______________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________
FORM 10-K
(Mark One)
/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1997
OR
/__/ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________ to _____________
Commission file number 1-5728
ROLLINS TRUCK LEASING CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0074022
(State of Incorporation) (I.R.S. Employer Identification Number)
ONE ROLLINS PLAZA, WILMINGTON, DELAWARE 19803
(Address of principal executive offices)
Registrant's telephone number including area code (302) 426-2700
Securities registered pursuant to Section 12(b) of the Act:
Title of Class Name of each exchange on
which registered
Common Stock, $1 Par Value NEW YORK STOCK EXCHANGE
PACIFIC STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. / /
The aggregate market value of the voting stock held by non-
affiliates of the registrant was $559,276,000 as of October 31, 1997.
The number of shares of registrant's common stock outstanding as
of October 31, 1997 was 40,972,395.
The following documents are incorporated by reference:
Part of this form into which
Document incorporated
Proxy Statement in connection with
Annual Meeting of Shareholders to be
held January 29, 1998 III
<PAGE>
PART I
ITEM I. BUSINESS.
The Registrant, Rollins Truck Leasing Corp., together with its
subsidiaries, is referred to as the "Company" unless the context
clearly indicates otherwise.
(a) General Development of Business
There have been no significant changes in the business of the
Company since September 30, 1996.
(b) Financial Information about Industry Segments
The Company operates principally in one industry segment and
through its principal subsidiaries, Rollins Leasing Corp. ("Rollins")
and Rollins Logistics Inc., is engaged primarily in full-service truck
leasing and rentals and the provision and management of complete truck
transportation and distribution systems. All of the Company's
operations currently are conducted within the United States. The
financial information concerning this business is included in this 1997
Annual Report on Form 10-K.
(c) Narrative Description of Business
Full-service leasing accounts for the major portion of Rollins'
revenues. Under these leases, Rollins purchases vehicles and
components that are custom-engineered to the customer's requirements.
This equipment is then leased to the customer for periods usually
ranging from three to eight years. Rollins provides fuel, oil, tires,
washing and regularly scheduled maintenance and repairs at its
facilities. In addition, Rollins arranges for licenses and insurance,
pays highway and use taxes and supplies a 24-hour-a-day emergency road
service to its customers.
Another service that the Company provides its customers through
Rollins Logistics Inc. and its subsidiaries is Dedicated Carriage
Services ("DCS") and Logistics Services. DCS analyzes the customer's
specific distribution needs and then designs and operates a customized
transportation service, which can include any of the services mentioned
previously plus management, drivers and other operating personnel.
Logistics Services addresses the needs of companies that desire to
outsource their distribution and warehousing functions to a third party
provider. These functions can range from selection and negotiation of
core carrier contracts to selection of the most cost effective carrier
for specific traffic lane movements.
The commercial rental fleet, which at September 30, 1997 consisted
of more than 8,000 units with payload capacities ranging from 4,000 to
45,000 pounds, offers tractors, trucks and a limited number of trailers
to customers for short periods of time ranging from one day to several
months. The Company's commercial rental fleet also provides additional
vehicles to full service lease customers to handle their peak or
seasonal business needs. The rental fleet's average age is
approximately two years. The utilization rate of the rental fleet
during fiscal year 1997 averaged in excess of 85%. Rollins does not
offer services in the consumer one-way truck rental market.
Rollins also furnishes a guaranteed maintenance service to private
fleet customers who choose to own their vehicles. This service
includes preventive maintenance, fuel procurement, tax reporting,
permitting, licensing and access to the Rollins 24-hour-a-day emergency
road service.
There are many companies engaged in all aspects of vehicle rental
and leasing, some of which also operate on a nationwide basis and are
larger than the Company's business. Ryder System, Inc. and Penske
Truck Leasing Co., L.P., Inc. are respectively the largest and second
largest competitors in the truck leasing industry. The Company
believes Rollins is the third largest competitor in the field of full-
service leasing and short-term rental of heavy duty trucks in the
United States. Since the unit cost of vehicles and the cost of the
borrowed funds used to purchase such vehicles are believed to be
similar for most vehicle leasing companies, successful competition is
based in part on service.
At September 30, 1997, a total of 3,708 persons were employed by
the Company.
ITEM 2. PROPERTIES.
The Company's headquarters is located in a modern 15-story office
building of approximately 245,000 square feet owned by the Company at
One Rollins Plaza, Wilmington, DE 19803. In addition to providing
administrative office space to the Company and its subsidiaries, a
lesser portion of the building is leased to Matlack Systems, Inc. for
its use as administrative offices and corporate headquarters.
The Company's principal operating properties consist of land and
buildings used in its truck leasing and rental business. These
properties generally consist of an equipment repair facility and
administrative offices. Rollins owns or leases 204 facilities in 42
states.
ITEM 3. LEGAL PROCEEDINGS.
Neither the Company nor any of its subsidiaries is a party to any
material legal proceedings. The Company and its subsidiaries are
engaged in ordinary routine litigation incidental to the business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
NONE.
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS.
STOCK PRICES AND DIVIDENDS
The range of share prices for the Common Stock on the New York and
Pacific Stock Exchanges and per share dividends paid on Common Stock
for the fiscal years ended September 30, 1997 and 1996 are as follows:
Prices Dividends
1997 1996 1997 1996
High Low High Low
Fiscal Quarter
First $13 1/8 $10 1/2 $11 1/4 $ 9 1/4 $.05 $.045
Second 14 12 1/8 11 1/8 10 .05 .045
Third 15 12 3/4 11 5/8 9 5/8 .05 .045
Fourth 17 9/16 13 7/8 12 1/2 10 1/8 .05 .045
At September 30, 1997, there were 2,320 holders of record of the
Common Stock.
ITEM 6. SELECTED FINANCIAL DATA.
FIVE YEAR SELECTED FINANCIAL DATA
(Dollars in Millions, Except Per Share Amounts)
Year Ended September 30, 1997 1996 1995 1994 1993
Revenues 556.7 513.8 482.6 450.9 408.8
Earnings before
income taxes 70.2 55.9 67.1 66.4 54.7
Net earnings 42.8 34.1 41.3 39.8 30.4
Earnings per share 1.01 .78 .91 .86 .66
Dividends per
common share .20 .18 .16 .13 .12
At September 30,
Total assets 1,191.8 1,125.2 1,027.0 909.7 781.2
Equipment on operating
leases, net 847.9 784.3 727.9 637.8 543.4
Equipment financing
obligations 671.8 641.4 574.2 499.2 428.2
Shareholders' equity 288.7 284.0 275.6 251.2 216.8
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
Fiscal Year 1997 vs. 1996
Revenues increased by $42.9 million (8.4%) as revenues from all
areas of operation improved over the prior year. The increase in full-
service lease, guaranteed maintenance and logistics revenues, which
represent approximately 75% of total revenues, was principally volume-
related as industry competition limited price increases. Commercial
rental revenues, which represent the remainder of total revenues,
increased by 4.9% and was in large part due to improved pricing in 1997
when compared with the competitive pricing effects experienced in 1996.
Operating expenses increased by $17.0 million (8.0%) reflecting the
increase in revenues. The more significant operating expense increases
resulted from the continued growth in the dedicated contract carriage
and logistics business in which drivers' wages increased by $8.9
million and vehicle expenses increased by $5.7 million. Operating
expenses as a percentage of revenues decreased to 41.1% in 1997 from
41.2% in 1996.
Depreciation expense increased by $11.6 million (7.3%) principally
due to the increased investment in equipment on operating leases
required to support the current level of business. Depreciation as a
percentage of revenues decreased to 30.5% in 1997 compared with 30.8%
in 1996.
Gain on the sale of property and equipment increased by $4.3 million
(53.8%) to $12.2 million when compared with the 1996 gain of $7.9
million. The increase resulted from the sale of more vehicles at
higher selling prices reflecting the stable market for used equipment
in 1997.
Selling and administrative expenses increased by $2.5 million (5.1%)
to $50.5 million from $48.0 million in 1996. Increased salaries, wages
and sales commissions accounted for $2.3 million of the increase and
reflected the higher level of business in 1997. As a percentage of
revenues, selling and administrative expenses decreased to 9.1% in 1997
from 9.3% in 1996.
Interest expense increased by $1.8 million (3.8%) principally due
to the increase in average borrowings related to the purchase of
additional equipment offset in part by a lower average interest rate on
the Company's Collateral Trust Debentures.
The effective income tax rate for both 1996 and 1997 was 39.0%.
Net earnings increased by $8.7 million (25.4%) to $42.8 million or
$1.01 per share from $34.1 million or $.78 per share in 1996. Net
earnings as a percentage of revenues was 7.7% in 1997 compared with
6.6% in 1996. The increased net earnings resulted from higher
revenues, which were reduced in part by the incremental costs
associated with such revenues.
Fiscal Year 1996 vs. 1995
Revenues increased by $31.2 million (6.5%) to $513.8 million from
$482.6 million as full-service lease, guaranteed maintenance and
dedicated logistics revenues all improved over the prior year.
Revenues from the more economically sensitive short-term commercial
rental business, which represents approximately 25% of the Company's
revenues, declined by 3.3% due in large part to overcapacity and
aggressive price competition in the trucking industry.
Operating expenses increased by $17.8 million (9.2%) reflecting the
increase in revenues. Higher vehicle expenses and increased wages
associated with the growing dedicated logistics services business
accounted in large part for the operating expense increases. Operating
expenses as a percentage of revenues increased to 41.2% in 1996 from
40.2% in 1995. The increased operating cost ratio results from both
higher operating costs and industry-wide competitive pricing.
Depreciation expense increased by $11.6 million (7.9%) due to the
increased investment in equipment on operating leases and related
transportation service facilities. The higher levels of investment in
property and equipment reflect, in addition to the higher level of
business, increased prices paid for recently acquired capital assets.
Depreciation as a percentage of revenues was 30.8% in 1996 compared
with 30.4% in 1995. The higher percentage in 1996 reflected both
higher equipment costs and the effects of competitive conditions which
limited price increases.
Gain on the sale of property and equipment was $7.9 million, a
decrease of $4.8 million (37.8%) when compared with the 1995 gain of
$12.7 million. The decrease in 1996 resulted from the sale of fewer
units of transportation equipment and lower prices realized from such
sales.
Selling and administrative expenses increased by $4.9 million
(11.4%) to $48.0 million from $43.1 million in 1995. The increase
reflects expanded revenues along with higher compensation and related
costs of an expanded sales force. In addition, office, bad debt and
data processing expenses were higher during 1996. As a percentage of
revenues, selling and administrative expenses increased to 9.3% in 1996
from 8.9% in 1995.
Interest expense increased by $3.3 million (7.5%) principally due
to the increase in average borrowings related to the purchase of
additional equipment offset in part by a lower average interest rate on
the Company's Collateral Trust Debentures.
The effective income tax rates for 1996 and 1995 were 39.0% and
38.4%, respectively.
Net earnings decreased by $7.2 million (17.4%) to $34.1 million or
$.78 per share from $41.3 million or $.91 per share in 1995. Net
earnings as a percentage of revenues was 6.6% in 1996 compared with
8.6% in 1995. The decrease in net earnings was due mainly to the
higher operating cost ratio, lower gains on the sale of equipment,
higher depreciation, selling and administrative and interest expense.
Liquidity and Capital Resources
The Company's primary operation is the full-service leasing and
rental of tractors, trucks and trailers, which requires substantial
amounts of capital and constant access to financing sources. At
September 30, 1997, equipment on operating leases of $847.9 million
represented 71.1% of the Company's assets. Funds for the acquisition
of this equipment are provided principally by the cash flows from
operations, the proceeds from the sale of used equipment and borrowings
under the Company's revolving credit facility. Cash flows from
operating activities of $221.6 million were generated principally from
net earnings of $42.8 million and the noncash depreciation and
amortization totaling $170.4 million. Because existing leases provide
the primary source of funds from operations, the Company expects a
similar amount of funds to be generated in 1998.
Investing activities reflect the Company's capital expenditures of
$303.1 million in 1997 and $297.3 in 1996. Proceeds from the sale of
equipment amounted to $75.6 million in 1997 and $63.1 million in 1996.
At September 30, 1997, the Company's commitment for the purchase of
revenue equipment was $74.4 million. Based on the current level of
business and including commitments already made at September 30, 1997,
the Company anticipates spending approximately $300.0 million for
equipment and facilities in 1998.
Equipment financing obligations increased to $671.8 million at
September 30, 1997 from $641.4 million a year earlier. Borrowings from
external sources included equipment term loans furnished by commercial
banks and, in March 1997, the sale of $75.0 million of 7.30% Collateral
Trust Debentures, Series R, due March 1, 2007. The proceeds from this
sale were used to redeem $50.0 million of outstanding Series K, 7.75%
Collateral Trust Debentures in April 1997.
At September 30, 1997, the Company could sell an additional $155.0
million of Collateral Trust Debentures under its current shelf
registration statement. Based on its access to the debt markets and
relationships with current lending institutions and others who have
expressed an interest in providing financing, the Company expects to
continue to be able to obtain financing for its equipment and facility
purchases at market rates and under satisfactory terms and conditions.
The Company's principal subsidiary, Rollins Leasing Corp., has a
$100.0 million revolving credit facility of which $83.5 million was
available at September 30, 1997. This facility, used primarily to
finance vehicle purchases on an interim basis pending placement of
long-term financing, requires the maintenance of specified financial
ratios and restricts payments to the Company. At the option of the
banks who provide the facility, the facility and the Company's
Collateral Trust Debentures may be secured by certain leasing
equipment.
During 1997, the Company's financing activities included an increase
in equipment financing obligations of $30.5 million, payment of
dividends of $8.4 million and the purchase and retirement of 2,483,800
shares of $1 par value common stock for $30.6 million. At September
30, 1997, the Company was authorized to purchase 1,860,500 additional
shares of its stock.
At September 30, 1997 and 1996, the debt to equity ratio of the
Company was 2.3 to 1.
Impact of Recent Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share." This statement, which is effective in fiscal
1998, simplifies the standards for computing earnings per share ("EPS")
by replacing the presentation of primary EPS with a presentation of
basic EPS. The Company has determined that SFAS No. 128 will not have
a material effect on its financial statements.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." This statement requires that comprehensive income be reported
in a financial statement that is displayed with the same prominence as
other financial statements. The adoption of this standard on October
1, 1998, will not impact results of operations or financial condition.
Forward-Looking Statements
The Company may make forward-looking statements relating to
anticipated financial performance, business prospects, acquisitions or
divestitures, new products, market forces, commitments and other
matters. The Private Securities Litigation Reform Act of 1995 provides
a safe harbor for forward-looking statements. In order to comply with
the terms of the safe harbor, the Company notes that a variety of
factors could cause the Company's actual results and experience to
differ materially from the anticipated results or other expectations
expressed in the Company's forward-looking statements. Forward-looking
statements typically contain words such as "anticipates", "believes",
"estimates", "expects", "forecasts", "predicts", or "projects", or
variations of these words, suggesting that future outcomes are
uncertain.
Various risks and uncertainties may affect the operations,
performance, development and results of the Company's business and
could cause future outcomes to differ materially from those set forth
in forward-looking statements, including the following factors:
general economic conditions, competitive factors and pricing pressures,
shift in market demand, the performance and needs of industries served
by the Company, equipment utilization, management's success in
developing and introducing new services and lines of business,
potential increases in labor costs, potential increases in equipment,
maintenance and fuel costs, uncertainties of litigation, the Company's
ability to finance its future business requirements through outside
sources or internally generated funds, the availability of adequate
levels of insurance, success or timing of completion of ongoing or
anticipated capital or maintenance projects, management retention and
development, changes in Federal, State and local laws and regulations,
including environmental regulations, as well as the risks,
uncertainties and other factors described from time to time in the
Company's SEC filings and reports.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of the Company, the
Independent Auditors' Report and the financial statement schedules
included in this report are shown on the Index to the Consolidated
Financial Statements and Schedules.
ITEM 9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
NONE.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Except as presented below, the information called for by this
Item 10 is incorporated by reference from the Company's Proxy Statement
to be filed pursuant to Regulation 14A for the Annual Meeting of
Shareholders to be held on January 29, 1998.
Executive Officers of the Registrant. As of October 31, 1997, the
Executive Officers of the registrant were:
Name Position Age Term of Office
Patrick J. Bagley Vice President-Finance 50 7/87 to date
and Treasurer 1/87 to date
David F. Burr Chairman,
Rollins Leasing Corp. 62 1/89 to date
Michael B. Kinnard Vice President-General
Counsel and Secretary 39 10/94 to date
John W. Rollins Chairman of the Board 81 1954 to date
and Chief Executive Officer 10/74 to date
John W. Rollins, Jr. President and Chief 55 9/75 to date
Operating Officer and Director
Henry B. Tippie Chairman of the Executive 70 3/74 to date
Committee and Vice Chairman
of the Board
David F. Burr has been employed by Rollins Leasing Corp., a wholly
owned subsidiary of Rollins Truck Leasing Corp., since 1969. Mr. Burr
has been Chairman of Rollins Leasing Corp. since 1989.
Michael B. Kinnard has been Vice President-General Counsel and
Secretary to the Company since 1994. Mr. Kinnard also serves as Vice
President-General Counsel and Secretary to Matlack Systems, Inc. and
Vice President-General Counsel to Dover Downs Entertainment, Inc.
Prior to 1995, Mr. Kinnard was a partner in the law firm of Baker,
Worthington, Crossley, Stansberry & Woolf (now known as Baker,
Donelson, Bearman & Caldwell).
The Company's Executive Officers are elected for the ensuing year
and until their successors are elected.
ITEM 11. EXECUTIVE COMPENSATION.
The information called for by this Item 11 is incorporated by
reference from the Company's Proxy Statement to be filed pursuant to
Regulation 14A for the Annual Meeting of Shareholders to be held on
January 29, 1998.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The information called for by this Item 12 is incorporated by
reference from the Company's Proxy Statement to be filed pursuant to
Regulation 14A for the Annual Meeting of Shareholders to be held on
January 29, 1998.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During the year ended September 30, 1997, the following
officers and/or directors of the Company were also officers and/or
directors of Laidlaw Environmental Services Inc. (formerly known as
Rollins Environmental Services, Inc.); Patrick J. Bagley, Michael B.
Kinnard, William B. Philipbar, Jr., John W. Rollins, John W. Rollins,
Jr. and Henry B. Tippie.
The following officers and/or directors of the Company were
also officers and/or directors of Matlack Systems, Inc.; Patrick J.
Bagley, Michael B. Kinnard, William B. Philipbar, Jr., John W. Rollins,
John W. Rollins, Jr. and Henry B. Tippie. John W. Rollins owns
directly and of record 11.4% of the outstanding shares of Common Stock
of Matlack Systems, Inc. at October 31, 1997.
The description of transactions between the Company and Laidlaw
Environmental Services, Inc. and between the Company and Matlack
Systems, Inc. appears under the caption "Transactions with Related
Parties" of this 1997 Annual Report on Form 10-K.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K.
(a) Financial Statements, Financial Statement Schedules and
Exhibits.
(1) Financial Statements - See accompanying Index to Consolidated
Financial Statements and Schedules.
(2) Financial Statements Schedules - See accompanying Index to
Consolidated Financial Statements and Schedules.
(3)Exhibits:
(3) (a) Restated Certificate of Incorporation of Rollins Truck
Leasing Corp. as last amended on January 25, 1990.
(3) (b) By-Laws of Rollins Truck Leasing Corp. as last amended on
October 30, 1997.
(4) (a) Collateral Trust Indenture dated as of March 21, 1983,
between RLC CORP. (now known as Rollins Truck Leasing
Corp.) and Bank of America Illinois (formerly Continental
Illinois National Bank and Trust Company of Chicago), as
Trustee, as filed with the Company's Registration
Statement No. 33-40476 on Form S-3 dated May 10, 1991, is
incorporated herein by reference.
(4) (b) Third Supplemental Collateral Trust Indenture dated
February 20, 1986 to the Collateral Trust Indenture dated
March 21, 1983 between RLC CORP. (now known as Rollins
Truck Leasing Corp.) and Bank of America Illinois
(formerly Continental Illinois National Bank and Trust
Company of Chicago), as Trustee, as filed with the
Company's Registration Statement No. 33-40476 on Form S-3
dated May 10, 1991, is incorporated herein by reference.
(4) (e) Eighth Supplemental Collateral Trust Indenture dated May
15, 1990 to the Collateral Trust Indenture dated March 21,
1983 as supplemented and amended by a Third Supplemental
Indenture thereto dated as of February 20, 1986, between
Rollins Truck Leasing Corp. and Bank of America Illinois
(formerly Continental Bank, N.A.), as Trustee, as filed
with the Company's Registration Statement No. 33-67682 on
Form S-3 dated August 20, 1993 is incorporated herein by
reference.
(4) (f) Ninth Supplemental Collateral Trust Indenture dated
December 1, 1991 to the Collateral Trust Indenture dated
March 21, 1983 as supplemented and amended by a Third
Supplemental Indenture thereto dated as of February 20,
1986 and by an Eighth Supplemental Indenture dated May 15,
1990, between Rollins Truck Leasing Corp. and Bank of
America Illinois (formerly Continental Bank, N.A.), as
Trustee, as filed with the Company's Registration
Statement No. 333-21835 on Form S-3 dated February 14,
1997 is incorporated herein by reference.
(4) (g) Eleventh Supplemental Collateral Trust Indenture dated
March 15, 1993 to the Collateral Trust Indenture dated
March 21, 1983 as supplemented and amended by a Third
Supplemental Indenture thereto dated as of February 20,
1986 and by an Eighth Supplemental Indenture dated May 15,
1990, between Rollins Truck Leasing Corp. and Bank of
America Illinois (formerly Continental Bank, N.A.), as
Trustee, as filed with the Company's Registration
Statement No. 333-21835 on Form S-3 dated February 14,
1997 is incorporated herein by reference.
(4) (h) Twelfth Supplemental Collateral Trust Indenture dated
March 15, 1994 to the Collateral Trust Indenture dated
March 21, 1983 as supplemented and amended by a Third
Supplemental Indenture thereto dated as of February 20,
1986 and by an Eighth Supplemental Indenture dated May 15,
1990, between Rollins Truck Leasing Corp. and Bank of
America Illinois (formerly Continental Bank, N.A.), as
Trustee, as filed with the Company's Registration
Statement No. 333-21835 on Form S-3 dated February 14,
1997 is incorporated herein by reference.
(4) (i) Thirteenth Supplemental Collateral Trust Indenture dated
March 15, 1995 to the Collateral Trust Indenture dated
March 21, 1983 as supplemented and amended by a Third
Supplemental Indenture thereto dated as of February 20,
1986 and by an Eighth Supplemental Indenture dated May 15,
1990, between Rollins Truck Leasing Corp. and Bank of
America Illinois (formerly Continental Bank, N.A.), as
Trustee, as filed with the Company's Registration
Statement No. 333-21835 on Form S-3 dated February 14,
1997 is incorporated herein by reference.
(4) (j) Fourteenth Supplemental Collateral Trust Indenture dated
May 15, 1995 to the Collateral Trust Indenture dated March
21, 1983 as supplemented and amended by a Third
Supplemental Indenture thereto dated as of February 20,
1986 and by an Eighth Supplemental Indenture dated May 15,
1990, between Rollins Truck Leasing Corp. and Bank of
America Illinois (formerly Continental Bank, N.A.), as
Trustee, as filed with the Company's Registration
Statement No. 333-21835 on Form S-3 dated February 14,
1997 is incorporated herein by reference.
(4) (k) Fifteenth Supplemental Collateral Trust Indenture dated
March 15, 1996 to the Collateral Trust Indenture dated
March 21, 1983 as supplemented and amended by a Third
Supplemental Indenture thereto dated as of February 20,
1986 and by an Eighth Supplemental Indenture dated May 15,
1990, between Rollins Truck Leasing Corp. and First Trust
of Illinois, National Association, as Trustee, as filed
with the Company's Registration Statement No. 333-21835 on
Form S-3 dated February 14, 1997 is incorporated herein by
reference.
(4) (l) Sixteenth Supplemental Collateral Trust Indenture dated
August 7, 1996 to the Collateral Trust Indenture dated
March 21, 1983 as supplemented and amended by a Third
Supplemental Indenture thereto dated as of February 20,
1986 and by an Eighth Supplemental Indenture dated May 15,
1990, between Rollins Truck Leasing Corp. and First Trust
of Illinois, National Association, as Trustee, as filed
with the Company's Registration Statement No. 333-21835 on
Form S-3 dated February 14, 1997 is incorporated herein by
reference.
(4) (m) Seventeenth Supplemental Collateral Trust Indenture dated
as of March 10, 1997 to the Collateral Trust Indenture
dated as of March 21, 1983 as supplemented and amended by
a Third Supplemental Indenture thereto dated as of
February 20, 1986 and by the Eighth Supplemental Indenture
dated as of May 15, 1990 between Rollins Truck Leasing
Corp. and First Union National Bank, as Trustee.
(4) (n) RLC CORP. (now known as Rollins Truck Leasing Corp.)
Rights Agreement dated as of June 14, 1989 as filed as an
Exhibit to Registration Statement on Form 8-A filed by
Registrant on June 15, 1989 is incorporated herein by
reference.
(10) (a) RLC CORP. (now known as Rollins Truck Leasing Corp.) 1982
Incentive Stock Option Plan, as filed with the Company's
Proxy Statement for the Annual Meeting of Shareholders
held on January 27, 1983, is incorporated herein by
reference.
(10) (b) RLC CORP. (now known as Rollins Truck Leasing Corp.) 1986
Stock Option Plan, as filed with the Company's Proxy
Statement for the Annual Meeting of Shareholders held on
January 29, 1987, is incorporated herein by reference.
(10) (c) Rollins Truck Leasing Corp. 1993 Stock Option Plan, as
filed with the Company's Proxy Statement for the Annual
Meeting of Shareholders held on January 27, 1994, is
incorporated herein by reference.
(21) Rollins Truck Leasing Corp. Subsidiaries at September 30,
1997.
(23) Consent of KPMG Peat Marwick LLP, Independent Auditors,
providing for incorporation by reference of their report
dated October 28, 1997 into Registration Statement No. 333-
21835 filed on Form S-3.
(27) Rollins Truck Leasing Corp. Financial Data Schedule at
September 30, 1997.
(b) Reports on Form 8-K.
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DATED: December 2, 1997 ROLLINS TRUCK LEASING CORP.
(Registrant)
BY:/s/ John W. Rollins, Jr.
John W. Rollins, Jr.
President and Chief Operating Officer
and Director
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below
by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:
/s/ Patrick J. Bagley Vice President-Finance
Patrick J. Bagley and Treasurer December 2, 1997
Chief Financial Officer
Chief Accounting Officer
Director
/s/ John W. Rollins Chairman of the Board and December 2, 1997
John W. Rollins Chief Executive Officer
/s/ Gary W. Rollins Director December 2, 1997
Gary W. Rollins
/s/ Henry B. Tippie Chairman of the Executive December 2, 1997
Henry B. Tippie Committee and Vice Chairman
of the Board
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
(1) Consolidated
Independent Auditors' Report on Financial
Statements and Financial Statement Schedules
Consolidated Statement of Earnings for the years
ended September 30, 1997, 1996 and 1995
Consolidated Balance Sheet at September 30, 1997
and 1996
Consolidated Statement of Cash Flows for the years
ended September 30, 1997, 1996 and 1995
Notes to the Consolidated Financial Statements
(2) Financial Statement Schedules
Rollins Truck Leasing Corp. (Parent)
Schedule I - Condensed Financial Information
Balance Sheet at September 30, 1997 and 1996
Statement of Earnings for the years ended
September 30, 1997, 1996 and 1995
Statement of Cash Flows for the years ended
September 30, 1997, 1996 and 1995
Notes to the Financial Statements
Rollins Truck Leasing Corp. and Subsidiaries Consolidated
Schedule II - Valuation and Qualifying Accounts
for the years ended September 30,
1997, 1996 and 1995
Any financial statement schedules otherwise required have been
omitted because they are not applicable or the required information is
shown in the financial statements or notes thereto.<PAGE>
Independent Auditors' Report
The Shareholders and Board of Directors
Rollins Truck Leasing Corp.
We have audited the consolidated financial statements of Rollins
Truck Leasing Corp. and subsidiaries as listed in the accompanying
index. In connection with our audits of the consolidated financial
statements, we also have audited the financial statement schedules as
listed in the accompanying index. These consolidated financial
statements and financial statement schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these consolidated financial statements and consolidated financial
statement schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Rollins Truck Leasing Corp. and subsidiaries as of September 30,
1997 and 1996, and the results of their operations and their cash flows
for each of the years in the three-year period ended September 30,
1997, in conformity with generally accepted accounting principles.
Also in our opinion, the related financial statement schedules, when
considered in relation to the basic consolidated financial statements
taken as a whole, present fairly, in all material respects, the
information set forth therein.
KPMG Peat Marwick LLP
Philadelphia, Pennsylvania
October 28, 1997
<PAGE>
CONSOLIDATED STATEMENT OF EARNINGS
Year Ended September 30,
1997 1996 1995
Revenues $556,704,000 $513,779,000 $482,612,000
Expenses:
Operating 228,957,000 211,919,000 194,073,000
Depreciation 170,039,000 158,407,000 146,777,000
Gain on sale of property
and equipment (12,230,000) (7,950,000) (12,657,000)
Selling and
administrative 50,457,000 47,995,000 43,146,000
437,223,000 410,371,000 371,339,000
Operating earnings 119,481,000 103,408,000 111,273,000
Interest income - - 272,000
Interest expense (49,270,000) (47,481,000) (44,453,000)
Earnings before income taxes 70,211,000 55,927,000 67,092,000
Income taxes 27,417,000 21,811,000 25,756,000
Net earnings $ 42,794,000 $ 34,116,000 $ 41,336,000
Earnings per share $ 1.01 $ .78 $ .91
Average common shares and
equivalents outstanding 42,333,000 43,730,000 45,365,000
The Notes to the Consolidated Financial Statements are an integral part
of these statements.
CONSOLIDATED BALANCE SHEET
September 30,
1997 1996
ASSETS
Current assets
Cash $ 17,637,000 $ 31,207,000
Accounts receivable, net of
allowance for doubtful accounts:
1997-$2,126,000; 1996-$1,928,000 71,165,000 62,389,000
Inventories 8,659,000 9,124,000
Prepaid expenses 15,465,000 14,195,000
Refundable income taxes 965,000 897,000
Deferred income taxes 7,152,000 5,960,000
Total current assets 121,043,000 123,772,000
Equipment on operating leases, net 847,910,000 784,346,000
Other property and equipment, net 204,745,000 198,681,000
Excess of cost over net assets of
businesses acquired 12,156,000 12,497,000
Other assets 5,937,000 5,916,000
Total assets $1,191,791,000 $1,125,212,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities (excluding equipment financing obligations)
Accounts payable $ 10,451,000 $ 8,759,000
Accrued liabilities 51,952,000 44,857,000
Total current liabilities 62,403,000 53,616,000
Equipment financing obligations
including maturities due within
one year: 1997-$26,557,000;
1996-$75,047,000 671,822,000 641,362,000
Other liabilities 13,955,000 11,375,000
Deferred income taxes 154,937,000 134,811,000
Commitments and contingent liabilities
(see Notes to the Consolidated
Financial Statements)
Shareholders' equity
Common stock, $1 par value,
outstanding: 1997-41,067,408 shares;
1996-43,383,935 shares 41,067,000 43,384,000
Additional paid-in capital 274,000 -
Retained earnings 247,333,000 240,664,000
Total shareholders' equity 288,674,000 284,048,000
Total liabilities and
shareholders' equity $1,191,791,000 $1,125,212,000
The Notes to the Consolidated Financial Statements are an integral part
of these statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended September 30,
1997 1996 1995
Cash flows from operating activities
Net earnings $ 42,794,000 $ 34,116,000 $ 41,336,000
Adjustments to reconcile
net earnings to net cash
provided by operating
activities:
Depreciation and
amortization 170,380,000 158,738,000 147,003,000
Net gain on sale of
property and equipment (12,230,000) (7,950,000) (12,657,000)
Changes in assets and
liabilities:
Notes and accounts
receivable (8,776,000) (5,443,000) 1,085,000
Accounts payable and
accrued liabilities 8,787,000 2,210,000 3,963,000
Current and deferred
income taxes 18,866,000 20,032,000 18,956,000
Other, net 1,754,000 666,000 (1,165,000)
Net cash provided by
operating activities 221,575,000 202,369,000 198,521,000
Cash flows from investing activities
Purchase of property and
equipment (303,058,000) (297,339,000) (318,983,000)
Proceeds from sales of
equipment 75,621,000 63,090,000 70,013,000
Excess of cost over
net assets of business
acquired - (1,150,000) -
Net cash used in
investing activities (227,437,000) (235,399,000) (248,970,000)
Cash flows from financing activities
Proceeds of equipment
financing obligations 140,150,000 171,406,000 239,128,000
Repayment of equipment
financing obligations (109,690,000) (104,256,000) (164,085,000)
Payment of dividends (8,353,000) (7,974,000) (7,298,000)
Proceeds of stock
options exercised 818,000 540,000 446,000
Common stock acquired
and retired (30,633,000) (18,187,000) (10,128,000)
Net cash (used in)
provided by financing
activities (7,708,000) 41,529,000 58,063,000
Net (decrease) increase
in cash (13,570,000) 8,499,000 7,614,000
Cash beginning of period 31,207,000 22,708,000 15,094,000
Cash end of period $ 17,637,000 $ 31,207,000 $ 22,708,000
Supplemental information
Interest paid $ 49,212,000 $ 47,008,000 $ 42,692,000
Income taxes paid $ 8,551,000 $ 1,779,000 $ 6,800,000
The Notes to the Consolidated Financial Statements are an integral part
of these statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Organization and Accounting Policies
Organization - Rollins Truck Leasing Corp. is engaged primarily in
full-service truck leasing and rentals and the provision and management
of complete truck transportation and distribution systems. All of the
Company's operations currently are conducted within the United States.
Consolidation - The consolidated financial statements include the
accounts of all subsidiaries. Intercompany transactions and balances
among these subsidiaries have been eliminated.
Revenue recognition - Lease, rental and other transportation service
revenues including contingent rentals, which represent the mileage
charges on full-service leases, are recognized over the terms of the
respective contracts.
Earnings per share - Earnings per share are computed assuming the
conversion of all potentially dilutive outstanding stock options.
Inventories - Inventories of transportation equipment parts and
supplies are valued at the lower of first-in, first-out cost or market.
Property and equipment - Property and equipment is carried at cost,
net of applicable allowances. Tires placed in service on new equipment
are capitalized as part of the original equipment cost. Depreciation
is provided on a straight-line basis. Depreciable lives for equipment
on operating leases and other property and equipment range from 3 to 12
years and 3 to 45 years, respectively. The cost and related
accumulated depreciation of property and equipment sold or retired are
eliminated from the property accounts and the resulting gain or loss is
reflected in the Consolidated Statement of Earnings. Repairs and
maintenance are expenses as incurred. Replacement tires are expensed
when placed in service. Major additions and improvements are
capitalized and written off over the remaining depreciable lives of the
assets.
Goodwill - The excess of cost over net assets of businesses acquired
prior to October 30, 1970 amounting to $4,588,000 is not being
amortized since its value, in management's opinion, has not diminished.
The excess of cost over net assets of businesses acquired subsequently
is being amortized on a straight-line basis over 40 years.
Leasing operations - Leasing operations consist of the long-term
leasing and short-term rental of transportation equipment. All leases
are classified as operating leases and expire on various dates during
the next twelve years.
Claims and insurance reserves - The Company retains a specific
portion of insurable risks with regard to public liability and workers'
compensation claims. Retention levels are currently $500,000.
Reserves are established for claims incurred plus an estimate for
claims incurred but not reported. Reserve requirements are evaluated
and established utilizing historical trends, the Company's experience,
claim severity and other factors. Claims estimated to be paid within
one year have been classified in accrued liabilities with the remainder
included with other liabilities.
Use of estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Fair values of financial instruments - The carrying amounts reported
in the balance sheet for current assets and current liabilities
approximate their fair value at September 30, 1997.
Stock-based compensation - The Company adopted the provisions of
SFAS No. 123, "Accounting for Stock-Based Compensation," on October 1,
1996. SFAS No. 123 defines a fair value based method of accounting for
stock-based compensation plans, however, it allows the continued use of
the intrinsic value method under Accounting Principles Board Opinion
("APB"), No. 25, "Accounting for Stock Issued to Employees." The
Company has elected to continue to use the intrinsic value method.
Equipment on Operating Leases
The Company's investment in equipment on operating leases is as
follows:
September 30,
1997 1996
Transportation equipment $1,265,407,000 $1,160,364,000
Less accumulated depreciation (417,497,000) (376,018,000)
$ 847,910,000 $ 784,346,000
Commitments for the purchase of transportation equipment amounted to
$74,381,000 at September 30, 1997.
At September 30, 1997, minimum future revenues from non-cancelable
leases are as follows:
Year Ending September 30,
1998 $227,143,000
1999 191,036,000
2000 147,455,000
2001 105,125,000
2002 67,285,000
Later years 53,481,000
Total future minimum lease revenues $791,525,000
Other Property and Equipment
The Company's other property and equipment accounts are as follows:
September 30,
1997 1996
Land $ 54,062,000 $ 48,749,000
Transportation service facilities 188,628,000 181,362,000
Other operating assets 38,018,000 36,500,000
Less accumulated depreciation (75,963,000) (67,930,000)
$204,745,000 $198,681,000
Accrued Liabilities
Accrued liabilities are as follows:
September 30,
1997 1996
Employee compensation $12,619,000 $ 9,534,000
Interest 6,736,000 8,050,000
Taxes other than income 12,422,000 11,057,000
Insurance reserves 7,482,000 6,063,000
Environmental 2,769,000 1,868,000
Unbilled services and supplies 6,674,000 5,647,000
Other 3,250,000 2,638,000
$51,952,000 $44,857,000
Equipment Financing Obligations
Equipment financing obligations are as follows:
September 30,
1997 1996
Revolving Credit Agreement $ 16,500,000 $ 10,000,000
Collateral Trust Debentures:
Series I, 10.35%, due 2000 50,000,000 50,000,000
Series J, 8 5/8%, due 1998 30,000,000 30,000,000
Series K, 7 3/4%, due 1997 - 50,000,000
Series L, 7%, due 2003 70,000,000 70,000,000
Series M, 7%, due 2001 60,000,000 60,000,000
Series N, 8.27%, due 2002 100,000,000 100,000,000
Series O, 7.25%, due 2005 50,000,000 50,000,000
Series P, 6.89%, due 2004 75,000,000 75,000,000
Series Q, 6 7/8%, due 2001 60,000,000 60,000,000
Series R 7.30%, due 2007 75,000,000 -
Other equipment financing obligations 85,322,000 86,362,000
$671,822,000 $641,362,000
Two banks provide an unsecured $100,000,000 line under a Revolving
Credit Agreement ("the Revolver"). At the option of the banks, the
Revolver and the Collateral Trust Debentures may be secured by certain
leasing equipment. Termination of the Revolver would result in
repayment of the outstanding balance over 60 months in equal
installments; otherwise, no repayments are required unless the
financing value of the eligible equipment available as security falls
below the outstanding loan balance. At September 30, 1997, interest
rates on borrowings under the Revolver averaged 6.1%. The Revolver
provides for the maintenance of specified financial ratios and
restricts payments to the Company by a consolidated subsidiary. Net
assets of all subsidiaries not restricted under the Revolver totaled
$217,051,000 at September 30, 1997.
Other equipment financing obligations due within one year totaled
$26,557,000 at September 30, 1997 with the balance payable through
2007. Interest rates on these obligations averaged 6.4% at September
30, 1997. The other equipment financing obligations are collateralized
by certain leasing equipment. The Collateral Trust Debentures are
secured by notes from Rollins Leasing Corp.
Equipment financing obligations due within one year are not classified
as current liabilities as the Company intends and has the ability to
refinance them on a long-term basis through available credit
facilities.
Based on published bid prices at September 30, 1997, the estimated
fair value of the Company's Collateral Trust Debentures was
$586,756,000 compared with the recorded book amount of $570,000,000.
The fair value of the remaining $101,822,000 of equipment indebtedness
approximates its recorded amount.
The aggregate amounts of maturities for all indebtedness over the next
five years are as follows: 1998-$26,557,000; 1999-$50,897,000; 2000-
$64,236,000; 2001-$129,971,000 and 2002-$106,388,000.
Pension Plans
The Company maintains a noncontributory pension plan for eligible
employees not covered by pension plans under collective bargaining
agreements. Pension costs are funded in accordance with the provisions
of the Internal Revenue Code. The Company also maintains a
nonqualified, noncontributory defined benefit pension plan for certain
employees to restore pension benefits reduced by federal income tax
regulations. The cost associated with the plan is determined using the
same actuarial methods and assumptions as those used for the Company's
qualified pension plan.
The following table sets forth the funded status and the amount
recognized in the Company's balance sheet for the plans:
September 30,
1997 1996
Actuarial present value of
accumulated benefit obligation:
Vested $34,404,000 $31,114,000
Non-vested 2,567,000 1,279,000
$36,971,000 $32,393,000
Projected benefit obligation $43,679,000 $38,227,000
Plan assets at market value 53,466,000 39,167,000
Plan assets in excess of projected
benefit obligation (9,787,000) (940,000)
Unrecognized gain 14,721,000 6,352,000
Unrecognized prior service costs 678,000) (717,000)
Unrecognized overfunding at adoption 211,000 281,000
Accrued pension liability $ 4,467,000 $ 4,976,000
At September 30, 1997, the assets of the pension plans were invested
76% in equity securities, 18% in fixed income securities and the
balance in other short-term interest bearing accounts.
The discount rate, the rate of assumed compensation increase and the
expected long-term rate of return on assets for 1997, 1996 and 1995
were 8.0%, 5.0% and 9.0%, respectively.
The components of net periodic pension cost are as follows:
Year Ended September 30,
1997 1996 1995
Service cost $ 2,735,000 $ 2,555,000 $ 2,175,000
Interest cost 2,969,000 2,727,000 2,371,000
Return on plan assets (13,043,000) (3,659,000) (7,420,000)
Net amortization and
deferral 9,330,000 244,000 4,907,000
Net periodic pension cost $ 1,991,000 $ 1,867,000 $ 2,033,000
Effective October 1, 1994, the Company established a defined
contribution 401(k) plan which permits participation by substantially
all employees not represented under a collective bargaining agreement.
The Company expensed payments to multi-employer pension plans
required by collective bargaining agreements of $129,000 in 1997,
$85,000 in 1996 and $131,000 in 1995. The actuarial present value of
accumulated plan benefits and net assets available for benefits to
employees under these plans are not available.
<PAGE>
Shareholders' Equity
Changes in the components of shareholders' equity are as follows:
$1 Par Value Additional
Common Paid-in Retained
Stock Capital Earnings
Balance at
September 30, 1994 $45,771,000 $20,319,000 $185,107,000
Net earnings 41,336,000
Dividends on common stock,
$.16 per share (7,298,000)
Common stock acquired
and retired (963,000) (9,165,000)
Exercise of stock options 147,000 299,000
Balance at
September 30, 1995 44,955,000 11,453,000 219,145,000
Net earnings 34,116,000
Dividends on common stock,
$.18 per share (7,974,000)
Common stock acquired
and retired (1,746,000) (11,818,000) (4,623,000)
Exercise of stock options 175,000 365,000
Balance at
September 30, 1996 43,384,000 - 240,664,000
Net earnings 42,794,000
Dividends on common stock,
$.20 per share (8,353,000)
Common stock acquired
and retired (2,484,000) (377,000) (27,772,000)
Exercise of stock options 167,000 651,000
Balance at
September 30, 1997 $41,067,000 $ 274,000 $247,333,000
The Company is authorized to issue 100,000,000 shares of its $1 Par
Value Common Stock and 1,000,000 shares of Preferred Stock. The
preferred shares are without par value, with terms and conditions of
each issue as determined by the Board of Directors.
Each share of common stock includes one common stock purchase right
("Right") which is non-exercisable until certain defined events occur,
including tender offers or the acquisition by a person or group of
affiliated or associated persons of 20% of the Company's common stock.
Upon the occurrence of certain defined events, the Right entitles the
holder to purchase additional stock of the Company or stock of an
acquiring company at a 50% discount. The Right expires on June 30,
1999 unless earlier redeemed by the Company at a price of $.0045 per
Right.
The terms of a credit agreement restrict the Company's dividend
payments to consolidated net earnings subsequent to September 30, 1984
subject to certain adjustments. At September 30, 1997, $191,675,000 of
retained earnings was available for the payment of cash dividends.
<TABLE>
Stock Option Plans
Under the Company's stock option plans, options to purchase common stock of the Company may
be granted to officers and key employees at not less than 100% of the fair market value at the
date of grant. Generally, options granted vest ratably over a six-year period and have a maximum
life of eight years.
The Company accounts for these plans under APB No. 25. Accordingly, no compensation cost has
been recognized. Had compensation cost for these plans been determined consistent with SFAS No.
123, the Company's pro forma net earnings for 1997 and 1996 would have been reduced to
$42,524,000 ($1.00 per share) and $33,876,000 ($.77 per share), respectively. Because the SFAS
123 method of accounting has not been applied to options granted prior to October 1, 1995, the
resulting pro forma compensation cost may not be representative of that to be expected in future
years.
As of September 30, stock option activity under the Company's plans is as follows:
<CAPTION> 1997 1996 1995
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of year 1,582,746 $ 8.87 1,326,773 $ 7.90 1,121,499 $ 6.12
Granted 100,000 16.25 481,800 9.51 359,500 11.50
Exercised (167,273) 4.89 (175,256) 3.08 (146,501) 3.05
Expired or cancelled (46,762) 7.89 (50,571) 10.70 (7,725) 9.08
Outstanding at
September 30 1,468,711 $ 9.86 1,582,746 $ 8.87 1,326,773 $ 7.90
Exercisable at
September 30 656,587 $ 8.46 623,521 $ 6.86 539,662 $ 5.55
The weighted average fair value of options granted during 1997 and 1996 was $5.14 and $3.36,
respectively. The fair value for these options was estimated at the date of grant using a Black-
Scholes option pricing model with the following weighted average assumptions for 1997 and 1996,
respectively: risk-free interest rates of 6.1% and 6.0%; dividend yields of 1.9% and 1.6%;
expected volatility of .26 and .27 and a weighted average expected life of the option of 6 years
and 7 years.
</TABLE>
<TABLE>
The following table summarizes information regarding stock options outstanding and exercisable
at September 30, 1997:
<CAPTION> Options Outstanding Options Exercisable
Weighted
Average Weighted Weighted
Range of Remaining Average Average
Exercise Number Contractual Exercise Number Exercise
Prices Outstanding Life Price Exercisable Price
<S> <C> <C> <C> <C> <C>
$ 2.83 - $ 3.17 155,447 .8 yrs. $ 2.92 155,447 $ 2.92
$ 7.56 - $11.00 644,799 5.1 yrs. $ 8.93 223,432 $ 8.22
$11.50 - $16.25 668,465 4.9 yrs. $12.36 277,708 $11.75
At September 30, 1997, a total of 418,400 shares of common stock were available for future
grants.
</TABLE>
Lease Commitments
The Company leases some of the premises and equipment used in its
operations. Leases classified as operating leases expire on various
dates during the next 17 years. Some of the leases are renewable at
the Company's option. Minimum future rental payments required under
operating leases having non-cancelable terms in excess of one year as
of September 30, 1997 are as follows:
Year Ending September 30,
1998 $ 2,984,000
1999 2,499,000
2000 2,073,000
2001 1,801,000
2002 1,509,000
Later years 3,272,000
Total minimum payments required $14,138,000
Total rent expense for all operating leases except those with
terms of one month or less was $7,624,000 in 1997, $7,604,000 in 1996
and $7,560,000 in 1995.
Income Taxes
The tax provisions for the three years ended September 30, 1997
are comprised as follows:
Year Ended September 30,
1997 1996 1995
Current:
Federal $ 8,345,000 $ 2,514,000 $ 6,584,000
State 747,000 15,000 1,128,000
Deferred:
Federal 15,138,000 16,413,000 16,256,000
State 3,187,000 2,869,000 1,788,000
Total income taxes $27,417,000 $21,811,000 $25,756,000
A reconciliation of the tax provisions for the three years ended
September 30, 1997 with amounts calculated by applying the statutory
federal tax rate to earnings before income taxes for those years is as
follows:
Year Ended September 30,
1997 1996 1995
Federal tax $24,574,000 $19,574,000 $23,482,000
State taxes, net of
federal benefit 2,557,000 1,875,000 1,896,000
Other 286,000 362,000 378,000
Total income taxes $27,417,000 $21,811,000 $25,756,000
The tax effect of temporary differences and the tax credit
carryforwards that comprise the current and non-current deferred tax
amounts shown on the balance sheet are as follows:
September 30
1997 1996
Depreciation $172,922,000 $148,599,000
Expenses deductible when paid (10,960,000) (9,077,000)
Alternative minimum tax credit
carryforwards (14,411,000) (11,335,000)
Other 234,000 664,000
Deferred income taxes, net $147,785,000 $128,851,000
At September 30, 1997, the Company had alternative minimum tax
credit carryforwards of $14,411,000 which have no expiration date. The
Company has no tax credit carryforwards for financial reporting
purposes since all such credits have been considered in the
determination of deferred tax amounts.
Environmental Regulation
The Company is subject to certain regulations of the Environmental
Protection Agency in that it stores and dispenses petroleum products.
Most of these regulations address testing and replacement of
underground tanks. The Company's adherence to these regulations is
part of its normal business operations. These regulations have not had
any material adverse effect upon the Company.
Commitments and Contingent Liabilities
There are various routine claims and legal actions pending against
the Company incidental to the ordinary operation of its business. The
Company is of the opinion, based on the advice of counsel, that it is
only remotely likely that the ultimate resolution of these claims and
actions will be material.
Transactions with Related Parties
Certain directors and officers of the Company are also directors and
officers of Matlack Systems, Inc.
The Company provided administrative services and rented office space
to Matlack Systems, Inc. for aggregate charges of $3,600,000 in 1997,
$3,542,000 in 1996 and $3,286,000 in 1995, which have been included in
revenues or offset against operating expense, as appropriate, in the
Consolidated Statement of Earnings. Interest charges to Matlack, Inc.,
which have been offset against interest expense, were $272,000 in 1995.
Certain directors of the Company are also directors of Laidlaw
Environmental Services, Inc. (formerly Rollins Environmental Services,
Inc.) which, prior to May 16, 1997, was a related party.
The Company sold materials (principally vehicle fuel) and services
(including data processing services) and rented transportation
equipment and office space to Laidlaw Environmental Services, Inc. The
aggregate charges for these materials and services, which have been
included in revenues or offset against operating expense, as
appropriate, in the Consolidated Statement of Earnings, were $2,628,000
for the period through May 15, 1997, $4,769,000 in 1996 and $6,617,000
in 1995.
An officer of the Company is the trustee of an employee benefits
trust, which provides certain insurance and health care benefits to
employees of the Company. Contributions to the trust, which were
charged to operating or selling and administrative expense, as
appropriate, were $12,497,000 in 1997, $10,892,000 in 1996 and
$9,099,000 in 1995.
In the opinion of management of the Company, the foregoing
transactions were effected at rates that approximate those the Company
would have realized or incurred had such transactions been effected
with independent third parties.
Quarterly Results (Unaudited)
December March June September
1997 31 31 30 30
Revenues $133,697,000 $132,376,000 $142,095,000 $148,536,000
Gross profit $ 39,706,000 $ 36,752,000 $ 44,741,000 $ 48,739,000
Earnings before
income taxes $ 16,104,000 $ 12,503,000 $ 19,213,000 $ 22,391,000
Net earnings $ 9,823,000 $ 7,628,000 $ 11,767,000 $ 13,576,000
Earnings
per share $ .23 $ .18 $ .28 $ .32
1996
Revenues $125,021,000 $122,192,000 $130,723,000 $135,843,000
Gross profit $ 37,293,000 $ 33,232,000 $ 39,347,000 $ 41,531,000
Earnings before
income taxes $ 13,586,000 $ 8,833,000 $ 15,903,000 $ 17,605,000
Net earnings $ 8,356,000 $ 5,432,000 $ 9,742,000 $ 10,586,000
Earnings
per share $ .19 $ .12 $ .22 $ .25
SCHEDULE I - Condensed Financial Information
ROLLINS TRUCK LEASING CORP.
BALANCE SHEET
($000 Omitted)
Assets September 30,
1997 1996
Current assets (excluding notes
receivable from subsidiaries)
Cash $ 1,173 $ 1,255
Accounts receivable 121 14
Accounts receivable from subsidiaries* 20 4
Other current assets 76 141
Total current assets 1,390 1,414
Notes receivable from subsidiary* 570,000 545,000
Investments in subsidiaries, at equity* 309,310 282,202
Advances to subsidiaries* 14,627 15,832
Property and equipment, at cost,
net of accumulated depreciation 933 1,100
Other assets 183 96
Deferred income taxes 189 -
Total assets $896,632 $845,644
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable to subsidiaries* $ 14 $ 5
Accounts payable to others 189 437
Accrued liabilities 1,531 494
Income taxes payable 895 1,785
Total current liabilities 2,629 2,721
Bank Master Note Obligation - 3,000
Collateral Trust Debentures
10.35% Series I, due 2000 50,000 50,000
8 5/8% Series J, due 1998 30,000 30,000
7 3/4% Series K, due 1997 - 50,000
7% Series L, due 2003 70,000 70,000
7% Series M, due 2001 60,000 60,000
8.27% Series N, due 2002 100,000 100,000
7.25% Series O, due 2005 50,000 50,000
6.89% Series P, due 2004 75,000 75,000
6 7/8% Series Q, due 2001 60,000 60,000
7.30% Series R, due 2007 75,000 -
Advances from subsidiaries* 34,869 10,320
Other liabilities 460 215
Deferred income taxes - 340
Commitments and contingent liabilities
(see Notes to the Financial Statements)
Shareholders' equity
Common stock $1 par value,
100,000,000 shares authorized;
issued and outstanding:
1997: 41,067,408; 1996: 43,383,935 41,067 43,384
Additional paid-in capital 274 -
Retained earnings 247,333 240,664
Total shareholders' equity 288,674 284,048
Total liabilities and shareholders' equity $896,632 $845,644
* Eliminated in consolidation.
The Notes to the Financial Statements are an integral part of these
statements.
SCHEDULE I - Condensed Financial Information
(continued)
ROLLINS TRUCK LEASING CORP.
STATEMENT OF EARNINGS
($000 Omitted)
Year Ended September 30,
1997 1996 1995
Revenues:
Dividends from subsidiaries $15,150 $12,300 $12,501
Other income 7,191 6,322 5,301
22,341 18,622 17,802
Expenses:
Administrative 4,571 2,930 3,365
Depreciation and amortization 265 254 220
Loss on sale of property and equipment - - 9
4,836 3,184 3,594
Earnings before interest and income taxes 17,505 15,438 14,208
Interest income 43,286 40,085 36,995
Interest expense (44,888) (40,307) (36,995)
Earnings before income taxes 15,903 15,216 14,208
Income taxes 297 1,089 980
Net earnings of
Rollins Truck Leasing Corp. 15,606 14,127 13,228
Equity in undistributed net earnings
of subsidiaries 27,188 19,989 28,108
Net earnings $42,794 $34,116 $41,336
The Notes to the Financial Statements are an integral part of these
statements.
SCHEDULE I - Condensed Financial Information
(continued)
ROLLINS TRUCK LEASING CORP.
STATEMENT OF CASH FLOWS
($000 Omitted)
Year Ended September 30,
1997 1996 1995
Cash flows from operating activities:
Earnings prior to equity in
subsidiaries' undistributed earnings $ 15,606 $ 14,127 $ 13,228
Adjustments to reconcile earnings
to net cash provided by operating
activities:
Depreciation and amortization 265 254 220
Loss on sale of property and equipment - - 9
Changes in assets and liabilities:
Accounts receivable (123) 55 70
Accounts payable and accrued
liabilities 798 256 (92)
Current and deferred income taxes (1,419) 215 767
Other, net 223 318 (235)
Net cash provided by operating
activities 15,350 15,225 13,967
Cash flows from investing activities:
Purchase of equipment (18) (367) (148)
Proceeds from sale of equipment - - 12
Net cash used in investing
activities (18) (367) (136)
Cash flows from financing activities:
Proceeds of equipment financing
obligations 89,500 144,300 150,000
Notes receivable from subsidiary (75,000) (135,000) (150,000)
Repayment of note by subsidiary 50,000 75,000 45,600
Repayment of note by Matlack, Inc. - - 6,000
Repayment of equipment financing
obligations (67,500) (81,300) (50,000)
Payment of dividends (8,353) (7,974) (7,298)
Proceeds of stock options exercised 818 540 446
Common stock acquired and retired (30,633) (18,187) (10,128)
Subsidiary advances and payments 25,754 8,158 1,710
Net cash used in financing
activities (15,414) (14,463) (13,670)
Net (decrease) increase in cash (82) 395 161
Cash beginning of period 1,255 860 699
Cash end of period $ 1,173 $ 1,255 $ 860
Supplemental information:
Interest paid $ 42,934 $ 39,377 $ 35,291
Income taxes paid $ 8,000 $ 1,655 $ 6,710
The Notes to the Financial Statements are an integral part of these
statements.
SCHEDULE I - Condensed Financial Information
(continued)
ROLLINS TRUCK LEASING CORP.
Notes to the Financial Statements
Accounting Policies
The accounting policies of the Company and its subsidiaries are set
forth in the Organization and Accounting Policies note in the
consolidated financial statements of this 1997 Annual Report on Form
10-K.
The Company's principal sources of earnings are dividends and
management fees paid by its subsidiaries. Certain loan agreements
restrict payments to the Company by its subsidiaries. Net assets of
subsidiaries not restricted under such loan agreements totaled
$217,051,000 at September 30, 1997. The Company also realizes cash
receipts by assessing subsidiaries for federal taxes on income and
expends cash in payment of such taxes on a consolidated basis. Tax
assessments are based on the amount of federal income taxes which would
be payable (recoverable) by each subsidiary company based on its
current year's earnings (loss) reduced by that subsidiary's applicable
portion of any consolidated credits utilized currently in the
consolidated federal income tax return.
Interest income on notes receivable from a subsidiary, which are
pledged to secure the Collateral Trust Debentures (described in the
Equipment Financing Obligations note in the consoldiated financial
statements of this 1997 Annual Report on Form 10-K), was $43,286,000,
$40,085,000 and $36,995,000 in 1997, 1996 and 1995, respectively.
Commitments and Contingencies
The Company is obligated to an affiliated company for $302,000
annually ($983,000 in the aggregate) of future rentals under a lease to
2001. Rent expense was $284,000 in 1997, $345,000 in 1996 and $398,000
in 1995.
Commitments of the Company have been collateralized by bank letters
of credit issued on behalf of the Company in the amount of $7,750,000.
The aggregate amounts of maturities for the Collateral Trust
Debentures during the next five years are as follows: 1999 -
$30,000,000; 2000 -$50,000,000; 2001 - $120,000,000 and 2002 -
$100,000,000.
<TABLE>
ROLLINS TRUCK LEASING CORP. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
($000 OMITTED)
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
Balance at Charged to Charged Balance at
Year Ended Beginning Costs and to Other End of
September 30, Description of Period Expenses Accounts Deductions Period
<S> <C> <C> <C> <C> <C>
1997: Allowance for doubtful accounts $1,928 $1,454 $695(1) $1,951(2) $2,126
1996: Allowance for doubtful accounts $1,635 $2,207 $448(1) $2,362(2) $1,928
1995: Allowance for doubtful accounts $1,770 $1,182 $707(1) $2,024(2) $1,635
(1) Recoveries.
(2) Write-offs.
</TABLE>
<PAGE>
ROLLINS TRUCK LEASING CORP.
Exhibits to Form 10-K
For Fiscal Year Ended September 30, 1997
Index to Exhibits
Exhibit (3)(a) Restated Certificate of Incorporation of Rollins
Truck Leasing Corp. as last amended on January
25, 1990.
Exhibit (3)(b) By-Laws of Rollins Truck Leasing Corp. as last
amended on October 30, 1997.
Exhibit (4)(m) Seventeenth Supplemental Collateral Trust
Indenture dated as of March 10, 1997 to the
Collateral Trust Indenture dated as of March 21,
1983 as supplemented and amended by a Third
Supplemental Indenture thereto dated as of
February 20, 1986 and by the Eighth Supplemental
Indenture dated as of May 15, 1990 between
Rollins Truck Leasing Corp. and First Union
National Bank, as Trustee.
Exhibit 21 Rollins Truck Leasing Corp.
Subsidiaries at September 30, 1997
Exhibit 23 Consent of Independent Auditors
Exhibit 27 Rollins Truck Leasing Corp.
Financial Data Schedule at
September 30, 1997
Exhibit 21
ROLLINS TRUCK LEASING CORP.
Subsidiaries of Registrant at September 30, 1997
JURISDICTION OF
NAME INCORPORATION
Rollins Logistics Inc. Delaware
Rollins Leasing Corp. Delaware
Rollins Properties, Inc. Delaware
Transrisk, Limited Bermuda
Concord Administrative Services, Inc. Delaware
Exhibit 23
The Board of Directors
Rollins Truck Leasing Corp.
We consent to incorporation by reference in the registration
statement (No. 333-21835) on Form S-3 of Rollins Truck Leasing Corp. of
our report dated October 28, 1997, relating to the consolidated balance
sheets of Rollins Truck Leasing Corp. and subsidiaries as of September
30, 1997 and 1996 and the related consolidated statements of earnings
and cash flows and related financial statement schedules for each of
the years in the three-year period ended September 30, 1997, which
report appears in the 1997 Annual Report on Form 10-K of Rollins Truck
Leasing Corp.
KPMG Peat Marwick LLP
Philadelphia, Pennsylvania
December 1, 1997
Rollins Truck Leasing Corp.
Exhibit 3(a)
Restated Certificate of Incorporation
as last amended on January 25, 1990
<PAGE>
RESTATED
CERTIFICATE OF INCORPORATION
OF
RLC CORP.
(Originally Incorporated Under
The Name of
"Rollins Fleet Leasing, Inc."
On April 28, 1954)
FIRST: The name of the Corporation is RLC CORP.
SECOND: Its registered office is to be located at One
Rollins Plaza, County of New Castle, Wilmington, in the
State of Delaware. The name of its registered agent at that
address is RLC CORP.
THIRD: The nature of the business of the Corporation
is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The total number of shares of stock which this
Corporation shall have authority to issue is Fifty One
Million (51,000,000) shares, divided into two classes,
namely Preferred Stock and Common Stock. The number of
shares of Preferred Stock which this Corporation is
authorized to issue is One Million (1,000,000) shares
without par value; the number of shares of Common Stock
which this Corporation is authorized to issue is Fifty
Million (50,000,000) shares of the par value of One Dollar
($1.00) per share.
There is hereby expressly granted to the Board of
Directors of the Corporation the power and authority to
issue the Preferred Stock as a class without series, or if
so determined from time to time, in one or more series, and
to fix the voting rights, the designations, preferences and
relative, participating, optional or other special rights of
the class of the Preferred Stock or of one or more series
thereof and the qualifications, limitation or restrictions
thereof with respect to the Preferred Stock authorized
herein in a resolution or resolutions adopted by the Board
of Directors providing for the issue of said stock. The
holders of Preferred Stock shall have no preemptive rights
to subscribe for any shares of any class of stock of the
Corporation whether now or hereafter authorized.
The Board of Directors is further authorized to provide
that the Preferred Stock, when issued, may be convertible
into or exchangeable for shares of any other class or
classes of stock of the Corporation or of any series of the
same at such price or prices or rates of exchange and with
such adjustments as shall be stated and expressed in the
resolution or resolutions providing for the issue of such
Preferred Stock adopted by the Board of Directors as
hereinabove provided.
Each and every resolution adopted by the Board of
Directors providing for the issuance of the Preferred Stock
as a class or in series within such class from time to time
shall be, under certificate of the proper officers of the
Corporation, filed with the Secretary of State of Delaware
and a certified copy thereof shall be recorded in the same
manner as certificates of incorporation are required to be
filed and recorded.
The holders of the Common Stock shall have no
preemptive rights to subscribe for any shares of any class
of stock of the Corporation whether now or hereafter
authorized.
Special meetings of the stockholders may be called at
any time by the Chairman of the Board of Directors, the
President or the Chairman of the Executive Committee of the
Board of Directors and not by any other person. No action
shall be taken by the stockholders except at an annual or
special meeting of stockholders and stockholders may not act
by written consent.
DESIGNATION, POWERS, PREFERENCES
AND RIGHTS OF SERIES C $1 DIVIDEND
CUMULATIVE CONVERTIBLE PREFERRED
STOCK.
The series of 423,912 shares of the Preferred Stock,
without par value, of the Corporation, hereby designated
"Series C $1 Dividend Cumulative Convertible Preferred
Stock", to be issued from time to time as the Board of
Directors may determine, shall have the following powers,
preferences, rights and limitations in addition to those
applicable generally to the Preferred Stock of the
Corporation.
(a) The holders of shares of Series C $1 Dividend
Cumulative Convertible Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors, out
of funds and assets of the Corporation legally available
therefor, a cash dividend of $1.00 per share, payable
October 31, 1970 and thereafter an annual cash dividend at
the rate of $1.00 per share, payable semi-annually in
installments of $.50 per share on the 30th day of April and
October in each year, to stockholders of record on record
dates, not exceeding 15 days preceding such dividend payment
dates, fixed for that purpose by the Board of Directors.
Dividends on each share of the Series C $1 Dividend
Cumulative Convertible Preferred Stock shall accrue and be
cumulative from the date of issue. Accumulations of
dividends shall not bear interest.
No dividend shall be paid or declared and set
apart for payment on any shares of Preferred Stock for any
dividend period unless a dividend for the same period and
all past periods, if any, ending within such period ratable
in proportion to the respective annual dividend rates fixed
therefor, shall be or have been paid or declared and set
apart for payment on all shares of Preferred Stock of all
series then outstanding and entitled to receive dividends
for such period or for any past dividend period, if any,
ending within such dividend period.
So long as any shares of Series C $1 Dividend
Cumulative Convertible Preferred Stock are outstanding, the
Corporation shall not declare and pay or set apart for
payment any dividends or make any other distribution on the
Corporation's Common Stock and shall not redeem, retire,
purchase or otherwise acquire, or permit any subsidiary to
purchase or otherwise acquire, any shares of Common Stock or
Preferred Stock, unless at the time of making such
declaration, payment, distribution, redemption, retirement,
purchase or acquisition, dividends on all outstanding shares
of Series C $1 Dividend Cumulative Convertible Preferred
Stock for all past dividend periods shall have been paid or
declared and sufficient funds set apart for the payment
thereof.
(b) The Corporation may, at the option of the
Board of Directors, redeem all or any part of the
outstanding Series C $1 Dividend Cumulative Convertible
Preferred Stock at any time after June 30, 1971, by paying
for each share so redeemed the redemption prices listed
below, together with an amount equal to all cumulative
dividends accrued thereon to the date fixed for redemption
plus accrued and unpaid dividends, if any, provided that
notice of redemption is sent by certified mail to the
holders of record of the Series C $1 Dividend Cumulative
Convertible Preferred Stock to be redeemed at least 40 but
not more than 60 days prior to the date of redemption
specified in such notice, addressed to each such holder at
his address as it appears in the records of the Corporation.
On or after the redemption date each holder of shares of
Series C $1 Dividend Cumulative Convertible Preferred Stock
to be redeemed shall present and surrender his certificate
or certificates for such shares to the Corporation at the
place designated in such notice and thereupon the redemption
price of such shares shall be paid to or to the order of the
person whose name appears on such certificate or
certificates as the owner thereon and each surrender
certificate shall be cancelled. In case less than all the
shares represented by any such certificates are redeemed, a
certificate shall be issued representing the unredeemed
shares. From and after the redemption date (unless default
shall be made by the Corporation in payment of the
redemption price) all dividends on the shares of Series C $1
Dividend Cumulative Convertible Preferred Stock designated
for redemption in such notice shall cease to accrue, and all
rights of the holders thereof as stockholders of the
Corporation, except the right to receive the redemption
price thereof upon the surrender of certificates
representing the same, without interest, shall cease and
terminate and such shares shall not thereafter be
transferred (except with the consent of the Corporation) on
the books of the Corporation, and such shares shall not be
deemed to be outstanding for any purpose whatsoever. At its
election, the Corporation prior to the redemption date may
deposit the redemption price of the shares of Series C $1
Dividend Cumulative Convertible Preferred Stock so called
for redemption in trust for the holders thereof with a bank
or trust company (having a capital and surplus of not less
than $1,000,000) in which case such notice to holders of the
Series C $1 Cumulative Convertible Preferred Stock to be
redeemed shall state the date of such deposit, shall specify
the office of such bank or trust company as the place of
payment of the redemption price, and shall call upon such
holders to surrender the certificates representing such
shares at such price on or after the date fixed in such
redemption notice (which shall not be later than the
redemption date) against payment of the redemption price.
From and after the making of such deposit, the shares of
Series C $1 Dividend Cumulative Convertible Preferred Stock
so designated for redemption shall not be deemed to be
outstanding for any purpose whatsoever, and the rights of
the holders of such shares shall be limited to the right to
receive the redemption price of such shares, without
interest, upon surrender of the certificates representing
the same to the Corporation at said office of such bank and
trust company, and the right of conversion (on or before the
close of business on the last business day prior to the date
fixed for redemption) herein provided. Any funds so
deposited which shall not be required for such redemption
because of the exercise of such right of conversion after
the date of such deposit shall be returned to the
Corporation. Any interest accrued on such funds shall be
paid to the Corporation from time to time. Any moneys so
deposited which shall remain unclaimed by the holders of
such Series C $1 Dividend Cumulative Convertible Preferred
Stock at the end of six years after the redemption shall be
returned by such bank or trust company to the Corporation
after which the holders of the Series C $1 Cumulative
Convertible Preferred Stock shall look only to the
Corporation for payment of the redemption price. In the
event that less than all the outstanding shares of Series C
$1 Dividend Cumulative Convertible Preferred Stock are to be
redeemed at one time, the shares so to be redeemed shall be
determined by lot or pro rata in such manner as the Board of
Directors may determine. The prices at which each share of
Series C $1 Dividend Cumulative Convertible Preferred Stock
may be redeemed during the periods set forth below are as
follows:
Prior to July 1, 1971: No right to redeem.
If redemption date occurs after June 30, 1971
but before July 1, 1972: $32.00 together with an amount
equal to all cumulative dividends accrued thereon to the
date of redemption.
If redemption date occurs after June 30, 1972
but before July 1, 1973: $31.00 together with an amount
equal to all cumulative dividends accrued thereon to the
date of redemption.
If redemption date occurs after June 30,
1973; $30.00 together with any amount equal to all
cumulative dividends accrued thereon to the date of
redemption.
(c) Upon liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the
holders of Series C $1 Dividend Cumulative Convertible
Preferred Stock shall be entitled to be paid out of the
assets of the Corporation available for distribution to its
stockholders before any payment shall be made in respect of
any class or series of stock which shall rank subordinate
thereto as to assets the fixed amount of $30.00 for each
share of Series C $1 Dividend Cumulative Convertible
Preferred Stock held by them and accrued and unpaid
dividends, if any, thereon.
If upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation the assets of
the Corporation available for distribution to its Series C
$1 Dividend Cumulative Convertible Preferred Stockholders
shall be insufficient to pay the holders of Series C $1
Dividend Cumulative Convertible Preferred Stock the full
amount to which they are entitled hereunder, the holders of
Series C $1 Dividend Cumulative Convertible Preferred Stock
shall share with all other preferred stock ratably in any
distribution of assets according to the respective amounts
which would be payable in respect of the shares of Series C
$1 Dividend Cumulative Convertible Preferred Stock held by
them upon such distribution if all amounts payable on or
with respect to Series C $1 Dividend Cumulative Convertible
Preferred Stock were paid in full.
Neither the merger or consolidation of the
Corporation into or with another Corporation, nor the sale,
transfer or lease of all or substantially all the assets of
the Corporation, shall be deemed to be voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation.
(d) At each meeting of stockholders each holder
of record of shares of Series C $1 Dividend Cumulative
Convertible Preferred Stock shall be entitled to .7 of a
vote per share on each matter on which the holders of record
of common stock shall be entitled to vote, except the
election of directors, voting, except as otherwise provided
herein or required by law, together with the holder of
record of common stock and any other series of preferred
stock entitled to vote with the holders of record of common
stock as one class, and each such record holder of shares of
Series C $1 Dividend Cumulative Convertible Preferred Stock
shall be entitled to notice of any such meeting of
stockholders, provided however, that so long as 50,000
shares of Series C $1 Dividend Cumulative Convertible
Preferred Stock are outstanding, the holders of record of
Series C $1 Dividend Cumulative Convertible Preferred Stock,
voting separately as a class, shall have the right to elect
one director, if at the time of any annual meeting of
stockholders for the election of directors a default in
dividends (as defined in this paragraph) shall exist, the
holders of shares of Series C $1 Dividend Cumulative
Convertible Preferred Stock, voting separately as a class
shall have the right to elect one-quarter of the members of
the Board of Directors of the Corporation and the holders of
other preferred stock and common stock shall not be entitled
to vote in the election of the directors so to be elected by
the holders of shares of Series C $1 Dividend Cumulative
Convertible Preferred Stock. Any director elected by the
holders of shares of Series C $1 Dividend Cumulative
Convertible Preferred Stock, elected because a default in
Series C $1 Dividend Cumulative Convertible Preferred Stock
exists, voting as a class as aforesaid, shall continue to
serve as such director for the full term for which he shall
have been elected notwithstanding that prior to the end of
such term a default in Series C $1 Dividend Cumulative
Convertible Preferred Stock dividends shall cease to exist.
At any meeting held for the election of directors at
which the holders of shares of Series C $1 Dividend
Cumulative Convertible Preferred Stock shall have the right
to elect directors as hereinabove provided, the presence, in
person or by proxy, of the holders of a majority of the
number of outstanding shares of Series C $1 Dividend
Cumulative Convertible Preferred Stock shall be required to
constitute a quorum of such class for the election of any
director by the holders of such Series C $1 Dividend
Cumulative Convertible Preferred Stock. At any such meeting
or adjournment thereof the absence of a quorum of the
holders of Series C $1 Dividend Cumulative Convertible
Preferred Stock shall not prevent the election of directors
other than those to be elected by such holders of Series C
$1 Dividend Cumulative Convertible Preferred Stock voting
together as a class. During any period in which the holders
of shares of Series C $1 Dividend Cumulative Convertible
Preferred Stock have the right to elect directors as
provided for herein, any vacancy in the directorships filled
by such holders shall be filled by the vote of the remaining
director or directors theretofore elected by such holders.
If not so filled within 40 days after the creation thereof,
or if at the time of such vacancy there should be only one
director elected by such holders, the Secretary of the
Corporation shall call a special meeting of the holders of
the Series C $1 Dividend Cumulative Convertible Preferred
Stock and such vacancy or vacancies shall be filled at such
special meeting.
For the purposes of this paragraph, a default in Series
C $1 Dividend Cumulative Convertible Preferred Stock
dividends shall be deemed to have occurred whenever the
amount of dividends in arrears shall be equivalent to three
semi-annual dividends or more and, having so occurred, such
default shall be deemed to exist thereafter until all
accrued dividends on all shares of Series C $1 Dividend
Cumulative Convertible Preferred Stock then outstanding
shall have been paid.
No director elected by the holders of the Series C $1
Dividend Cumulative Convertible Preferred Stock shall be
removed otherwise than by vote of the holders of at least a
majority in number of the outstanding shares of such stock,
voting separately as a class, at a special meeting of such
holders.
(e) So long as any shares of the Series C $1
Dividend Cumulative Convertible Preferred Stock are
outstanding, the Corporation shall not, without the
affirmative vote or written consent of the holders of at
least two-thirds of the aggregate number of shares at the
time outstanding of the Series C $1 Dividend Cumulative
Convertible Preferred Stock and any other series of
preferred stock hereafter issued which shall be accorded
such class voting right by the Board of Directors as
permitted in the Certificate of Incorporation, voting or
consenting, as the case may be, separately as a class
without regard to series:
(i) authorize, create or increase any class
or capital stock ranking prior to the Preferred Stock as to
dividends or upon liquidation, dissolution or winding up; or
(ii) alter or change any of the powers,
preferences, or special rights given to the Series C $1
Dividend Cumulative Convertible Preferred Stock by the
Certificate of Incorporation so as to affect the Preferred
Stock adversely.
So long as any shares of the Series C $1 Dividend
Cumulative Convertible Preferred Stock are outstanding, the
Corporation shall not, without the affirmative vote or
written consent of the holders of at least a majority of the
aggregate number of shares at the time outstanding of the
Series C $1 Dividend Cumulative Convertible Preferred Stock
and any other series of preferred stock hereafter issued
which shall be accorded such class voting right by the Board
of Directors as permitted in the Certificate of
Incorporation, voting or consenting as the case may be,
separately as a class without regard to series:
(i) increase the number of share of
Preferred Stock at the time authorized by the Certificate of
Incorporation of the Corporation.
(ii) authorize, create or increase any class
of capital stock ranking on a parity with the Preferred
Stock as to dividends or upon liquidation, dissolution or
winding up.
No vote or written consent of the holders of
Series C $1 Dividend Cumulative Convertible Preferred Stock
shall be required for any purpose if, at or prior to the
time when any such action otherwise requiring such vote or
written consent is to take effect, provision is made for the
redemption of all shares of Series C $1 Dividend Cumulative
Convertible Preferred Stock at the time outstanding.
(f) The Series C $1 Dividend Cumulative
Convertible Preferred Stock shall be convertible into Common
Stock of the Corporation at the option of the holders
thereof at any time at the rate, subject to the provisions
for adjustment hereinafter set forth, of seven-tenths (.7)
of a share of Common Stock for each share of Series C $1
Dividend Cumulative Convertible Preferred Stock. No
allowance or adjustments for dividends on either class of
stock shall be made upon conversion. The right to convert
any shares called for redemption shall continue until and
shall expire at the close of business on the last business
day prior to the redemption date.
The holder of a share or shares of Series C $1
Dividend Cumulative Convertible Preferred Stock may exercise
the conversion rights as to any thereof by delivering to the
Corporation during regular business hours, at the office of
the transfer agent of the Corporation for the Series C $1
Dividend Cumulative Convertible Preferred Stock or at such
other place as may be designated by the Corporation, the
certificate or certificates for the shares to be converted,
duly endorsed or assigned in blank or to the Corporation (if
required by it), accompanied in any event by written notice
stating that the holder elects to convert such shares and
stating the name or names (with address) in which the
certificate or certificates for Common Stock are to be
issued. Conversion shall be deemed to have been effected on
the date when such delivery is made, and such date is
referred to herein as the "conversion date". As promptly as
practicable thereafter the Corporation shall issue and
deliver to or upon the written order of such holder, at such
office or other place designated by the Corporation, a
certificate or certificates for the number of full shares of
Common Stock to which he is entitled and a check or
fractional scrip certificate in respect of any fraction of a
share as provided below. The person in whose name the
certificate or certificates for Common Stock are to be
issued shall be deemed to have become a holder of Common
Stock of record on the conversion date.
The issuance of Common Stock on conversion of Series C
$1 Dividend Cumulative Convertible Preferred Stock shall be
without charge to the converting holder of Series C $1
Dividend Cumulative Convertible Preferred Stock for any fee,
expense or tax in respect of the issuance thereof, but the
Corporation shall not be required to pay any fee, expense or
tax which may be payable in respect of any transfer involved
in the issuance and delivery of shares in the name other
than that of the holder of record on the books of the
Corporation of the shares of Series C $1 Dividend Cumulative
Convertible Preferred Stock converted, and the Corporation
shall not, in any such case, be required to issue or
delivery any certificate for shares of Common Stock unless
and until the person requesting the issuance thereof shall
have paid to the Corporation the amount of such fee, expense
or tax or shall have established to the satisfaction of the
Company that such fee, expense or tax has been paid.
The number of shares of Common Stock deliverable
upon conversion of each share of Series C $1 Dividend
Cumulative Convertible Preferred Stock shall be subject to
adjustments from time to time as follows:
(i) In case the Corporation shall (A) take a
record of the holders of the Common Stock for the purpose of
entitling them to receive a dividend payable in shares of
Common Stock, (B) subdivide its outstanding shares of Common
Stock into a greater number of shares, (C) combine its
outstanding shares of Common Stock into a smaller number of
shares, or (D) issue by reclassification of its Common Stock
any shares of the Corporation of any class or series, the
holder of each share of the Series C $1 Dividend Cumulative
Convertible Preferred Stock shall thereafter be entitled to
receive upon the conversion of such shares the number of
shares of Common Stock or other stock of the Corporation
which he would have owned or have been entitled to receive
after the happening of one of the events described above
which shall have happened had such shares of the Series C $1
Dividend Cumulative Convertible Preferred Stock held by him
been converted immediately prior to the happening of such
event, such adjustments to become effective immediately
after the opening of business on the day following such
record date or the day upon which such subdivision,
combination or reclassification becomes effective.
(ii) In case of any consolidation or merger
of the Corporation with or into another Corporation, or in
the case of any sale or conveyance to another Corporation of
all or substantially all the property of the Corporation,
each holder of the Series C $1 Dividend Cumulative
Convertible Preferred Stock then outstanding and thereafter
remaining outstanding shall have the right thereafter to
convert each share held by him into the kind and amount of
shares of stock, other securities, cash or property
receivable upon such consolidation, merger, sale or
conveyance, by a holder of the number of shares of Common
Stock into which such share might have been converted
immediately prior to such consolidation, merger, sale or
conveyance and shall have no other conversion rights, in any
such event, effective provision shall be made, in the
certificate of incorporation of the resulting or surviving
Corporation or otherwise, so that the provisions set forth
herein for the protection of the conversion rights of the
shares of the Series C $1 Dividend Cumulative Convertible
Preferred Stock shall thereafter be applicable, as nearly as
reasonably may be, to any such other shares of stock, other
securities, cash or property deliverable upon conversion of
the shares of the Series C $1 Dividend Cumulative
Convertible Preferred Stock remaining outstanding or other
convertible stock or securities received by the holders in
place thereof, and any such resulting or surviving
Corporation shall expressly assume the obligation to
deliver, upon the exercise of the conversion privilege, such
shares, other securities, cash or property as the holders of
the shares of the Series C $1 Dividend Cumulative
Convertible Preferred Stock remaining outstanding, or other
convertible stock or securities received by the holders in
place thereof, shall be entitled to receive pursuant to the
provisions hereof, and to make provision for the protection
of the conversion right as above provided.
(iii) In case the Corporation shall fix a
record date for the issuance of rights or warrants to all
holders of its Common Stock entitling them to subscribe for
or purchase Common Stock at a price per share less than the
current market price of the Common Stock (as defined in this
clause (iii) below) on such record date, the number of
shares of Common Stock into which each share of Series C $1
Dividend Cumulative Convertible Preferred Stock shall be
convertible after such record date shall be determined by
multiplying the number of shares of Common stock into which
such share of Series C $1 Dividend Cumulative Convertible
Preferred Stock was convertible immediately prior to such
record date by a fraction, of which the numerator shall be
the number of shares of Common Stock outstanding on such
date plus the number of additional shares of Common Stock to
be offered for subscription or purchase, and of which the
denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total
number of shares so to be offered would purchase at such
current market price. Shares of Common Stock owned by or
held for the account of the Corporation or any subsidiary
shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that
such rights or warrants are not so issued, the conversion
rate shall again be adjusted to be the conversion rate which
would then be in effect if such record date has not been
fixed. For the purpose of any computation under this clause
(iii), the current market price per share of Common Stock on
any date shall mean the closing price on the record date
determined for the issuance of such rights and warrants.
In the event that the Corporation takes a record
of holders of Common Stock for the purpose of entitling them
to receive a dividend payable in any security convertible
into Common Stock and the holder of a share of Series C $1
Dividend Cumulative Convertible Preferred Stock thereafter
converts all or part of the shares of Series C $1 Dividend
Cumulative Convertible Preferred Stock into shares of Common
Stick in accordance with the provisions hereof, such holder
shall be entitled to receive upon such conversion in
addition to the shares of Common Stock deliverable to him in
accordance with the provisions hereof, the number of shares
or principal amount of such security convertible into Common
Stock as he would have been entitled to receive if he had
converted immediately prior to the taking of such record.
No adjustment in the number of shares into which
each share of the Series C $1 Dividend Cumulative
Convertible Preferred Stock is convertible shall be required
unless such adjustment would require an increase or decrease
of a least 1/100th of a share in the number of shares into
which such share is then convertible; provided, however,
that any adjustment which by reason hereof is not required
to be made shall be carried forward and taken into account
in any subsequent adjustment.
Whenever any adjustment is required in the number
of shares into which each share of the Series C $1 Dividend
Cumulative Convertible Preferred Stock is convertible, the
Corporation shall forthwith file at the office or agency
maintained for the purpose of conversion of the Series C $1
Dividend Cumulative Convertible Preferred Stock a statement
describing in reasonable detail the adjustment and method of
calculation used.
The Corporation shall at all times keep available
for issue and delivery the full number of shares of stock or
other securities into which all outstanding shares of Series
C $1 Dividend Cumulative Convertible Preferred Stock are
convertible.
(g) Shares of the Series C $1 Dividend Cumulative
Convertible Preferred Stock redeemed or purchased by the
Corporation of surrendered to the Corporation on the
conversion thereof into shares of Common Stock as
hereinabove provided shall not be reissued by the
Corporation.
FIFTH: The property and business of this Corporation
shall be managed by a Board of up to six directors. The
directors shall be divided into three classes. The first
class (Class I) shall consist of two (2) directors and the
term of office of such class shall expire at the Annual
Meeting of Stockholders in 1981. The second class (Class
II) shall consist of two (2) directors and the term of
office of such class shall expire at the Annual Meeting of
Stockholders in 1979. The third class (Class III) shall
consist of two (2) directors and the term of such third
class shall expire at the Annual Meeting of Stockholders in
1980. At each annual election, commencing at the next
Annual Meeting of Stockholders in 1979, the successors of
the class of directors whose term expires at the time shall
be elected to hold office for the term of three years to
succeed those whose term expires, so that the term of office
of one class of directors shall expire in each year. Each
director shall hold office for the term for which he is
elected or appointed or until his successor shall be elected
and qualified, or until his death or until he shall resign.
Notwithstanding any of the provisions of this
Certificate of Incorporation or the by-laws of the
Corporation (and notwithstanding the fact that some lesser
percentage may be specified by law, this Certificate of
Incorporation or the by-laws of the Corporation), any
director or the entire Board of Directors of the Corporation
may be removed at any time, but only for cause, and only at
a meeting of the stockholders called for that purpose by the
affirmative vote of the holders of 75% or more of the shares
of the Corporation entitled to vote at an election of
directors.
Nominations for the election of directors may be made
by the Board of Directors or by any Stockholder entitled to
vote for the election of directors. Such nominations shall
be made by notice in writing, delivered or mailed by first
class United States mail, postage prepaid, to the Secretary
of the Corporation not less than 14 days nor more than 50
days prior to any meeting of the stockholders called for the
election of directors; provided, however, that if less than
21 days' notice of the meeting is given to stockholders,
such written notice shall be delivered or mailed, as
prescribed, to the Secretary of the Corporation not later
than the close of business on the seventh day following the
day on which notice of the meeting was mailed to
stockholders. Notice of nominations which are proposed by
the Board of Directors shall be given by the Chairman on
behalf of the Board.
Each such notice shall set forth (i) the name, age,
business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal
occupation or employment of each such nominee and (iii) the
number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was
not made in accordance with the foregoing procedure, and, if
he should so determine, he shall so declare to the meeting
and the defective nomination shall be disregarded.
SIXTH: This Corporation is to have perpetual
existence.
SEVENTH: The private property of the stockholders
shall not be subject to the payment of corporate debts to
any extent whatsoever.
EIGHTH: In furtherance and not in limitation of the
powers conferred by the laws of the State of Delaware, the
Board of Directors is expressly authorized to make, alter,
amend and repeal the by-laws. The stockholders may make,
alter or repeal any by-law whether or not adopted by them,
provided however, that any such additional by-law,
alterations or repeal may be adopted only by the affirmative
vote of the holders of 75% or more of the outstanding shares
of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this
purpose as one class), unless such additional by-laws,
alternations or repeal shall have been recommended to the
stockholders for adoption by a majority of the Board of
Directors, in which event such additional by-laws,
alternations or repeal may be adopted by the affirmative
vote of the holders of a majority of the outstanding shares
of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this
purpose as one class).
NINTH; (a)1. In addition to any affirmative vote
required by law, and except as otherwise expressly provided
in section (b) and (c) of this Article NINTH:
(A) any merger or consolidation of the
Corporation or any Subsidiary (as hereinafter defined) with
or into (i) any Interested Stockholder (as hereinafter
defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder) which, after such merger
or consolidation, would be an Affiliate (as hereinafter
defined) or an Interested Stockholder; or
(B) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition (in one transaction or
a series of related transactions) to or with an Interested
Stockholder, or an Affiliate of any Interested Stockholder,
of any assets of the Corporation or any Subsidiary having
any aggregate fair market value of $5,000,000 or more; or
(C) The issuance or transfer by the
Corporation or any Subsidiary (in one transaction or a
series of related transactions) of any securities of the
Corporation to any Interested Stockholder, or an Affiliate
of any Interested Stockholder, in exchange for cash,
securities or other property (or a combination thereof)
having an aggregate fair market value of $5,000,000 or more;
or
(D) the adoption of any plan or proposal for
the liquidation or dissolution of the Corporation; or
(E) any reclassification of securities
(including any reverse stock split), or recapitalization of
the Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, or increasing the proportionate
share of the outstanding shares of any class of equity of
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder;
shall require the affirmative vote of the holders of at
least 75% of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of
directors, considered for the purpose of this Article NINTH
as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be
required, or that some lesser percentage may be specified,
by law or in any agreement with any national securities
exchange or otherwise.
2. The term "business combination" as used
in this Article NINTH shall mean any transaction which is
referred to in any one or more of clauses (A) through (E) of
paragraph 1 of this section (a).
(b) The provisions of section (a) of this
Article NINTH shall not be applicable to any particular
business combination and such business combination shall
require only such affirmative vote as is required by law and
any other provisions of the Certificate of Incorporation or
by-laws if such business combination has been approved by a
majority of the whole Board.
(c) For the purposes of this Article NINTH:
1. A "person" shall mean any individual,
firm, corporation or other entity.
2. "Interested Stockholder" shall mean, in
respect of any business combination, any person (other than
the Corporation or any Subsidiary) who or which, as of the
record date for the determination of stockholders entitled
to notice of and to vote on such business combination, or
immediately prior to the consummation of any such
transaction.
(A) is the beneficial owner, directly or
indirectly, of more than 20% of the Voting Shares; or
(B) is an Affiliate of the Corporation and
at any time within two years prior thereto was the
beneficial owner, directly or indirectly, of not less than
20% of the then outstanding Voting Shares; or
(C) is an assignee of or has otherwise
succeeded to any shares of capital stock of the Corporation
which were at any time within two years prior thereto
beneficially owned by any Interested Stockholder, and such
assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving a
public offering within the meaning of the Securities Act of
1933.
Provided, however, that no person who on the date of the
adoption of this Article NINTH would otherwise be an
"Interested Stockholder" as defined in this subsection 2
shall be deemed to be an "Interested Stockholder".
3. A person shall be the "beneficial owner"
of any Voting Shares:
(A) which such person or any of its
Affiliates and Associates (as hereinafter defined)
beneficially own, directly or indirectly, or
(B) which such person or any of its
Affiliates or Associates has (i) the right to acquire
(whether such right is exercisable immediately or only after
the passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly
or indirectly, by any other person with which such first
mentioned person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares of
capital stock of the Corporation.
4. The outstanding Voting Shares shall
include shares deemed owned through application of paragraph
3 above but shall not include any other Voting Shares which
may be issuable pursuant to any agreement, or upon exercise
of conversion rights, warrants or options or otherwise.
5. "Affiliate" and "Associate" shall have
the respective meanings given those terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934 as in effect on the date of the
adoption of this provision.
6. "Subsidiary" shall mean any corporation
of which a majority of any class of equity security (as
defined in Rule 3a11-1 of the General Rules and Regulations
under the Securities Exchange Act of 1934 as in effect on
the date of the adoption of this provision), is owned,
directly or indirectly, by the Corporation; provided,
however, that for the purposes of the definition of
Interested Stockholder set forth in paragraph 2 of this
section (c), the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the
Corporation.
(d) A majority of the directors shall have
the power and duty to determine for the purposes of this
Article NINTH on the basis of information known to them (1)
the number of Voting Shares beneficially owned by any
person, (2) whether a person is an Affiliate or Associate of
another, (3) whether a person has an agreement, arrangement
or understanding with another as to the matters referred to
in paragraph 3 of section (c), or (4) whether the assets
subject to any business combination or the consideration
received for the issuance or transfer of securities by the
Corporation or any Subsidiary has an aggregate fair market
value of $5,000,000 or more.
(e) Nothing contained in this Article NINTH
shall be construed to relieve any Interested Stockholder
from any fiduciary obligation imposed by law.
TENTH: Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, the
affirmative vote of the holders of at least 75% of the
shares of the Corporation then entitled to be voted in an
election of directors shall be required to amend or repeal,
or to adopt any provision inconsistent with Articles FOURTH,
FIFTH, EIGHTH, NINTH or TENTH of this Certificate of
Incorporation, except that only the affirmative vote of the
holders of a simple majority of the shares of the
Corporation then entitled to be voted in an election of
directors shall be required to amend or repeal, or to adopt
any provision inconsistent with Articles FOURTH, FIFTH or
EIGHTH of this Certificate of Incorporation if such
amendment, repeal or adoption shall have been approved by a
majority of the members of the Board of Directors.
IN WITNESS WHEREOF, this Restated Certificate of
Incorporation which restates and integrates and does not
further amend the provisions of the Corporation's
Certificate of Incorporation as heretofore amended and
supplemented, there being no discrepancies between those
provisions and the provisions of this Restated Certificate
of Incorporation and having been duly adopted by the Board
of Directors of the Corporation in accordance with the
provisions of Section 245(b) of the General Corporation Law
of the State of Delaware, has been executed on this 24th day
of January, 1985.
RLC CORP.
ATTEST: /s/ John C. Peet, Jr. By: /s/ John W. Rollins, Jr.
John C. Peet, Jr. John W. Rollins, Jr,.
Secretary President
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
RLC CORP.
RLC CORP., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the
"Company"), does hereby certify:
That the Restated Certificate of Incorporation of the
Company be amended as set forth in Appendix "A". That such
amendment has been duly approved by the affirmative vote of
the holders of a majority of the stock entitled to vote in
accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
In witness whereof, RLC CORP. has caused this
Certificate to be signed and attested by its duly authorized
officers, this 9th day of February, 1987.
RLC CORP.
/s/ John W. Rollins, Jr.
President
ATTEST:
/s/ J. Carlisle Peet, III
Assistant Secretary
<PAGE>
APPENDIX "A"
The Certificate of Incorporation of RLC CORP. is hereby
amended by adding a new Article Eleventh to read in its
entirety as follows:
"Eleventh. No director of the Corporation shall be
personally liable to the Corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director;
provided, however, that the foregoing clause shall not apply
to any liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its
shareholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper
personal benefit. This Article Eleventh shall not eliminate
or limit the liability of a director for any act or omission
occurring prior to the time this Article Eleventh became
effective."
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED
CERTIFICATE OF INCORPORATION
OF
RLC CORP.
Adopted in accordance with the provisions
of Section 242 of the General Corporation Law
of the State of Delaware
I, John C. Peet, Jr., Vice President-General Counsel
and Secretary of RLC CORP., a corporation existing under the
laws of the State of Delaware, do hereby certify as follows:
FIRST: That the Restated Certificate of Incorporation
of said corporation be amended as follows:
FIRST: The name of the Corporation is
Rollins Truck Leasing Corp.
SECOND: That such amendment has been duly adopted by
the affirmative vote of the holders of a majority of the
stock entitled to vote in accordance with the provisions of
Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, I have signed this Certificate this
25th day of January 1990.
/s/ John C. Peet, Jr.
John C. Peet, Jr., Vice
President-
General Counsel and Secretary
ATTEST:
/s/ Jean M. Ewing
Jean M. Ewing,
Assistant Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<CASH> 17,637
<SECURITIES> 0
<RECEIVABLES> 73,291
<ALLOWANCES> 2,126
<INVENTORY> 8,659
<CURRENT-ASSETS> 121,043
<PP&E> 1,546,115
<DEPRECIATION> 493,460
<TOTAL-ASSETS> 1,191,791
<CURRENT-LIABILITIES> 62,403
<BONDS> 671,822
0
0
<COMMON> 41,067
<OTHER-SE> 247,607
<TOTAL-LIABILITY-AND-EQUITY> 1,191,791
<SALES> 556,704
<TOTAL-REVENUES> 556,704
<CGS> 0
<TOTAL-COSTS> 398,996
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 49,270
<INCOME-PRETAX> 70,211
<INCOME-TAX> 27,417
<INCOME-CONTINUING> 42,794
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 42,794
<EPS-PRIMARY> 1.01
<EPS-DILUTED> 1.01
</TABLE>
Revised 10/30/97
BY-LAWS
OF
ROLLINS TRUCK LEASING CORP.
-----------------------------------------------------------------
ARTICLE I
The Corporation
Section 1.1 Name. The title of this Corporation is
Rollins Truck Leasing Corp.
Section 1.2 Office. The registered office of this
Corporation shall be located at One Rollins Plaza, Wilmington, County
of New Castle, State of Delaware, or at such other place as the Board
of Directors may designate in accordance with Section 133 of the
Delaware Corporation Law.
Section 1.3 Seal. The corporate seal of the Corporation
shall have inscribed thereon the name of the Corporation and the year
of its creation (1954) and the words "Incorporated Delaware".
ARTICLE II
Stockholders
Section 2.1 Annual Meeting. The annual meeting of
stockholders shall be held at such place within or without the State of
Delaware as the Board of Directors from time to time determine.
A majority of the amount of the stock issued and outstanding and
entitled to vote shall constitute a quorum for the transaction of all
business, except as otherwise provided by law, the charter of the
corporation or these by-laws. Each stockholder shall be entitled to
one vote, either in person or by proxy, for each share of stock
standing registered in his or her name on the books of the Corporation
on the record date selected by the Board of Directors in accordance
with these by-laws, unless more or less than one vote per share is, by
the terms of the instrument creating special or preferred shares,
conferred upon the holders thereof.
Notice of the annual meeting shall be mailed by the Secretary to
each stockholder at his or her last known post office address no less
than ten days and no more than fifty days prior thereto.
Section 2.2 Special Meetings. Special meetings of
stockholders for any purpose or purposes may be called at any time by
the Chairman of the Board of Directors, the Vice Chairman of the Board
of Directors, the Chairman of the Executive Committee or the President
and not by any other person.
Section 2.3 Notice of Meetings. Whenever stockholders are
required or permitted to take any action at a meeting, a written notice
of the meeting shall be given which shall state the place, date and
hour of the meeting, and, in the case of a special meeting, the purpose
or purposes for which the meeting is called. Unless otherwise provided
by law, the written notice of any meeting shall be given not less than
ten nor more than sixty days before the date of the meeting to each
stockholder entitled to vote at such meeting. If mailed, such notice
shall be deemed to be given when deposited in the mail, postage
prepaid, directed to the stockholder at his address as it appears on
the records of the Corporation.
Section 2.4 Adjournments. Any meeting of the
stockholders, annual or special, may adjourn from time to time to
reconvene at the same or some other place, and notice need not be given
of any such adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At the
adjourned meeting the Corporation may transact any business which might
have been transacted at the original meeting. If the adjournment is
for more than thirty days, or if after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote
at the meeting.
Section 2.5 Quorum. At each meeting of stockholders,
except where otherwise provided by law or the certificate of
incorporation or these by-laws, the holders of a majority of the
outstanding shares of stock entitled to vote at the meeting, present in
person or by proxy, shall constitute a quorum. In the absence of a
quorum, the stockholders so present may, by majority vote, adjourn the
meeting from time to time in the manner provided in Section 2.4 of
these by-laws until a quorum shall attend.
Section 2.6 Organization. Meetings of stockholders shall
be presided over by the Chairman of the Board, if any, or in his
absence by the Vice Chairman of the Board, if any, or in his absence by
the President, or in his absence by a Vice President, or in the absence
of the foregoing persons by a chairman designated by the Board of
Directors, or in the absence of such designation by a chairman chosen
at the meeting. The Secretary shall act as secretary of the meeting,
but in his absence the chairman of the meeting may appoint any person
to act as secretary of the meeting.
Section 2.7 Voting; Proxies. Unless otherwise provided in
the certificate of incorporation, each stockholder entitled to vote at
any meeting of stockholders shall be entitled to one vote for each
share of stock held by him which has voting power upon the matter in
question. Each stockholder entitled to vote at a meeting of
stockholders may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years
from its date, unless the proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is irrevocable
and if, and only as long as, it is coupled with an interest sufficient
in law to support an irrevocable power. A stockholder may revoke any
proxy which is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or
another duly executed proxy bearing a later date with the Secretary of
the Corporation. Voting at meetings of stockholders need not be by
written ballot and need not be conducted by inspectors unless the
holders of a majority of the outstanding shares of all classes of stock
entitled to vote thereon present in person or by proxy at such meeting
shall so determine. At all meetings of stockholders for the election
of directors a plurality of the votes cast shall be sufficient to
elect. All other elections and questions shall, unless otherwise
provided by law or by the certificate of incorporation or these
by-laws, be decided by the vote of the holders of a majority of the
outstanding shares of stock entitled to vote thereon present in person
or by proxy at the meeting, provided that (except as otherwise required
by law or by the certificate of incorporation or these by-laws) the
Board of Directors may require a larger vote upon any election or
question.
Section 2.8 Fixing Date for Determination of Stockholders
of Record. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment
of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion of
exchange or stock or for the purpose of any other lawful action, the
Board of Directors may fix, in advance, a record date, which shall not
be more than sixty nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action. If no
record date is fixed: (1) the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be
at the close of business on the day next preceding the day on which
notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; and (2)
the record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 2.9 List of Stockholders Entitled To Vote. The
Secretary shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled
to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the
name of each stockholder. Such list shall be open to the examination
of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or,
if not so specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the
meeting during the whole time thereof and may be inspected by any
stockholder who is present. The stock ledger shall be the only
evidence as to who are the stockholders entitled to examine the stock
ledger, the list of stockholders or the books of the Corporation, or to
vote in person or by proxy at any meeting of stockholders.
Section 2.10 Action by Consent Of Stockholders. No action
required to be taken or which may be taken at any annual or special
meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without
a meeting, to the taking of any action is specifically denied.
ARTICLE III
Board of Directors
Section 3.1 Number; Qualifications. The Board of
Directors shall consist of six members. Directors need not be
stockholders.
Section 3.2 Election; Resignation; Removal; Vacancies. At
each annual meeting of stockholders, the stockholders shall elect
Directors to replace those Directors whose terms then expire. Any
Director may resign at any time upon written notice to the Corporation.
Stockholders may remove Directors only for cause. Any vacancy
occurring in the Board of Directors for any cause may be filled only by
the Board of Directors, acting by vote of a majority of the Directors
then in office, although less than quorum. Each Director so elected
shall hold office until the expiration of the term of office of the
Director whom he has replaced.
Section 3.3 Notice Of Nomination Of Directors.
Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing,
delivered or mailed by first class United States mail, postage prepaid,
to the Secretary of the Corporation not less than fourteen days nor
more than fifty days prior to any meeting of the stockholders called
for the election of directors; provided, however, that if less than
twenty-one days' notice of the meeting is given to stockholders, such
written notice shall be delivered or mailed, as prescribed, to the
Secretary of the Corporation not later than the close of the seventh
day following the day on which notice of the meeting was mailed to
stockholders. Notice of nominations which are proposed by the Board of
Directors shall be given by the Chairman on behalf of the Board. Each
such notice shall set forth (i) the name, age, business address and, if
known, residence address of each nominee proposed in such notice, (ii)
the principal occupation or employment of each such nominee and (iii)
the number of shares of stock of the Corporation which are beneficially
owned by each such nominee. The Chairman of the meeting may, if the
facts warrant, determine and declare to the meeting that a nomination
was not made in accordance with the foregoing procedure, and if he
should so determine, he shall so declare to the meeting and the
defective nomination shall be disregarded.
Section 3.4 Regular Meetings. Regular meetings of the
Board of Directors may be held at such places within or without the
State of Delaware and at such times as the Board of Directors may from
time to time determine, and if so determined notices thereof need not
be given.
Section 3.5 Special Meetings. Special meetings of the
Board of Directors may be held at any time or place within or without
the State of Delaware whenever called by the President, the Chairman of
the Board of Directors, the Vice Chairman of the Board of Directors, or
by the Chairman of the Executive Committee. Reasonable notice thereof
shall be given by the person calling the meeting, not later than the
second day before the date of the special meeting.
Section 3.6 Telephonic Meetings Permitted. Members of the
Board of Directors, or any committee designated by the Board, may
participate in any meeting of such Board or committee by means of
conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this by-law shall constitute
presence in person at such meeting.
Section 3.7 Quorum; Vote Required For Action; Informal
Action. At all meetings of the Board of Directors a majority of the
whole Board shall constitute a quorum for the transaction of business.
Except in cases in which the certificate of incorporation or these
by-laws otherwise provide, the vote of a majority of the directors
present at a meeting at which a quorum is present shall be the act of
the Board of Directors. Unless otherwise restricted by the certificate
of incorporation or these by-laws, any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting if all members of the Board or
such committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of the proceedings of
the Board or committee.
Section 3.8 Organization. Meetings of the Board of
Directors shall be presided over by the Chairman of the Board, if any,
or in his absence by the Vice Chairman of the Board, if any, or in his
absence by the President, or in their absence by a chairman chosen at
the meeting. The Secretary shall act as a secretary of the meeting,
but in his absence the chairman of the meeting may appoint any person
to act as secretary of the meeting.
Section 3.9 Compensation Of Directors. The Directors and
members of standing committees shall receive such fees or salaries as
fixed by resolution of the Executive Committee and in addition will
receive expenses in connection with attendance or participation in each
regular or special meeting.
ARTICLE IV
Committees
Section 4.1 Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or
more committees, each committee to consist of one or more of the
directors of the Corporation. The Board may designate one or more
directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. In the
absence or disqualification of a member of the committee, the member or
members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting
in place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of
Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of
the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it; but no such committee shall
have power or authority in reference to amending the certificate of
incorporation of the Corporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or
exchange or all or substantially all of the Corporation's property and
assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of dissolution, or amending these by-laws.
The Board of Directors shall, at the annual organization meeting
thereof, elect an Executive Committee which shall consist of not more
than four members, all of whom shall be members of the Board of
Directors. The Executive Committee shall have and may exercise all of
the powers and authority of the Board of Directors in the management of
business and affairs of the Corporation to the fullest extent permitted
by law (as presently allowed under Section 141 (c) to the Delaware
General Corporation Law as revised effective July 1, 1996, and as may
be allowed in the future pursuant to amendments or revisions to
applicable law).
Section 4.2 Committee Rules. Unless the Board of
Directors otherwise provides, each committee designated by the Board
may make, alter and repeal rules for the conduct of its business. In
the absence of such rules each committee shall conduct its business in
the same manner as the Board of Directors conducts its business
pursuant to Article III of these by-laws.
ARTICLE V
Officers
Section 5.1 Executive Officers; Election; Qualifications;
Term of Office; Resignation; Removal; Vacancies. The officers of the
Corporation shall consist of a Chairman, Vice Chairman, President, Vice
Presidents, Secretary, Assistant Secretaries, Treasurer, Assistant
Treasurers, General Counsel, and such other officers as may from time
to time be elected or appointed by the Board of Directors. The
President shall be elected from the Board of Directors. Any officer
may resign at any time upon written notice to the Corporation. The
Board of Directors may remove any officer with or without cause at any
time, but such removal shall be without prejudice to the contractual
rights of such officer, if any, with the Corporation. Any number of
offices may be held by the same person. Any vacancy occurring in any
office of the Corporation by death, resignation, removal or otherwise
may be filled for the unexpired portion of the term by the Board of
Directors at any regular or special meeting. In the absence of any
officer, the Board of Directors may delegate his power and duties to
any other officer or to any director for the time being.
Section 5.2 Duties Of The Chairman Of The Board And The
Chairman Of The Executive Committee. The Chairman shall be the Chief
Executive Officer of the Corporation, shall preside at all meetings of
the Board, shall have general and active management of the business of
the Corporation and shall see that all orders and resolutions of the
Board are carried into effect. He shall submit a complete report of
the operations and condition of the Corporation for the year to the
stockholders at their annual meeting. In all cases, where a Chairman
of the Executive Committee is elected, the Chairman of the Executive
Committee shall, in the absence of the Chairman of the Board of
Directors, act in the latter's capacity.
Section 5.3 President. The President shall be the Chief
Operating Officer of the Corporation, shall execute in the name of the
Corporation all contracts and agreements authorized by the Board or the
Executive Committee, and shall affix the seal to any instrument
requiring the same, which shall always be attested by the signature of
the President, the Vice President or the Secretary or any Assistant
Secretary or the Treasurer. He may sign certificates of stock; he
shall have general supervision and direction of all the other officers
of the Corporation; he shall submit a complete report of the operations
and condition of the Corporation for the year to the Chairman and to
the directors at their regular meetings, and from time to time shall
report to the directors all matters which the interest of the
Corporation may require to be brought to their notice. He shall have
the general powers and duties usually vested in the office of a
President of a corporation.
Section 5.4 Vice President Finance. The Vice President
Finance shall be Chief Accounting and Chief Financial Officer of the
Corporation and shall be responsible to the Board of Directors, the
Executive Committee and the President for all financial control and
internal audit of the Corporation and its subsidiaries. He shall
perform such other duties as may be assigned to him by the Board of
Directors, the Executive Committee or the President.
Section 5.5 Vice Presidents. The Vice Presidents elected
or appointed by the Board of Directors shall perform such duties and
exercise such powers as may be assigned to them from time to time by
the Board of Directors, the Executive Committee or the President. In
the absence or disability of the President, the Vice President
designated by the Board of Directors, the Executive Committee, or the
President shall perform the duties and exercise the powers of the
President. A Vice President may sign and execute contracts and other
obligations pertaining to the regular course of his duties.
Section 5.6 Secretary. The Secretary shall be ex-officio
Secretary of the Board of Directors and of the standing committees. He
shall attend all sessions of the Board, act as clerk thereof, record
all votes and keep the minutes of all proceedings in a book to be kept
for that purpose. He shall perform like duties for the standing
committees when required. He shall see that the proper notices are
given of all meetings of stockholders and directors, and perform such
other duties as may be prescribed from time to time by the Board of
Directors, the Executive Committee, Chairman or President, and shall be
sworn to the faithful discharge of his duties.
He shall keep the accounts of stock registered and transferred in
such form and manner and under such regulations as the Board of
Directors or Executive Committee may prescribe.
Section 5.7 Treasurer. The Treasurer shall keep full and
accurate accounts of receipts and disbursements in books belonging to
the Corporation and shall deposit all monies and other valuable effects
in the name and to the credit of the Corporation, in such depositories
as may be designated by the Board of Directors or Executive Committee.
He shall disburse the funds of the Corporation as may be ordered by the
Board, the Executive Committee or the President, taking proper vouchers
therefor, and shall render to the President and the Executive Committee
and Directors, whenever they may require it, an account of all his
transactions as Treasurer, and of the financial condition of the
Corporation, and at the annual organization meeting of the Board a like
report for the preceding year.
Section 5.8 General Counsel. The General Counsel shall be
the legal adviser of the Corporation and shall perform such services as
the Chairman, President, Board of Directors or Executive Committee may
require.
ARTICLE VI
Stock
Section 6.1 Certificates. Every holder of stock shall be
entitled to have a certificate signed by or in the name of the
Corporation by the Chairman or Vice Chairman of the Board of Directors,
if any, or the President of the Corporation, certifying the number of
shares owned by him in the Corporation. Any of or all the signatures
on the certificate may be a facsimile. In case any officer, transfer
agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate, shall have ceased to be such officer,
transfer agent, or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such
officer, transfer agent, or registrar at the date of issue.
Section 6.2 Lost, Stolen Or Destroyed Stock Certificates;
Issuance Of New Certificates. The Corporation may issue a new
certificate of stock in the place of any certificate theretofore issued
by it, alleged to have been lost, stolen or destroyed, and the
Corporation may require the owner of the lost, stolen or destroyed
certificate, or his legal representative, to give the Corporation a
bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any
such certificate or the issuance of such new certificate.
ARTICLE VII
Indemnification
Section 7.1. General. The Company shall indemnify, and
advance Expenses (as hereinafter defined) to, Indemnitee (as
hereinafter defined) to the fullest extent permitted by applicable law
in effect on July 23, 1986, and to such greater extent as applicable
law may thereafter from time to time permit. The rights of Indemnitee
provided under the preceding sentence shall include, but shall not be
limited to, the rights set forth in the other Sections of this Article.
Section 7.2. Proceedings Other Than Proceedings By Or In
The Right Of The Company. Indemnitee shall be entitled to the
indemnification rights provided in this Section 7.2 if, by reason of
his Corporate Status (as hereinafter defined), he is, or is threatened
to be made, a party to any threatened, pending, or completed Proceeding
(as hereinafter defined), other than a Proceeding by or in the right of
the Company. Pursuant to this Section 7.2, Indemnitee shall be
indemnified against Expenses, judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by him or on his
behalf in connection with such Proceeding or any claim, issue or matter
therein, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company,
and, with respect to any criminal Proceeding, had no reasonable cause
to believe his conduct was unlawful.
Section 7.3. Proceedings By Or In The Right Of The Company.
Indemnitee shall be entitled to the indemnification rights provided in
this Section 7.3 to the fullest extent permitted by law if, by reason
of his Corporate Status, he is, or is threatened to be made, a party to
any threatened, pending or completed Proceeding brought by or in the
right of the Company to procure a judgment in its favor. Pursuant to
this Section 7.3, Indemnitee shall be indemnified against Expenses,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such
Proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interest of the Company.
Section 7.4. Indemnification For Expenses Of A Party Who Is
Wholly Or Partly Successful. Notwithstanding any other provision of
this Article, to the extent that Indemnitee is, by reason of his
Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, he shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in
connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this
Section and without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue or
matter.
Section 7.5. Indemnification For Expenses Of A Witness.
Notwithstanding any other provision of this Article, to the extent that
Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding, he shall be indemnified against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7.6. Advancement Of Expenses. The Company shall
advance all reasonable Expenses incurred by or on behalf of Indemnitee
in connection with any Proceeding within twenty days after the receipt
by the Company of a statement or statements from Indemnitee requesting
such advance or advances from time to time, whether prior to or after
final disposition of such proceeding. Such statement or statements
shall reasonably evidence the Expenses incurred by Indemnitee and shall
include or be preceded or accompanied by an undertaking by or on behalf
of Indemnitee to repay any Expenses advanced if it shall ultimately be
determined that Indemnitee is not entitled to be indemnified against
such Expenses.
Section 7.7. Procedure For Determination Of Entitlement To
Indemnification.
(a) To obtain indemnification under this Article, Indemnitee
shall submit to the Company a written request, including therein or
therewith such documentation and information as is reasonably available
to Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to indemnification. The
determination of Indemnitee's entitlement to indemnification shall be
made not later than 60 days after receipt by the Company of the written
request for indemnification. The Secretary of the Company shall,
promptly upon receipt of such a request for indemnification, advise the
Board of Directors in writing that Indemnitee has requested
indemnification.
(b) Indemnitee's entitlement to indemnification under any of
Sections 7.2, 7.3 or 7.4 of this Article shall be determined in the
specific case: (i) by the Board of Directors by a majority vote of a
quorum of the Board consisting of Disinterested Directors (as
hereinafter defined); or (ii) by Independent Counsel (as hereinafter
defined), in a written opinion, if (A) a Change of Control (as
hereinafter defined) shall have occurred and Indemnitee so requests, or
(B) if a quorum of the Board of Directors consisting of Disinterested
Directors is not obtainable or, even if obtainable, such quorum of
Disinterested Directors so directs; or (iii) by the stockholders of the
Company; or (iv) as provided in Section 7.8 of this Article.
(c) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 7.7(b) of this Article, the Independent Counsel shall be
selected as provided in this Section 7.7(c). If a Change of Control
shall not have occurred, the Independent Counsel shall be selected by
the Board of Directors, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so
selected. If a Change of Control shall have occurred, and if so
requested by Indemnitee in his written request for indemnification, the
Independent Counsel shall be selected by Indemnitee, and Indemnitee
shall give written notice to the Company advising it of the identity of
the Independent Counsel so selected. In either event, Indemnitee or
the Company, as the case may be, may, within 7 days after such written
notice of selection shall have been given, deliver to the Company or to
Indemnitee, as the case may be, a written objection to such selection.
Such objection may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of "Independent
Counsel" as defined in Section 7.13 of this Article, and the objection
shall set forth with particularity the factual basis of such assertion.
If such written objection is made, the Independent Counsel so selected
shall be disqualified from acting as such. If, within 20 days after
submission by Indemnitee of a written request for indemnification
pursuant to Section 7.7(a) hereof, no Independent Counsel shall have
been selected, or if selected shall have been objected to, in
accordance with this Section 7.7(c), either the Company or Indemnitee
may petition the Court of Chancery of the State of Delaware for the
appointment as Independent Counsel of a person selected by the Court or
by such other person as the Court shall designate, and the person so
appointed shall act as Independent Counsel under Section 7.7(b) hereof.
The Company shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in acting
pursuant to Section 7.7(b) hereof, and the Company shall pay all
reasonable fees and expenses incident to the procedures of this Section
7.7(c), regardless of the manner in which such Independent Counsel was
selected or appointed.
Section 7.8. Presumptions And Effect Of Certain
Proceedings. If a Change of Control shall have occurred, Indemnitee
shall be presumed (except as otherwise expressly provided in this
Article) to be entitled to indemnification under this Article upon
submission of a request for indemnification in accordance with Section
7.7(a) of this Article, and thereafter the Company shall have the
burden of proof to overcome that presumption in reaching a
determination contrary to that presumption. Whether or not a Change of
Control shall have occurred, if the person or persons empowered under
Section 7.7 of this Article to determine entitlement to indemnification
shall not have made a determination within 60 days after receipt by the
Company of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and
Indemnitee shall be entitled to such indemnification unless (i)
Indemnitee misrepresented or failed to disclose a material fact in
making the request for indemnification, or (ii) such indemnification is
prohibited by law. The termination of any Proceeding described in any
of Sections 7.2, 7.3, or 7.4 of this Article, or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not (except as
otherwise expressly provided in this Article) of itself adversely
affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was
unlawful.
Section 7.9. Remedies Of Indemnitee.
(a) In the event that (i) a determination is made pursuant
to Section 7.7 of this Article that Indemnitee is not entitled to
indemnification under this Article, (ii) advancement of Expenses is not
timely made pursuant to Section 7.6 of this Article, or (iii) payment
of indemnification is not made within five (5) days after a
determination of entitlement to indemnification has been made or deemed
to have been made pursuant to Sections 7.7 or 7.8 of this Article,
Indemnitee shall be entitled to an adjudication in an appropriate court
of the State of Delaware, or in any other court of competent
jurisdiction, of his entitlement to such indemnification or advancement
of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to
the rules of the American Arbitration Association. The Company shall
not oppose Indemnitee's right to seek any such adjudication or award in
arbitration.
(b) In the event that a determination shall have been made
pursuant to Section 7.7 of this Article that Indemnitee is not entitled
to indemnification, any judicial proceeding or arbitration commenced
pursuant to this Section 7.9 shall be conducted in all respects as a de
novo trial, or arbitration, on the merits and Indemnitee shall not be
prejudiced by reason of that adverse determination. If a Change of
Control shall have occurred, in any judicial proceeding or arbitration
commenced pursuant to this Section 7.9 the Company shall have the
burden of proving that Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be.
(c) If a determination shall have been made or deemed to
have been made pursuant to Sections 7.7 or 7.8 of this Article that
Indemnitee is entitled to indemnification, the Company shall be bound
by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section 7.9, unless (i) Indemnitee
misrepresented or failed to disclose a material fact in making the
request for indemnification, or (ii) such indemnification is prohibited
by law.
(d) The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section
7.9 that the procedures and presumptions of this Article are not valid,
binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of
this Article.
(e) In the event that Indemnitee, pursuant to this Section
7.9, seeks a judicial adjudication of, or an award in arbitration to
enforce his rights under, or to recover damages for breach of, this
Article, Indemnitee shall be entitled to recover from the Company, and
shall be indemnified by the Company against, any and all expenses (of
the types described in the definition of Expenses in Section 7.13 of
this Article) actually and reasonably incurred by him in such judicial
adjudication or arbitration, but only if he prevails therein. If it
shall be determined in said judicial adjudication or arbitration that
Indemnitee is entitled to receive part but not all of the
indemnification or advancement of Expenses sought, the expenses
incurred by Indemnitee in connection with such judicial adjudication or
arbitration shall be appropriately prorated.
Section 7.10. Non-Exclusivity And Survival Of Rights. The
rights of indemnification and to receive advancement of Expenses as
provided by this Article shall not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under applicable
law, the Certificate of Incorporation, the By-Laws, any agreement, a
vote of stockholders or a resolution of directors, or otherwise.
Notwithstanding any amendment, alteration or repeal of any provision of
this Article, Indemnitee shall, unless otherwise prohibited by law,
have the rights of indemnification and to receive advancement of
Expenses as provided by this Article in respect of any action taken or
omitted by Indemnitee in his Corporate Status and in respect of any
claim asserted in respect thereof at any time when such provision of
this Article was in effect. The provisions of this Article shall
continue as to an Indemnitee whose Corporate Status has ceased and
shall inure to the benefit of his heirs, executors and administrators.
Section 7.11. Severability. If any provision or provisions
of this Article shall be held to be invalid, illegal or unenforceable
for any reason whatsoever:
(a) the validity, legality and enforceability of the
remaining provisions of this Article (including without limitation,
each portion of any Section of this Article containing any such
provision held to be invalid, illegal or unenforceable, that is not
itself invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby; and
(b) to the fullest extent possible, the provisions of this
Article (including, without limitation, each portion of any Section of
this Article containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
Section 7.12. Certain Persons Not Entitled To
Indemnification Or Advancement Of Expenses. Notwithstanding any other
provision of this Article, no person shall be entitled to
indemnification or advancement of Expenses under this Article with
respect to any Proceeding, or any claim therein, brought or made by him
against the Company.
Section 7.13. Definitions. For purposes of this Article:
(a) "Change in Control" means a change in control of the
Company of a nature that would be required to be reported in response
to Item 5(f) of Schedule 14A of Regulation 14A (or in response to any
similar item on any similar schedule or form) promulgated under the
Securities Exchange Act of 1934 (the "Act"), whether or not the Company
is then subject to such reporting requirement; provided, however, that,
without limitation, such a Change in Control shall be deemed to have
occurred if (i) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Act) is or becomes the "beneficial owner") (as defined
in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company representing 20% or more of the combined voting power of
the Company's then outstanding securities without the prior approval of
at least two-thirds of the members of the Board of Directors in office
immediately prior to such person attaining such percentage interest;
(ii) the Company is a party to a merger, consolidation, sale of assets
or other reorganization, or a proxy contest, as a consequence of which
members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of
Directors thereafter; or (iii) during any period of two consecutive
years, individuals who at the beginning of such period constituted the
Board of Directors (including for this purpose any new director whose
election or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then still
in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board of Directors.
(b) "Corporate Status" describes the status of a person who
is or was a director, officer, employee, agent or fiduciary of the
Company or of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person is or was
serving at the request of the Company.
(c) "Disinterested Director" means a director of the Company
who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
(d) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness
fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or
defend, investigating, or being or preparing to be a witness in a
Proceeding.
(e) "Indemnitee" includes any person who is, or is
threatened to be made, a witness in or a party to any Proceeding as
described in Sections 7.2, 7.3 or 7.4 of this Article by reason of his
Corporate Status.
(f) "Independent Counsel" means a law firm, or a member of
a law firm, that is experienced in matters of corporation law and
neither presently is, nor in the past five (5) years has been, retained
to represent: (i) the Company or Indemnitee in any matter material to
either such party, or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term "Independent Counsel" shall not include any person
who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either
the Company or Indemnitee in an action to determine Indemnitee's rights
under this Article.
(g) "Proceeding" includes any action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative
hearing or any other proceeding whether civil, criminal, administrative
or investigative, except one initiated by an Indemnitee pursuant to
Section 7.9 of this Article to enforce his rights under this Article.
Section 7.14. Miscellaneous. Use of the masculine pronoun
shall be deemed to include usage of the feminine pronoun where
appropriate.
ARTICLE VIII
Miscellaneous
Section 8.1 Fiscal Year. The fiscal year of the
Corporation shall be determined by resolution of the Board of
Directors.
Section 8.2 Waiver Of Notice Of Meetings Of Stockholders,
Directors, And Committees. Any written waiver of notice, signed by the
person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person
at a meeting shall constitute a waiver of notice of such meeting,
except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of any
regular or special meeting of the stockholders, directors, or members
of a committee of directors need be specified in any written waiver of
notice.
Section 8.3 Interested Directors; Quorum. No contract or
transaction between the Corporation and one or more of its directors or
officers, or between the Corporation and any other corporation,
partnership, association, or other organization in which one or more of
its directors or officers are directors or officers, or have a
financial interest, shall be void or voidable solely for this reason,
or solely because the director or officer is present at or participates
in the meeting of the Board or committee thereof which authorizes the
contract or transaction, or solely because his or their votes are
counted for such purpose, if: (1) the material facts as to his
relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and
the Board or the committee in good faith authorizes the contract or
transaction by the affirmative vote of a majority of the disinterested
directors, even though the disinterested directors be less than a
quorum; or (2) the material facts as to his relationship or interest
and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction
is specifically approved in good faith by vote of the stockholders; or
(3) the contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified, by the Board of Directors,
a committee thereof, or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a
meeting of the Board of Directors or of a committee which authorizes
the contract or transaction.
Section 8.4 Form Of Records. Any records maintained by
the Corporation in the regular course of its business, including its
stock ledger, books of account, and minute books, may be kept on, or be
in the form of, punch cards, magnetic tape, photographs,
microphotographs, or any other information storage device, provided
that the records so kept can be converted into clearly legible form
within a reasonable time. The Corporation shall so convert any records
so kept upon the request of any person entitled to inspect the same.
Section 8.5 Amendment Of By-Laws. The Board of Directors
of the Corporation is expressly authorized to adopt, amend or repeal
the by-laws of the Corporation by a vote of a majority of the entire
Board. The stockholders may make, alter or repeal any by-law whether
or not adopted by them, provided however, that any such additional
by-laws, alterations or repeal may be adopted only by the affirmative
vote of the holders of 75% or more of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class), unless such
additional by-laws, alterations or repeal shall have been recommended
to the stockholders for adoption by a majority of the Board of
Directors, in which event such additional by-laws, alterations or
repeal may be adopted by the affirmative vote of the holders of a
majority of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered for
this purpose as one class).
ROLLINS TRUCK LEASING CORP.
and
FIRST UNION NATIONAL BANK
as Trustee
SEVENTEENTH SUPPLEMENTAL INDENTURE
Dated as of March 10, 1997
TO THE
Collateral Trust Indenture
Dated as of March 21, 1983
7.30% COLLATERAL TRUST DEBENTURES, SERIES R, DUE MARCH 1, 2007
TABLE OF CONTENTS*
Page
PARTIES 1
RECITALS:
Execution of Collateral Trust Indenture Supplemental
Indentures 1
Issuance of Series R Debentures 1
Text of Forms:
Form of Face of Series R Debentures 1
Form of Trustee's Authentication Certificate for
Series R Debentures 2
Form of Reverse of Series R Debentures 3
All Things Done 5
GRANTING CLAUSES
GRANTING CLAUSE I - Securities 5
GRANTING CLAUSE II - Agreements and Assignments 5
GRANTING CLAUSE III- Other Securities and Property 6
HABENDUM 6
GRANT IN TRUST 6
GENERAL COVENANT 6
SECTION 1. Series R Debentures: Terms and Provisions 6
SECTION 2. Authentication and Delivery of Series R
Debentures 7
SECTION 3. Maintenance of Office or Agency;
Authenticating Agent for
Series R Debentures 7
SECTION 4. Debentures Issuable in the Form of
a Global Security 7
SECTION 5. Registration and Transfer 10
SECTION 6. Requirement and Eligibility of Trustee 10
SECTION 7. Original Indenture Ratified 10
SECTION 8. Trustee Not Responsible 10
SECTION 9. Defined Terms 11
SECTION 10. Counterparts 11
SECTION 11. Applicable Law 11
TESTIMONIUM 11
EXECUTION 11
ACKNOWLEDGEMENTS 11
____________
*Note: This Table of Contents has been inserted for
convenience and does not constitute a part of the
Seventeenth Supplemental Indenture.
i
<PAGE>
SEVENTEENTH SUPPLEMENTAL INDENTURE (herein called the "Seventeenth
Supplemental Indenture"), dated as of March 10, 1997, between Rollins
Truck Leasing Corp., a Delaware corporation (herein called the
"Corporation"), and FIRST UNION NATIONAL BANK, a national banking
association, as Trustee (herein called the "Trustee").
WHEREAS, the Corporation and the Trustee have heretofore executed
and delivered a Collateral Trust Indenture dated as of March 21, 1983,
as supplemented and amended by a Third Supplemental Indenture thereto
dated as of February 20, 1986 and by an Eighth Supplemental Indenture
dated as of May 15, 1990 (the "Original Indenture"; the Original
Indenture, as supplemented and amended by this Seventeenth Supplemental
Indenture, being herein called the "Indenture");
WHEREAS, the Original Indenture provides that the Corporation and
the Trustee may enter into indentures supplemental to the Original
Indenture, among other things, to provide for the issuance from time to
time of debentures (defined in the Original Indenture as "Debentures")
of the Corporation;
WHEREAS, the Corporation has determined to issue hereunder a
series of Debentures (herein called the "Series R Debentures") to be
designated as "7.30% Collateral Trust Debentures, Series R, Due March
1, 2007", to be in the aggregate principal amount of not in excess of
$75,000,000;
WHEREAS, the Series R Debentures and the Trustee's certificate to
be endorsed on the Series R Debentures are to be substantially in the
following forms, with necessary or appropriate variations, omissions
and insertions as permitted or required by the Indenture:
(FORM OF FACE OF SERIES R DEBENTURES)
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, A New York corporation
("DTC"), to Issuer or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.
Rollins Truck Leasing Corp.
7.30% COLLATERAL TRUST DEBENTURE, SERIES R, DUE MARCH 1, 2007
$_____________________________ No. ___________________
Rollins Truck Leasing Corp., a corporation organized and existing
under the laws of the State of Delaware (herein called the
"Corporation", which term shall include any successor corporation to
the extent provided in the Indenture hereinafter referred to), for
value received, hereby promises to pay to ___________________ , or
registered assigns, the principal sum of ____________ on March 1, 2007
in such coin or currency of the United States of America as at the time
of payment shall be legal tender for public and private debts, and to
pay interest on said principal sum at the rate of 7.30% per annum (and
at the same rate per annum on any overdue principal, premium, if any,
and, to the extent legally enforceable, overdue installment of
interest) in like coin or currency from the first day of March or
September, as the case may be, to which interest on the Series R
Debentures has been paid preceding the date hereof (unless the date
hereof is a March 1 or September 1 to which interest has been paid, in
which case from the date hereof, or unless no interest has been paid on
the Series R Debentures since the original issuance of this Debenture,
in which case from March 1, 1997), semiannually on March 1 and
September 1 until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is
after February 15 or August 15, as the case may be, and before the
following March 1 or September 1 this Debenture shall bear interest
from such March 1 or September 1; provided, however, that if the
Corporation shall default in the payment of interest due on such March
1 or September 1 then this Debenture shall bear interest from the next
preceding March 1 or September 1 to which interest has been paid or, if
no interest has been paid on the Series R Debentures since the original
issuance of this Debenture, from March 1, 1997. The interest so
payable on any March 1 or September 1 will, subject to certain
exceptions provided in the Indenture referred to on the reverse hereof,
be paid to the person in whose name this Debenture is registered at the
close of business on February 15 or August 15, as the case may be, next
preceding such March 1 or September 1. Payment of the principal of,
premium, if any, and interest on this Debenture will be made at the
office or agency of the Corporation in the Borough of Manhattan, the
City of New York, New York; provided, however, that interest may be
paid, at the option of the Corporation, by check mailed to the
registered holder hereof at his address last appearing on the registry
books for the Series R Debentures.
Additional provisions of this Debenture are contained on the
reverse hereof and such provisions shall for all purposes have the same
effect as though fully set forth at this place.
This Debenture shall not be entitled to any of the benefits of the
Indenture or any indenture supplemental thereto, or be valid or
obligatory for any purpose, unless the form of certificate of
authentication hereon shall have been executed by or on behalf of the
Trustee or a successor trustee thereto under the Indenture.
IN WITNESS WHEREOF, Rollins Truck Leasing Corp. has caused this
instrument to be signed in its name by its President or a Vice
President and by its Secretary or an Assistant Secretary, or by
facsimiles of any of their signatures, and its corporate seal, or a
facsimile thereof, to be hereto affixed.
DATED:__________________________
Rollins Truck Leasing Corp.
BY:_______________________________
(Title)
ATTESTED:
________________________________
(Title)
(FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE)
TRUSTEE'S AUTHENTICATION CERTIFICATE
This is one of the Debentures, of the series designated therein,
described in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK,
AS TRUSTEE
BY:_________________________________________
Authorized Officer
(FORM OF REVERSE OF SERIES R DEBENTURES)
This Debenture is one of the Debentures of the Corporation (herein
called the "Debentures"), all duly authorized or from time to time to
be duly authorized and not limited in aggregate principal amount, all
issued and to be issued in one or more series from time to time under
and equally secured by a Collateral Trust Indenture dated as of March
21, 1983, as supplemented and amended by a Third Supplemental Indenture
thereto dated as of February 20, 1986 and by an Eighth Supplemental
Indenture dated as of May 15, 1990, between the Corporation and First
Union National Bank, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture as hereinafter
defined), as last supplemented and amended by a Seventeenth
Supplemental Indenture, dated as of March 10, 1997 (said Indenture, as
so supplemented and amended, being herein called the "Indenture"), to
which Indenture and all indentures supplemental thereto reference is
hereby made for a description of the property thereby pledged, the
nature and extent of the security, the rights of the holders of the
Debentures in respect of the security, the rights, duties and
immunities of the Trustee and the rights and obligations of the
Corporation in respect of the Debentures, and the terms and conditions
upon which the Debentures are, and are to be, secured. The Debentures
may be issued in series, for various principal sums, may mature at
different times, may bear interest at different rates and may otherwise
vary as in the Indenture provided. This Debenture is one of a series
designated as the "7.30% Collateral Trust Debentures, Series R, due
March 1, 2007" of the Corporation (herein called the "Series R
Debentures"), duly authorized and lawfully issued in an aggregate
principal amount not exceeding $75,000,000 under and secured by the
Indenture.
The provisions of the Indenture may be waived, or modified or
amended by supplemental indenture, to the extent and in the manner
provided in the Indenture, but in certain instances only with the
consent of the holders of a majority in aggregate principal amount of
all Debentures at the time outstanding, and of 66 2/3% in aggregate
principal amount of each series of the Debentures at the time
outstanding which is affected by such waiver or supplemental indenture;
provided, however, that, without the written consent of the holder of
this Debenture, no such modification or amendment shall be made so as
to (i) extend the fixed maturity of this Debenture or the time of
payment of interest hereon, or reduce or otherwise modify the terms of
payment of the principal of, or premium, if any, or the rate of
interest on, this Debenture, or adversely affect the right of the
holder hereof to institute suit for the enforcement of any such
payment, (ii) permit the creation of any lien ranking prior to or on a
parity with the lien of the Indenture with respect to, or terminate the
lien of the Indenture on, any of the property covered thereby, or
deprive the holder hereof of the security afforded by the lien of the
Indenture or (iii) reduce the percentage of the aggregate principal
amount of Debentures, or of Series R Debentures, required to authorize
any such modification or amendment or any waiver of any provision of,
or default under, the Indenture.
In case an Event of Default (as defined in the Indenture) shall
occur, the principal of all the Debentures at any such time outstanding
under the Indenture may be declared or may become due and payable upon
the conditions and in the manner and with the effect provided in the
Indenture. The Indenture provides that in certain events such Event of
Default and its consequences may be waived and such declaration may be
rescinded by the holders of outstanding Debentures in the manner
provided in the Indenture.
Any request, demand, authorization, direction, declaration,
notice, consent, waiver or other action by the holder of this Debenture
shall bind the holder of every Debenture issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, in respect
of anything done or suffered to be done by or on behalf of the Trustee
or the Corporation in reliance thereon, whether or not notation of such
action is made upon this Debenture.
The Series R Debentures may not be redeemed prior to maturity.
The transfer of this Debenture may be registered by the registered
holder hereof or by his duly authorized attorney at the office or
agency of the Corporation in the Borough of Manhattan, The City of New
York, New York, upon surrender of this Debenture for cancellation,
accompanied by a written instrument of transfer in a form approved by
the Corporation, duly executed by the registered holder of this
Debenture or by his duly authorized attorney, and thereupon one or more
new Debentures of the same series and aggregate principal amount will
be issued in the name of the transferee or transferees in exchange
herefor without service charge, except that the Corporation may require
payment of a sum sufficient to pay any stamp taxes or other
governmental charges that may be required with respect thereto, as
provided in the Indenture.
The person in whose name this Debenture shall be registered shall
be deemed the absolute owner hereof for all purposes, and payment of or
on account of the principal of, and premium, if any, and interest on,
this Debenture shall be made only to or upon the written order of such
registered owner or his duly authorized attorney. All such payments
shall satisfy and discharge the liability upon this Debenture to the
extent of the amounts so paid.
No recourse shall be had for the payment of the principal of, or
premium, if any, or interest on, this Debenture, or for any claim based
hereon, or otherwise in respect hereof, or based on or in respect of
the Indenture or any indenture supplemental thereto, against any
incorporator, stockholder, officer or director, as such, past, present
or future, of the Corporation or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
(END OF FORM OF REVERSE OF SERIES R DEBENTURES)
<PAGE>
WHEREAS, the Debentures of any other series are to be
substantially in the forms herein provided for Series R Debentures,
with such omissions, insertions and variations as may be authorized and
permitted by this Indenture; and
WHEREAS, all acts and things prescribed by law, by the Articles
of Incorporation and the Bylaws of the Corporation, and all other acts
and things necessary to make the Series R Debentures, when executed by
the Corporation, and authenticated and delivered by the Trustee as in
this Seventeenth Supplemental Indenture provided, the valid, binding
and legal obligations of the Corporation, and to make this Seventeenth
Supplemental Indenture a valid, binding and legal instrument for the
security of the Series R Debentures, in accordance with its terms, have
been done and performed;
NOW, THEREFORE, THIS SEVENTEENTH SUPPLEMENTAL INDENTURE
WITNESSETH:
THAT the Corporation, in consideration of these premises, of the
acceptance by the Trustee of the trusts created hereby, of the mutual
covenants herein contained, of the purchase and acceptance of the
Debentures by the holders thereof, of the sum of $10 duly paid by the
Trustee to the Corporation at or before the ensealing and delivery of
this Seventeenth Supplemental Indenture and for other valuable
consideration, the receipt whereof is hereby acknowledged, and in order
to secure the payment of the principal of, and premium, if any, and
interest on, all Debentures at any time issued and Outstanding under
the Indenture, according to their tenor and effect, and the performance
and observance by the Corporation of all the covenants and conditions
herein and therein contained on its part to be performed and observed,
and to declare the terms and conditions upon and subject to which the
Debentures are, and are to be, issued and secured, has executed and
delivered this Indenture and has granted, bargained, sold, remised,
released, conveyed, assigned, transferred, mortgaged, pledged, set
over, confirmed and warranted, and by these presents does grant,
bargain, sell, remise, release, convey, assign, transfer, mortgage,
pledge, set over, confirm and warrant, to the Trustee, and to its
successors in the trusts and its and their assigns forever, with power
of sale, all and singular the following:
GRANTING CLAUSE I
Securities
A note of Rollins Leasing Corp., a Delaware corporation, dated
March 10, 1997 in the aggregate principal amount of $75,000,000.
GRANTING CLAUSE II
Agreement and Assignment
The following agreement and assignment:
A. A Loan Agreement dated as of March 10, 1997, between the
Corporation and Rollins Leasing Corp., which Loan Agreement shall be in
the form attached hereto as Exhibit A, with such insertions, omissions,
substitutions and variations as the Board of Directors and the Trustee
may deem appropriate and as shall not be inconsistent with the
provisions of the Seventeenth Supplemental Indenture or the Original
Indenture.
B. Assignment dated as of March 10, 1997, of the Loan Agreement
described in Subparagraph A of this Granting Clause II, which
Assignment shall be in the form attached hereto as Exhibit B, with such
insertions, omissions, substitutions and variations as the Board of
Directors and the Trustee may deem appropriate and as shall not be
inconsistent with the provisions of the Seventeenth Supplemental
Indenture or the Original Indenture.
<PAGE>
GRANTING CLAUSE III
Other Securities and Property
All other securities and other property, including cash, and any
and all security therefor of whatsoever nature, that may, from time to
time hereafter, by delivery or by writing of any kind, be subjected to
the lien hereof by the Corporation or by anyone on its behalf; and the
Trustee is hereby authorized to receive the same as additional security
hereunder. Such subjection to the lien hereof of such securities or
other property, including cash, as additional security hereunder may be
made subject to any reservations, limitations or conditions which shall
not be prohibited by this Indenture and which shall be set forth in a
written instrument executed by the Corporation or the person so acting
on its behalf, respecting the use and disposition of such property or
the proceeds thereof.
TO HAVE AND TO HOLD the Pledged Property unto the Trustee and its
successors and assigns forever;
BUT IN TRUST, NEVERTHELESS, for the equal and proportionate
benefit and security of the holders from time to time of all the
Debentures issued hereunder and Outstanding, without any priority of
any of said Debentures over any of the others.
IT IS HEREBY COVENANTED, DECLARED AND AGREED that all the
Debentures are to be issued, authenticated and delivered, and that all
property, including cash, subject or to become subject hereto is to be
held, subject to the further covenants, conditions, uses and trusts
hereinafter set forth, and the Corporation, for itself and its
successors and assigns, hereby covenants and agrees to and with the
Trustee and its successors in said trust for the equal and
proportionate benefit and security of those who shall hold the
Debentures, as hereinafter set forth.
SECTION 1. Series R Debentures: Terms and Provisions.
Series R Debentures shall be designated as "7.30% Collateral Trust
Debentures, Series R, due March 1, 2007" of the Corporation, and shall
have the following terms and provisions:
(a) Series R Debentures shall be substantially in the form set
forth in the recitals hereto.
(b) The aggregate principal amount of Series R Debentures
which may be issued shall be limited to $75,000,000, except Series
R Debentures issued in exchange for, in lieu of, in substitution
for, or upon the registration or transfer of, other Series R
Debentures pursuant to the provisions of Article II and Sections
5.01(e) and 18.04 of the Original Indenture.
(c) Series R Debentures shall be dated as provided in Section
2.06(b) of the Original Indenture.
(d) Series R Debentures shall mature March 1, 2007, and shall
bear interest as provided in Section 2.06(b) of the Original
Indenture, payable semi-annually on March 1 and September 1 in
each year, commencing September 1, 1997, at the rate of 7.30% per
annum until the principal thereof shall become due and payable
(whether at the stated maturity, upon redemption, by declaration
or otherwise), and at the same rate per annum on any overdue
principal, premium, if any, and (to the extent legally
enforceable) any overdue installment of interest. Payment of
principal, premium, if any, and interest shall be made at the
office of the Trustee in the Borough of Manhattan, in such coin
or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and
private debts; provided, however, that interest may be paid, at
the option of the Corporation, by check mailed to the Person
entitled thereto at his address last appearing on the registry
books required to be kept pursuant to Section 2.05 of the Original
Indenture.
(e) Series R Debentures shall be issued in denominations of
$1,000 and integral multiples thereof and may be fully printed or
printed on steel engraved borders or fully or partly engraved.
(f) Series R Debentures may not be redeemed prior to maturity.
SECTION 2. Authentication and Delivery of Series R
Debentures. On or after the date of execution and delivery of the
Seventeenth Supplemental Indenture and upon compliance with the
provisions of Article IV of the Original Indenture, Series R Debentures
(up to but not exceeding the aggregate principal amount provided in
Section 1 of the Seventeenth Supplemental Indenture) shall be executed
by the Corporation and delivered to the Trustee, and the Trustee shall,
upon request, authenticate and deliver such Series R Debentures upon
the written order of the Corporation signed by its President or one of
its Vice Presidents and its Treasurer or Controller, an Assistant
Treasurer or an Assistant Secretary.
SECTION 3. Maintenance of Office or Agency; Authenticating
Agent for Series R Debentures. Paragraph (a) of Section 7.02 of the
Original Indenture is amended and restated to read as follows:
The Corporation will cause to be maintained an office or
agency in the City of Chicago, Illinois, or the Borough of
Manhattan, The City of New York, New York, where Debentures may
be authenticated and presented for exchange, registration of
transfer or payment of principal and interest, and notices and
demands in respect of Debentures or this Indenture may be
served. The Corporation will give to the Trustee notice of the
location of any such office or agency and of any change of
location thereof. In case the Corporation shall fail to
maintain such office or agency or shall fail to give such
notice of the location or of any change in the location
thereof, such office or agency shall be the office of the
Trustee in the Borough of Manhattan, The City of New York, New
York.
SECTION 4. Debentures Issuable in the Form of a Global
Security.
(a) Section 1.01 of the Original Indenture is amended to add
new definitions thereto, in the appropriate alphabetical sequence,
as follows:
"Depository" means, unless otherwise specified by the
Corporation pursuant to either Section 2.02 or 2.17, with
respect to Debentures of any series issuable or issued in whole
or in part in the form of one or more Global Securities, The
Depository Trust Corporation, New York, New York, or any
successor thereto registered as a clearing agency under the
Exchange Act or other applicable statute or regulations.
"Global Security" means with respect to any series of
Debentures issued hereunder, a Debenture which is executed by
the Corporation and authenticated and delivered by the Trustee
to the Depository or its custodian or pursuant to the
Depository's instruction, all in accordance with this Indenture
and any indentures supplemental hereto, which shall be
registered in the name of the Depository or its nominee and
which shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of, all the Outstanding
Debentures of such series or any portion thereof, in either
case having the same terms, including, without limitation, the
same original issue date, date or dates on which principal is
due and interest rate or method of determining interest.
(b) Article II of the Original Indenture is amended to add a
new Section 2.17, which reads in its entirety as follows:
SECTION 2.17. Debentures Issuable in the Form of a Global
Security. (a) If the Corporation shall establish pursuant to
Section 2.02 that the Debentures of a particular series are to
be issued in whole or in part in the form of one or more Global
Securities, then the Corporation shall execute and the Trustee
or its agent shall, in accordance with Section 4.01,
authenticate and deliver, such Global Security or Securities,
which (i) shall represent, and shall be denominated in an
amount equal to the aggregate principal amount of, the
Outstanding Debentures of such series to be represented by such
Global Security or Securities, (ii) shall be registered in the
name of the Depository for such Global Security or Securities
or its nominee, (iii) shall be delivered by the Trustee or its
agent to the Depository or pursuant to the Depository's
instruction and (iv) shall bear a legend substantially to the
following effect: "Unless and until it is exchanged in whole
or in part for the individual Debentures represented hereby,
this Global Security may not be transferred except as a whole
by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to
a successor Depository or a nominee of such successor
Depository", or such other legend as may then be required by
the Depository for such Global Security or Securities.
(b) Notwithstanding any other provision of this
Section 2.17 or of Section 2.06 to the contrary, and subject
to the provisions of paragraph (c) below, unless the terms of
a Global Security expressly permit such Global Security to be
exchanged in whole or in part for definitive Debentures in
registered form, a Global Security may be transferred, in whole
but not in part and in the manner provided in Section 2.06,
only by the Depository to a nominee of the Depository for such
Global Security, or by a nominee of the Depository to the
Depository or another nominee of the Depository, or by the
Depository or a nominee of the Depository to a successor
Depository for such Global Security selected or approved by the
Corporation, or to a nominee of such successor Depository.
(c) (i) If at any time the Depository for a Global
Security or Securities notifies the Corporation that it is
unwilling or unable to continue as Depository for such Global
Security or Securities or if at any time the Depository for the
Debentures for such series shall no longer be eligible or in
good standing under the Exchange Act or other applicable
statute, rule or regulation, the Corporation shall appoint a
successor Depository with respect to such Global Security or
Securities. If a successor Depository for such Global Security
or Securities is not appointed by the Corporation within 90
days after the Corporation receives such notice or becomes
aware of such ineligibility, the Corporation shall execute, and
the Trustee or its agent, upon receipt of a Request for the
authentication and delivery of such individual Debentures of
such series in exchange for such Global Security or Securities,
will authenticate and deliver individual Debentures of such
series of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of the
Global Security or Securities in exchange for such Global
Security or Securities.
(ii) The Corporation may at any time and in its sole
discretion determine that the Debentures of any series or
portion thereof issued or issuable in the form of one or more
Global Securities shall no longer be represented by such Global
Security or Securities. In such event, the Corporation will
execute, and the Trustee, upon receipt of a Request for the
authentication and delivery of individual Debentures of such
series in exchange in whole or in part for such Global Security
or Securities, will authenticate and deliver individual
Debentures of such series of like tenor and terms in definitive
form in an aggregate principal amount equal to the principal
amount of such series or portion thereof in exchange for such
Global Security or Securities.
(iii) If specified by the Corporation pursuant to
Section 2.02 with respect to Debentures issued or issuable in
the form of a Global Security, the Depository for such Global
Security may surrender such Global Security in exchange in
whole or in part for individual Debentures of such series of
like tenor and terms in definitive form on such terms as are
acceptable to the Corporation, the Trustee and such Depository.
Thereupon the Corporation shall execute, and the Trustee or its
agent upon receipt of a Request for the authentication and
delivery of definitive Debentures of such series shall
authenticate and deliver, without service charge, (1) to each
Person specified by such Depository a new Debenture or
Debentures of the same series of like tenor and terms and of
any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such
Person's beneficial interest in the Global Security; and (2)
to such Depository a new Global Security of like tenor and
terms and in an authorized denomination equal to the
difference, if any, between the principal amount of the
surrendered Global Security and the aggregate principal amount
of Debentures delivered to Holders thereof.
(iv) In any exchange provided for in any of the
preceding three paragraphs, the Corporation will execute and
the Trustee or its agent will authenticate and deliver
individual Debentures. Upon the exchange of the entire
principal amount of a Global Security for individual
Debentures, such Global Security shall be cancelled by the
Trustee or its agent. Except as provided in the preceding
paragraph, Debentures issued in exchange for a Global Security
pursuant to this Section 2.17 shall be registered in such names
and in such authorized denominations as the Depository for such
Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Debentures to the Persons in
whose names such Debentures are so registered or to such other
Person as the Depository shall designate.
(v) Payments in respect of the principal of and
interest on any Debentures registered in the name of the
Depository or its nominee will be payable to the Depository or
such nominee in its capacity as the registered owner of such
Global Security. The Corporation and the Trustee may treat the
Person in whose names the Debentures, including the Global
Security, are registered as the owner thereof for the purpose
of receiving such payments and for any and all other purposes
whatsoever. None of the Corporation, the Trustee or any agent
of the Corporation or the Trustee will have any responsibility
or liability for (a) any aspect of the records relating to or
payments made on account of the beneficial ownership interests
of the Global Security by the Depository or its nominee or any
of the Depository's direct or indirect participants, or for
maintaining, supervising or reviewing any records of the
Depository, its nominee or any of its direct or indirect
participants relating to the beneficial ownership interests of
the Global Security, (b) the payments to the beneficial owners
of the Global Security of amounts paid to the Depository or its
nominee, or (c) any other matter relating to the actions and
practices of the Depository, its nominee or any of its direct
or indirect participants. None of the Corporation, the Trustee
or any such agent will be liable for any delay by the
Depository, its nominee, or any of its direct or indirect
participants in identifying the beneficial owners of the
Debentures, and the Corporation and the Trustee may
conclusively rely on, and will be protected in relying on,
instructions from the Depository or its nominee for all
purposes (including with respect to the registration and
delivery, and the respective principal amounts, of the
Debentures to be issued).
SECTION 5. Registration of Transfer.
(a) The first sentence of paragraph (a) of Section 2.06 of the
Original Indenture is amended and restated to read as follows:
"Subject to Section 2.17, the transfer of any Debenture may be
registered on the books required to be kept pursuant to Section
2.04 upon the surrender of such Debenture at the office or agency
of the Corporation required to be maintained under Section 7.02(a)
in the City of Chicago, Illinois, or the Borough of Manhattan, The
City of New York, New York, or in the case of Debentures of any
Additional Series, at any such office or agency required by any
supplemental indenture, in each case accompanied by delivery of
instruments of transfer, in form approved by the Corporation, duly
executed by the registered owner thereof or by his duly authorized
attorney, and thereupon the Corporation shall execute in the name
of the transferee or transferees, and the Trustee or appropriate
authenticating agent shall authenticate and deliver, a new
Debenture or Debentures of the same series, maturity and aggregate
principal amount."
(b) Section 2.06 of the Original Indenture is amended to add
a new paragraph (c), which reads in its entirety as follows: "(c)
None of the Corporation, the Trustee, or any agent of the
Corporation or the Trustee will have any responsibility or
liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests of a Global
Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests."
SECTION 6. Requirement and Eligibility of Trustee. The first
paragraph of Section 12.04 of the Original Indenture is amended and
restated to read as follows:
There shall at all times be a Trustee under this
Indenture, which shall be an incorporated bank or trust company
in good standing organized and doing business under the laws
of the United States or of the State of New York, or the State
of Illinois, or of the Commonwealth of Pennsylvania, having a
combined capital and surplus of not less than $10,000,000,
which is authorized under the laws of its jurisdiction of
incorporation to exercise corporate trust powers and subject
to supervision or examination by Federal or State authority.
If the Trustee publishes reports of condition at least
annually, pursuant to law or to the requirement of the
aforesaid supervising or examining authority, the combined
capital and surplus of the Trustee shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published. The Trustee shall at all
times satisfy the requirements of Section 310(a)(v) of the
Trust Indenture Act of 1939.
SECTION 7. Original Indenture Ratified. The Original
Indenture as amended by the Third Supplemental Indenture dated February
20, 1986 and by the Eighth Supplemental Indenture dated May 15, 1990,
and as supplemented and amended by this Seventeenth Supplemental
Indenture is in all respects ratified and confirmed and the Seventeenth
Supplemental Indenture and all its provisions shall be deemed a part
thereof in the manner and to the extent herein provided, and the
Original Indenture, as modified in the manner and to the extent herein
provided, shall be deemed a part hereof as though fully set forth
herein.
SECTION 8. Trustee Not Responsible. The Trustee assumes no
responsibility for or in respect of the validity or sufficiency of the
Seventeenth Supplemental Indenture or the due execution hereof by the
Corporation or for or in respect of the recitals and statements
contained herein, all of which are made solely by the Corporation. The
Trustee accepts the trusts created by the Seventeenth Supplemental
Indenture upon the terms and conditions hereof and of the Original
Indenture.
SECTION 9. Defined Terms. All terms used in the Seventeenth
Supplemental Indenture which are defined in the Original Indenture
shall have the meanings assigned to them in the Original Indenture.
SECTION 10. Counterparts. The Seventeenth Supplemental
Indenture may be executed in any number of counterparts, each of which
when so executed and delivered shall be an original; and all such
counterparts shall together constitute but one and the same instrument.
SECTION 11. Applicable Law. The Seventeenth Supplemental
Indenture shall be construed in accordance with and governed by the
laws of the State of Delaware.
IN WITNESS WHEREOF, Rollins Truck Leasing Corp. has caused the
Seventeenth Supplemental Indenture to be executed on its behalf by its
President or one of its Vice Presidents and its corporate seal to be
hereto affixed and said seal and this Seventeenth Supplemental
Indenture to be attested by its Secretary or Assistant Secretary, and
First Union National Bank, in evidence of its acceptance of the trusts
hereby created, has caused this Seventeenth Supplemental Indenture to
be executed on its behalf and its corporate seal to be affixed by one
of its Vice Presidents and said seal and this Indenture to be attested
by its Assistant Secretary or one of its Trust Officers, as of March
10, 1997.
Rollins Truck Leasing Corp.
(CORPORATE SEAL) BY:/s/ Patrick J. Bagley
Vice President-Finance and Treasurer
Attest:
/s/ J. Carlisle Peet, III
Assistant Secretary
FIRST UNION NATIONAL BANK
as Trustee
(CORPORATE SEAL) BY:/s/ Stephanie Roche
Vice President
Attest:
/s/ Paul O'Brien
Assistant Vice President
