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.
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_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11:*
_____________________________________________________________________________
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/_/ Check box if any part of the fee is offset as provided by
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the offsetting fee was paid previously. Identify the previous
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*Set forth the amount on which the filing fee is calculated and state how it was
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<PAGE>
MATLACK SYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 10, 2000
---------------
TO THE HOLDERS OF COMMON STOCK:
PLEASE TAKE NOTICE that the 2000 Annual Meeting of Shareholders of MATLACK
SYSTEMS, INC., a Delaware corporation, will be held at the Rollins Building,
First Floor Auditorium, Wilmington, Delaware, on Thursday, February 10, 2000, at
8:30 A.M. (Eastern Time) for the following purposes:
1. To elect two (2) Class II Directors to the Board of Directors;
2. To approve the proposed 1999 Stock Option Plan; and
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 January 21, 2000 is attached.
The Board of Directors has fixed the close of business on December 17, 1999
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. If you hold your stock in a broker or bank "street" account and wish to
vote your shares in person at the meeting, your must obtain the appropriate
documentation from your broker or bank custodian (the record holder).
BY ORDER OF THE BOARD OF DIRECTORS
KLAUS M. BELOHOUBEK, Secretary
Dated: Wilmington, Delaware
January 21, 2000
---------------
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 FEBRUARY 10, 2000
---------------
The information concerning the enclosed proxy and the matters to be acted
upon at the Annual Meeting of Shareholders to be held on February 10, 2000 (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 21, 2000.
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 II Directors and (b) in favor of the 1999 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.
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
Two individuals are to be elected at the Annual Meeting to serve as Class
II Directors for a term of three years each, and until the election and
qualification of their successors. Three other individuals serve as directors
but are not standing for re-election because their terms as directors extend
past the
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<PAGE>
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.
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, 1999 (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 II (Term Expires 2003)
John W. Rollins, Jr. Chairman of the Board and 1988 to date 57 181,325(4) 2.1%
Chief Executive Officer;
President, Chief Operating
Officer and Director, Rollins
Truck Leasing Corp.(3)
William B. Philipbar, Jr. Retired; Former President and 1993 to date 74 1,606 0.0%
Chief Executive Officer,
Rollins Environmental
Services, Inc.
Names of Directors Whose
Terms Have Not Expired
- ------------------------
Class III (Term Expires 2001)
John W. Rollins Chairman of the Board and 1988 to date 83 1,003,684(5) 11.4%
Chief Executive Officer,
Rollins Truck Leasing Corp.;
Chairman of the Board,
Dover Downs Entertainment,
Inc.(3)
</TABLE>
2
<PAGE>
<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>
Henry B. Tippie Chairman of the Executive 1988 to date 72 200,000(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.
Class I (Term Expires 2002)
Patrick J. Bagley Vice President - Finance and 1988 to date 52 12,565 0.1%
Treasurer; Vice President -
Finance, Treasurer and
Director, Rollins Truck
Leasing Corp.
</TABLE>
- ----------
(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., 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 and Patrick J. Bagley, 19,100 shares.
(3) John W. Rollins is the father of John W. Rollins, Jr.
(4) Does not include 44,571* 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.
3
<PAGE>
PROPOSAL NUMBER TWO
1999 Stock Option Plan
Introduction
On October 28, 1999, the Board of Directors adopted resolutions approving
and adopting, subject to shareholder approval, the Company's 1999 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 (the
"Options") 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, 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.
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.
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.
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<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 employees 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.
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 27, 2000, 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 27, 2009; 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.
5
<PAGE>
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.
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. No
Option shall be granted under the Plan after ten (10) years from the date the
Plan is adopted.
Shares Subject to the Plan
On October 28, 1999, 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
$5.00 per share.
The Board of Directors recommends a vote FOR the approval of the 1999 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 17, 1999 consisted
of 8,814,434 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
17, 1999, 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 (Proposal Number One) will
require the affirmative vote of a plurality of the votes of the shares present
in person or represented by proxy 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.
6
<PAGE>
The approval of the 1999 Stock Option Plan (Proposal Number Two) will require
the affirmative vote of the majority of shares present in person or represented
by proxy provided that a quorum is present at the Annual Meeting.
As of October 31, 1999, 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:
<TABLE>
<CAPTION>
Number of Shares
Title of Names and Addresses and Nature of Percent of
Class of Beneficial Owners Beneficial Ownership(1) Class
- -------- -------------------- ----------------------- ----------
<S> <C> <C>
Common Eugene C. Bonacci 40,859 0.5%
One Rollins Plaza
Wilmington, DE 19803
Common John W. Rollins 1,003,685 11.4%
One Rollins Plaza
Wilmington, DE 19803
Common Gerard J. Trippitelli 95,239 1.1%
One Rollins Plaza
Wilmington, DE 19803
Common John W. Rollins, Jr. 181,325 2.1%
One Rollins Plaza
Wilmington, DE 19803
Common Alpine Capital, L.P., et al 2,024,150(2) 23.0%
201 Main Street, Suite 3100
Fort Worth, TX 76102
Common Dimensional Fund Advisors, Inc. 669,917(3) 7.6%
1299 Ocean Avenue, Suite 1100
Santa Monica, CA 90401
Common Rollins Properties, Inc. 600,000 6.8%
One Rollins Plaza
Wilmington, DE 19803
Common All Directors and Officers as a 1,538,728 17.5%
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: John W.
Rollins, Jr., 51,000; Gerard J. Trippitelli, 34,999; Eugene C. Bonacci,
27,450; and all directors and officers as a group, 153,346 shares.
7
<PAGE>
(2) Includes 1,903,994 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 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.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940,
furnishes investment advice to four investment companies registered under
the Investment Company Act of 1940, and serves as investment manager to
certain other investment vehicles, including commingled group trusts.
(These investment companies and investment vehicles are the "Portfolios").
In its role as investment advisor and investment manager, Dimensional
possesses both voting and investment power over 669,917 shares of Matlack
Systems, Inc. stock as of September 30, 1999. The Portfolios own all
securities reported in this statement, and Dimensional disclaims beneficial
ownership of such shares.
BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board of Directors held four regularly scheduled meetings and one
special meeting during fiscal year 1999. All members of the Board attended all
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.
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 10 shall not be incorporated by reference into any
such filings.
8
<PAGE>
REPORT OF THE EXECUTIVE AND STOCK OPTION COMMITTEES OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
During fiscal year 1999, 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. Except for the CEO, none
of the members of the Board of Directors or the Executive Committee participate
in the incentive program.
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. The CEO is a member of the Executive Committee but does
not participate in the deliberations of the Executive Committee with respect to
his own compensation. 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 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 Stock Option Committee
------------------- ----------------------
Henry B. Tippie, Chairman Henry B. Tippie, Chairman
John W. Rollins John W. Rollins
John W. Rollins, Jr.
9
<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 1999 all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with.
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, 1994 through September 30, 1999. The graph assumes that
the value of the investment in the Company's common stock and each index was 100
at September 30, 1994 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.
[GRAPHIC]
In the printed version of the document, a line graph appears which depicts
the following plot points:
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG MATLACK SYSTEMS, INC., THE S&P 500 INDEX
AND THE S&P TRUCKERS INDEX
Cumulative Total Return
-------------------------------------------------
9\94 9\95 9\96 9\97 9\98 9\99
---- ---- ---- ---- ---- ----
MATLACK SYSTEMS, INC. 100 90 68 74 60 48
S&P 500 100 130 156 219 239 306
S&P TRUCKERS 100 93 72 119 84 72
*$100 INVESTED ON 9/30/94 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS,
FISCAL YEAR ENDING SEPTEMBER 30.
10
<PAGE>
<TABLE>
<CAPTION>
YEARS
------------------------------------------------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Matlack Systems, Inc. 100 90 68 74 60 48
S&P Truckers Index 100 130 156 219 239 306
S&P Composite 500 Index 100 93 72 119 84 72
Assumes $100 invested on October 1, 1994
</TABLE>
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.,
Henry B. Tippie and Patrick J. Bagley are executive officers of Rollins Truck
Leasing Corp. ("RTL"). Patrick J. Bagley is a director and John W. Rollins, Jr.
is a member of the Executive Committee of RTL. The Executive Committee of RTL
performs the functions of a compensation committee. John W. Rollins is an
executive officer and John W. Rollins, Jr. and Patrick J. Bagley are directors
of Dover Downs Entertainment, Inc.
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, 1997,
1998 and 1999, of those persons who were, at September 30, 1999, (i) the Chief
Executive Officer and (ii) the other most highly compensated executive officers
of the Company whose total annual salary exceeded $100,000 (the "Named
Executives"):
11
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
--------------------------------- ---------------------- -------
Other Restricted Stock All Other
Annual Stock Options/ LTIP Compen-
Name and Salary Bonus Comp (2) Awards (3) SARs Payouts sation
Principal Position Year(1) ($) ($) $ $ # $ $
- ------------------ ------- ------- ------- -------- ---------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John W. Rollins, Jr. 1999 60,000 - 0 - -- - 0 - - 0 - - 0 - - 0 -
Chairman of the
Board and CEO
Gerard J. Trippitelli 1999 300,000 - 0 - -- - 0 - - 0 - - 0 - - 0 -
Former President and 1998 300,000 - 0 - -- - 0 - 9,000 - 0 - - 0 -
CEO(4) 1997 291,250 112,818 -- - 0 - 36,000 - 0 - - 0 -
Eugene C. Bonacci 1999 210,970 - 0 - -- - 0 - - 0 - - 0 - - 0 -
Former Senior Vice 1998 200,008 - 0 - -- - 0 - 9,000 - 0 - - 0 -
President and COO(5) 1997 193,275 40,289 -- - 0 - 26,850 - 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.
(4) Mr. Trippitelli resigned as president and chief executive officer and as a
director effective July 29, 1999. As of September 30, 1999, the Company had
accrued $580,000.00 in connection with severance obligations (including
payments in consideration for certain non-competition covenants) payable to
Mr. Trippitelli over the next two fiscal years.
(5) Mr. Bonacci resigned as senior vice president and chief operating officer
effective July 29, 1999. As of September 30, 1999, the Company had accrued
$421,000.00 in connection with severance obligations (including payments in
consideration for certain non-competition covenants) payable to Mr. Bonacci
over the next two fiscal years.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The following table summarizes option exercises during fiscal 1999 by the
Company's Named Executives, and the value of the options held by such persons as
of September 30, 1999. The Company has not granted and does not have any Stock
Appreciation Rights outstanding.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Value Options at Options at
Acquired on Realized FY-End(#) FY-End($)
Name(1) Exercise(#) ($)(2) Exercisable/Unexercisable Exercisable/Unexercisable(3)
------- ----------- -------- ------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Eugene C. Bonacci 1,200 $5,650 27,450/20,400 $7,938/$-0-
</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 30, 1999 was $5.0625
per share.
12
<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 1999.
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. Pensionable earnings 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 $135,000 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 unless
otherwise noted; (b) that the participant's earnings continue at the same rate
as paid in the fiscal year ended September 30, 1999 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
of the Company is: John W. Rollins, Jr, $14,416; Gerard J. Trippitelli, $76,568;
and Eugene C. Bonacci, $49,677.
401(k) Retirement Plan
The Company has a deferred compensation plan pursuant to section 401(k) of
the Internal Revenue Code for all 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
$10,500. All contributions are funded currently.
13
<PAGE>
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 LLP served as the Company's auditors for the fiscal year ended
September 30, 1999. 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, 1999, 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 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 29, 2000
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, 1999 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
KLAUS M. BELOHOUBEK, Secretary
Wilmington, Delaware
January 21, 2000
14
<PAGE>
Appendix A
MATLACK SYSTEMS, INC.
1999 Stock Option Plan
1. Purpose. The 1999 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. 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.
4. Termination of Plan. The Plan shall terminate on October 27, 2000,
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 27,
2009; 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
15
<PAGE>
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.
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, certified 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 him.
16
<PAGE>
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.
17
<PAGE>
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
18
<PAGE>
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 28, 1999.
19
<PAGE>
MATLACK SYSTEMS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF SHAREHOLDERS
Thursday, February 10, 2000, 8:30 A.M., E.T.
The undersigned hereby constitutes and appoints Patrick J. Bagley and
Klaus M. Belohoubek, 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 February 10, 2000 at 8:30 A.M. Eastern 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 21, 2000 as follows:
(Mark only one box)
1. ELECTION OF DIRECTORS
Nominees: John W. Rollins, Jr. and William P. Philipbar, Jr.
/_/ VOTE FOR all nominees listed above; except vote withheld from the
following nominee (if any):
- --------------------------------------------------------------------------------
/_/ VOTE WITHHELD FROM all nominees.
2. APPROVAL OF THE 1999 STOCK OPTION PLAN
/_/ FOR approval of the 1999 Stock Option Plan
/_/ AGAINST approval of the 1999 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 January 21, 2000, 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 NUMBER ONE AND FOR PROPOSAL NUMBER TWO.
Please sign below, date and return promptly.
--------------------------------------------
--------------------------------------------
Signature(s) of Shareholder(s)
DATED: ________ ___, 2000
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.
