<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, 2000
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: 7,850,547 shares of the
Company's Common Stock ($.01-2/3 par value) were outstanding as of March 31,
2000.
<PAGE>
PART I - FINANCIAL INFORMATION
QUIXOTE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended March 31,
-------------------------------
2000 1999
---- ----
<S> <C> <C>
Net sales .................................. $ 55,584,000 $ 49,212,000
Cost of sales .............................. 29,400,000 27,400,000
------------ ------------
Gross profit ............................... 26,184,000 21,812,000
Operating expenses:
Selling & administrative ................. 17,336,000 14,327,000
Research & development ................... 1,044,000 1,186,000
------------ ------------
18,380,000 15,513,000
Operating profit ........................... 7,804,000 6,299,000
------------ ------------
Other income (expense):
Interest income .......................... 23,000 76,000
Interest expense ......................... (617,000) (723,000)
Other .................................... (4,000) 29,000
------------ ------------
(598,000) (618,000)
------------ ------------
Earnings from continuing operations before
income taxes ............................. 7,206,000 5,681,000
Provision for income taxes ................. 2,738,000 1,988,000
------------ ------------
Earnings from continuing operations......... 4,468,000 3,693,000
------------ ------------
Earnings from discontinued operations
(net of income taxes) .................... 240,000
------------ ------------
Net earnings ............................... $ 4,468,000 $ 3,933,000
============ ============
Per share data - basic:
Earnings from continuing operations....... $ .56 $ .46
Earnings from discontinued operations..... .03
------------ ------------
Net earnings.............................. $ .56 $ .49
============ ============
Weighted average common shares outstanding 7,997,553 7,962,584
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
2
<PAGE>
QUIXOTE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations-Continued
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended March 31,
-----------------------------
2000 1999
---- ----
<S> <C> <C>
Per share data - diluted:
Earnings from continuing operations ........... $ .54 $ .45
Earnings from discontinued operations.......... .03
---------- ----------
Net earnings .................................. $ .54 $ .48
========== ==========
Weighted average common shares outstanding..... 8,270,950 8,216,341
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
QUIXOTE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
-------------------------------
2000 1999
---- ----
<S> <C> <C>
Net sales .................................. $ 20,053,000 $ 18,347,000
Cost of sales .............................. 10,309,000 10,098,000
------------ ------------
Gross profit ............................... 9,744,000 8,249,000
Operating expenses:
Selling & administrative ................. 6,739,000 5,746,000
Research & development ................... 376,000 456,000
------------ ------------
7,115,000 6,202,000
Operating profit ........................... 2,629,000 2,047,000
------------ ------------
Other income (expense):
Interest income .......................... 8,000 10,000
Interest expense ......................... (225,000) (343,000)
Other .................................... (19,000) 29,000
------------ ------------
(236,000) (304,000)
------------ ------------
Earnings from continuing operations before
income taxes ............................. 2,393,000 1,743,000
Provision for income taxes ................. 909,000 610,000
------------ ------------
Earnings from continuing operations......... 1,484,000 1,133,000
------------ ------------
Earnings from discontinued operations
(net of income taxes) .................... 240,000
------------ ------------
Net earnings ............................... $ 1,484,000 $ 1,373,000
============ ============
Per share data - basic:
Earnings from continuing operations....... $ .19 $ .14
Earnings from discontinued operations..... .03
------------ ------------
Net earnings.............................. $ .19 $ .17
============ ============
Weighted average common shares outstanding 7,891,580 8,018,193
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE>
QUIXOTE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations-Continued
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------
2000 1999
---- ----
<S> <C> <C>
Per share data - diluted:
Earnings from continuing operations ........... $ .18 $ .14
Earnings from discontinued operations.......... .03
---------- ----------
Net earnings .................................. $ .18 $ .17
========== ==========
Weighted average common shares outstanding..... 8,068,079 8,238,973
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
QUIXOTE CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
As of
<TABLE>
<CAPTION>
March 31, June 30,
-------------------------------
ASSETS 2000 1999
- --------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents ...................... $ 689,000 $2,153,000
Accounts receivable, net of allowances
for doubtful accounts of $893,000 at
March 31 and $480,000 at June 30 ............. 16,317,000 17,078,000
Inventories:
Raw materials ................................ 3,568,000 3,069,000
Work in process .............................. 1,610,000 1,527,000
Finished goods ............................... 3,453,000 3,941,000
----------- ----------
8,631,000 8,537,000
----------- ----------
Deferred income tax assets .................... 2,491,000 2,491,000
Other current assets .......................... 512,000 538,000
----------- ----------
Total current assets ............................ 28,640,000 30,797,000
----------- ----------
Property, plant and equipment, at cost .......... 27,775,000 26,794,000
Less: accumulated depreciation .................. (12,602,000) (11,195,000)
----------- ----------
15,173,000 15,599,000
----------- ----------
Intangible assets, net.......................... 23,041,000 24,038,000
Other assets.................................... 1,485,000 1,340,000
----------- ----------
$68,339,000 $71,774,000
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
6
<PAGE>
QUIXOTE CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets-Continued
As of
<TABLE>
<CAPTION>
March 31, June 30,
---------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY 2000 1999
- --------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Current liabilities:
Current portion of long-term debt ................ $ 714,000 $ 722,000
Accounts payable ................................. 2,028,000 3,300,000
Dividends payable ................................ 1,128,000
Accrued expenses ................................. 4,290,000 4,693,000
Income taxes payable.............................. 1,586,000 691,000
Liabilities of discontinued operations ........... 559,000 1,684,000
----------- ----------
Total current liabilities .......................... 9,177,000 12,218,000
----------- ----------
Long-term debt, net of current portion.............. 11,774,000 11,901,000
Deferred income tax liabilities .................... 1,449,000 1,449,000
Liabilities of discontinued operations.............. 353,000 224,000
Shareholders' equity:
Preferred stock, no par value; authorized 100,000
shares; none issued.............................
Common stock, par value $.01-2/3; authorized
15,000,000 shares; 9,186,067 issued shares at
March 31 and 9,104,166 shares at June 30 ....... 153,000 151,000
Capital in excess of par value of common stock ... 33,487,000 32,929,000
Retained earnings ................................ 24,232,000 20,884,000
Treasury stock, at cost, 1,335,520 shares at
March 31 and 1,032,420 shares at June 30........ (12,286,000) (7,982,000)
----------- ----------
Total shareholders' equity ......................... 45,586,000 45,982,000
----------- ----------
$68,339,000 $71,774,000
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
7
<PAGE>
QUIXOTE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended March 31,
----------------------------
2000 1999
---- ----
<S> <C> <C>
Cash from operating activities:
Earnings from continuing operations............. $ 4,468,000 $ 3,693,000
Adjustments to reconcile earnings from continuing
operations to net cash provided by operating
activities:
Depreciation ................................. 1,556,000 1,320,000
Amortization.................................. 1,140,000 1,210,000
Provisions for losses on accounts receivable.. 413,000 (94,000)
Changes in operating assets and liabilities
(net of the effect of acquisitions):
Accounts receivable ........................ 348,000 (865,000)
Refundable income taxes .................... 1,132,000
Inventories and other current assets........ (68,000) (2,635,000)
Accounts payable and accrued expenses ...... (1,675,000) 1,051,000
Income taxes payable ....................... 895,000 2,410,000
----------- -----------
Net cash provided by operating activities of
continuing operations........................... 7,077,000 7,222,000
Net cash provided by (used in) discontinued
operations...................................... (996,000) 1,542,000
----------- -----------
Net cash provided by operating activities ........ 6,081,000 8,764,000
----------- -----------
Investing activities:
Cash paid for acquired business (net of cash on
books)........................................ (13,701,000)
Purchase of property, plant and equipment ...... (1,130,000) (1,881,000)
Investment in Transportation Management
Technologies, L.L.C. ......................... (361,000) (500,000)
Other .......................................... 73,000 (49,000)
----------- -----------
Net cash used in investing activities ............ (1,418,000) (16,131,000)
----------- -----------
Financing activities:
Payments on revolving line of credit ........... (4,100,000)
Borrowings on revolving line of credit.......... 4,400,000 7,100,000
Payments on notes payable....................... (435,000) (797,000)
Payment of semi-annual cash dividend ........... (2,248,000) (2,135,000)
Proceeds from exercise of common stock options.. 560,000 612,000
Repurchase of common stock for the treasury..... (4,304,000)
----------- -----------
Net cash provided by(used in)financing
activities...................................... (6,127,000) 4,780,000
----------- -----------
Decrease in cash and cash equivalents ............ (1,464,000) (2,587,000)
Cash and cash equivalents at beginning of period.. 2,153,000 3,927,000
----------- -----------
Cash and cash equivalents at end of period ....... $ 689,000 $ 1,340,000
=========== ===========
</TABLE>
Note: During the nine months ended March 31, 2000, the Company paid $1,844,000
for income taxes and paid $580,000 for interest. During the same period in the
prior year, the Company had net cash refunds of $1,554,000 for income taxes and
paid $742,000 for interest.
See Notes to Consolidated Financial Statements.
8
<PAGE>
QUIXOTE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
1. The accompanying unaudited consolidated financial statements present
information in accordance with generally accepted accounting principles for
interim financial information and applicable rules of Regulation S-X.
Accordingly, they do not include all information or footnotes required by
generally accepted accounting principles for complete financial statements. The
June 30, 1999 consolidated balance sheet as presented was derived from audited
financial statements. The interim financial statements and notes should be read
in conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year ended June 30,
1999. Management believes the financial statements include all normal recurring
adjustments necessary for a fair presentation of the results for the interim
periods presented.
2. The provision for income taxes is based upon the estimated effective income
tax rate for the year.
3. Operating results for the first nine months of fiscal 2000 are not
necessarily indicative of the performance for the entire year. The Company's
business is historically seasonal with a higher level of sales in the Company's
first and fourth fiscal quarters.
4. The computation of basic and diluted earnings per share, as prescribed by
FASB No. 128, is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net earnings per share of common stock:
Basic ...................... $ .19 $ .17 $ .56 $ .49
Diluted .................... $ .18 $ .17 $ .54 $ .48
Numerator:
- ----------
Net earnings available to
common shareholders-basic
and diluted: ................. $1,484,000 $1,373,000 $4,468,000 $3,933,000
========== ========== ========== ==========
Denominator:
- ------------
Weighted average shares
outstanding-basic: ........... 7,891,580 8,018,193 7,997,553 7,962,584
Effect of dilutive securities:
Stock options ................ 176,499 220,780 273,397 253,757
---------- ---------- ---------- ----------
Weighted average shares
outstanding-diluted: ......... 8,068,079 8,238,973 8,270,950 8,216,341
========== ========== ========== ==========
</TABLE>
Options to purchase 60,000 shares of common stock at $21 per share were
outstanding during the first nine months of both fiscal 2000 and fiscal 1999 and
were not included in the computation of diluted earnings per share because the
options' exercise price was greater than the average market price of the common
shares or anti-dilutive.
9
<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 2000 increased 13% to
$55,584,000 from $49,212,000 in the first nine months of fiscal 1999 due to
solid internal sales growth as well as growth from one acquisition the Company
completed during fiscal 1999. Internal sales increased 8% primarily due to
domestic and international demand for the Company's permanent crash cushion
products. Sales of Energy Absorption Systems, Inc. ("Energy Absorption") and its
subsidiaries increased 5% due to strong demand for its permanent line of crash
cushion products. Sales of Energy Absorption Systems, Inc. and its subsidiaries'
permanent line of crash cushion products increased 14% primarily due to strong
unit sales of the REACT 350 -Registered Trademark- crash cushion and its
QuadGuard -Registered Trademark- family of crash cushions. Sales of the new
Safe-Stop -trademark- truck-mounted attenuator ("TMA"), the Energite -Registered
Trademark- barrel product line, parts, and highway delineators also increased
during the first nine months of fiscal 2000. Energy Absorption and its
subsidiaries' sales increase was offset in part by a decrease in sales of its
other TMA products, Universal Module -Registered Trademark- barrels, the Triton
Barrier -Registered Trademark-, glare screen and custom-molded products.
Nu-Metrics, Inc., acquired in December 1998, contributed sales of $5,309,000 for
the first nine months of fiscal 2000 compared to $1,801,000 for the four months
as part of the Company last year. Sales of Highway Information Systems, Inc.
("HIS") increased 23% to $2,081,000 for the first nine months of fiscal 2000
from $1,696,000 for the first nine months of fiscal 1999 primarily due to strong
sales of its highway advisory radio systems.
The gross profit margin in the first nine months of the current year increased
to 47.1% from 44.3% in the first nine months of fiscal 1999. This was due
principally to increased sales of higher margin products at Nu-Metrics, Inc. and
HIS. A change in sales mix at Energy Absorption and its subsidiaries also
contributed to the increase in margin due to increased sales of the higher
margin QuadGuard -Registered Trademark- family of products along with decreased
sales of the lower margin TMA product line. Offsetting the increase in part was
the effect of the increase in sales of the lower margin REACT 350 -Registered
Trademark-. Energy Absorption and its subsidiaries benefited from lower vendor
costs obtained for certain products along with price increases that occurred on
selected products.
Selling and administrative expenses in the first nine months of the current year
increased 21% to $17,336,000 from $14,327,000 in the first nine months last
year. This was due principally to the higher level of sales and the December
1998 acquisition of Nu-Metrics, Inc. which added $968,000 in selling and
administrative expenses compared to the prior year. Energy Absorption and its
subsidiaries had a $1,074,000 increase in selling and administrative expenses
primarily related to the increased level of their sales and business development
efforts. HIS' selling and administrative expenses increased $454,000 primarily
due to the increased level of their sales. Corporate level administrative
expenses increased $461,000 primarily as a result of increased international
acquisition and development efforts as well as increased health insurance and
certain employee benefit expenses. In addition, the increase was due to the
equity loss on the investment in the joint venture, Transportation Management
Technologies, L.L.C. ("TMT"), reclassified from other expenses.
Research and development expenses in the first nine months of the current
year decreased 12% to $1,044,000 compared to $1,186,000 in the first nine
months last year. This was due to a considerable amount of testing in the
prior year of a wider version of the REACT-Registered Trademark- crash
cushion and the development of the Safe-Stop -trademark- TMA. During the
first nine months of fiscal 2000, the Company made expenditures for the
development of products relating to the Safe-Stop -trademark- TMA and for
European qualifying tests of certain QuadGuard-Registered Trademark- crash
cushion products. The Company continued with its development and testing of a
reflective pavement marker for warm weather climates and of a snowplowable
road marker, the development of an anti-icing system for bridges, new
broadband wireless sensors and other developmental projects.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Interest income in the first nine months of the current year was $23,000
compared to $76,000 in the first nine months last year. Interest income declined
as a result of a decline in the Company's invested cash balance. Interest
expense in the first nine months of the current year was $617,000 compared to
$723,000 in the first nine months last year. The decrease in interest expense is
related to the higher level of average long-term debt outstanding in the first
nine months of fiscal 1999 in connection with the acquisition of Nu-Metrics,
Inc. in December 1998.
The Company's effective income tax rate for the first nine months of fiscal 2000
was 38% compared to an effective income tax rate of 35% in the same period last
year due to last year's greater realization of certain tax benefits. The Company
believes its effective income tax rate for the current year will be
approximately 38%.
CURRENT YEAR QUARTER VERSUS PRIOR YEAR QUARTER
- ----------------------------------------------
The Company's sales for the third quarter of fiscal 2000 increased 9% to
$20,053,000 from $18,347,000 in the third quarter of fiscal 1999 due to
increased sales at Energy Absorption Systems, Inc. and its subsidiaries as
well as Nu-Metrics, Inc. and HIS. Sales of Energy Absorption Systems, Inc.
and its subsidiaries increased 4% due to strong demand for its permanent line
of crash cushion products for which sales increased 11%. Strong unit sales of
the REACT 350 -Registered Trademark- crash cushion were offset in part by a
decrease in sales of its QuadGuard -Registered Trademark- family of crash
cushions. Sales of the Safe-Stop - trademark- TMA, Energite -Registered
Trademark- barrels, parts and custom-molded products also increased during
the quarter. Energy Absorption and its subsidiaries' sales increase was
offset in part by a decrease in sales of its Triton Barrier -Registered
Trademark-, Universal Module -Registered Trademark- barrels, highway
delineators and glare screen products. Sales of Nu-Metrics, Inc.'s products
increased 54% to $2,017,000 for the third quarter of fiscal 2000 compared to
$1,314,000 for the third quarter of fiscal 1999 primarily due to strong unit
sales of its Groundhog -Registered Trademark- line of permanent traffic
monitors and its Hi-Star-Registered Trademark- portable traffic counter.
Sales of HIS increased 74% to $766,000 for the third quarter of the current
year from $440,000 for the third quarter of the prior year as a result of
strong sales of its highway advisory radio systems.
The gross profit margin in the third quarter of the current year increased to
48.6% from 45.0% in the third quarter of the prior year. This was due
principally to increased sales of higher margin products at Nu-Metrics, Inc. and
HIS and to the increased sales volume of these companies. The increase was
offset by a slight decrease in gross margin due to a change in sales mix at
Energy Absorption and its subsidiaries with increased sales of the lower margin
REACT 350 -Registered Trademark- and Safe-Stop -trademark- TMA and decreased
sales of the higher margin QuadGuard -Registered Trademark- family of products.
However, Energy Absorption and its subsidiaries continued to benefit from lower
vendor costs obtained for certain products along with price increases that
occurred on selected products.
Selling and administrative expenses in the third quarter of the current year
increased 17% to $6,739,000 from $5,746,000 in the same period last year. This
was due principally to the higher level of sales for the third quarter of the
current year. Energy Absorption and its subsidiaries had a $362,000 increase in
selling and administrative expenses primarily related to the increased level of
their sales and business development efforts. Selling and administrative
expenses at Nu-Metrics, Inc. and HIS increased $523,000 primarily due to the
increased level of their sales. Corporate level administrative expenses
increased $108,000 primarily as a result of the equity loss on the investment in
the joint venture, TMT, reclassified from other expenses.
Research and development expenses in the third quarter of the current year
decreased 18% to $376,000 compared to $456,000 in the third quarter last year.
This was due to a considerable amount of testing in the prior year relating to
the development of the Safe-Stop -trademark- TMA.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Interest income in the third quarter of the current year was $8,000 compared to
$10,000 in the third quarter last year. Interest income declined as a result of
a decline in the Company's invested cash balance. Interest expense in the third
quarter of fiscal 2000 was $225,000 compared to $343,000 in the third quarter of
fiscal 1999. The decrease in interest expense is related to the higher level of
average long-term debt outstanding in the third quarter of fiscal 1999 in
connection with the acquisition of Nu-Metrics, Inc. in December 1998. Other
expense in the current quarter was $19,000 primarily due to the reclassification
to operating income of $100,000 in royalty income earned by Nu-Metrics, Inc.
offset by an $84,000 equity loss on the investment in the joint venture, TMT.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company had cash and cash equivalents of $689,000 and access to additional
funds of $31,700,000 under its bank arrangements as of March 31, 2000.
Continuing operating activities were a source of cash for the Company for the
first nine months of fiscal 2000 providing $7,077,000. Discontinued operations,
however, used cash of $996,000 primarily for lease commitments as well as
accounting and legal expenses. This resulted in net cash provided from operating
activities of $6,081,000.
Investing activities used cash of $1,418,000 during the first nine months of
fiscal 2000 including $1,130,000 for the purchase of equipment and $361,000 for
the Company's investment in TMT.
Financing activities used cash of $6,127,000 during the first nine months of the
current year. The payment of the Company's semi-annual cash dividend used cash
of $2,248,000. The Company also borrowed $4,400,000 on its revolving credit
facility offset by payments of $4,100,000. In addition, the Company used cash of
$435,000 for the payment of notes payable due in connection with the
acquisitions of Roadway Safety Service, Inc. and Nu-Metrics, Inc. and paid
$4,304,000 to purchase 303,100 shares of its own common stock for the treasury.
Offsetting these cash payments somewhat, the Company received cash of $560,000
for the exercise of common stock options.
For fiscal 2000, the Company anticipates needing less than $2,000,000 in cash
for capital expenditures. The Company may also need additional cash as it
considers acquiring businesses that complement its existing operations. Also,
the Company will require additional investments in working capital to maintain
growth. The Company may also need additional funds to repurchase its own common
stock from time to time. These expenditures will be financed either through the
Company's invested cash, cash generated from its operations or from borrowings
available under the Company's revolving credit facility. The Company believes
its existing cash, cash generated from operations and funds available under its
existing credit facility are sufficient for all planned operating and capital
requirements.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENTS
- --------------------------
Various statements made within the Management's Discussion and Analysis of
Financial Condition and Results of Operations and elsewhere in this Quarterly
Report on Form 10-Q constitute "forward looking statements" for purposes of the
Securities and Exchange Commission's "safe harbor" provisions under the Private
Securities Litigation Reform Act of 1995 and Rule 3b-6 under the Securities
Exchange Act of 1934, as amended. Investors are cautioned that all forward
looking statements involve risks and uncertainties, including those detailed in
the Company's filings with the Securities and Exchange Commission. There can be
no assurance that actual results will not differ from the Company's
expectations. Factors which could cause materially different results include,
among others, uncertainties related to the introduction of the Company's
products and services; the successful completion and integration of
acquisitions; continued funding from federal highway legislation; and
competitive and general economic conditions.
13
<PAGE>
PART II - OTHER INFORMATION
There is no information required to be reported under any items except as
indicated below:
ITEM 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
Exhibit 3(b) Amended and Restated By-Laws of the Company as amended
through February 24, 2000, filed herewith.
Exhibit 27 Financial Data Scehdule
(b) Reports on Form 8-K.
None
14
<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, 2000 to be signed on its behalf by the undersigned thereunto
duly authorized.
QUIXOTE CORPORATION
DATED: May 12, 2000 /s/ Daniel P. Gorey
----------------- -------------------
DANIEL P. GOREY
Chief Financial Officer,
Vice President and Treasurer
(Chief Financial & Accounting
Officer)
15
<PAGE>
AMENDED AND
RESTATED
BY-LAWS
OF
QUIXOTE CORPORATION
(A Delaware Corporation)
as adopted on March 16, 1991,
and as amended through February 24, 2000
(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
<PAGE>
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.
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.
<PAGE>
SECTION 2.7. PROXIES. At all meetings of stockholders, a
stockholder may vote by proxy. Without limiting the manner in which a
stockholder may authorize another person or persons to act for him as
proxy, the following are valid means of granting such authority. A
stockholder may execute a writing authorizing another person or persons
to act for him as proxy. Execution may be accomplished by the
stockholder or his authorized officer, director, employee or agent
signing such writing or causing his or her signature to be affixed to
such writing by any reasonable means including, but not limited to, by
facsimile signature. A stockholder may also authorize another person or
persons to act for him as proxy by transmitting or authorizing the
transmission of a telegram, cablegram or other means of electronic
transmission to the person who will be the holder of the proxy or to a
proxy solicitation firm, proxy support service organization or like
agent duly authorized by the person who will be the holder of the proxy
to receive such transmission, provided that any such telegram, cablegram
or other means of electronic transmission must either set forth or be
submitted with information from which it can be determined that the
telegram, cablegram or other electronic transmission was authorized by
the stockholder. If it is determined that such telegrams, cablegrams or
other electronic transmissions are valid, the inspectors or, if there
are no inspectors, such other persons making that determination shall
specify the information upon which they relied. Any copy, facsimile
telecommunication or other reliable reproduction of the writing or
transmission created pursuant to this section may be substituted or used
in lieu of the original writing or transmission for any and all purposes
for which the writing or transmission could be used, provided that such
copy, facsimile telecommunication or other reproduction shall be a
complete reproduction of the entire original writing or transmission. 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 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.
<PAGE>
(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.
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
<PAGE>
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.
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
<PAGE>
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 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.
<PAGE>
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.
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 preside
at all meetings of the Board of Directors and of the stockholders. The Chairman
of the Board shall perform such other duties as from time to time may be
assigned to him or her by the Board of Directors or these By-Laws. In the
absence of the President, the Chairman of the Board may perform specific duties
and responsibilities of the President as determined by the Board of Directors.
SECTION 4.4. PRESIDENT. The President shall be the chief executive officer
of the corporation and he or she shall exercise the powers and perform the
duties usual to the chief executive officer. Subject to the control and
direction of the Board of Directors, the President shall have general charge of,
and shall direct and supervise, the business and affairs of the corporation. He
or she shall see that all orders and resolutions of the Board of
<PAGE>
Directors are implemented, and shall do and perform such other duties as from
time to time may be assigned to him or her by the Board of Directors or these
By-Laws and as are incident to the office of the chief executive officer. He or
she shall have the power to execute bonds, mortgages and other contract
agreements and instruments of the Corporation. 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 shall exercise all of the powers
and duties of the Chairman of the Board.
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.
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 whatsoever, 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
<PAGE>
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 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
<PAGE>
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 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.
<PAGE>
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, 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.
<PAGE>
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 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.
<PAGE>
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.
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