MATLACK SYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 25, 1996
TO THE HOLDERS OF COMMON STOCK:
PLEASE TAKE NOTICE that the 1996 Annual Meeting of
Shareholders of MATLACK SYSTEMS, INC., a Delaware
corporation, will be held on the First Floor, 1209 Orange
Street, Wilmington, Delaware, on Thursday, January 25, 1996,
at 9:30 A.M. (Eastern Standard Time) for the following
purposes:
1. To elect two Class I Directors to the Board of
Directors;
2. To approve the proposed 1995 Stock Option Plan;
3. To consider and act upon such other business as may
properly come before the Annual Meeting or any
adjournment thereof.
The Proxy Statement dated December 20, 1995 is attached.
The Board of Directors has fixed the close of business
on December 15, 1995 as the record date for the determination
of shareholders entitled to notice of and to vote at the
meeting.
You are cordially invited to attend the Annual Meeting.
If you cannot be present in person, please sign and date the
enclosed proxy and promptly mail it in the enclosed return
envelope which requires no postage. Any shareholder giving
a proxy has the right to revoke it any time before it is
voted.
BY ORDER OF THE BOARD OF DIRECTORS
MICHAEL B. KINNARD, Secretary
Dated: Wilmington, Delaware
December 20, 1995
YOU ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO UNITED
STATES POSTAGE.
<PAGE>
PROXY STATEMENT
MATLACK SYSTEMS, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 25, 1996
The information concerning the enclosed proxy and
the matters to be acted upon at the Annual Meeting of
Shareholders to be held on January 25, 1996 (the "Annual
Meeting") is submitted to the shareholders for their
information.
SOLICITATION OF AND POWER TO REVOKE PROXY
This Proxy Statement is furnished in connection with
the solicitation of proxies on behalf of the Board of
Directors of MATLACK SYSTEMS, INC., a Delaware corporation
(the "Company"). Proxies solicited hereby are to be voted at
the Annual Meeting or at any adjournment thereof.
The mailing address for the Company's principal
executive office is P. O. Box 8790, Wilmington, Delaware
19899. This Proxy Statement and the form of proxy were first
sent to the Company's shareholders on December 20, 1995.
A form of proxy is enclosed. Each proxy submitted
will be voted as directed but, if not otherwise specified,
proxies solicited by the Board of Directors of the Company
will be voted (a) in favor of the candidates for election to
the Board of Directors as Class I Directors, and (b) to
approve the proposed 1995 Stock Option Plan.
The solicitation of proxies will be by mail. It may
be that further solicitation of proxies will be made by
telephone, telegram or interview with some shareholders of
the Company, following the original solicitation. All such
further solicitations will be made by regular officers and
employees of the Company, who will not be additionally
compensated therefor, or its Transfer Agent. The Company
will bear the entire cost of all such solicitations, which
will be nominal and include reimbursements paid to brokerage
firms and others for their expenses in forwarding
solicitation material regarding the meeting to beneficial
owners.
Each shareholder has the right to revoke his or her
proxy at any time before it is voted. A proxy may be revoked
by filing with the Secretary of the Company a written
revocation or a duly executed proxy bearing a later date or
by voting in person at the Annual Meeting. Any shareholder
may attend the Annual Meeting and vote in person, whether or
not such shareholder has previously given a proxy.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Two individuals are to be elected at the Annual
Meeting to serve as Class I Directors for a term of three
years each, and until the election and qualification of their
successors. Four other individuals serve as directors but
are not standing for re-election because their terms as
directors extend past the Annual Meeting pursuant to
provisions of the Company's Certificate of Incorporation
which provide for the election of directors for staggered
terms, with each director serving a three year term.
Unless a shareholder WITHHOLDS AUTHORITY, the proxy
holders will vote FOR the election of the persons
named below to three year terms as directors. Although the
Board of Directors does not contemplate the possibility, in
the event a nominee is not a candidate or is unable to serve
as a director at the time of the election, unless the
shareholder WITHHOLDS AUTHORITY, the proxies will be voted
for any nominee designated by the present Board of Directors
to fill such vacancy.
The name and age of each of the nominees, his
principal occupation, the period during which he has served
as a director together with the number of shares of Common
Stock beneficially owned by him, directly or indirectly, and
the percentage of outstanding shares that ownership
represents, all as at the close of business October 31, 1995
(according to information received by the Company), are set
forth below. Similar information is also provided for those
directors whose terms expire in future years.
<TABLE>
Shares of Percent of
Names of Principal Service as Common Outstanding
Nominees Occupation (1) Director Age Stock(2) Shares
<S> <C> <C> <C> <C> <C>
Class I (Term Expires 1999)
Patrick J. Bagley Vice President-Finance 1988 to date 48 9,542 0.1%
and Treasurer; Vice
President - Finance
and Treasurer, Rollins
Truck Leasing Corp.*;
Gerard J. Trippitelli President and Chief 1988 to date 52 59,616 0.7%
Executive Officer (3)
<PAGE>
Names of Directors Whose
Terms Have Not Expired
Class II (Term Expires 1997)
John W. Rollins, Jr. Chairman of the Board; 1988 to date 53 221,325 (4) 2.5%
President, Chief
Operating Officer and
Director, Rollins
Truck Leasing Corp.*;
Senior Vice Chairman of
the Board, Rollins
Environmental Services,
Inc.** (3)
William B. Philipbar, Jr. Retired; Former 1993 to date 70 1,606 -
President and Chief
Executive Officer,
Rollins Environmental
Services, Inc. **
Class III (Term Expires 1998)
John W. Rollins Chairman of the Board 1988 to date 79 1,003,684 (5) 11.4%
and Chief Executive
Officer, Rollins Truck
Leasing Corp.*; Chairman
of the Board and Chief
Executive Officer,
Rollins Environmental
Services, Inc.** (3)
Henry B. Tippie Chairman of the 1988 to date 68 300,000 (6) 3.4%
Executive Committee;
Chairman of the
Executive Committee and
Vice Chairman of the
Board, Rollins Truck
Leasing Corp.*; Chairman
of the Executive
Committee and Director,
Rollins Environmental
Services, Inc.**;
Chairman of the Board
and Chief Executive
Officer, Tippie
Communications, Inc.
et al. (Radio Stations)
</TABLE>
*Rollins Truck Leasing Corp. is engaged in the business of truck
leasing.
**Rollins Environmental Services, Inc. is engaged in the business
of industrial waste disposal.
<PAGE>
(l) Except as noted, the nominees and other directors have held
the positions of responsibility set out in the above column
(but not necessarily their present titles) for more than five
years. In addition to the directorships listed in the above
column, the following individuals also serve on the board of
directors of the following companies: John W. Rollins,
Rollins, Inc., RPC Energy Services, Inc. and FPA Corp.; Henry
B. Tippie, Rollins, Inc. and RPC Energy Services, Inc.;
William B. Philipbar, Jr., Rollins Truck Leasing Corp. and
Rollins Environmental Services, Inc.; Patrick J. Bagley,
Rollins Environmental Services, Inc.
(2) All shares are owned directly and of record.
(3) John W. Rollins is the father of John W. Rollins, Jr. Mr.
Trippitelli is married to a first cousin of Eugene C. Bonacci,
a Named Executive officer of the Company.
(4) Does not include 53,998* shares held as Co-Trustee and 3,000*
shares held by his wife.
(5) Does not include 24,268* shares held by his wife and 15,687*
shares held by his wife as Custodian for his minor children.
(6) Does not include 163,821* shares held as Co-Trustee; 5,500*
shares held as Trustee; 5,500* shares owned by his wife;
4,500* shares held by his wife as Trustee for his children;
and 27,000* shares owned by a partnership over which Mr.
Tippie has sole voting power.
*The Messrs. Rollins and Tippie disclaim any beneficial interest in
these holdings.
PROPOSAL NO. 2
1995 Stock Option Plan
Introduction
On October 26, 1995, the Board of Directors adopted resolutions
approving and adopting, subject to shareholder approval,
the Company's 1995 Stock Option Plan (the "Plan"). A copy of the
Plan is attached to this Proxy Statement as Appendix A.
The purpose of the Plan and the granting of Options thereunder to
specific employees is to further the growth, development and
financial success of the Company and its subsidiaries by providing
additional incentives to certain of its employees or directors,
who have been or will be given responsibility for the management of
its business affairs, by assisting them to become owners
of shares of the Common Stock of the Company and thus to benefit
directly from its growth, development and financial success.
The Board of Directors has proposed that 500,000 shares of the
Company's Common Stock be made available for grant under
the Plan.
<PAGE>
Shares Subject to the Plan
Upon approval of the Plan by the shareholders, the aggregate
number of shares of Common Stock in respect to which
Options may be granted under the Plan will be 500,000, subject,
however, to increase or decrease as hereinafter described. More
than one Option may be granted to the same individual. If an
Option terminates for any reason without having been exercised
in full, the shares applicable to the unexercised portion of such
Option shall become available again for the granting of other
Options under the Plan, unless the Plan has terminated.
Administration
The Plan will be administered by the Stock Option Committee of
the Board of Directors of the Company (the "Committee").
Under the Plan, the Committee is authorized and empowered to
administer the Plan and to: (a) select the employees to whom
Options are to be granted and to fix the number of shares to be
granted to each; (b) determine whether the Option granted is to
be considered an "incentive stock option" qualified under Section
422 of the Internal Revenue Code, or a "non-qualified stock
option" (that is, any Option which is not considered an incentive
stock option); (c) determine the date on which Options shall
be granted and the terms and conditions of the granted Options in
a manner consistent with the Plan, which terms need not always
be identical; (d) interpret the Plan; (e) prescribe, amend and
rescind rules relating to the Plan; and (f) determine the rights
and obligations of participants under the Plan. The Committee
shall consist of two or more Directors of the Company, neither of
whom shall have been granted or awarded, during the one year prior
to service as an administrator of the Plan, any equity securities
pursuant to the Plan or any other plan of the Company or any of its
affiliates.
Option Price
The Option price of the shares under each Option shall be
determined by the Committee, but shall not be less than 100%
of the fair market value of such shares on the date of granting of
the Option as reported in The Wall Street Journal. Fair market
value is the closing price of the Common Stock on the New York
Stock Exchange on the date of grant of the Option or, in the
absence of reported sales on said Exchange on that date, on the
next preceding date on which there was a sale of such stock.
Exercise of the Option
Each Option shall be exercisable for the full number of shares
subject thereto, or any part thereof, and at such intervals as
the Committee may determine, provided that no Option may be
exercisable subsequent to its termination date.
<PAGE>
Not Transferable
No Option shall be assignable or transferable except by will or
by the laws of descent and distribution. During the lifetime
of an optionee, the Option shall be exercisable only by the
optionee. After the death of an optionee, the Option may be
exercised prior to its termination by the optionee's legal
representative, heir or legatee.
Eligibility
The employees who will be eligible to receive grants of Options
under the Plan will be those key executive employees or
directors of the Company, or of any subsidiaries, who have been
selected by the Committee.
Stock Splits, Stock Dividends, etc.
If there are any changes in the capitalization of the Company
affecting in any manner the number or kind of outstanding
shares of Common Stock of the Company, whether such changes have
been occasioned by declaration of stock dividends, stock
split-ups, reclassifications or recapitalizations of such stock, or
because the Company has merged or consolidated with some other
corporation (and provided the Option does not thereby become
terminated), or for any other reason whatsoever, then the number
and kind of shares then subject to Options and thereafter to become
subject to Options, and the prices to be paid therefor, shall
be proportionately adjusted by the Committee to whatever extent the
Committee determines that any such change equitably
requires an adjustment.
Mergers or Consolidations
If the Company at any time should elect to dissolve, undergo a
reorganization, split-up its stock, or merge or consolidate
with any corporation, and the Company is not the surviving
corporation, then (unless, in the case of a reorganization, stock
split-up, merger or consolidation, one or more of the surviving
corporations assumes the Options under the Plan or issues
substitute options in place thereof) each Optionee holding
outstanding Options not yet exercised shall be notified of his or
her right to exercise such Options to the extent then exercisable
prior to such dissolution, reorganization, stock split-up, merger
or consolidation. The Committee may, in its sole and absolute
discretion and on such terms and conditions as it deems
appropriate, authorize the exercise of such Options with respect to
all shares covered thereby. Any Options not exercised as so
authorized thereupon shall be deemed terminated, and simultaneously
the Plan itself shall be deemed terminated.
<PAGE>
Modification
The Board of Directors of the Company may make such amendments
to the Plan, and, with the consent of each Optionee
affected, in the terms and conditions of granted Options, as it
shall deem advisable, including, but not limited to, accelerating
the time at which an incentive Option may be exercised, but may
not, without the approval of the holders of not less than a
majority of the outstanding shares of Common Stock of the Company,
increase the maximum number of shares subject to the
Plan, except as set forth immediately above.
Termination
The Plan shall terminate on October 26, 1996, unless prior to
that time it has been approved by the vote of the holders of
not less than a majority of the then outstanding Common Stock of
the Company. If such approval is given, the Plan will
terminate on October 26, 2005; provided, however, that the Board of
Directors of the Company within its absolute discretion may
terminate the Plan at any time. No such termination, other than as
a consequence of a merger or consolidation, as described above,
shall in any way affect any Option then outstanding.
Tax Effect
The Company will not realize any tax benefit upon the exercise
or disposition of an incentive stock Option except in the event
the employee does not hold his incentive stock Option shares at
least two years from the date the Option was granted and at least
one year from the date he exercised his Option, in which event the
Company will be entitled to a deduction measured by the difference
between the exercise price and the amount realized by the employee
on the sale. On the other hand, the Company will be entitled to a
deduction upon the employee's exercise of a non-qualified stock
Option measured by the difference between the exercise price and
the market value of the Option stock on the day of exercise.
Employee Status
The holder of an Option must be an employee as of the grant date
of the Option through three months before the exercise date. A
disabled or retired employee may also exercise his Option up to
three months after termination of employment. No employee who owns
ten (10%) percent of the total combined voting power of all classes
of the Company's, or of its subsidiaries', capital stock may be
granted an Option.
<PAGE>
Aggregate Value
The aggregate fair market value of the stock (determined as of
the time the Option is granted) with respect to which stock
options are exercisable for the first time by the employee during
any calendar year (under all the stock option plans maintained
by the Company and its subsidiary corporations) shall not exceed
$100,000 in accordance with Section 422 of the Internal
Revenue Code of 1986 as amended. No Option shall be granted under
the Plan after ten (10) years from the date the Plan is
adopted.
General
On October 26, 1995, the last reported sale price of the
Company's Common Stock on the New York Stock Exchange as
reported in The Wall Street Journal was $8.625 per share.
The Board of Directors recommends a vote FOR the approval of the
1995 Stock Option Plan and the management proxy holders will vote
all proxies received in favor of the proposed Plan unless otherwise
instructed.
CAPITAL STOCK
The outstanding capital stock of the Company on December 15,
1995 consisted of 8,803,218 shares of Common Stock, par value $l.00
per share. Holders of Common Stock are entitled to one vote
(non-cumulative) for each share of such stock registered in their
respective names at the close of business on December 15, 1995, the
record date for determining shares entitled to notice of and to
vote at the Annual Meeting or any adjournment thereof.
The holders of a majority of the issued and outstanding
Common Stock constitute a quorum at any meeting of
shareholders and the affirmative vote of a majority of the shares
present is required for shareholder approval, except for certain
proposals to amend the Certificate of Incorporation which require
the affirmative vote of the holders of a majority of all
outstanding Common Stock for approval. Other amendments to the
Certificate of Incorporation concerning: (a) special meetings
of shareholders; (b) amendments to the by-laws; (c) provisions
relating to the Board of Directors; and (d) certain business
transactions, when not approved by a majority of the Board of
Directors, require the affirmative vote of 75% of the shares then
entitled to be voted for approval.
<PAGE>
As of October 31, 1995, four persons were known to the
Company to own beneficially more than five percent (5%)
of the outstanding shares of Common Stock of the Company. The name
and address of each such person together with the number of shares
so owned and the percentage of outstanding shares that ownership
represents and information as to Common Stock ownership of the
Named Executives identified in the Summary Compensation Table and
the officers and directors of the Company as a group (according to
information received by the Company) are set forth below:
Number of
Shares and
Nature of
Title of Names and Addresses Beneficial Percent of
Class of Beneficial Owners Ownership (1) Class
Common John W. Rollins 1,003,684 11.4%
One Rollins Plaza
Wilmington, DE 19803
Common Dimensional Fund Advisors, Inc. 504,325 (2) 5.7%
1299 Ocean Avenue, Suite 1100
Santa Monica, CA 90401
Common Alpine Capital, L.P., et al 1,742,750 (3) 19.8%
201 Main Street, Suite 3100
Fort Worth, TX 76102
Common Rollins Properties, Inc. 600,000 6.8%
One Rollins Plaza
Wilmington, DE 19803
Common Gerard J. Trippitelli 59,616 0.7%
One Rollins Plaza
Wilmington, DE 19803
Common Eugene C. Bonacci 34,709 0.4%
One Rollins Plaza
Wilmington, DE 19803
Common All Directors and 1,631,082 18.5%
Officers as a Group
(8 persons)
(1) As to officers and directors, owned directly and of record.
(2) Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership
of 504,325 shares of stock as of September 30, 1995, all of
which shares are held in portfolios of DFA Investment
Dimensions Group Inc. (the "Fund"), a registered open-end
investment company, in series of The DFA Investment Trust
Company (the "Trust"), a Delaware business trust, or in the
DFA Group Trust and the DFA Participating Group Trust,
investment vehicles for qualified employee benefit plans, all
of which are served by Dimensional Fund Advisors Inc. as
investment manager. Dimensional disclaims beneficial
ownership of all such shares.
<PAGE>
Sole Voting Power = 408,075 shares*
Shared Voting Power = 0
Sole Dispositive Power = 504,325
Shared Dispositive Power = 0
*Persons who are officers of Dimensional also serve as officers
of the Fund and the Trust. In their capacities as officers
of the Fund and the Trust, these persons vote 65,580
additional shares which are owned by the Fund and 30,400
shares which are owned by the Trust (both included in Sole
Dispositive Power above).
(3) Includes 1,573,794 shares held by Alpine Capital, L.P., a
Texas limited partnership ("Alpine") and 168,956 shares held
by The Anne T. and Robert M. Bass Foundation, a Texas
non-profit corporation ("Foundation"). The two general
partners of Alpine are Robert W. Bruce III and Algenpar, Inc.
Algenpar, Inc. is a Texas corporation controlled by J. Taylor
Crandall. Mr. Bruce, through The Robert Bruce Management Co.,
Inc., shares investment discretion over the shares held
by the Foundation with Mr. Crandall, Anne T. Bass and Robert
M. Bass, who serve as directors of the Foundation.
BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board of Directors held four regularly scheduled meetings
during fiscal year 1995. All members of the Board attended
each meeting.
Audit Committee. The Audit Committee consists of William B.
Philipbar, Jr., Chairman, and Henry B. Tippie. The Audit
Committee held two meetings during the last fiscal year. The
Committee's functions include consulting with the Company's
independent public accountants concerning the scope and results of
the audit, reviewing the evaluation of internal accounting
controls and inquiring into special accounting-related matters.
Executive Committee. The Executive Committee consists of Henry
B. Tippie, Chairman, John W. Rollins, John W. Rollins,
Jr and Gerard J. Trippitelli. The Executive Committee held five
meetings during the last fiscal year. The Executive Committee
has the power to exercise all of the powers and authority of the
Board of Directors in the management of the business and affairs
of the Company in accordance with the provisions of the by-laws of
the Company. The Executive Committee performs all of
the functions of a compensation committee of the Board of
Directors.
Stock Option Committee. The Stock Option Committee consists of
Henry B. Tippie, Chairman, and John W. Rollins. Mr. Tippie and Mr.
Rollins are disinterested directors within the meaning of Rule
16b-3 of the Securities Exchange Act of 1934. Neither participates
in any Company stock option plan. The Stock Option Committee held
two meetings during the last fiscal year. The Stock Option
Committee administers the Company's outstanding Stock Options Plan
including the granting of options to various employees of the
Company and its subsidiaries.
<PAGE>
The Company does not have a nominating committee of the Board
of Directors.
DIRECTOR'S COMPENSATION
Directors who are not full- time employees of the Company or
any of its subsidiaries are paid an attendance fee of $750
for each Board of Directors or committee meeting attended.
Notwithstanding anything to the contrary set forth in any of
the Company's previous filings under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended,
that might incorporate future filings, including this Proxy
Statement, in whole or in part, the following report and the
Performance Graph on page 9 shall not be incorporated by reference
into any such filings.
REPORT OF THE EXECUTIVE AND STOCK OPTION COMMITTEES OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
During fiscal year 1995, the members of the Executive Committee
of the Board of Directors held primary responsibility for
determining executive compensation levels.
The Company is engaged in a highly competitive industry. As a
consequence, the Company views its ability to attract and
retain qualified executives as the cornerstone of its future
success. In order to accomplish this objective, the Company has
endeavored to structure its executive compensation in a fashion
that takes into account the Company's operating performance
and the individual performance of the executive. Of necessity,
this analysis is subjective in nature and not based upon a
structured formula. The factors referred to above are not weighted
in an exact fashion.
Pursuant to the above compensation philosophy, the total annual
compensation of executive officers of the Company is made
up of one or more of three elements. The three elements are
salary, an annual incentive compensation package and, in some
years grants of stock options.
The salary of each executive officer is determined by the
Executive Committee. As previously stated, in making its
determinations the Executive Committee gives consideration to the
Company's operating performance for the prior fiscal year,
increases in share value and the individual executive's
performance.
<PAGE>
The annual incentive compensation package for executive
officers is developed by the Chief Executive Officer of the
Company prior to the end of each fiscal year. It is based upon a
performance formula for the ensuing fiscal year. That
performance formula and incentive package is then reviewed by the
Executive Committee and is either accepted, amended or
modified. Other than the CEO, none of the members of the Executive
Committee participate in the incentive program, nor does
any member of the Board of Directors, except for the CEO, who is
also a director. The CEO does not participate in the
deliberations of the Executive Committee when his salary or
incentive is determined.
Awards under the Company's Stock Option Plan are purely
discretionary, are not based upon any specific formula, and
may or may not be granted in any given fiscal year. Grants made
under and the administration of the Company's Stock Option
Plan is by disinterested directors within the meaning of Rule 16b-3
of the Securities Exchange Act of 1934. When considering
the grant of stock options, the Stock Option Committee gives
consideration to the overall performance of the Company and the
performance of individual employees.
CEO COMPENSATION
The CEO's compensation is determined by the Executive Committee
and the Stock Option Committee. As is the case with
respect to the Named Executives, the CEO's compensation is based
upon the Company's operating performance and his individual
performance. The CEO's compensation consists of the same three
elements identified above with respect to Named Executives:
salary; an annual incentive; and, in some years, grants of stock
options. The determination of salary and the award of stock
options, if any, are subjective and not based upon any specific
formula or guidelines. The determination of an annual incentive
is based on the amount by which the Company's pretax earnings
exceed a target established by the Executive Committee prior
to the beginning of the fiscal year. The target is revised
annually. For fiscal year ending September 30, 1995, the Company's
pretax earnings exceeded the target established by the Executive
Committee and Mr. Trippitelli received $21,480 in incentive
compensation. The CEO is not a member of the Stock Option
Committee and does not participate in the deliberations of the
Executive Committee when his salary or incentive is determined.
Executive Committee Stock Option Committee
Henry B. Tippie, Chairman Henry B. Tippie, Chairman
John W. Rollins John W. Rollins
John W. Rollins, Jr.
Gerard J. Trippitelli
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers and directors and persons who own
more than ten percent of a registered class of the Company's equity
securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC").
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 on its review of the copies of such forms received by it,
the Company believes that during its fiscal year ended 1995
all filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with.
COMMON STOCK PERFORMANCE
The following table reflects a comparison of the cumulative
total shareholder return on the Company's common stock with
the S&P Composite 500 Index and the S & P Truckers Index,
respectively, for the five year period commencing October 1, 1990
through September 30, 1995. The table assumes that the value of
the investment in the Company's common stock and each
index was 100 at September 30, 1990 and all dividends were
reinvested. The comparisons in this table are required by the
Securities and Exchange Commission and, therefore, are not intended
to forecast or be necessarily indicative of any future return
on the Company's common stock.
****************YEARS******************
1990 1991 1992 1993 1994 1995
Matlack Systems, Inc. 100 110 193 400 435 390
S&P Composite 500 Index 100 131 146 165 171 221
S&P Truckers Index 100 159 177 174 177 165
Assumes $100 invested on October 1, 1990
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following directors serve on the Company's Executive
Committee: John W. Rollins, John W. Rollins, Jr., Henry B.
Tippie and Gerard J. Trippitelli. Each is an employee of the
Company but none participates in the deliberations of the Executive
Committee with respect to his own compensation. John W. Rollins,
John W. Rollins, Jr. and Henry B. Tippie are members of the
Executive Committees of Rollins Truck Leasing Corp. and Rollins
Environmental Services, Inc. The Executive Committee of each of
these two companies performs the functions of a compensation
committee. Patrick J. Bagley serves as a director of Rollins
Environmental Services, Inc.
<PAGE>
EXECUTIVE COMPENSATION
Shown below is information concerning the annual compensation for
services in all capacities to the Company for the fiscal
years ended September 30, 1993, 1994 and 1995, of those persons who
were, at September 30, 1995, (i) the Chief Executive Officer and
(ii) the other most highly compensated executive officers of the
Company whose total annual salary exceeded $100,000 (the "Named
Executives"):
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
Restricted Stock All Other
Name and Other Annual Stock Options LTIP Compen-
Principal Salary Bonus Comp. (2) Awards(3) /SARs Payouts sation
Position Year (1) $ $ $ $ # $ $
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gerard J. Trippitelli 1995 247,500 21,480 - -0- 9,000 -0- -0-
President and CEO 1994 232,500 136,334 - -0- -0- -0- -0-
1993 204,484 173,594 - -0- 18,000 -0- -0-
Eugene C. Bonacci 1995 168,656 -0- - -0- 6,000 -0- -0-
Vice President - 1994 162,311 64,357 - -0- -0- -0- -0-
Operations of 1993 152,500 92,872 - -0- 13,500 -0- -0-
Matlack, Inc.
</TABLE>
(1) Fiscal years ending September 30.
(2) The only type of Other Annual Compensation for each of the
named officers was in the form of perquisites and was less
than the level required for reporting.
(3) No awards have ever been made.
<PAGE>
OPTION AND STOCK APPRECIATION RIGHTS GRANTS IN LAST FISCAL YEAR
The following table sets forth stock options granted in the
fiscal year ending September 30, 1995 to each of the
Company's Named Executives. Employees of the Company and its
subsidiaries are eligible for stock option grants based on
individual performance. The Company did not issue any stock
appreciation rights. The table also sets forth the hypothetical
gains that would exist for the options at the end of their
eight-year terms, assuming compound rates of stock
appreciation of 0%, 5% and 10%. The actual future value of the
options will depend on the market value of the Company's
Common Stock. All option exercise prices are based on the market
price on the grant date.
<TABLE>
Potential Realizable Value
at Assumed Annual Rates of Stock
Price Appreciation for
Individual Grants(1) Option Term (2)
<CAPTION>
% of Total
Options
Options Granted To Exercise
Granted Employees Price Expiration
Name (#) in Fiscal Year ($/Sh) Date 0% 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
Gerard J. Trippitelli 9,000 7.2% $9.75 01/03/03 - $ 41,940 $ 100,350
Eugene C. Bonacci 6,000 4.8% $9.75 01/03/03 - $ 27,960 $ 66,900
All employees as a
group (3) 124,900 100.0% $9.75 01/03/03 - $ 581,734 $ 1,391,910
Total potential stock price appreciation from January 4, 1995
to January 3, 2003 for all stockholders at assumed rates of
stock price appreciation (4) $41,008,233 $98,120,558
</TABLE>
(1) Options were granted on January 4, 1995.
<PAGE>
(2) These amounts, based on assumed appreciation rates of 0%
and the 5% and 10% rates prescribed by the Securities
and Exchange Commission rules, are not intended to
forecast possible future appreciation, if any, of the
Company's stock price. These numbers do not take into
account certain provisions of options providing for
termination of the option following termination of
employment, nontransferability or phased-in vesting.
The Company did not use an alternative formula for a
grant date valuation as it is not aware of any formula
which will determine with reasonable accuracy a
present value based on future unknown or volatile
factors. Future compensation resulting from option
grants is based solely on the performance of the
Company's stock price.
(3) Based on 2,500 options granted on November 24, 1994 at
an exercise price of $9.50 and 122,400 options granted
on January 4, 1995 at an exercise price of $9.75.
(4) Based on a price of $9.75 on January 4, 1995 and a total
of 8,800,050 shares of Common Stock outstanding on
October 31, 1995.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The following table summarizes option exercises
during fiscal 1995 by the Company's Named Executives, and
the value of the options held by such persons as of September
29, 1995. The Company has not granted and does not have
any Stock Appreciation Rights outstanding.
<TABLE>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares Acquired Value FY-End (#) FY-End ($)
Name on Exercise (#) Realized ($)(1) Exercisable Unexercisable Exercisable Unexercisable(2)
<S> <C> <C> <C> <C> <C> <C>
Gerard J. Trippitelli 9,812 $52,041 5,813 34,309 $21,488 $105,961
Eugene C. Bonacci 4,950 $22,969 4,500 24,150 $17,063 $ 73,289
</TABLE>
(1) Fair market value of underlying security at exercise
date less the exercise price.
(2) The value of the Company's common stock on September 29,
1995 was $9.75 per share.
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
There were no Long-Term Incentive Plan awards to the
Named Executives during fiscal year 1995.
<PAGE>
DEFINED BENEFIT PLANS
The Company's Pension Plan is a non-contributory
qualified employee defined benefit plan. All full time
employees of the Company (except certain employees covered by
collective bargaining agreements) are eligible to participate
in the Pension Plan. Retirement benefits are equal to the
sum of 1.35% of earnings up to covered compensation, as that
term is defined in the Plan, and 1.7% of earnings above
covered compensation. Covered compensation includes regular
salaries or wages, commissions, bonuses, overtime earnings
and short-term disability income protection benefits.
Retirement benefits are not subject to any reduction
for Social Security benefits or other offset amounts. An
employee's benefits may be paid in certain alternative forms
having actuarially equivalent values. Retirement benefits
are fully vested at the completion of five years of credited
service or, if earlier, upon reaching age 55. The maximum
annual benefit under a qualified pension plan is currently
$120,000 beginning at the Social Security retirement age
(currently age 65).
The Company maintains a non-qualified, defined benefit
plan, called the Excess Benefit Plan, which covers those
participants of the Pension Plan whose benefits are limited
by the Internal Revenue Code. A participant in the Excess
Benefit Plan is entitled to a benefit equaling the difference
between the amount of the benefit payable without limitation
and the amount of the benefit payable under the Pension Plan.
Annual pension benefit projections for the Named
Executives assume: (a) that the participant remains in the
service of the Company until age 65; (b) that the
participant's earnings continue at the same rate as paid in
the fiscal year ended September 30, 1995 during the remainder
of his service until age 65; and (c) that the Plans continue
without substantial modification. The estimated annual
benefit at retirement for each of the Named Executives is:
Gerard J. Trippitelli, $125,248; and Eugene C. Bonacci,
$65,158.
AUDITORS
The Board of Directors has not selected or recommended
the name of an independent public accounting firm for
approval or ratification by the shareholders. The Board of
Directors believes that it will be in the best interests of
the shareholders if it is free to make such determination
based upon all factors that are then relevant.
KPMG Peat Marwick LLP served as the Company's auditors
for the fiscal year ended September 30, 1995. A
representative of KPMG Peat Marwick LLP will be present at
the Annual Meeting and will have the opportunity to make
a statement should such representative so desire. Such
representative also will be available to answer questions
raised orally.
<PAGE>
During the fiscal year ended September 30, 1995, KPMG
Peat Marwick LLP's services rendered to the Company
consisted of auditing the Company's financial statements. In
this connection, KPMG Peat Marwick LLP performed such
tests of the Company's accounting records and other auditing
procedures as were required by generally accepted auditing
standards.
SHAREHOLDER PROPOSALS
Appropriate proposals of eligible shareholders (an
eligible shareholder must be a record or beneficial owner of
at least l% or $l,000 in market value of securities entitled
to be voted at the meeting and have held such securities for
at least one year) intended to be presented at the Company's
next Annual Meeting of Shareholders must be received by the
Company no later than August 23, 1996 for inclusion in the
Proxy Statement and form of proxy relating to that meeting.
MISCELLANEOUS
ON WRITTEN REQUEST OF ANY RECORD OR BENEFICIAL
SHAREHOLDER OF THE COMPANY, THE COMPANY WILL PROVIDE, FREE OF
CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1995, INCLUDING
THE FINANCIAL STATEMENTS AND SCHEDULES THERETO. REQUESTS FOR
A COPY OF FORM 10-K SHOULD BE MADE IN WRITING AND
ADDRESSED TO:
PATRICK J. BAGLEY
VICE PRESIDENT - FINANCE AND TREASURER
MATLACK SYSTEMS, INC.
P. O. BOX 8790
WILMINGTON, DELAWARE 19899
THE COMPANY WILL CHARGE REASONABLE OUT-OF-POCKET
EXPENSES FOR THE REPRODUCTION OF EXHIBITS TO FORM 10-K SHOULD
A SHAREHOLDER REQUEST COPIES OF SUCH EXHIBITS.
The Company's Annual Report for the fiscal year ended
September 30, 1995 has been mailed to shareholders under
separate cover.
The Board of Directors knows of no business other than
the matters set forth herein which will be presented at the
meeting. Inasmuch as matters not known at this time may come
before the meeting, the enclosed proxy confers discretionary
authority with respect to such matters as may properly come
before the meeting and it is the intention of the persons
named in the proxy to vote in accordance with their judgment
on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
MICHAEL B. KINNARD, Secretary
Wilmington, Delaware
December 20, 1995
<PAGE>
APPENDIX "A"
MATLACK SYSTEMS, INC.
1995 Stock Option Plan
1. Purpose. The 1995 Stock Option Plan (the "Plan")
is intended to advance the best interests of Matlack
Systems, Inc. (the "Company") by providing its employees and
the employees of its subsidiaries with additional incentive
and by increasing their proprietary interest in the success
of the Company and its subsidiary corporations.
2. Administration. The Plan shall be administered
by the Stock Option Committee of the Board of Directors
of the Company (the "Committee"). The Committee shall
consist of two or more Directors of the Company, each of whom
shall be a disinterested person and shall not have been
granted or awarded, during the one year prior to service as
an administrator of the Plan, any equity securities pursuant
to the Plan or any other plan of the Company or any of its
affiliates, except as permitted by Rule 16b-3 of the
Securities Exchange Act of 1934. Meetings shall be held at
such time and place as shall be determined by the Committee.
A majority of the members of the Committee shall constitute
a quorum for the transaction of business, and the vote of a
majority of those members present at any meeting shall decide
any questions brought before that meeting. In addition, the
Committee may take any action otherwise proper under the Plan
by the unanimous written consent of its members. No member
of the Committee shall be liable for any act or omission of
any other member of the Committee or for any act or omission
on his own part, including, but not limited to, the exercise
of any power or discretion given to him under the Plan,
except those resulting from his own gross negligence or
willful misconduct. All questions of interpretation and
application of the Plan, or of options granted hereunder (the
"Options"), shall be subject to the determination, which
shall be final and binding, of a majority of the whole
Committee.
3. Option Shares. The stock subject to the Options
and other provisions of the Plan shall be shares of the
Company's Common Stock, $1.00 par value (the "Stock"). The
total amount of the Stock with respect to which Options
may be granted shall not exceed in the aggregate 500,000
shares; provided, however, that the class and aggregate
number of shares which may be subject to Options granted
hereunder shall be subject to adjustment in accordance with
the provisions of Paragraph 16 hereof. Such shares may be
treasury shares or authorized but unissued shares. In the
event that any outstanding Option for any reason shall
expire, the shares of Stock allocable to the unexercised
portion of such Option may again be subject to an Option
under the Plan.
<PAGE>
4. Termination of Plan. The Plan shall terminate on
October 26, 1996, unless prior to that time it has been
approved by the vote or written consent of the holders of not
less than a majority of the then outstanding common stock of
the Company. If such approval is given, the Plan shall
terminate on October 26, 2005; provided, however, that the
Board of Directors of the Company within its absolute
discretion may terminate the Plan at any time. No such
termination, other than as provided for in Section 16 hereof,
shall in any way affect any Option then outstanding.
5. Authority to Grant Options. The Committee may
grant from time to time, to such eligible individuals as
it shall from time to time determine, an Option, or Options,
to buy a stated number of shares of Stock under the terms and
conditions of the Plan. Subject only to any applicable
limitations set forth in the Plan, the number of shares of
Stock to be covered by any Option shall be as determined by
the Committee. The Committee shall determine whether an
Option shall be an "incentive stock option" qualified under
Section 422 of the Internal Revenue Code of 1986 as amended
(the "Code"), or a "non-qualified stock option" (that is, any
Option which is not considered an incentive stock option).
The aggregate fair market value (determined as provided in
Section 7 of the Plan) of the Stock with respect to which
incentive stock options are granted hereunder which are
exercisable for the first time by such employee during any
calendar year (under all the stock option plans maintained by
the Company and subsidiary corporations) shall not exceed
$100,000 in accordance with Section 422 of the Code. No
option shall be granted under the Plan after ten (10) years
from the date the Plan is adopted.
6. Eligibility. The individuals who shall be
eligible to participate in the Plan shall be employees of the
Company, or of any subsidiary corporation, as the Committee
shall determine from time to time; provided, however, that
no employee owning more than ten percent (10%) of the stock
of the Company at the time an option is granted shall be
eligible to participate in the Plan. For all purposes of the
Plan, the term "subsidiary corporation" shall mean any
corporation of which the Company is the "parent corporation"
as that term is defined in Section 424(e) of the Code.
7. Option Price. The price at which shares may be
purchased pursuant to an Option shall be not less than
the fair market value of the shares of Stock on the date the
Option is granted, and the Committee in its discretion may
provide that the price at which shares may be purchased shall
be more than such fair market value. The "fair market value"
of the Stock shall be the closing price of the Stock on the
New York Stock Exchange as reported in The Wall Street
Journal for the trading day on which the Option is granted,
or if the Option is not granted on a trading day, then such
fair market value shall be determined on the trading day
before the Option is granted.
<PAGE>
8. Duration of Options. No Option shall be
exercisable after the expiration of ten years from the date
such Option is granted; and the Committee in its discretion
may provide that an Option shall be exercisable throughout
such ten-year period or during any lesser period of time
commencing on or after the date of grant of the Option and
ending upon or before the expiration of such ten-year period.
9. Amount Exercisable. Each Option may be
exercised, so long as it is valid and outstanding, from time
to time in part or as a whole, subject to any limitations
with respect to the number of shares for which the Option may
be exercised at a particular time and to such other
conditions as the Committee in its discretion may specify
upon granting the Option.
10. Exercise of Options. Options shall be exercised
by the delivery of written notice to the Company setting
forth the number of shares with respect to which the Option
is to be exercised, together with cash, personal check, bank
draft or postal or express money order payable to the order
of the Company for an amount equal to the Option price of
such shares, and specifying the address to which the
certificates for such shares are to be mailed. Such notice
may be delivered in person to a member of the Committee, or
the Secretary of the Company, or may be sent by registered
mail, return receipt requested, to a member of the Committee,
or the Secretary of the Company, in which case delivery shall
be deemed made on the date such notice is deposited in the
mail. As promptly as practicable after receipt of such
written notification and payment, the Company shall deliver
to the optionee certificates for the number of shares with
respect to which such Option has been so exercised, issued in
the optionee's name; provided, however, that such delivery
shall be deemed effected for all purposes when a stock
transfer agent of the Company shall have deposited such
certificates in the United States mail, addressed to the
optionee, at the address specified pursuant to this Paragraph
10.
11. Transferability of Options. Options shall not be
transferrable by the optionee other than by will or under
the laws of descent and distribution, and shall be
exercisable, during his lifetime, only by the optionee.
12. Termination of Employment by Optionee. Except as
may be otherwise expressly provided herein, Options
shall terminate on such date as shall be selected by the
Committee in its discretion and specified in the Option
agreement not in excess of one day less than three months
following severance of the employment relationship between
the Company or its subsidiary corporation and the optionee
for any reason, for or without cause. Whether authorized
leave of absence, or absence on military or government
service, shall constitute severance of the employment
relationship between the Company or its subsidiary
corporation and the optionee shall be determined by the
Committee at the time thereof. If, before
the date of expiration of the Option, the optionee shall be
retired in good standing from the employ of the Company for
reasons of age or disability under the then established rules
of the Company, the Option shall terminate on the earlier of
such date of expiration or one day less than three months
after the date of such retirement. In the event of such
retirement, the optionee shall have the right prior to the
termination of such Option to exercise the Option to the
extent to which he was entitled to exercise such Option
immediately prior to such retirement. After the death of the
optionee, his executors, administrators, or any person or
persons to whom his Option may be transferred by will or by
the laws of descent and distribution, shall have the right,
at any time prior to the earlier of the date of expiration or
one year following the date of such death, to exercise the
Option, in whole or in part (without regard to any
limitations set forth in or imposed pursuant
to Paragraph 9 hereof).
13. Requirements of Law. The Company shall not be
required to sell or issue any shares under an Option if
the issuance of such shares constitute a violation by the
optionee or the Company of any provisions of any law or
regulation or any governmental authority. In addition, in
connection with the Securities Act of 1933 (as now in effect
or hereafter amended), upon exercise of any Option, the
Company shall not be required to issue such shares unless the
Committee has received evidence satisfactory to it to the
effect that the holder of such Option will not transfer such
shares except pursuant to a registration statement in effect
under such Act or unless an opinion of counsel to the Company
has been received by the Company to the effect that such
registration is not required. Any determination in this
connection by the Committee shall be final, binding and
conclusive. In the event the shares issuable on exercise of
an Option are not registered under the Securities Act of
1933, the Company may imprint the following legend or any
other legend which counsel for the Company considers
necessary or advisable to comply with the Securities Act of
1933:
"The shares of stock represented by this
certificate have not been registered under the Securities Act
of 1933 or under the securities laws of any State and may not
be sold or transferred except upon such registration or upon
receipt by the Company of an opinion of counsel satisfactory
to the Company, in form and substance satisfactory to the
Company, that registration is not required for such sale or
transfer."
The Company may, but shall in no event be
obligated to, register any securities covered hereby pursuant
to the Securities Act of 1933 (as now in effect or as
hereafter amended); and in the event any shares are so
registered the Company may remove any legend on certificates
representing such shares. The Company shall not be obligated
to take any other affirmative action in order to cause the
exercise of an Option or the issuance of shares pursuant
thereto to comply with any law or regulation of any
governmental authority.
14. No Rights as Shareholder. No optionee shall
have rights as a shareholder with respect to shares covered
by his Option until the date of issuance of a stock
certificate for such shares; and, except as otherwise
provided in Paragraph 16 hereof, no adjustment for dividends,
or otherwise, shall be made if the record date thereof is
prior to the date of issuance of such certificate.
15. Employment Obligation. The granting of any
Option shall not impose upon the Company any obligation
to employ or continue to employ any optionee; and the right
of the Company to terminate the employment of any employee
shall not be dismissed or affected by reason of the fact that
an Option has been granted to him.
16. Changes in the Company's Capital Structure.
The existence of outstanding Options shall not affect in
any way the right or power of the Company or its shareholders
to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or
affecting the Stock or the rights thereof, or the dissolution
or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or
otherwise.
If the Company shall effect a subdivision or
consolidation of shares or other capital readjustment, the
payment of a stock dividend, or other increase or reduction
of the number of shares of the Stock outstanding, without
receiving compensation therefor in money, services or
property, then (a) the number, class, and per share price of
shares of stock subject to outstanding Options hereunder
shall be appropriately adjusted in such a manner as to
entitle an optionee to receive upon exercise of any Option,
for the same aggregate cash consideration, the same total
number and class of shares as he would have received had he
exercised his Option in full immediately prior to the event
requiring the adjustment; and (b) the number and class of
shares then reserved for issuance under the Plan shall be
adjusted by substituting for the total number and class of
shares of Stock then reserved that number and class of shares
of stock that would have been received by the owner of an
equal number of outstanding shares of each class of Stock as
the result of the event requiring the adjustment.
After a merger of one or more corporations into
the Company, or after a consolidation of the Company
and one or more corporations in which the Company shall be
the surviving corporation, each holder of an outstanding
Option shall, at no additional cost, be entitled upon
exercise of such Option to receive (subject to any required
action by shareholders) in lieu of the number and class of
shares as to which such Option would have been so exercisable
in the absence of such event, the number and class of shares
of stock or other securities to which such holder would have
been entitled pursuant to the terms of the agreement of
merger or consolidation if, immediately prior to such merger
or consolidation, such holder had been the holder of record
of the number and class of shares of Stock equal to the
number and class of shares as to which such Option shall be
so exercised.
If the Company is merged into or consolidated
with another corporation under circumstances where the
Company is not the surviving corporation, or if the Company
is liquidated, or sells or otherwise disposes of
substantially all of its assets to another corporation while
unexercised Options remain outstanding under the Plan: (i)
subject to the provisions of clause (iii) below, after the
effective date of such merger, consolidation or sale, as the
case may be, each holder of an outstanding Option shall be
entitled, upon exercise of such Option, to receive, in lieu
of shares of the Stock, shares of such stock or other
securities as the holders of shares of such class of Stock
received pursuant to the terms of the merger,
consolidation or sale; (ii) the Board of Directors may waive
any limitations set forth in or imposed pursuant to Paragraph
9 hereof so that all Options, from and after a date prior to
the effective date of such merger, consolidation, liquidation
or sale, as the case may be, specified by the Board, shall be
exercisable in full; and (iii) all outstanding Options may be
canceled by the Board of Directors as of the effective date
of any such merger, consolidation, liquidation or sale
provided that (x) notice of such cancellation shall be given
to each holder of an Option and (y) each holder of an Option
shall have the right to exercise such Option in full (without
regard to any limitations set forth in or imposed pursuant to
Paragraph 9 hereof) during a 30-day period preceding the
effective date of such merger, consolidation, liquidation or
sale.
Except as hereinbefore expressly provided, the
issue by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class,
for cash or property, or for labor or services, either upon
direct sale or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or
other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number,
class or price of shares of Stock then subject to outstanding
Options.
17. Amendment or Termination of Plan. The Board of
Directors may modify, revise or terminate this Plan
at any time and from time to time; provided, however, that
without the further approval of the holders of at least a
majority of the outstanding shares of Stock, the Board may
not increase the aggregate number of shares which may be
issued under Options pursuant to the provisions of the Plan
and that any amendment, modification, revision or termination
shall not effect any outstanding options.
18. Written Agreement. Each Option granted
hereunder shall be embodied in a written option agreement,
which shall be subject to the terms and conditions prescribed
above and shall be signed by the optionee and by the
President or any Executive Officer of the Company for and in
the name and on behalf of the Company. Such an option
agreement shall contain such other provisions as the
Committee in its discretion shall deem advisable.
19. Indemnification of Committee. The Company
shall indemnify each present and future member of the
Committee against, and each member of the committee shall be
entitled without further act on his part to indemnity from
the Company for, all expenses (including the amount of
judgments and the amount of approved settlements made with a
view to the curtailment of costs of litigation, other than
amounts paid to the Company itself) reasonably incurred by
him in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his being
or having been a member of the Committee, whether or not he
continues to be such member of the Committee at the time of
incurring such expenses; provided, however, that such
indemnity shall not include any expenses incurred by any such
member of the Committee (a) in respect of matters as to which
he shall be finally adjudged in any such action, suit or
proceeding to have been guilty of gross negligence or willful
misconduct in the performance of his duty as such member of
the Committee, or (b) in respect of any matter in which any
settlement is effected, to any amount in excess of the amount
approved by the Company on the advice of its legal counsel;
and provided further, that no right of indemnification under
the provisions set forth herein shall be available to or
enforceable by any such member of the Committee unless,
within sixty (60) days after institution of any such action,
suit or proceeding, he shall have offered the Company, in
writing, the opportunity to handle and defend same at its own
expense. The foregoing right of indemnification shall inure
to the benefit of the heirs, executors or administrators of
each such member of the Committee and shall be in addition to
all other rights to which such member of the Committee may be
entitled as a matter of law, contract, or otherwise.
20. Effective Date of Plan. The Plan shall become
effective and shall be deemed to have been adopted on
October 26, 1995.
<PAGE>
MATLACK SYSTEMS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING
OF SHAREHOLDERS
Thursday, January 25, 1996, 9:30 A.M., E.S.T.
The undersigned hereby constitutes and
appoints John W. Rollins, Jr. and Michael B. Kinnard, and
each of them jointly and severally, proxies with full power
of substitution, to vote all shares of Common Stock which the
undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Company to be held on January 25, 1996 at
9:30 A.M. Eastern Standard Time, First Floor, 1209 Orange
Street, Wilmington, Delaware, or at any adjournment thereof,
on all matters set forth in the Notice of Annual Meeting and
Proxy Statement dated December 20, 1995, as follows:
(Mark only one box)
1. ELECTION OF DIRECTORS
Nominees: Patrick J. Bagley and Gerard J. Trippitelli
VOTE FOR all nominees listed above; except vote
withheld from the following nominee (if any):
VOTE WITHHELD FROM all nominees.
2. FOR AGAINST WITHHOLDS AUTHORITY FROM
VOTING ON The 1995 Stock Option Plan.
3. At their discretion, upon such matters as may properly
come before the Annual Meeting or any adjournment thereof.
(OVER)
<PAGE>
(CONTINUED FROM OTHER SIDE)
The undersigned acknowledges receipt of the aforesaid
Notice of Annual Meeting and Proxy Statement, each dated
December 20, 1995, grants authority to any of said proxies,
or their substitutes, to act in the absence of others, with
all the powers which the undersigned would possess if
personally present at such meeting, and hereby ratifies and
confirms all that said proxies, or their substitutes, may
lawfully do in the undersigned's name, place and stead.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF MATLACK SYSTEMS, INC. AND THE SHARES REPRESENTED
BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR
INSTRUCTIONS. IF NO CHOICE IS SPECIFIED BY YOU, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2.
Please sign below, date and return promptly.
Signature(s) of Shareholder(s)
DATED: January , 1996
Signature(s) should conform to name(s) and
title(s) stenciled hereon. Executors,
administrators, trustees, guardians and
attorneys should add their title(s) on
signing.
NO POSTAGE IS REQUIRED IF THIS PROXY IS RETURNED IN THE
ENCLOSED ENVELOPE AND MAILED IN THE UNITED STATES.
