SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ROLLINS TRUCK LEASING CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/_/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
/_/ $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(1)(3).
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
/X/ No Fee Required.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
/_/ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
1) Amount previously paid: _________________________________________________
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3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
___________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE>
ROLLINS TRUCK LEASING CORP.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 27, 2000
TO THE HOLDERS OF COMMON STOCK:
PLEASE TAKE NOTICE that the 2000 Annual Meeting of Shareholders of ROLLINS
TRUCK LEASING CORP. (the "Company"), a Delaware corporation, will be held at the
Rollins Building, First Floor Auditorium, Wilmington, Delaware, on Thursday,
January 27, 2000, at 8:30 A.M. (Eastern Time) for the following purposes:
1. To re-elect two (2) Class II Directors to the Board of Directors;
2. To amend the Restated Certificate of Incorporation of the Company to
increase the number of directors authorized on the Board to eight (8),
consisting of three (3) classes of directors each with three (3) year
staggered terms, Class I to have two (2) members, Class II to have
three (3) members and Class III to have three (3) members.
3. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournment thereof.
The Proxy Statement dated December 27, 1999 is attached.
The Board of Directors has fixed the close of business on December 17, 1999
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting.
You are cordially invited to attend the Annual Meeting. If you cannot be
present in person, please sign and date the enclosed proxy and promptly mail it
in the enclosed return envelope which requires no United States postage. Any
shareholder giving a proxy has the right to revoke it any time before it is
voted. If you hold your stock in a broker or bank "street" account and wish to
vote your shares in person at the meeting, your must obtain the appropriate
documentation from your broker or bank custodian (the record holder).
BY ORDER OF THE BOARD OF DIRECTORS
KLAUS M. BELOHOUBEK, Secretary
Dated: Wilmington, Delaware
December 27, 1999
----------------
YOU ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE WHICH REQUIRES NO UNITED STATES POSTAGE.
<PAGE>
PROXY STATEMENT
ROLLINS TRUCK LEASING CORP.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 27, 2000
The information concerning the enclosed proxy and the matters to be acted
upon at the Annual Meeting of Shareholders to be held on January 27, 2000 (the
"Annual Meeting") is submitted to the shareholders for their information.
SOLICITATION OF AND POWER TO REVOKE PROXY
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of 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 27, 1999.
A form of proxy is enclosed. Each proxy submitted will be voted as directed
but, if not otherwise specified, proxies solicited by the Board of Directors of
the Company will be voted (a) in favor of the candidates for election to the
Board of Directors as Class II Directors and (b) in favor of the Amendment to
the Restated Certificate of Incorporation to increase the authorized number of
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.
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<PAGE>
CAPITAL STOCK
The outstanding capital stock of the Company on December 17, 1999 consisted
of 56,678,738 shares of Common Stock, par value $l.00 per share. Holders of
Common Stock are entitled to one vote (non-cumulative) for each share of such
stock registered in their respective names at the close of business on December
17, 1999, the record date for determining shares entitled to notice of and to
vote at the Annual Meeting or any adjournment thereof.
A majority of the outstanding shares will constitute a quorum at the Annual
Meeting. Abstentions and broker non_votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business.
In accordance with the General Corporation Law of the State of Delaware, the
election of the nominees named herein as Directors (Proposal Number One) will
require the affirmative vote of a plurality of the votes of the shares present
in person or represented by proxy provided that a quorum is present at the
Annual Meeting. In the case of a plurality vote requirement (as in the election
of directors), where no particular percentage vote is required, the outcome is
solely a matter of comparing the number of votes cast in favor of a proposal to
the number of votes cast against the proposal, and hence only votes for or
against the proposal (and not abstentions or broker non-votes) are relevant to
the outcome. The affirmative vote of the holders of a majority of the
outstanding shares is required to approve the amendment to the Company's
Restated Certificate of Incorporation (Proposal Number Two).
As of October 31, 1999, only four persons were known to the Company to own
beneficially more than five percent (5%) of the outstanding shares of Common
Stock of the Company. The name and address of each such person, together with
the number of shares owned and the percentage of outstanding shares that
ownership represents and information as to Common Stock ownership of the Named
Executives identified in the Summary Compensation Table and the officers and
directors of the Company as a group (according to information received by the
Company) are set forth below:
<TABLE>
<CAPTION>
Number of Shares
Title of Names and Addresses and Nature of Percent of
Class of Beneficial Owners Beneficial Ownership(1) Class
- ----- -------------------- -------------------- ----------
<S> <C> <C> <C>
Common Patrick J. Bagley 88,605 0.2%
One Rollins Plaza
Wilmington, DE 19803
Common I. Larry Brown 129,625 0.2%
One Rollins Plaza
Wilmington, DE 19803
Common John W. Rollins 7,162,327 12.6%
One Rollins Plaza
Wilmington, DE 19803
Common John W. Rollins, Jr. 1,152,025 2.0%
One Rollins Plaza
Wilmington, DE 19803
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
Title of Names and Addresses and Nature of Percent of
Class of Beneficial Owners Beneficial Ownership(1) Class
- ----- -------------------- -------------------- ----------
<S> <C> <C> <C>
Common Henry B. Tippie 2,250,000 4.0%
P.O. Box 26557
Austin, TX 78755
Common Neuberger and Berman 4,567,930(2) 8.0%
605 Third Avenue
New York, NY 10158
Common Strong/Corneliuson Capital 3,696,050(3) 6.5%
Management, Inc.
100 Heritage Reserve
P.O. Box 2936
Milwaukee, WI 53201
Common Dimensional Fund Advisors, Inc. 3,257,850(4) 5.7%
1299 Ocean Avenue, Suite 1100
Santa Monica, CA 90401
Common All Directors and Officers as a 10,804,051 19.0%
Group (8 persons)
</TABLE>
- ----------------
(1) As to officers and directors, owned directly and of record. The above
numbers exclude the following shares of Common Stock subject to options
granted under the Company's 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, 44,450 shares; I. Larry
Brown, 44,750 shares; and all directors and officers as a group, 169,863
shares.
(2) Neuberger & Berman, LLC ("Neuberger") is a registered investment advisor.
In its capacity as investment advisor, Neuberger may have discretionary
authority to dispose of or to vote shares that are under its management.
As a result, Neuberger may be deemed to have beneficial ownership of such
shares. Neuberger 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 29, 1999, of the
shares set forth above, Neuberger had shared dispositive power with
respect to 4,567,930 shares, sole voting power with respect to 3,196,258
shares and shared voting power on 0 shares.
(3) Strong Capital Management, Inc. ("Strong") 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 may be revoked in whole or in part at
any time. Strong votes the shares owned by its clients according to its
statement of General Proxy Voting Policy (Proxy Voting Policy). The
general principle of the Proxy Voting Policy is to vote any beneficial
interest in an equity security prudently and solely in the best long-term
economic interest of
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<PAGE>
the client considering all relevant factors and without undue influence
from individuals or groups who may have an economic interest in the
outcome of a proxy vote.
(4) Dimensional Fund Advisors, Inc. ("Dimensional"), an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940,
furnishes investment advice to four investment companies registered under
the Investment Act of 1940, and serves as investment manager to certain
other investment vehicles, including commingled group trusts. (These
investment companies and investment vehicles are the "Portfolios"). In its
role as investment advisor and investment manager, Dimensional possesses
both voting and investment power over 3,257,850 shares of the Company's
stock as of September 30, 1999. The Portfolios own all securities reported
in this statement, and Dimensional disclaims beneficial ownership of such
securities.
PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
Two individuals are to be re-elected at the Annual Meeting to serve as
Class II Directors for a term of three years each, and until the election and
qualification of their successors. 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, 1999 (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.
5
<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 II (Term Expires 2003)
William B. Philipbar, Jr. Retired, Former President 1993 to date 74 12,655 --
and Chief Executive Officer,
Rollins Environmental
Services, Inc.
John W. Rollins, Jr. President and Chief 1967 to date 57 1,152,025(4) 2.0%
Operating Officer; Chairman
of the Board and Chief
Executive Officer, Matlack
Systems, Inc.(3)
Names of Directors Whose
Terms Have Not Expired
- ------------------------
Class III (Term Expires 2001)
John W. Rollins Chairman of the Board and 1954 to date 83 7,162,327(5) 12.6%
Chief Executive Officer;
Chairman of the Board, Dover
Downs Entertainment, Inc.
Henry B. Tippie Chairman of the Executive 1974 to date 72 2,250,000(6) 4.0%
Committee and Vice Chairman 1954 to 1965
of 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.
Class I (Term Expires 2002)
Patrick J. Bagley Vice President - Finance and 1998 to date 52 88,605 .2%
Treasurer; Vice President -
Finance and Treasurer,
Matlack Systems, Inc.
Gary W. Rollins President, Rollins, Inc.(7) 1975 to date 55 0(7) --
</TABLE>
- ------------------
6
<PAGE>
(l) 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 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, 44,450 shares.
(3) John W. Rollins is the uncle of Gary W. Rollins and the father of John W.
Rollins, Jr.
(4) Does not include 597,943* shares held as Co-Trustee and 23,625* shares held
by his wife.
(5) Does not include 253,116* shares held by his wife and 135,037* shares held
by his wife as Custodian for his minor children.
(6) Does not include 1,600,011* 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.
(7) Does not include 1,191,543* shares held as Co-Trustee, 141,073* shares held
as Trustee for his children and 124,118* shares representing a
proportionate interest of shares held by a general partnership.
- ------------------
*The Messrs. Rollins and Tippie disclaim any beneficial interest in these
holdings.
THE BOARD RECOMMENDS A VOTE FOR ALL OF THE NOMINEES.
BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board of Directors held four regularly scheduled meetings and one
special meeting during fiscal year 1999. All members of the Board attended all
of the meetings held.
Audit Committee. The Audit Committee consists of William B. Philipbar, Jr.,
Chairman, and Gary
7
<PAGE>
W. Rollins. The Audit Committee held three 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
five meetings during the last fiscal year. The Executive Committee has the power
to exercise all of the powers and authority of the Board of Directors in the
management of the business and affairs of the Company in accordance with the
provisions of the by-laws of the Company. During the past fiscal year, the
Executive Committee has performed all of the functions of a compensation
committee of the Board of Directors.
Compensation Committee. The Compensation Committee consists of Henry B.
Tippie, Chairman and William B. Philipbar, Jr. This committee was recently
formed and did not meet during the past fiscal year. Its functions will include
the determination of salary, incentive and other forms of compensation for key
executives of the Company, excluding stock options which are granted and
administered by the Stock Option Committee.
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 10 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 1999, the members of the Executive Committee of the
Board of Directors held primary responsibility for determining executive
compensation levels.
The Company is engaged in a highly competitive industry. As a consequence,
the Company views its ability to attract and retain qualified executives as the
cornerstone of its future success. In order to accomplish this objective, the
Company has endeavored to structure its executive compensation in a fashion
8
<PAGE>
that takes into account the Company's operating performance and the individual
performance of the executive. Of necessity, this analysis is subjective in
nature and not based upon a structured formula. The factors referred to above
are not weighted in an exact fashion.
Pursuant to the above compensation philosophy, the total annual
compensation of executive officers of the Company is made up of one or more of
three elements. The three elements are salary, an annual incentive compensation
package and, in some years, grants of stock options.
The salary of each executive officer is determined by the Executive
Committee. As previously stated, in making its determinations the Executive
Committee gives consideration to the Company's operating performance for the
prior fiscal year and the individual executive's performance.
The annual incentive compensation package for 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 Stock Option Committee
------------------- ----------------------
Henry B. Tippie, Chairman Henry B. Tippie, Chairman
John W. Rollins John W. Rollins
John W. Rollins, Jr.
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
9
<PAGE>
Company with copies of all Section 16(a) forms they file.
Based on its review of the copies of such forms received by it, the Company
believes that during its fiscal year ended 1999 all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with.
COMMON STOCK PERFORMANCE
The following graph reflects a comparison of the cumulative total
shareholder return on the Company's common stock with the S&P Composite 500
Index and S&P Truckers Index, respectively, for the five year period commencing
October 1, 1994 through September 30, 1999. The graph assumes that the value of
the investment in the Company's common stock and each index was 100 at September
30, 1994 and all dividends were reinvested. The comparisons in this table are
required by the Securities and Exchange Commission and, therefore, are not
intended to forecast or be necessarily indicative of any future return on the
Company's common stock.
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
<TABLE>
<CAPTION>
YEARS
----------------------------------------------------------------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Rollins Truck Leasing Corp. 100 93 100 154 159 141
S&P Truckers 100 93 72 119 84 72
S&P 500 100 130 156 219 239 306
</TABLE>
Assumes $100 invested on October 1, 1994
10
<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 Dover Downs Entertainment, Inc. ("Dover"). Gary
W. Rollins is an executive officer of Rollins, Inc. John W. Rollins, John W.
Rollins, Jr. and Henry B. Tippie are members of the Executive Committee of
Matlack Systems, Inc. ("Matlack"). The Executive Committee of Matlack performs
the functions of a Compensation Committee. John W. Rollins, Jr. serves on the
Board of Dover and is an executive officer of Matlack. Patrick J. Bagley serves
as a director of Dover and as a director and executive officer of Matlack. John
W. Rollins serves on the Compensation Committee and is an executive officer of
Dover.
EXECUTIVE COMPENSATION
Shown below is information concerning the annual compensation for services
in all capacities to the Company for the fiscal years ended September 30, 1997,
1998 and 1999, of those persons who were, at September 30, 1999, (i) the
Chairman and Chief Executive Officer and (ii) the other most highly compensated
executive officers of the Company whose total annual salary exceeded $100,000
(the "Named Executives"):
<TABLE>
<CAPTION>
Long Term Compensation
---------------------------------
Annual Compensation Awards Payouts
---------------------------- --------------------- -------
Other Restricted Stock All Other
Name and Annual Stock Options LTIP Compen-
Principal Salary Bonus Comp.(2) Awards(3) /SARS Payouts sation
Position Year(1) ($) ($) $ $ # $ $
- -------- ------- ------- ------ -------- ---------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John W. Rollins 1999 540,000 -0- - -0- -0- -0- -0-
Chairman of the Board 1998 560,000 -0- - -0- -0- -0- -0-
and CEO 1997 550,000 -0- - -0- -0- -0- -0-
Patrick J. Bagley 1999 276,250 75,000 - -0- 12,000 -0- -0-
Vice Pres. - Finance, 1998 261,250 65,000 - -0- 16,200 -0- -0-
Treasurer and CFO 1997 246,250 50,000 - -0- -0- -0- -0-
I. Larry Brown
President and CEO of 1999 300,000 165,758 - -0- 15,000 -0- -0-
Rollins Leasing Corp. 1998 269,231 476,682 - -0- 18,000 -0- -0-
John W. Rollins, Jr. 1999 700,000 -0- - -0- 15,000 -0- -0-
President and COO 1998 660,000 -0- - -0- 122,500 -0- -0-
1997 600,000 -0- - -0- 150,000 -0- -0-
Henry B. Tippie 1999 540,000 -0- - -0- -0- -0- -0-
Chairman - Executive 1998 560,000 -0- - -0- -0- -0- -0-
Committee 1997 550,000 -0- - -0- -0- -0- -0-
</TABLE>
11
<PAGE>
- -------------
(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.
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, 1999 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 at
% of Total Assumed Annual Rates of Stock Price
Options 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. 15,000 3.5% $9.625 3/17/07 - $ 68,925 $ 165,105
I. Larry Brown 15,000 3.5% $9.625 3/17/07 - $ 68,925 $ 165,105
Patrick J. Bagley 12,000 2.8% $9.625 3/17/07 - $ 55,140 $ 132,084
All emloyees as a group(3) 425,200 100.0% $9.625 3/17/07 -
to to
$11.00 7/28/07 - $ 1,960,344 $ 4,695,906
Total potential stock price appreciation from March 18, 1999 to March 17, 2007
for all stockholders at assumed rates of stock
price appreciation.(4) - $261,052,891 $625,333,878
</TABLE>
- -------------------
(1) Options were granted on March 18, 1999 and July 29, 1999.
(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, non-transferability 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 415,200 options granted March 18, 1999 at an exercise price of
$9.625 and 10,000 options granted July 29, 1999 at an exercise price of
$11.00.
12
<PAGE>
(4) Based upon a price of $9.625 on March 17, 1999 and a total of 56,812,381
shares of Common Stock outstanding on October 31, 1999.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The following table summarizes option exercises during fiscal year 1999 by
the Company's Named Executives, and the value of the options held by such
persons as of September 30, 1999. The Company has not granted and does not have
any Stock Appreciation Rights outstanding.
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Value Options at Options at
Shares Acquired Realized FY-End (#) FY-End ($)
Name(1) on Exercise(#) ($)(2) Exercisable/Unexercisable Exercisable/Unexercisable(3)
- ------- --------------- -------- ------------------------- ----------------------------
<S> <C> <C> <C> <C> <C>
Patrick J. Bagley 10,000 $66,413 44,450 / 39,000 $137,869 / $51,203
I. Larry Brown 10,000 $75,225 44,750 / 43,500 $137,869 / $52,703
</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, 1999 was $10.125
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 1999.
PROXY-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. Pensionable earnings includes regular salaries or wages,
commissions, bonuses, overtime earnings and short-term disability income
protection benefits.
13
<PAGE>
Retirement benefits are not subject to any reduction for Social Security
benefits or other offset amounts. An employee's benefits may be paid in certain
alternative forms having actuarially equivalent values. Retirement benefits are
fully vested at the completion of five years of credited service or, if earlier,
upon reaching age 55. The maximum annual benefit under a qualified pension plan
is currently $135,000 beginning at the Social Security retirement age (currently
age 65).
The Company maintains a non-qualified, defined benefit plan, called the
Excess Benefit Plan, which covers those participants of the Pension Plan whose
benefits are limited by the Internal Revenue Code. A participant in the Excess
Benefit Plan is entitled to a benefit equaling the difference between the amount
of the benefit payable without limitation and the amount of the benefit payable
under the Pension Plan.
Annual pension benefit projections for the Named Executives assume: (a)
that the participant remains in the service of the Company until age 65; (b)
that the participant's earnings continue at the same rate as paid in the fiscal
year ended September 30, 1999 during the remainder of his service until age 65;
and (c) that the Plans continue without substantial modification.
The estimated annual benefit at retirement for each of the following Named
Executives of the Company is: Patrick J. Bagley, $115,787; I. Larry Brown,
$225,950; and John W. Rollins, Jr., $243,759. 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
currently $10,500. All contributions are funded currently.
PROPOSAL NUMBER TWO
PROPOSAL TO AMEND THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION
The Company's stockholders are asked to approve an amendment to the
Company's Restated Certificate of Incorporation to increase the number of
directors authorized on the Board of Directors to eight (8), consisting of three
(3) classes of directors each with three (3) year staggered terms, Class I to
have two (2) members, Class II to have three (3) members and Class III to have
three (3) members.
Article Fifth of the Restated Certificate of Incorporation of the Company
currently states that the property and business of the Company shall be managed
by a Board of up to six (6) directors. The directors are divided into three (3)
classes, Classes I, II and III, consisting of two (2) directors in each class.
Each director is elected for a term of three (3) years. The terms of the
directors are staggered so that at each annual meeting the terms of two (2)
directors in a class shall expire.
The Board of Directors has unanimously recommended that the shareholders
approve a proposal to amended the Restated Certificate of Incorporation of the
Company to increase the size of the Board of Directors from its current size of
six (6) directors to a Board of Directors consisting of eight (8) directors. One
additional director would be placed in each of Class II and Class III.
14
<PAGE>
If the shareholders approve this Proposal, the Board will have the
authority to fill both vacancies without further shareholder approval pursuant
to Section 223 of the General Corporation Law of the State of Delaware.
The purpose of the proposed Amendment is twofold. The first purpose is to
provide additional flexibility to the Board with respect to adding one or more
directors from either within or outside the Company whose skills and experience
would benefit the Company and the conduct and operations of the Board. The
second purpose is to create an opening on the Board which would allow for the
election to the Board of Directors of a nominee of UPS Logistics Group ("UPS
Logistics"), a unit of United Parcel Service, Inc., pursuant to rights recently
granted to UPS Logistics under the term of the Company's alliance with UPS
Logistics.
As previously reported by the Company, on November 12, 1999, the Company
executed a stock purchase agreement with the UPS Logistics whereby a subsidiary
of the Company would acquire UPS Truck Leasing. UPS Truck Leasing, which has its
headquarter in Atlanta, Georgia, is in the truck rental and leasing business and
currently maintains approximately 9,000 trucks from 54 facilities throughout the
United States.
The Company also executed an asset sales agreement to sell the assets and
business of Rollins Logistics Inc., its dedicated carriage and logistics
subsidiary, to UPS Logistics. Closing under these two agreements is subject to
normal conditions and is expected to occur in early January 2000.
In connection with the above, the Company will also enter into a Strategic
Alliance Agreement (the "Alliance") with UPS Logistics. Under the terms of the
Alliance, Rollins would become the preferred provider of lease and rental
vehicles and other ancillary services to Worldwide Dedicated Services, Inc., a
unit of the UPS Logistics Group. In turn, the UPS Logistics Group would become
the preferred provider of logistics management and dedicated logistics services
to Rollins and its customers.
The Alliance is for an initial term of five years and during this term, UPS
Logistics reserves the right to appoint a nominee of UPS Logistics to serve on
the Company's Board. UPS Logistics has not yet indicated whether it will seek to
exercise this right or the identity of any prospective nominee.
The Company is expected to issue 2,000,000 shares of Common Stock as
partial consideration for the purchase of UPS Truck Leasing with the remainder
of the consideration to be paid in cash. The Company is expected to receive cash
as consideration for the sale of Rollins Logistics Inc.
The 2,000,000 shares of Common Stock referred to above will represent
approximately 3.5% of the Company's outstanding shares of Common Stock once
issued and UPS Logistics has agreed to vote its shares either (a) in accordance
with the recommendations of the Company's Board of Directors or (b) on the same
percentage basis as all other shareholders of the Company. The Company has
agreed to provide UPS Logistics customary demand and piggy-back registration
rights in connection with the issuance of these shares. The voting and
registration obligations will continue for two years following the termination
of the Alliance. The Company's obligation to allow the UPS Logistics' board
nominee to serve on its Board will terminate if UPS Logistics ceases to own at
least 1,000,000 shares of the Company's Common Stock.
Pursuant to Section 242 of the General Corporation Law of the State of
Delaware, the affirmative vote of the holders of a majority of the stock
entitled to vote is required to approve this Proposal.
15
<PAGE>
Proposal Number Two only addresses the amendment to the Company's Restated
Certificate of Incorporation to increase the number of directors authorized on
the Board of Directors to eight. The purchase of UPS Truck Leasing, the sale of
the assets and business of Rollins Logistics, and the Alliance with UPS
Logistics do not require shareholder approval and, therefore, are not being
proposed as items to be voted on at the Annual Meeting. Closing on these
transactions is anticipated to occur prior to the Annual Meeting and is not
contingent on the approval of Proposal Number Two.
The amendment requires the following revisions to the first paragraph of
Article Fifth to the Company's Restated Certificate of Incorporation (words in
caps are to be added and words in brackets are to be deleted):
"The property and business of this Corporation shall be managed by a Board
of up to EIGHT [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 2002 [1981]. The second class (Class II) shall consist of
THREE (3) [two (2)] directors and the term of office of such class shall
expire at the Annual Meeting of Stockholders in 2003 [1979]. The third
class (Class III) shall consist of THREE (3) [two (2)] directors and the
term of such third class shall expire at the Annual Meeting of Stockholders
in 2001 [1980]. At each annual election, commencing at the next Annual
Meeting of Stockholders in 2000 [1979], the successors of the class of
directors whose term expires at that 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."
THE BOARD RECOMMENDS A VOTE FOR PROPOSAL NUMBER TWO.
AUDITORS
The Board of Directors has not selected or recommended the name of an
independent public accounting firm for approval or ratification by the
shareholders. The Board of Directors believes that it will be in the best
interests of the shareholders if it is free to make such determination based
upon all factors that are then relevant.
KPMG LLP served as the Company's auditors for the fiscal year ended
September 30, 1999. A representative of KPMG LLP will be present at the Annual
Meeting and will have the opportunity to make a statement should such
representative so desire. Such representative also will be available to answer
questions raised orally.
During the fiscal year ended September 30, 1999, KPMG LLP's services
rendered to the Company consisted of auditing the Company's financial
statements. In this connection, KPMG LLP performed such tests of the Company's
accounting records and other auditing procedures as were required by generally
accepted auditing standards.
SHAREHOLDER PROPOSALS
16
<PAGE>
Appropriate proposals of eligible shareholders (an eligible shareholder
must be a record or beneficial owner of at least l% or $l,000 in market value of
securities entitled to be voted at the meeting and have held such securities for
at least one year) intended to be presented at the Company's next Annual Meeting
of Shareholders must be received by the Company no later than August 29, 2000
for inclusion in the Proxy Statement and form of proxy relating to that meeting.
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, 1999, 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, 1999
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
KLAUS M. BELOHOUBEK, Secretary
Wilmington, Delaware
December 27, 1999
17
<PAGE>
ROLLINS TRUCK LEASING CORP.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF SHAREHOLDERS
Thursday, January 27, 2000, 8:30 A.M., E.T.
The undersigned hereby constitutes and appoints John W. Rollins, Jr. and
Klaus M. Belohoubek, and each of them jointly and severally, proxies with full
power of substitution, to vote all shares of Common Stock which the undersigned
is entitled to vote at the Annual Meeting of Shareholders of the Company to be
held on January 27, 2000 at 8:30 A.M. Eastern 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 27, 1999, as follows:
(Mark only one box)
1. ELECTION OF DIRECTORS
Nominees: William B. Philipbar, Jr. and John W. Rollins, Jr.
|_| VOTE FOR all nominees listed above; except vote withheld from
following nominee (if any):
- --------------------------------------------------------------------------------
|_| VOTE WITHHELD FROM all nominees.
2. AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
|_| FOR |_| AGAINST the proposal to amend the Company's Restated
Certificate of Incorporation to increase the number of
directors to eight.
3. At their discretion, upon such matters as may properly come before the
Annual Meeting or any adjournment thereof.
(OVER)
<PAGE>
(CONTINUED FROM OTHER SIDE)
The undersigned acknowledges receipt of the aforesaid Notice of Annual
Meeting and Proxy Statement, each dated December 27, 1999, grants authority to
any of said proxies, or their substitutes, to act in the absence of others, with
all the powers which the undersigned would possess if personally present at such
meeting, and hereby ratifies and confirms all that said proxies, or their
substitutes, may lawfully do in the undersigned's name, place and stead.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF 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 NUMBER ONE AND PROPOSAL NUMBER TWO.
Please sign below, date and return promptly.
--------------------------------------------
--------------------------------------------
Signature(s) of Shareholder(s)
DATED: January , 2000
Signature(s) should conform to name(s) and
title(s) stenciled hereon. Executors,
administrators, trustees, guardians and attorneys
should add their title(s) on signing.
NO POSTAGE IS REQUIRED IF THIS PROXY IS RETURNED IN THE ENCLOSED ENVELOPE AND
MAILED IN THE UNITED STATES.
