SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MATLACK SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
/_/ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
1) Amount previously paid: _________________________________________________
2) Form, Schedule or Registration No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
___________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE>
MATLACK SYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 28, 1999
------------------------
TO THE HOLDERS OF COMMON STOCK:
PLEASE TAKE NOTICE that the 1999 Annual Meeting of Shareholders of MATLACK
SYSTEMS, INC., a Delaware corporation, will be held at the Rollins Building,
2200 Concord Pike, First Floor Auditorium, Wilmington, Delaware, on Thursday,
January 28, 1999, at 9:00 A.M. (Eastern Standard Time) for the following
purposes:
1. To elect two Class I Directors to the Board of Directors;
2. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournment thereof.
The Proxy Statement dated January 8, 1999 is attached.
The Board of Directors has fixed the close of business on December 18, 1998
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 United States 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
January 8, 1999
------------------------
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 28, 1999
------------------------
The information concerning the enclosed proxy and the matters to be acted
upon at the Annual Meeting of Shareholders to be held on January 28, 1999 (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 or about January 8, 1999.
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 in favor of the candidates for election to the Board
of Directors as Class I Directors.
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.
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 each of the persons named below to a three year term as a
director. 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 a nominee designated by the present Board of Directors
to fill such vacancy.
1
<PAGE>
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 of the
close of business October 31, 1998 (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>
<CAPTION>
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 2002)
Patrick J. Bagley Vice President -- Finance and 1988 to date 51 12,565 .1%
Treasurer; Vice President --
Finance, Treasurer and
Director, Rollins Truck
Leasing Corp.
Gerard J. Trippitelli President and Chief Executive 1988 to date 55 95,239 1.1%
Officer(3)
</TABLE>
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
NAMES OF DIRECTORS WHOSE PRINCIPAL SERVICE AS COMMON OUTSTANDING
TERMS HAVE NOT EXPIRED OCCUPATION(1) DIRECTOR AGE STOCK(2) SHARES
- -------------------------- ------------------------------ ------------ -- --------- ----
<S> <C> <C> <C> <C> <C>
Class II (Term Expires 2000)
John W. Rollins, Jr. Chairman of the Board; 1988 to date 56 181,325(4) 2.1%
President, Chief Operating
Officer and Director, Rollins
Truck Leasing Corp.(3)
William B. Philipbar, Jr. Retired; Former President and 1993 to date 73 1,606 --
Chief Executive Officer,
Rollins Environmental
Services, Inc.
Class III (Term Expires 2001)
John W. Rollins Chairman of the Board and 1988 to date 82 1,003,684(5) 11.4%
Chief Executive Officer,
Rollins Truck Leasing Corp.;
Chairman of the Board, Dover
Downs Entertainment, Inc.(3)
Henry B. Tippie Chairman of Executive 1988 to date 71 200,000(6) 2.3%
Committee; Chairman of the
Executive Committee and Vice
Chairman of the Board, Rollins
Truck Leasing Corp.; Chairman
of the Board and Chief
Executive Officer, Tippie
Services, Inc.; Vice Chairman
of the Board, Dover Downs
Entertainment, Inc.
</TABLE>
- ------------------
(1) 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
2
<PAGE>
directors of the following companies: John W. Rollins, Rollins, Inc.,
Safety-Kleen Corp., RPC, Inc., and FPA Corp.; John W. Rollins, Jr.,
Safety-Kleen Corp. and Dover Downs Entertainment, Inc.; Henry B. Tippie,
Rollins, Inc., Safety-Kleen Corp. and RPC, Inc.; William B. Philipbar, Jr.,
Rollins Truck Leasing Corp. and Waste Systems International, Inc.; and
Patrick J. Bagley, Dover Downs Entertainment, Inc. Rollins Truck Leasing
Corp. is engaged in the business of truck leasing and logistics. Dover Downs
Entertainment, Inc. operates facilities offering gaming, motorsports, horse
racing and other forms of entertainment. Rollins, Inc. is a consumer
services company engaged in residential and commercial termite and pest
control. Safety-Kleen Corp. is engaged in the business of industrial waste
disposal. RPC, Inc. is a diversified company engaged in oil and gas field
services and boat manufacturing. Tippie Services, Inc. provides management
services. Waste Systems International, Inc. is engaged in the business of
solid waste management.
(2) All shares are owned directly and of record. The above numbers exclude the
following shares of Common Stock subject to options granted under the
Company's 1988 and 1995 Stock Option Plans which the listed beneficial owner
has the right to acquire beneficial ownership as specified in Rule 13d of
the Securities Exchange Act of 1934: John W. Rollins, Jr., 51,000 shares;
Gerard J. Trippitelli, 24,999 shares; and Patrick J. Bagley, 14,000 shares.
(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 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 263,821* shares held as Co-Trustee; 5,500* shares held as
Trustee; 5,500* shares owned by his wife; 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.
CAPITAL STOCK
The outstanding capital stock of the Company on December 18, 1998 consisted
of 8,814,434 shares of Common Stock, par value $1.00 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
18, 1998, the record date for determining shares entitled to notice of and to
vote at the Annual Meeting or any adjournment thereof.
A majority of the outstanding shares will constitute a quorum at the Annual
Meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
In accordance with the General Corporation Law of the State of Delaware, the
election of the nominees named herein as Directors will require the affirmative
vote of a plurality of the votes cast by the shares entitled to vote in the
election provided that a quorum is present at the Annual Meeting. In the case of
a plurality vote requirement (as in the election of directors), where no
particular percentage vote is required, the outcome is solely a matter of
comparing the number of votes cast in favor of a proposal to the number of votes
cast against the proposal, and hence only votes for or against the proposal (and
not abstentions or broker non-votes) are relevant to the outcome.
3
<PAGE>
As of October 31, 1998, five 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:
<TABLE>
<CAPTION>
NUMBER OF SHARES
TITLE OF AND NATURE OF PERCENT OF
CLASS NAMES AND ADDRESSES OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP(1) CLASS
- -------- ---------------------------------------- ----------------------- ----------
<S> <C> <C> <C>
Common Eugene C. Bonacci 43,109 .5%
One Rollins Plaza
Wilmington, DE 19803
Common John W. Rollins 1,003,684 11.4%
One Rollins Plaza
Wilmington, DE 19803
Common Gerard J. Trippitelli 95,239 1.1%
One Rollins Plaza
Wilmington, DE 19803
Common Alpine Capital, L.P., et al 1,859,350(2) 21.1%
201 Main Street, Suite 3100
Fort Worth, TX 76102
Common Dimensional Fund Advisors, Inc. 624,067(3) 7.1%
1299 Ocean Avenue, Suite 1100
Santa Monica, CA 90401
Common Rollins Properties, Inc. 600,000 6.8%
One Rollins Plaza
Wilmington, DE 19803
Common The TCW Group, Inc. 462,900 5.3%
865 South Figueroa Street
Los Angeles, CA 90017
Common All Directors and 1,537,528 17.5%
Officers as a Group
(8 persons)
</TABLE>
- ------------------
(1) As to officers and directors, owned directly and of record. The above
numbers exclude the following shares of Common Stock subject to options
granted under the Company's 1988 and 1995 Stock Option Plans which the
listed beneficial owner has the right to acquire beneficial ownership as
specified in Rule 13d of the Securities Exchange Act of 1934: Gerard J.
Trippitelli, 24,999; Eugene C. Bonacci, 19,600; and all directors and
officers as a group, 119,259 shares.
(2) Includes 1,739,194 shares held by Alpine Capital, L.P., a Texas limited
partnership ("Alpine") and 120,156 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
4
<PAGE>
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. Holdings for Alpine and the Foundation are as of December 31,
1998.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 624,067 shares of Matlack
Systems, Inc. stock as of September 30, 1998, all of which shares are held
in portfolios of DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of The DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and the DFA Participating
Group Trust, investment vehicles for qualified employee benefit plans, all
of which Dimensional Fund Advisors Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
<TABLE>
<S> <C> <C>
Sole Voting Power = 446,075 shares*
Shared Voting Power = 0
Sole Dispositive Power = 624,067
Shared Dispositive Power = 0
</TABLE>
*Persons who are officers of Dimensional Fund Advisors Inc. also serve as
officers of DFA Investment Dimensions Group, Inc., (the "Fund") and The DFA
Investment Trust Company (the "Trust"), each an open-end management
investment company registered under the Investment Company Act of 1940. In
their capacity as officers of the Fund and the Trust, these persons vote
75,850 additional shares which are owned by the Fund and 102,142 shares
which are owned by the Trust (both included in Sole Dispositive Power
above).
BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board of Directors held four regularly scheduled meetings during fiscal
year 1998. All members of the Board attended at least seventy-five percent of
the meetings held.
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 and John W. Rollins, Jr. The Executive Committee held
three 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. Neither participates in any Company stock
option plan. The Stock Option Committee held one meeting during the last fiscal
year. The Stock Option Committee administers the Company's outstanding Stock
Option Plans including the granting of options to various employees of the
Company and its subsidiaries.
The Company does not have a nominating committee of the Board of Directors.
5
<PAGE>
DIRECTOR'S COMPENSATION
Directors who are not full-time employees of the Company or any of its
subsidiaries are paid an attendance fee of $1,000 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 8 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 1998, 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 and the individual executive's performance.
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. 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.
Awards under the Company's Stock Option Plans are purely discretionary, are
not based upon any specific formula, and may or may not be granted in any given
fiscal year. 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.
6
<PAGE>
The determination of an annual incentive is based on the amount by which the
Company's pre-tax earnings exceed a target established by the Executive
Committee prior to the beginning of the fiscal year. The target is revised
annually.
Executive Committee
Henry B. Tippie, Chairman
John W. Rollins
John W. Rollins, Jr.
Stock Option Committee
Henry B. Tippie, Chairman
John W. Rollins
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 1998 all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with, except as follows: Gerard J. Trippitelli
inadvertently filed a late Form 5 with respect to options he acquired through
the Company's Stock Option Plan.
7
<PAGE>
COMMON STOCK PERFORMANCE
The following graph 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, 1993 through September 30, 1998. The graph assumes that
the value of the investment in the Company's common stock and each index was 100
at September 30, 1993 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.
[In the Printed Version, a Line Graph Depicts the Following Information]
<TABLE>
<CAPTION>
YEARS
-----------------------------------------------------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Matlack Systems, Inc................... 100 109 98 74 80 65
S&P Truckers Index..................... 100 102 94 73 121 86
S&P Composite 500 Index................ 100 104 135 162 227 248
</TABLE>
Assumes $100 invested on October 1, 1993
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following directors serve on the Company's Executive Committee: John W.
Rollins, John W. Rollins, Jr. and Henry B. Tippie. 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 Committee of Rollins Truck Leasing
Corp. The Executive Committee of this company performs the functions of a
compensation committee. John W. Rollins and Henry B. Tippie serve on the
Compensation Committee of Dover Downs Entertainment, Inc. Patrick J. Bagley
serves as a director of Dover Downs Entertainment, Inc. and Rollins Truck
Leasing Corp.
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, 1996,
1997 and 1998, of those persons who were, at September 30, 1998, (i) the Chief
Executive Officer and (ii) the other most highly compensated executive officers
of the Company whose total annual salary exceeded $100,000 (the "Named
Executives"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION --------------------- -------
-------------------------------- RESTRICTED STOCK
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND SALARY BONUS COMP. (2) AWARDS(3) SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR (1) ($) ($) $ $ # $ $
------------------ -------- ------ ----- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gerard J. Trippitelli 1998 300,000 -0- -- -0- 9,000 -0- -0-
President and CEO 1997 291,250 112,818 -- -0- 36,000 -0- -0-
1996 261,250 -0- -- -0- 12,000 -0- -0-
Eugene C. Bonacci 1998 200,008 -0- -- -0- 9,000 -0- -0-
Senior Vice 1997 193,275 40,289 -- -0- 26,850 -0- -0-
President and COO 1996 173,655 -0- -- -0- 9,000 -0- -0-
</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.
9
<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, 1998 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 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>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------- POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES OF STOCK
OPTIONS PRICE APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OPTION TERM (2)
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 5.1% $8.875 4/30/06 -0- $ 38,137 $ 91,344
Eugene C. Bonacci 9,000 5.1% $8.875 4/30/06 -0- $ 38,137 $ 91,344
All employees as a group 177,000 100.0% $8.875 4/30/06 -0- $ 750,022 $ 1,796,435
Total potential stock price appreciation from May 1, 1998
to April 30, 2006 for all stockholders at assumed rates
of stock price appreciation (3) -0- $37,335,144 $89,424,259
</TABLE>
- ------------------
(1) Options with eight-year terms granted on May 1, 1998 at an exercise price of
$8.875.
(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. Future compensation
resulting from option grants is based solely on the performance of the
Company's stock price.
(3) Based on a price of $8.875 on May 1, 1998 and a total of 8,810,834 shares of
Common Stock outstanding on October 31, 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUE
The following table summarizes option exercises during fiscal 1998 by the
Company's Named Executives, and the value of the options held by such persons as
of September 30, 1998. The Company has not granted and does not have any Stock
Appreciation Rights outstanding.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES ACQUIRED VALUE FY-END (#) FY-END ($)
NAME ON EXERCISE (#) REALIZED ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
---- --------------- --------------- ------------------------- ----------------------------
<S> <C> <C> <C> <C> <C>
Gerard J. Trippitelli -0- -0- 24,999/34,500 $17,203/$16,250
Eugene C. Bonacci 2,250 $10,406 20,800/28,250 $20,250/$ 5,000
</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, 1998 was $7.00 per
share.
10
<PAGE>
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
There were no Long-Term Incentive Plan awards to the Named Executives
during fiscal year 1998.
DEFINED BENEFIT PLANS
PENSION 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 $130,000 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, 1998 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, $127,048; and Eugene C. Bonacci, $64,339.
401(K) RETIREMENT PLAN
The Company has a deferred compensation plan pursuant to section 401(k) of
the Internal Revenue Code for all of its full time employees who have completed
ninety (90) days of service. Covered employees may contribute up to 9% of their
compensation for each calendar year. In addition, the Company contributes up to
an additional 5% of the first 3% of compensation contributed by any covered
employee to the plan. An employee's maximum annual contribution to the plan is
$10,000. All contributions are funded currently.
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.
11
<PAGE>
KPMG LLP served as the Company's auditors for the fiscal year ended
September 30, 1998. A representative of KPMG 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.
During the fiscal year ended September 30, 1998, KPMG LLP's services
rendered to the Company consisted of auditing the Company's financial
statements. In this connection, KPMG 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 1% or $1,000 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 21, 1999
for inclusion in the Proxy Statement and form of proxy relating to that meeting.
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K
The Company is required to file an Annual Report, called Form 10-K,
with the Securities and Exchange Commission, a copy of Form 10-K for the
fiscal year ended September 30, 1998 accompanies this Proxy Statement.
Requests for additional copies should be directed to Patrick J. Bagley, Vice
President -- Finance and Treasurer, Matlack Systems, Inc., P.O. Box 8790,
Wilmington, DE 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.
MISCELLANEOUS
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
January 8, 1999
12
MATLACK SYSTEMS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF SHAREHOLDERS
Thursday, January 28, 1999, 9:00 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 28, 1999 at 9:00 A.M. Eastern Standard Time, Rollins Building,
First Floor Auditorium, Wilmington, Delaware, or at any adjournment thereof, on
all matters set forth in the Notice of Annual Meeting and Proxy Statement dated
January 8, 1999 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. 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 January 8, 1999, 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 PROPOSAL 1.
Please sign below, date and return promptly.
----------------------------------------------
----------------------------------------------
Signature(s) of Shareholder(s)
DATED: January __, 1999
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.
