ROLLINS TRUCK LEASING CORP.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 28, 1999
------------------------
TO THE HOLDERS OF COMMON STOCK:
PLEASE TAKE NOTICE that the 1999 Annual Meeting of Shareholders of ROLLINS
TRUCK LEASING CORP., a Delaware corporation, will be held at the Rollins
Building, 2200 Concord Pike, First Floor Auditorium, Wilmington, Delaware, on
Thursday, January 28, 1999, at 8:30 A.M. (Eastern Standard Time) for the
following purposes:
1. To elect two Class I Directors to the Board of Directors;
2. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournment thereof.
The Proxy Statement dated December 28, 1998 is attached.
The Board of Directors has fixed the close of business on December 18, 1998
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting.
You are cordially invited to attend the Annual Meeting. If you cannot be
present in person, please sign and date the enclosed proxy and promptly mail it
in the enclosed return envelope which requires no United States postage. Any
shareholder giving a proxy has the right to revoke it any time before it is
voted.
BY ORDER OF THE BOARD OF DIRECTORS
MICHAEL B. KINNARD, Secretary
Dated: Wilmington, Delaware
December 28, 1998
------------------------
YOU ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO UNITED STATES POSTAGE.
<PAGE>
PROXY STATEMENT
ROLLINS TRUCK LEASING CORP.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 28, 1999
------------------------
The information concerning the enclosed proxy and the matters to be acted
upon at the Annual Meeting of Shareholders to be held on January 28, 1999 (the
"Annual Meeting") is submitted to the shareholders for their information.
SOLICITATION OF AND POWER TO REVOKE PROXY
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of ROLLINS TRUCK LEASING CORP., a
Delaware corporation (the "Company"). Proxies solicited hereby are to be voted
at the Annual Meeting or at any adjournment thereof.
The mailing address for the Company's principal executive office is P.O.
Box 1791, Wilmington, Delaware 19899. This Proxy Statement and the form of proxy
were first sent to the Company's shareholders on or about December 28, 1998.
A form of proxy is enclosed. Each proxy submitted will be voted as directed
but, if not otherwise specified, proxies solicited by the Board of Directors of
the Company will be voted in favor of the candidates for election to the Board
of Directors as Class I Directors.
The solicitation of proxies will be by mail. It may be that further
solicitation of proxies will be made by telephone, telegram or interview with
some shareholders of the Company, following the original solicitation. All such
further solicitations will be made by regular officers and employees of the
Company, who will not be additionally compensated therefor, or its Transfer
Agent. The Company will bear the entire cost of all such solicitations, which
will be nominal and include reimbursements paid to brokerage firms and others
for their expenses in forwarding solicitation material regarding the meeting to
beneficial owners.
Each shareholder has the right to revoke his or her proxy at any time
before it is voted. A proxy may be revoked by filing with the Secretary of the
Company a written revocation or a duly executed proxy bearing a later date or by
voting in person at the Annual Meeting. Any shareholder may attend the Annual
Meeting and vote in person, whether or not such shareholder has previously given
a proxy.
CAPITAL STOCK
The outstanding capital stock of the Company on December 18, 1998 consisted
of 58,382,832 shares of Common Stock, par value $l.00 per share. Holders of
Common Stock are entitled to one vote (non-cumulative) for each share of such
stock registered in their respective names at the close of business on December
18, 1998, the record date for determining shares entitled to notice of and to
vote at the Annual Meeting or any adjournment thereof.
A majority of the outstanding shares will constitute a quorum at the Annual
Meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
In accordance with the General Corporation Law of the State of Delaware, the
election of the nominees named herein as Directors will require the affirmative
vote of a plurality
1
<PAGE>
of the votes cast by the shares entitled to vote in the election provided that a
quorum is present at the Annual Meeting. In the case of a plurality vote
requirement (as in the election of directors), where no particular percentage
vote is required, the outcome is solely a matter of comparing the number of
votes cast in favor of a proposal to the number of votes cast against the
proposal, and hence only votes for or against the proposal (and not abstentions
or broker non-votes) are relevant to the outcome.
As of October 31, 1998, only three persons were known to the Company to own
beneficially more than five percent (5%) of the outstanding shares of Common
Stock of the Company. The name and address of each such person, together with
the number of shares owned and the percentage of outstanding shares that
ownership represents and information as to Common Stock ownership of the Named
Executives identified in the Summary Compensation Table and the officers and
directors of the Company as a group (according to information received by the
Company) are set forth below:
<TABLE>
<CAPTION>
NUMBER OF SHARES
TITLE OF AND NATURE OF PERCENT OF
CLASS NAMES AND ADDRESSES OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP(1) CLASS
- -------- ---------------------------------------- ----------------------- ----------
<S> <C> <C> <C>
Common Patrick J. Bagley 82,005 .1%
One Rollins Plaza
Wilmington, DE 19803
Common I. Larry Brown 119,625 .2%
One Rollins Plaza
Wilmington, DE 19803
Common John W. Rollins 7,162,327 12.3%
One Rollins Plaza
Wilmington, DE 19803
Common John W. Rollins, Jr. 1,232,025 2.1%
One Rollins Plaza
Wilmington, DE 19803
Common Henry B. Tippie 2,250,000 3.9%
P.O. Box 26557
Austin, TX 78755
Common Neuberger and Berman 3,596,083(2) 6.1%
605 Third Avenue
New York, NY 10158
Common Strong/Corneliuson Capital 3,713,600(3) 6.4%
Management, Inc.
100 Heritage Reserve
P.O. Box 2936
Milwaukee, WI 53201
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES
TITLE OF AND NATURE OF PERCENT OF
CLASS NAMES AND ADDRESSES OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP(1) CLASS
- -------- ---------------------------------------- ----------------------- ----------
<S> <C> <C> <C>
Common All Directors and Officers as a Group 10,863,137 18.6%
(8 persons)
</TABLE>
- ------------------
(1) As to officers and directors, owned directly and of record. The above
numbers exclude the following shares of Common Stock subject to options
granted under the Company's 1982, 1986 and 1993 Stock Option Plans which the
listed beneficial owner has the right to acquire beneficial ownership as
specified in Rule 13d of the Securities Exchange Act of 1934: John W.
Rollins, Jr., 71,850 shares; Patrick J. Bagley, 44,250 shares; I. Larry
Brown, 44,250 shares; and all directors and officers as a group, 175,140
shares.
(2) Neuberger & Berman, LLC ("N&B") is a registered investment advisor. In its
capacity as investment advisor, N&B may have discretionary authority to
dispose of or to vote shares that are under its management. As a result, N&B
may be deemed to have beneficial ownership of such shares. N&B does not,
however, have any economic interest in the shares. The clients are the
actual owners of the shares and have the sole right to receive and the power
to direct the receipt of dividends from or proceeds from the sale of such
shares. As of October 31, 1998, of the shares set forth above, N&B had
shared dispositive power with respect to 3,589,083 shares, sole voting power
with respect to 2,420,226 shares and shared voting power on 0 shares.
(3) Strong Capital Management, Inc., has been granted discretionary dispositive
power over its clients' securities and in some instances has voting power
over such securities. Any and all discretionary authority which has been
delegated to Strong Capital may be revoked in whole or in part at any time.
ELECTION OF DIRECTORS
Two individuals are to be elected at the Annual Meeting to serve as Class I
Directors for a term of three years each, and until the election and
qualification of their successors. Four other individuals serve as directors but
are not standing for re-election because their terms as directors extend past
the Annual Meeting pursuant to provisions of the Company's Restated Certificate
of Incorporation which provide for the election of directors for staggered
terms, with each director serving a three year term.
Unless a shareholder WITHHOLDS AUTHORITY, the proxy holders will vote FOR
the election of the persons named below to serve as directors. Although the
Board of Directors does not contemplate the possibility, in the event a nominee
is not a candidate or is unable to serve as a director at the time of the
election, unless the shareholder WITHHOLDS AUTHORITY, the proxies will be voted
for a nominee designated by the present Board of Directors to fill such a
vacancy.
The name and age of each of the nominees, his principal occupation, the
period during which he has served as director, together with the number of
shares of Common Stock beneficially owned by him, directly or indirectly, and
the percentage of outstanding shares that ownership represents, all as of the
close of business October 31, 1998 (according to information received by the
Company), is set forth below. Similar information is also provided for those
directors whose terms expire in future years.
3
<PAGE>
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
NAMES OF PRINCIPAL SERVICE AS COMMON OUTSTANDING
NOMINEES OCCUPATION(1) DIRECTOR AGE STOCK(2) SHARES
-------- ------------- ---------- --- --------- -----------
<S> <C> <C> <C> <C> <C>
Class I (Term Expires 2002)
Patrick J. Bagley Vice President - Finance and 1998 to date 51 82,005 .1%
Treasurer; Vice President -
Finance and Treasurer, Matlack
Systems, Inc.
Gary W. Rollins President, Rollins, Inc. (3) 1975 to date 54 -0-(4) --
<CAPTION>
SHARES OF PERCENT OF
NAMES OF DIRECTORS WHOSE PRINCIPAL SERVICE AS COMMON OUTSTANDING
TERMS HAVE NOT EXPIRED OCCUPATION(1) DIRECTOR AGE STOCK(2) SHARES
- -------------------------- ------------------------------ ------------ -- --------- ----
<S> <C> <C> <C> <C> <C>
Class II (Term Expires 2000)
William B. Philipbar, Jr. Retired; Former President and 1993 to date 73 12,655 --
Chief Executive Officer,
Rollins Environmental
Services, Inc.
John W. Rollins, Jr. President and Chief Operating 1967 to date 56 1,232,025(5) 2.1%
Officer; Chairman of the
Board, Matlack Systems,
Inc.(3)
Class III (Term Expires 2001)
John W. Rollins Chairman of the Board and 1954 to date 82 7,162,327(6) 12.3%
Chief Executive Officer;
Chairman of the Board, Dover
Downs Entertainment, Inc. (3)
Henry B. Tippie Chairman of the Executive 1974 to date 71 2,250,000(7) 3.9%
Committee and Vice Chairman of 1954 to 1965
the Board; Chairman of the
Executive Committee and
Director, Matlack Systems,
Inc.; Chairman of the Board
and Chief Executive Officer,
Tippie Services, Inc.; Vice
Chairman of the Board, Dover
Downs Entertainment, Inc.
</TABLE>
- ------------------
(1) The nominees and other directors have held the positions of responsibility
set out in the above column (but not necessarily their present titles) for
more than five years. In addition to the directorships listed in the above
column, the following individuals also serve on the board of directors of
the following companies: Gary W. Rollins, Rollins, Inc. and RPC, Inc.; John
W. Rollins, Rollins, Inc., Matlack Systems, Inc., Safety-Kleen Corp., RPC,
Inc. and FPA Corp.; John W. Rollins, Jr., Dover Downs Entertainment, Inc.
and Safety-Kleen Corp.; Henry B. Tippie, Rollins, Inc., Safety-Kleen Corp.
and RPC, Inc.; William B. Philipbar, Jr., Matlack Systems, Inc. and Waste
Systems International, Inc.; Patrick J. Bagley, Matlack Systems, Inc. and
Dover Downs Entertainment, Inc. Matlack Systems, Inc. provides
transportation services. Dover Downs
4
<PAGE>
Entertainment, Inc. operates facilities offering gaming, motorsports, horse
racing and other forms of entertainment. Rollins, Inc. is a consumer
services company engaged in residential and commercial termite and pest
control. Safety-Kleen Corp. is engaged in the business of industrial waste
disposal. RPC, Inc. is a diversified company engaged in oil and gas field
services and boat manufacturing. Tippie Services, Inc. provides management
services. Waste Systems International, Inc. is engaged in the business of
solid waste management.
(2) All shares are owned directly and of record. The above numbers exclude the
following shares of Common Stock subject to options granted under the
Company's 1982, 1986 and 1993 Stock Option Plans which the listed beneficial
owner has the right to acquire beneficial ownership as specified in Rule 13d
of the Securities Exchange Act of 1934: John W. Rollins, Jr., 71,850 shares;
and Patrick J. Bagley, 44,250 shares.
(3) John W. Rollins is the uncle of Gary W. Rollins and the father of John W.
Rollins, Jr.
(4) Does not include 1,191,543* shares held as Co-Trustee, 124,182* shares held
as Trustee for his children and 109,254* shares representing a proportionate
interest of shares held by a general partnership.
(5) Does not include 707,463* shares held as Co-Trustee and 23,625* shares held
by his wife.
(6) Does not include 253,116* shares held by his wife and 135,037* shares held
by his wife as Custodian for his minor children.
(7) Does not include 1,671,711* shares held as Co-Trustee, 38,250* shares held
as Trustee, 31,500* shares owned by his wife, or 45,000* shares owned by a
partnership over which Mr. Tippie has sole voting power.
- ------------------
*The Messrs. Rollins and Tippie disclaim any beneficial interest in these
holdings.
5
<PAGE>
BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board of Directors held four regularly scheduled meetings and one
special meeting during fiscal year 1998. All members of the Board attended at
least eighty percent of the meetings held.
Audit Committee. The Audit Committee consists of William B. Philipbar,
Jr., Chairman, and Gary W. Rollins. The Audit Committee held two meetings during
the last fiscal year. The Committee's functions include consulting with the
Company's independent public accountants concerning the scope and results of the
audit, reviewing the evaluation of internal accounting controls and inquiring
into special accounting-related matters.
Executive Committee. The Executive Committee consists of Henry B. Tippie,
Chairman, John W. Rollins and John W. Rollins, Jr. The Executive Committee held
four meetings during the last fiscal year. The Executive Committee has the power
to exercise all of the powers and authority of the Board of Directors in the
management of the business and affairs of the Company in accordance with the
provisions of the by-laws of the Company. The Executive Committee performs all
of the functions of a compensation committee of the Board of Directors.
Stock Option Committee. The Stock Option Committee consists of Henry B.
Tippie, Chairman, and John W. Rollins. The Stock Option Committee held two
meetings during the last fiscal year. The Stock Option Committee administers the
Company's outstanding Stock Option Plans including the granting of options to
various employees of the Company and its subsidiaries.
The Company does not have a nominating committee of the Board of Directors.
DIRECTORS' COMPENSATION
Directors who are not full-time employees of the Company or any of its
subsidiaries are each paid an annual retainer for Board service of $10,000 and
an attendance fee of $1,000 for each Board of Directors or committee meeting
attended.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following report and
the Performance Graph on page 8 shall not be incorporated by reference into any
such filings.
REPORT OF THE EXECUTIVE AND STOCK OPTION COMMITTEES OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
During fiscal year 1998, the members of the Executive Committee of the
Board of Directors held primary responsibility for determining executive
compensation levels.
The Company is engaged in a highly competitive industry. As a consequence,
the Company views its ability to attract and retain qualified executives as the
cornerstone of its future success. In order to accomplish this objective, the
Company has endeavored to structure its executive compensation in a fashion that
takes into account the Company's operating performance and the individual
performance of the executive. Of necessity, this analysis is subjective in
nature and not based upon a structured formula. The factors referred to above
are not weighted in an exact fashion.
Pursuant to the above compensation philosophy, the total annual
compensation of executive officers of the Company is made up of one or more of
three elements. The three elements are salary, an annual incentive compensation
package and, in some years, grants of stock options.
6
<PAGE>
The salary of each executive officer is determined by the Executive
Committee. As previously stated, in making its determinations the Executive
Committee gives consideration to the Company's operating performance for the
prior fiscal year and the individual executive's performance.
The annual incentive compensation package for the Chief Executive Officer
of Rollins Leasing Corp. and the Chief Financial Officer of the Company is
developed by the Chief Operating Officer of the Company prior to the end of each
fiscal year. It is based upon a performance formula for the ensuing fiscal year.
That performance formula and incentive package is then reviewed by the Executive
Committee and is either accepted, amended or modified. None of the members of
the Board of Directors, other than the Chief Financial Officer, participate in
the incentive program.
Awards under the Company's Stock Option Plans are purely discretionary, are
not based upon any specific formula and may or may not be granted in any given
fiscal year. When considering the grant of stock options, the Stock Option
Committee gives consideration to the overall performance of the Company and the
performance of individual employees.
CEO COMPENSATION
The CEO's compensation is determined by the Executive Committee. As is the
case with respect to the Named Executives, the CEO's compensation is based upon
the Company's operating performance and his individual performance. The decision
of the Executive Committee is, however, very subjective and is not based upon
any specific formula or guidelines. The CEO does not participate in the
deliberations of the Executive Committee when his salary is determined. Neither
the CEO nor any other member of the Executive Committee participates in any
Company incentive program. The CEO has never received a Stock Option from the
Company.
Executive Committee
Henry B. Tippie, Chairman
John W. Rollins
John W. Rollins, Jr.
Stock Option Committee
Henry B. Tippie, Chairman
John W. Rollins
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than ten percent of a registered
class of the Company's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC").
Officers, directors and greater than ten percent shareholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
Based on its review of the copies of such forms received by it, the Company
believes that during its fiscal year ended 1998 all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with.
7
<PAGE>
COMMON STOCK PERFORMANCE
The following graph reflects a comparison of the cumulative total
shareholder return on the Company's common stock with the S&P Composite 500
Index and S&P Truckers Index, respectively, for the five year period commencing
October 1, 1993 through September 30, 1998. The graph assumes that the value of
the investment in the Company's common stock and each index was 100 at September
30, 1993 and all dividends were reinvested. The comparisons in this table are
required by the Securities and Exchange Commission and, therefore, are not
intended to forecast or be necessarily indicative of any future return on the
Company's common stock.
[GRAPHIC]
In the printed version of the document, a line graph appears which depicts
the following plot points:
<TABLE>
<CAPTION>
YEARS
-----------------------------------------------------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Rollins Truck Leasing Corp...... 100 86 80 86 132 137
S&P Truckers.................... 100 102 94 73 121 86
S&P 500......................... 100 104 135 162 227 248
Assumes $100 invested on October 1, 1993
</TABLE>
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following directors serve on the Company's Executive Committee: John W.
Rollins, John W. Rollins, Jr. and Henry B. Tippie. Each is an employee of the
Company, but none participate in the deliberations of the Executive Committee
with respect to his own compensation. Henry B. Tippie serves on the Compensation
Committees of Rollins, Inc. and RPC, Inc. John W. Rollins, Jr. serves on the
Compensation Committee of Safety-Kleen Corp. John W. Rollins, John W. Rollins,
Jr. and Henry B. Tippie are members of the Executive Committee of Matlack
Systems, Inc. The Executive Committee of this Company performs the functions of
a Compensation Committee. Patrick J. Bagley serves as a director of Dover Downs
Entertainment, Inc. and Matlack Systems, Inc. John W. Rollins and Henry B.
Tippie serve on the Compensation Committee of Dover Downs Entertainment, Inc.
EXECUTIVE COMPENSATION
Shown below is information concerning the annual compensation for services
in all capacities to the Company for the fiscal years ended September 30, 1996,
1997 and 1998, of those persons who were, at September 30, 1998, (i) the
Chairman and Chief Executive Officer and (ii) the other most highly compensated
executive officers of the Company whose total annual salary exceeded $100,000
(the "Named Executives"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION --------------------- -------
-------------------------------- RESTRICTED STOCK
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND SALARY BONUS COMP. (2) AWARDS(3) SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR (1) $ $ $ $ # $ $
------------------ -------- ------ ----- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John W. Rollins 1998 560,000 -0- -- -0- -0- -0- -0-
Chairman of the 1997 550,000 -0- -- -0- -0- -0- -0-
Board and CEO 1996 540,000 -0- -- -0- -0- -0- -0-
Patrick J. Bagley 1998 261,250 65,000 -- -0- 16,200 -0- -0-
Vice Pres.-Finance, 1997 246,250 50,000 -- -0- -0- -0- -0-
Treasurer and CFO 1996 231,250 35,000 -- -0- 18,000 -0- -0-
I. Larry Brown 1998 269,231 476,682 -- -0- 18,000 -0- -0-
President and CEO
of Rollins
Leasing Corp.
John W. Rollins, Jr. 1998 660,000 -0- -- -0- 122,500 -0- -0-
President and COO 1997 600,000 -0- -- -0- 150,000 -0- -0-
1996 540,000 -0- -- -0- 22,500 -0- -0-
Henry B. Tippie 1998 560,000 -0- -- -0- -0- -0- -0-
Chairman-Executive 1997 550,000 -0- -- -0- -0- -0- -0-
Committee 1996 540,000 -0- -- -0- -0- -0- -0-
</TABLE>
- ------------------
(1) Fiscal years ending September 30.
(2) The only type of Other Annual Compensation for each of the named officers
was in the form of perquisites and was less than the level required for
reporting.
(3) No awards have ever been made.
9
<PAGE>
OPTION AND STOCK APPRECIATION RIGHTS GRANTS IN LAST FISCAL YEAR
The following table sets forth stock options granted in the fiscal year
ending September 30, 1998 to each of the Company's Named Executives. Employees
of the Company and its subsidiaries are eligible for stock option grants based
on individual performance. The Company did not issue any stock appreciation
rights. The table also sets forth the hypothetical gains that would exist for
the options at the end of their six-year and eight-year terms, assuming compound
rates of stock appreciation of 0%, 5% and 10%. The actual future value of the
options will depend on the market value of the Company's Common Stock. All
option exercise prices are based on the market price on the grant date.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
------------------------------------------------ POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES OF STOCK
OPTIONS PRICE APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OPTION TERM (2)
GRANTED EMPLOYEES PRICE EXPIRATION ---------------------------------
NAME (#) IN FISCAL YEAR ($/SH) DATE 0% 5% 10%
---- ------- -------------- -------- ---------- --- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
John W. Rollins, Jr. 22,500 3.1% $ 10.71 11/13/05 -- $ 115,055 $ 275,576
100,000(3) 13.9% $10.875 09/13/04 -- $ 369,854 $ 839,073
Patrick J. Bagley 16,200 2.2% $ 10.71 11/13/05 -- $ 82,839 $ 198,415
I. Larry Brown 18,000 2.5% $ 10.71 11/13/05 -- $ 92,044 $ 220,461
All employees as a 721,900 100.0% $ 10.71 9/13/04
group
to to
$10.875 11/13/05 -- $ 3,549,967 $ 8,456,003
Total potential stock price appreciation from November
14, 1997 to November 13, 2005 for all stockholders at
assumed rates of stock price appreciation (4) -- $298,795,984 $715,669,123
</TABLE>
- ------------------
(1) Options were granted on November 14, 1997 and September 14, 1998.
(2) These amounts, based on assumed appreciation rates of 0% and the 5% and 10%
rates prescribed by the Securities and Exchange Commission rules, are not
intended to forecast possible future appreciation, if any, of the Company's
stock price. These numbers do not take into account certain provisions of
options providing for termination of the option following termination of
employment, nontransferability or phased-in vesting. Future compensation
resulting from option grants is based solely on the performance of the
Company's stock price.
(3) Based upon 100,000 options granted September 14, 1998 at an exercise price
of $10.875, the fair market value on the date of the grant. The options are
exercisable only if the closing price of the Common Stock on the New York
Stock Exchange reaches $20.875 or more for a period of ten (10) consecutive
trading days.
(4) Based upon a price of $10.71 on November 14, 1997 and a total of 58,432,281
shares of Common Stock outstanding on October 31, 1998.
10
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The following table summarizes option exercises during fiscal year 1998 by
the Company's Named Executives, and the value of the options held by such
persons as of September 30, 1998. The Company has not granted and does not have
any Stock Appreciation Rights outstanding.
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED
OPTIONS AT
SHARES ACQUIRED VALUE FY-END (#)
NAME (1) ON EXERCISE (#) REALIZED ($)(2) EXERCISABLE/UNEXERCISABLE
-------- --------------- --------------- -------------------------
<S> <C> <C> <C> <C>
Patrick J. Bagley 16,643 $161,326 44,250 37,200
I. Larry Brown 45,563 $422,689 44,250 39,000
John W. Rollins, Jr. -0- -0- 71,850 268,150
<CAPTION>
VALUE OF
UNEXERCISED
IN-THE-MONEY
OPTIONS AT
FY-END ($)
NAME (1) EXERCISABLE/UNEXERCISABLE(3)
-------- ----------------------------
<S> <C> <C>
Patrick J. Bagley $233,269 $113,351
I. Larry Brown $233,269 $114,998
John W. Rollins, Jr. $289,823 $210,857
</TABLE>
- ------------------
(1) John W. Rollins and Henry B. Tippie did not acquire or have any outstanding
Incentive Stock Options.
(2) Fair market value of underlying security at exercise date less the exercise
price.
(3) The value of the Company's common stock on September 30, 1998 was $11.625
per share.
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
There were no Long-Term Incentive Plan Awards to the Named Executives
during fiscal year 1998.
DEFINED BENEFIT PLANS
PENSION PLANS
The Company's Pension Plan is a non-contributory qualified defined benefit
plan. All full-time employees of the Company (except certain employees covered
by collective bargaining agreements) are eligible to participate in the Pension
Plan. Up to September 30, 1989, retirement benefits were equal to the sum of
from 1% to 1.8% of an employee's annual cash compensation for each year of
service to age 65. Commencing October 1, 1989 and thereafter, retirement
benefits are equal to the sum of 1.35% of earnings up to covered compensation,
as that term is defined in the Plan, and 1.7% of earnings above covered
compensation. Covered compensation includes regular salaries or wages,
commissions, bonuses, overtime earnings and short-term disability income
protection benefits.
Retirement benefits are not subject to any reduction for Social Security
benefits or other offset amounts. An employee's benefits may be paid in certain
alternative forms having actuarially equivalent values. Retirement benefits are
fully vested at the completion of five years of credited service or, if earlier,
upon reaching age 55. The maximum annual benefit under a qualified pension plan
is currently $130,000 beginning at the Social Security retirement age (currently
age 65).
The Company maintains a non-qualified, defined benefit plan, called the
Excess Benefit Plan, which covers those participants of the Pension Plan whose
benefits are limited by the Internal Revenue Code. A participant in the Excess
Benefit Plan is entitled to a benefit equaling the difference between
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the amount of the benefit payable without limitation and the amount of the
benefit payable under the Pension Plan.
Annual pension benefit projections for the Named Executives assume: (a)
that the participant remains in the service of the Company until age 65; (b)
that the participant's earnings continue at the same rate as paid in the fiscal
year ended September 30, 1998 during the remainder of his service until age 65;
and (c) that the Plans continue without substantial modification.
The estimated annual benefit at retirement for each of the following Named
Executives of the Company is: Patrick J. Bagley, $109,010; I. Larry Brown,
$204,484; and John W. Rollins, Jr., $238,423. The annual benefit for John W.
Rollins ($53,949) and Henry B. Tippie ($158,390) is the amount of retirement
income which they are required to receive by Federal law.
401(k) RETIREMENT PLAN
The Company has a deferred compensation plan pursuant to section 401(k) of
the Internal Revenue Code for all its full time employees who have completed
ninety (90) days of service. Covered employees may contribute up to 15% of their
compensation for each calendar year. In addition, the Company contributes up to
an additional 100% of the first $250 of compensation contributed by any covered
employee to the plan. An employee's maximum annual contribution to the plan is
$10,000. All contributions are funded currently.
AUDITORS
The Board of Directors has not selected or recommended the name of an
independent public accounting firm for approval or ratification by the
shareholders. The Board of Directors believes that it will be in the best
interests of the shareholders if it is free to make such determination based
upon all factors that are then relevant.
KPMG Peat Marwick LLP served as the Company's auditors for the fiscal year
ended September 30, 1998. A representative of KPMG Peat Marwick LLP will be
present at the Annual Meeting and will have the opportunity to make a statement
should such representative so desire. Such representative also will be available
to answer questions raised orally.
During the fiscal year ended September 30, 1998, KPMG Peat Marwick LLP's
services rendered to the Company consisted of auditing the Company's financial
statements. In this connection, KPMG Peat Marwick LLP performed such tests of
the Company's accounting records and other auditing procedures as were required
by generally accepted auditing standards.
SHAREHOLDER PROPOSALS
Appropriate proposals of eligible shareholders (an eligible shareholder
must be a record or beneficial owner of at least l% or $l,000 in market value of
securities entitled to be voted at the meeting and have held such securities for
at least one year) intended to be presented at the Company's next Annual Meeting
of Shareholders must be received by the Company no later than August 21, 1999
for inclusion in the Proxy Statement and form of proxy relating to that meeting.
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MISCELLANEOUS
ON WRITTEN REQUEST OF ANY RECORD OR BENEFICIAL SHAREHOLDER OF THE COMPANY,
THE COMPANY WILL PROVIDE, FREE OF CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1998, WHICH INCLUDES THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO. REQUESTS FOR A COPY OF FORM 10-K
SHOULD BE MADE IN WRITING AND ADDRESSED TO:
PATRICK J. BAGLEY
VICE PRESIDENT - FINANCE AND TREASURER
ROLLINS TRUCK LEASING CORP.
P.O. BOX 1791
WILMINGTON, DELAWARE 19899
THE COMPANY WILL CHARGE REASONABLE OUT-OF-POCKET EXPENSES FOR THE
REPRODUCTION OF EXHIBITS TO FORM 10-K SHOULD A SHAREHOLDER REQUEST COPIES OF
SUCH EXHIBITS.
The Company's Annual Report for the fiscal year ended September 30, 1998
has been mailed to shareholders under separate cover.
The Board of Directors knows of no business other than the matters set
forth herein which will be presented at the meeting. Inasmuch as matters not
known at this time may come before the meeting, the enclosed proxy confers
discretionary authority with respect to such matters as may properly come before
the meeting and it is the intention of the persons named in the proxy to vote in
accordance with their judgment on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
MICHAEL B. KINNARD, Secretary
Wilmington, Delaware
December 28, 1998
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ROLLINS TRUCK LEASING CORP.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF SHAREHOLDERS
Thursday, January 28, 1999, 8:30 A.M., E.S.T.
The undersigned hereby constitutes and appoints John W. Rollins, Jr. and
Michael B. Kinnard, and each of them jointly and severally, proxies with full
power of substitution, to vote all shares of Common Stock which the undersigned
is entitled to vote at the Annual Meeting of Shareholders of the Company to be
held on January 28, 1999 at 8:30 A.M. Eastern Standard Time, at the Rollins
Building, First Floor Auditorium, Wilmington, Delaware, or at any adjournment
thereof, on all matters set forth in the Notice of Annual Meeting and Proxy
Statement dated December 28, 1998, as follows:
(Mark only one box)
1. ELECTION OF DIRECTORS
Nominees: Patrick J. Bagley and Gary W. Rollins
/ / VOTE FOR all nominees listed above; except vote withheld from
following nominee (if any):
______________________________________________________________________
/ / VOTE WITHHELD FROM all nominees.
2. At their discretion, upon such matters as may properly come before the
Annual Meeting or any adjournment thereof.
(OVER)
<PAGE>
(CONTINUED FROM OTHER SIDE)
The undersigned acknowledges receipt of the aforesaid Notice of Annual
Meeting and Proxy Statement, each dated December 28, 1998, grants authority to
any of said proxies, or their substitutes, to act in the absence of others, with
all of the powers which the undersigned would possess if personally present at
such meeting, and hereby ratifies and confirms all that said proxies, or their
substitutes, may lawfully do in the undersigned's name, place and stead.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ROLLINS
TRUCK LEASING CORP. AND THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH YOUR INSTRUCTIONS. IF NO CHOICE IS SPECIFIED BY YOU, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1.
Please sign below, date and return promptly.
____________________________________________
____________________________________________
Signature(s) of Shareholder(s)
DATED: January __, 1999
Signature(s) should conform to name(s)
and title(s) stenciled hereon. Executors,
administrators, trustees, guardians and
attorneys should add their title(s) on
signing.
NO POSTAGE IS REQUIRED IF THIS PROXY IS RETURNED IN THE ENCLOSED ENVELOPE AND
MAILED IN THE UNITED STATES.
