on or before May 5, 1997, to be
considered for inclusion in the Company's proxy statement relative to that
meeting. Such proposals should be in writing and sent to Mr. James H. DeVries,
Executive Vice President - Quixote Corporation, One East Wacker Drive, Chicago,
IL 60601.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and Executive Officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission initial reports of
14
<PAGE>
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Executive Officers, Directors and greater than ten
percent shareholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on review of the copies of such reports furnished to the
Company and written representations that no other reports were required during
fiscal year 1996, the Company believes that all Section 16(a) filing
requirements applicable to the Company's Officers and Directors and ten percent
shareholders were complied with by such persons.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
The Company will be pleased to make its Annual Report on Form 10-K, as filed
with the Securities and Exchange Commission, available without charge to
interested parties. Written requests for the report should be directed to Mr.
James H. DeVries, Executive Vice President - Quixote Corporation, One East
Wacker Drive, Chicago, IL 60601.
15
<PAGE>
DETACH HERE
PROXY
QUIXOTE CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoint(s) Philip E. Rollhaus, Jr. and James H.
DeVries as proxies with full power of substitution and hereby directs them to
vote the stock of the undersigned at the Annual Meeting of Stockholders of
Quixote Corporation to be held in the Assembly Room at the Northern Trust
Company, 50 South LaSalle Street, Chicago, Illinois, Thursday, November 14,
1996, at 10:00 a.m. Central Standard Time, and at any adjournments thereof, as
indicated on the proposals set forth on the reverse side of this Proxy.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED, OR IF NO
DIRECTION IS INDICATED, IT WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS AND
"FOR" PROPOSAL 2. Discretionary authority is conferred by the Proxy to vote on
all matters, other than those specified on the reverse side, which may properly
come before the meeting or any adjournment thereof.
PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
-------------
SEE REVERSE
SIDE
-------------
<PAGE>
[LOGO] THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.
It is important to you and to your Company that you vote your shares by
returning your proxy in the enclosed envelope.
QUIXOTE CORPORATION
FISCAL 1996 HIGHLIGHTS
- - The Company increased its regular semiannual dividend to $0.12 per share,
marking the third consecutive year in which dividends have increased.
- - The Company focused its managerial and financial resources on Disc
Manufacturing, Inc. and Energy Absorption Systems, Inc., the two companies
Quixote founded and developed into industry leaders, after selling all the
businesses of its third subsidiary, Legal Technologies, Inc.
- - The Company reduced its long-term debt by $25 million from its peak level
in December 1995.
- - The Company completed its $50 million expansion program at Disc
Manufacturing, Inc. DMI's two state-of-the-art east and west coast plants
are among the largest, most efficient facilities of their kind in North
America.
DETACH HERE
PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE.
1. Election of Directors
Nominees: Philip E. Rollhaus, Jr. and
David S. Ruder
FOR WITHHELD
/ / / /
/ /
- ---------------------------------------
For both nominees except as noted above
2. Approving the selection of Coopers & Lybrand L.L.P. as Independent Auditors
of the Company.
FOR AGAINST ABSTAIN
/ / / / / /
3. Transaction of such other business as may properly come before the meeting
and any adjournments thereof.
MARK HERE MARK HERE
FOR ADDRESS / / IF YOU PLAN / /
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
Please date and sign as name is imprinted hereon, including designation as
executor, trustee, etc. if applicable. A corporation must sign in its name by
the president or other authorized officers. All co-owners must sign.
- --------------------------------------------------------------------------------
SIGNATURE(S) DATE SIGNATURE(S) DATE
