RURAL METRO CORP /DE/, S-4, 1997-10-07

RURAL METRO CORP /DE/
S-4, 1997-10-07
LOCAL & SUBURBAN TRANSIT & INTERURBAN HWY PASSENGER TRANS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 7, 1997

REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-4

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

RURAL/METRO CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 4119 AND 7389 86-0746929
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

------------------------

8401 EAST INDIAN SCHOOL ROAD

SCOTTSDALE, ARIZONA 85251
(602) 994-3886
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

WARREN S. RUSTAND

JAMES H. BOLIN
RURAL/METRO CORPORATION
8401 EAST INDIAN SCHOOL ROAD
SCOTTSDALE, ARIZONA 85251
(602) 994-3886
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------

COPIES TO:

JEAN E. HARRIS, ESQ.
MICHAEL L. KAPLAN, ESQ.
O'CONNOR, CAVANAGH, ANDERSON
KILLINGSWORTH & BESHEARS, P.A.
ONE EAST CAMELBACK, SUITE 1100
PHOENIX, ARIZONA 85012
------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practical after the Registration Statement becomes effective.

If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
=======================================================================================================
PROPOSED MAXIMUM
AGGREGATE PROPOSED MAXIMUM
TITLE OF EACH CLASS OF ACCOUNT TO BE OFFERING OFFERING PRICE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE(1) PER SHARE(1) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 Par Value...... 3,500,000 Shares $30.875 $108,062,500 $32,746.22
=======================================================================================================
</TABLE>

(1) Estimated solely for the purpose of calculating the amount of registration
fee pursuant to Rule 457 (c).
------------------------

PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS WHICH
CONSTITUTES PART OF THIS REGISTRATION STATEMENT ALSO RELATES TO AN AGGREGATE OF
53,060 SHARES OF THE REGISTRANT'S COMMON STOCK REGISTERED ON FORM S-4,
REGISTRATION NO. 33-95518, FOR WHICH A REGISTRATION FEE OF $434.55 HAS BEEN
PREVIOUSLY PAID.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2

PROSPECTUS

3,553,060 SHARES

RURAL/METRO CORPORATION

COMMON STOCK

------------------------

This Prospectus covers 3,553,060 shares of Common Stock that may be issued
and sold by Rural/Metro Corporation (the "Company") from time to time in
connection with the acquisition by the Company of other businesses. It is
expected that the terms of any such acquisitions will be determined by
negotiations with the owners or controlling persons of the businesses to be
acquired and that the shares of Common Stock issued in connection with such
acquisitions will be valued at prices reasonably related to market prices
current either at the time of agreement on the terms of an acquisition or at or
about the time of delivery of the shares.

No underwriting discounts or commissions will be paid, although finder's
fees may be paid from time to time in connection with specific acquisitions. Any
person receiving such fee may be deemed to be an Underwriter within the meaning
of the Securities Act of 1933, as amended (the "Securities Act").

The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "RURL." Application will be made to list the shares of Common Stock
offered hereby on the Nasdaq National Market. The last reported sale price of
the Company's Common Stock on the Nasdaq National Market on October 3, 1997 was
$31.50.

All expenses of the Offering will be paid by the Company.

FOR INFORMATION CONTAINING CERTAIN FACTORS RELATING TO THIS OFFERING, SEE
"RISK FACTORS" BEGINNING ON PAGE 5.

------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAVE THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

The date of this Prospectus is October , 1997
<PAGE> 3

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy and
information statements and other information may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, New York, New
York 10048, and Chicago Regional Office, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can be obtained from the Public
Reference Section of the Commission, Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 upon payment of the prescribed fees. The
Commission also maintains a Web site that contains reports, proxy and
information statements, and other materials that are filed through the
Commission's Electronic Data Gathering, Analysis, and Retrieval system. This Web
site can be accessed at http://www.sec.gov. The Common Stock of the Company is
quoted on the Nasdaq National Market.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Commission are
incorporated herein by reference except as superseded or modified herein: (1)
the Company's Annual Report on Form 10-K for the fiscal year ended June 30,
1997; (2) the Company's Current Report on Form 8-K dated July 15, 1997 as
amended by the Form 8-K/A dated August 12, 1997; and (3) the Company's
Registration Statement on Form 8-A filed July 8, 1993 as amended by Form 8-A/A
filed February 2, 1995, registering the Company's Common Stock under Section
12(g) of the Exchange Act. All documents filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date hereof and prior to the termination of the offering of
the Common Stock registered hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
of such documents. Any statements contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.

The Company will provide without charge to each person to whom this
Prospectus is delivered, upon a written request of such person, a copy of any or
all of the foregoing documents incorporated by reference into this Prospectus
(other than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Requests for such copies should
be delivered to the Investor Relations Department, 8401 East Indian School Road,
Scottsdale, Arizona 85251.

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<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements appearing elsewhere or
incorporated by reference in this Prospectus. This Prospectus contains
forward-looking statements that involve risks and uncertainties. The Company's
actual results may differ materially from the results discussed in the
forward-looking statements. Factors that might cause such a difference include,
but are not limited to, those discussed under "Risk Factors."

THE COMPANY

The Company provides "911" emergency and general transport ambulance
services, fire protection services, and other safety and health care related
services to municipal, residential, commercial, and industrial customers. The
Company believes that it is the only multi-state provider of both ambulance and
fire protection services in the United States and that it ranks as one of the
largest private-sector providers of ambulance services and fire protection
services in the world. The Company currently serves over 350 communities in 21
states, Canada, and Latin America. Ambulance services and fire protection
services accounted for approximately 81% and 13%, respectively, of the Company's
revenue for the fiscal year ended June 30, 1997.

Founded in 1948, the Company has been instrumental in the development of
protocols and policies applicable to the emergency services industry. The
Company has grown significantly since the late 1970s both through internal
growth and through acquisitions. To manage this growth, the Company invested in
the development of management and operational systems that have resulted in
productivity gains and increased profitability. The Company believes its current
systems and controls position it to continue its growth internally as well as
through acquisitions and enable it to operate profitably in both large and small
communities. The Company completed eight acquisitions in the fiscal year ended
June 30, 1994, 11 acquisitions in the fiscal year ended June 30, 1995, 18
acquisitions in the fiscal year ended June 30, 1996, and 19 acquisitions in the
fiscal year ended June 30, 1997.

Based on generally available industry data, it is estimated that annual
expenditures for ambulance services in the United States are between $4 billion
and $7 billion. Various factors, including the growth and aging of the
population, and trends towards the use of outpatient services and specialized
treatment facilities in an effort to contain health care costs have increased
the demand for ambulance services. At the same time, industry factors have
increased the standards of pre-hospital emergency care and have required faster
ambulance response times, increasing the capital and technological resources
necessary to provide higher levels of service. These factors, combined with the
historically fragmented nature of the ambulance service industry, are
contributing to consolidation within the industry.

Market-driven forces changing the health care industry are impacting the
ambulance industry as well. The Company believes the trend toward managed care
and away from fee-for-service arrangements is furthering industry consolidation.
The move to managed care benefits larger ambulance services providers, which can
service a larger portion of a managed care provider's needs. This allows the
managed care provider to reduce its number of suppliers, cutting administrative
costs and allowing them to negotiate more favorable rates.

Volunteer fire departments, tax-supported fire districts, and municipal
fire departments constitute the primary providers of fire protection services in
the United States. Because emergency medical response represents a significant
portion of fire response activity within many fire departments, the Company
believes that its ambulance and fire protection services operations are
complementary. The Company believes that its integration of such services can
provide operating economies, optimal coordination of the delivery of services,
efficiencies in the use of personnel and equipment, and enhanced levels of
service, especially in lower-utilization communities. Additionally, a variety of
economic pressures on the public sector may increase opportunities for
privatization and public/private partnerships in fire protection services.

The Company pursues a strategy designed to enable it to expand its business
in existing service areas, establish additional service areas both domestically
and internationally, respond to the needs of the public sector and health care
providers, expand fire protection services, integrate existing services, and
improve

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<PAGE> 5

productivity. This strategy includes plans to (i) acquire additional ambulance
service providers operating in metropolitan areas and in communities surrounding
the metropolitan areas that the Company currently serves or plans to serve; (ii)
expand its emergency ambulance services through the pursuit of new contracts
with municipalities and fire districts and its general ambulance services
through increased marketing efforts to, and pursuit of other alliances with,
managed care providers and other health care providers; (iii) expand its fire
protection services into selected additional service areas through the pursuit
of opportunities to supplant or enhance services provided by volunteer fire
departments, expand its services to newly developed communities, and to develop
public/private partnerships with tax supported fire districts and municipal fire
departments; (iv) continue the integration of its fire protection and ambulance
services to maximize operational efficiencies and synergies; and (v) improve its
productivity through the more efficient utilization of equipment and personnel.

The Company was incorporated in Arizona in 1948 and reincorporated in
Delaware in May 1993. Unless the context indicates otherwise, all references to
the "Company" refer to Rural/Metro Corporation and its subsidiaries. The Company
maintains its principal executive offices at 8401 East Indian School Road,
Scottsdale, Arizona 85251, and its telephone number is (602) 994-3886.

SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)

<TABLE>
<CAPTION>
FISCAL YEAR ENDED JUNE 30,
-----------------------------------------------
PROFORMA
1995 1996 1997 1997(1)
-------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
OPERATING DATA:
Revenue......................................... $171,583 $250,263 $319,805 $375,511
Operating income................................ 15,940 24,664 27,804 34,075
Interest expense, net........................... 3,059 5,108 5,720 7,911
Net income(2)................................... 7,593 11,512 12,720 15,070
Earnings per share(3)........................... 0.84 1.14 1.04 1.13
Weighted avg. number shares..................... 8,249 10,075 12,271 13,334
</TABLE>

<TABLE>
<CAPTION>
JUNE 30,
1997
--------
<S> <C>
BALANCE SHEET DATA:
Working capital................................................................. $ 94,766
Total assets.................................................................... 364,066
Current portion of long-term debt............................................... 9,814
Long-term debt, net of current portion.......................................... 144,643
Stockholders' equity............................................................ 159,808
</TABLE>

- ---------------
(1) Reflects the pro forma effects of the results of operations of the fiscal
1997 acquisitions as if each transaction had occurred as of the beginning of
the period.

(2) Net income for the year ended June 30, 1995 reflects the effect of an
extraordinary loss of $693,000.

(3) Earnings per share for the year ended June 30, 1995 include the effect of an
extraordinary loss of $0.08 per share.

4
<PAGE> 6

RISK FACTORS

DEPENDENCE ON CERTAIN BUSINESS RELATIONSHIPS

The Company depends to a great extent on certain contracts with
municipalities or fire districts to provide "911" emergency ambulance services
and fire protection services. The Company's five largest contracts accounted for
approximately 22% and 18% of total revenue for the fiscal years ended June 30,
1996 and 1997 respectively, with one contract accounting for approximately 7%
and 5% of total revenue for the same periods. The loss or cancellation of any
one or more of these contracts could have a material adverse effect on the
Company and its operations. No assurance can be given that the Company will be
successful in retaining its existing contracts or in obtaining new contracts for
ambulance services or for fire protection services. The Company also faces the
risk that areas in which it provides fire protection services through
subscription arrangements with residents and businesses will be converted to
tax-supported fire districts or annexed by municipalities. See
"Business -- Marketing and Sales," "Business -- Contracts" and "Business --
Competition."

ACQUISITION STRATEGY

The Company's strategy with respect to ambulance services depends in large
part on its continued ability to acquire and to operate successfully additional
ambulance service providers. The Company completed eight acquisitions in fiscal
1994, 11 acquisitions in fiscal 1995, 16 acquisitions in fiscal 1996, and 18
acquisitions of ambulance service providers in 1997. There can be no assurance
that the Company will be able to identify additional suitable acquisition
candidates, that it will be able to consummate any such acquisitions, or that it
will be able to integrate any such acquisitions successfully into its
operations. The Company expects to use cash and securities, including Common
Stock, as the principal consideration for future acquisitions. The Company's
acquisition program could be adversely affected if the Company does not generate
sufficient cash for future acquisitions from existing operations or through
external financings. There can be no assurance that the Company's operations
will generate sufficient cash for acquisitions, that any additional financings
for acquisitions will be available if and when needed or on terms acceptable to
the Company, or that financing that is obtained will be able to be deployed on a
prompt basis. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

POSSIBLE ADVERSE CHANGES IN REIMBURSEMENT RATES OF COVERAGE

Payments received from third-party payors (including Medicare, Medicaid,
and private insurers) represent a substantial portion of the Company's ambulance
receipts. The Company derived approximately 79% and 74% of its net ambulance fee
collections from such third-party payors during 1996 and 1997; including 27% and
26% from Medicare, respectively. There are continuing efforts of third-party
payors to control expenditures for health care, including proposals to revise
reimbursement policies.

During June 1997 HCFA issued proposed rules that would revise Medicare
policy on the coverage of ambulance services. These proposed rules have been
subject to public comment and, despite the passage of new laws addressing
changes to the reimbursement of ambulance services by Medicare (discussed
below), have not yet been withdrawn. The proposed new HCFA rules have not been
finalized. See "Business -- Reimbursement."

In addition, in August 1997, the "Balanced Budget Act of 1997" (the "Budget
Act") became law. The Budget Act provides for the development, negotiation, and
implementation of a prospective fee schedule for ambulance services between HCFA
and ambulance service providers by January 2000. The Budget Act also reduces the
annual rate adjustment for Medicare reimbursements from the Consumer Price Index
(CPI) to CPI less one percentage point.

If the proposed HCFA rules were to be finalized prior to the negotiation of
a prospective fee schedule as stipulated in the Budget Act, and the Company were
unable to mitigate the effect of the new rules, the Company's results of
operations could be adversely effected. The final outcome of the proposed rules
and the effect of the prospective fee schedule is uncertain. However, changes in
reimbursement policies, or other government action, together with the financial
instability of private third-party payors and budget pressures on payor sources
could influence the timing and, potentially, the ultimate receipt of
reimbursements. A reduction in coverage or reimbursement rates by third-party
payors could have a material adverse effect on the

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<PAGE> 7

Company's results of operations. See "Business -- Billings and Collections,"
"Business -- Government Regulation," and "Business -- Reimbursement."

IMPACT OF RATE STRUCTURES AND LIMITATIONS ON RATES OF RETURN

State or local government regulations or administrative policies regulate
rate structures in most states in which the Company conducts ambulance
operations. In certain service areas in which the Company is the exclusive
provider of services, the municipality or fire district sets the rates for
emergency service pursuant to a master contract and establishes the rates for
general ambulance services that the Company is permitted to charge. Rates in
most service areas are set at the same amounts for emergency and general
ambulance services. The State of Arizona establishes a rate of return on sales
the Company is permitted to earn in determining the ambulance service rates the
Company may charge in that state. Ambulance services revenue generated in
Arizona accounted for approximately 11% and 9% of total revenue for the fiscal
years ended June 30, 1996 and 1997, respectively. No assurance can be given that
the Company will be able to receive ambulance service rate increases on a timely
basis where rates are regulated or to establish or maintain satisfactory rate
structures where rates are not regulated. Under present coverage programs with
third-party payors, the Company faces the continuing risk of nonreimbursement to
the extent that uninsured individuals require ambulance service. Changes in
demographics in the Company's markets could increase the Company's risk of
doubtful accounts which, in turn, could have a material adverse effect on the
Company's operating results. See "Business -- Billings and Collections" and
"Business -- Governmental Regulation."

Municipalities and fire districts negotiate the payments to be made to the
Company for fire protection services pursuant to master contracts. These master
contracts are based on a budget and on level of effort or performance criteria
desired by the municipalities and fire districts. No assurance can be given that
the Company will be successful in negotiating or maintaining profitable
contracts with municipalities and fire districts. See "Business -- Contracts."

GOVERNMENTAL REGULATION

Numerous federal, state, and local laws and regulations govern various
aspects of the business of ambulance service providers, covering matters such as
licensing, rates, employee certification, environmental matters, and other
factors. Certificates of necessity may be required from state or local
governments to operate ambulance services in a designated service area. Master
contracts from governmental authorities are subject to risks of cancellation or
unenforceability as a result of budgetary and other factors and may subject the
Company to certain liabilities or restrictions which traditionally have applied
only to governmental bodies or to which they are otherwise immune. There can be
no assurance that federal, state, or local governments will not adopt laws or
regulations that would increase the Company's cost of doing business, lower
reimbursement levels, or otherwise have a material adverse effect on the
Company's business. See "Business -- Governmental Regulation" and
"Business -- Reimbursement."

INDUSTRY CONSIDERATIONS

Numerous legislative proposals have been considered that would result in
major reforms in the United States health care system. The Company cannot
predict which, if any, health care reforms may be proposed or enacted or the
effect that any such legislation would have on the Company's business. In
addition, managed care providers are attempting to contain health care costs
through the use of outpatient services and specialized treatment facilities. No
assurance can be given that changing industry practices will not have an adverse
effect on the Company.

COMPETITION

The ambulance service industry is highly competitive. The Company currently
encounters competition in providing ambulance services from governmental
entities (including fire districts), hospitals, other national ambulance service
providers, large regional ambulance service providers, and numerous local and
volunteer private providers. In addition, there can be no assurance that
municipalities, fire districts, or health care

6
<PAGE> 8

organizations that currently contract for ambulance services will not choose to
provide ambulance services directly in the future. The Company is experiencing
increased competition from fire departments to provide emergency ambulance
service. Some of the Company's current competitors and certain potential
competitors have greater capital and other resources than the Company.
Tax-supported fire districts, municipal fire departments, and volunteer fire
departments represent the principal providers of fire protection services for
residential and commercial properties. Private providers represent only a small
portion of the total fire protection market and generally provide services where
a tax-supported municipality or fire district has decided to contract for the
provision of fire protection services or has not assumed the financial
responsibility for fire protection. In these situations, the Company provides
services for a municipality or fire district on a contract basis or provides
fire protection services directly to residences and businesses on a subscription
basis. There can be no assurance that the Company will be able to obtain
additional fire protection business on a contractual or subscription basis, that
fire districts or municipalities will not choose to provide fire protection
services directly in the future, or that areas in which the Company provides
services through subscriptions will not be converted to tax-supported fire
districts or annexed by municipalities. See "Business -- Competition."

DEPENDENCE ON MANAGEMENT AND OTHER KEY PERSONNEL

The Company's success depends upon the retention of principal key personnel
and the recruitment and retention of additional key personnel. The loss of
existing key personnel or the failure to recruit and retain necessary additional
personnel would adversely affect the Company's business prospects. There can be
no assurance that the Company will be able to retain its current personnel or
attract and retain necessary additional personnel. The Company's internal growth
and its expansion into new geographic areas will require additional expertise,
such as marketing and operational management. These growth and expansion
activities will further increase the demand on the Company's resources and
require the addition of new personnel and the development of additional
expertise by existing personnel. The failure of the Company to attract and
retain personnel with the requisite expertise or to develop internally such
expertise could adversely affect the prospects for the Company's success. The
Company entered into three-year employment agreements with its executive
officers in May 1993, which were renewed in December 1995, and has entered into
similar agreements with certain other executive officers as they have joined the
Company. The Company maintains "key person" insurance on several of its key
executive officers. See "Management."

CONTROL BY CURRENT STOCKHOLDERS

The directors, executive officers, and their affiliates currently own
beneficially approximately 14%, and the Company's Employee Stock Ownership Plan
(the "ESOP") currently holds approximately 8%, of the outstanding shares of
Common Stock. Accordingly, these persons, if they act as a group, likely will be
able to significantly influence the election of the Company's directors and the
outcome of matters requiring approval by the stockholders of the Company.

CHANGE IN CONTROL PROVISIONS

The Company's Second Restated Certificate of Incorporation (the "Restated
Certificate") and the Delaware General Corporation Law (the "General Corporation
Law") contain provisions that may have the effect of making more difficult or
delaying attempts by others to obtain control of the Company, even when these
attempts may be in the best interests of stockholders. The Restated Certificate
also authorizes the Board of Directors, without stockholder approval, to issue
one or more series of preferred stock which could have voting and conversion
rights that adversely affect the voting power of the holders of Common Stock and
provides for a classified board of directors. The General Corporation Law also
imposes conditions on certain business combination transactions with "interested
stockholders" (as defined therein).

The Company has also adopted a Rights Plan whereby, if and when the Rights
become exercisable, holders of shares of Common Stock will be entitled to
purchase one one-thousandth of a share of Series A Junior Participating
Preferred Stock at a purchase price of $145 (subject to certain antidilution
adjustments). The Rights will expire 10 years after issuance, and will be
exercisable only if a person or group becomes the beneficial owner of 15% or
more of the Common Stock (such person or group, a "15% holder") or commences

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<PAGE> 9

a tender or exchange offer which would result in the offeror beneficially owning
15% or more of the Common Stock. If the Rights become exercisable, each Right,
unless redeemed by the Company, entitles the holder to purchase for $145 an
amount of Common Stock of the Company, or in certain circumstances a combination
of securities and/or assets or the common stock of the acquiror, having a market
value of twice the purchase price.

The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors, except pursuant to an
offer conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors since the Rights may be redeemed by the Company at $.01
per Right prior to 10 days (as such period may be extended) after the public
announcement of the existence of a 15% holder.

POSSIBLE VOLATILITY OF STOCK

The market price of the Company's Common Stock has increased since the
Company's initial public offering in July 1993. See "Price Range of Common
Stock." The period was marked by generally rising stock prices, favorable
industry conditions, and improved operating results by the Company. The trading
price of the Company's Common Stock in the future could be subject to wide
fluctuations in response to quarterly variations in operating results of the
Company and others in its industry, actual or anticipated announcements
concerning the Company or its competitors, including government regulations and
reimbursement changes, the announcement and implementation of health care reform
proposals, changes in analysts' estimates of the Company's financial
performance, general conditions in the health care industry, general economic
and financial conditions, and other events or factors. In addition, the stock
market has experienced extreme price and volume fluctuations which have affected
the market prices for many companies involved in health care and related
industries and which often have been unrelated to the operating performance of
such companies. These broad market fluctuations and other factors may adversely
affect the market price of the Company's Common Stock. See
"Business -- Competition" and "Business -- Governmental Regulation."

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of Common Stock in the public market could
adversely affect prevailing market prices. As of October 3, 1997, there were
13,452,141 shares of Common Stock outstanding, 10,168,888 shares of which were
freely transferable without restriction under the Securities Act of 1933, as
amended (the "Securities Act"), unless held by an "affiliate" of the Company, as
that term is defined under the Securities Act. The Company also has outstanding
136,313 restricted shares, as that term is defined under Rule 144 (the
"Restricted Shares") under the Securities Act, that are eligible for sale in the
public market subject to compliance with the holding period, volume limitations,
and other requirements of Rule 144. In addition, the Company has registered
6,646,940 shares of Common Stock, including the 3,553,060 shares of Common Stock
pursuant to the Registration Statements to which this Prospectus relates, for
issuance in connection with acquisitions (of which 3,146,940 shares have been
issued), which shares are generally freely tradeable after their issuance under
Rule 145 of the Securities Act, unless held by an affiliate of the acquired
company, in which case such shares will be subject to the volume and manner of
sale restrictions under Rule 144.

The Company has registered for offer and sale up to 3,965,625 shares of
Common Stock that are reserved for issuance pursuant to the Company's stock
option plans. Shares issued after the effective date of such registration
statement upon the exercise of stock options issued under the Company's stock
option plans generally will be eligible for sale in the public market, except
that affiliates of the Company will continue to be subject to volume
limitations. The Company also has the authority to issue additional shares of
Common Stock and shares of one or more series of Preferred Stock. The issuance
of such shares could have a dilutive effect on earnings per share, and the sale
of such shares could depress the market price of the Company's Common Stock.

8
<PAGE> 10

PRICE RANGE OF COMMON STOCK

The Company's Common Stock has been traded on the Nasdaq National Market
under the symbol RURL since its initial public offering on July 16, 1993 at
$12.50 per share. The following table sets forth the high and low sale prices of
the Common Stock for the fiscal quarters indicated as reported on the Nasdaq
National Market.

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
YEAR ENDED JUNE 30, 1996
First quarter.............................................. $26.50 $21.75
Second quarter............................................. 25.25 22.50
Third quarter.............................................. 28.75 22.00
Fourth quarter............................................. 35.75 26.75

YEAR ENDED JUNE 30, 1997
First quarter.............................................. $37.13 $29.25
Second quarter............................................. 39.00 32.00
Third quarter.............................................. 35.88 30.50
Fourth quarter............................................. 32.75 26.50
</TABLE>

On October 3, 1997, the closing sale price of the Company's Common Stock
was $31.50 per share. On October 3, 1997, there were approximately 1,058 holders
of record of the Company's Common Stock.

DIVIDEND POLICY

The Company has never paid any cash dividends on its Common Stock. The
Company currently plans to retain earnings to finance the growth of the
Company's business rather than to pay cash dividends. Payments of any cash
dividends in the future will depend on the financial condition, results of
operations, and capital requirements of the Company as well as other factors
deemed relevant by the Board of Directors. The Company's term notes and
revolving credit facility contain restrictions on the Company's ability to pay
cash dividends, and future borrowings may contain similar restrictions. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

9
<PAGE> 11

UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The following pro forma financial data of the Company presents the
Company's unaudited pro forma combined statements of income for the fiscal years
ended June 30, 1996 and 1997.

During the fiscal years ended June 30, 1996 and 1997, the Company purchased
either the stock or certain of the assets and assumed certain of the liabilities
of 32 ambulance service providers and merged under pooling-of-interests
transactions with five ambulance service providers. During the fiscal year ended
June 30, 1996, 18 acquisitions were completed and 19 such acquisitions were made
during the year ended June 30, 1997. The acquisitions occurring during the year
ended June 30, 1996 are referred to as "the fiscal 1996 acquisitions" and the
acquisitions made during the year ended June 30, 1997 are referred to as "the
fiscal 1997 acquisitions." All of these acquisitions, with the exception of the
pooling-of-interests transactions, were accounted for as purchases in accordance
with Accounting Principles Board Opinion ("APB") No. 16. The aggregate purchase
price of the operations accounted for as purchases in fiscal 1996 and fiscal
1997 consisted of the following:

<TABLE>
<CAPTION>
FISCAL 1996 FISCAL 1997
ACQUISITIONS ACQUISITIONS TOTAL
------------ ------------ --------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash................................................... $ 17,164 $ 35,512 $ 52,676
Rural/Metro common stock............................... 1,212 18,699 19,911
Notes payable to sellers............................... 4,673 4,477 9,150
Assumption of liabilities.............................. 8,221 23,915 32,136
------- ------- --------
$ 31,270 $ 82,603 $113,873
======= ======= ========
</TABLE>

The unaudited pro forma combined statement of income for the year ended
June 30, 1996 was prepared as if each of the fiscal 1996 acquisitions and fiscal
1997 acquisitions was consummated as of July 1, 1995. The unaudited pro forma
combined statement of income for the year ended June 30, 1997 was prepared as if
each of the fiscal 1997 acquisitions was consummated as of July 1, 1996.

The unaudited pro forma combined financial data should be read in
conjunction with the Consolidated Financial Statements of the Company and
related notes thereto.

The pro forma financial data does not purport to represent what the
Company's actual results of operations would have been had each transaction
occurred as of the beginning of each respective period nor does it project the
Company's results of operations for any future period.

10
<PAGE> 12

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED JUNE 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
BUSINESSES PRO FORMA PRO FORMA
HISTORICAL(1) ACQUIRED(2) ADJUSTMENTS COMBINED
------------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Revenue
Ambulance services........................ $ 197,201 $97,549 $ -- $ 294,750
Fire protection services.................. 38,770 179 -- 38,949
Other..................................... 14,292 548 -- 14,840
-------- ------- ------- --------
Total............................. 250,263 98,276 -- 348,539
-------- ------- ------- --------
Operating expenses
Payroll and employee benefits............. 135,464 45,355 (4,049)(4) 176,770
Provision for doubtful accounts........... 31,036 17,074 -- 48,110
Depreciation.............................. 9,778 3,973 (110)(5) 13,641
Amortization of intangibles............... 3,569 126 2,158(6) 5,853
Other operating expenses.................. 45,752 23,429 (1,606)(7) 67,575
-------- ------- ------- --------
Total............................. 225,599 89,957 (3,607) 311,949
-------- ------- ------- --------
Operating income............................ 24,664 8,319 3,607 36,590
Interest expense, net..................... 5,108 1,401 2,623(8) 9,132
-------- ------- ------- --------
Income before income taxes.................. 19,556 6,918 984 27,458
Provision for income taxes................ 8,044 638 2,612(9) 11,294
-------- ------- ------- --------
Net income.................................. $ 11,512 $ 6,280 $(1,628) $ 16,164
======== ======= ======= ========
Earnings per common stock and common stock
equivalent................................ $ 1.14 $ 1.38
Weighted average number of common stock and
common stock equivalents outstanding...... 10,075 1,660(10) 11,735
</TABLE>

The accompanying notes to pro forma combined statements of income are
an integral part of this statement.

11
<PAGE> 13

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED JUNE 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
BUSINESSES PRO FORMA PRO FORMA
HISTORICAL(1) ACQUIRED(3) ADJUSTMENTS COMBINED
------------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Revenue
Ambulance services........................ $ 257,488 $55,689 $ -- $ 313,177
Fire protection services.................. 42,163 -- -- 42,163
Other..................................... 20,154 17 -- 20,171
-------- ------- ------- --------
Total............................. 319,805 55,706 -- 375,511
-------- ------- ------- --------
Operating expenses
Payroll and employee benefits............. 170,833 24,698 (2,317)(4) 193,214
Provision for doubtful accounts........... 43,424 11,958 -- 55,382
Depreciation.............................. 12,136 2,306 (110)(5) 14,332
Amortization of intangibles............... 4,660 31 1,470(6) 6,161
Other operating expenses.................. 54,922 12,447 (1,048)(7) 66,321
Loss contract/restructuring charge........ 6,026 -- -- 6,026
-------- ------- ------- --------
Total............................. 292,001 51,440 (2,005) 341,436
-------- ------- ------- --------
Operating income............................ 27,804 4,266 2,005 34,075
Interest expense, net..................... 5,720 895 1,296(8) 7,911
-------- ------- ------- --------
Income before income taxes.................. 22,084 3,371 709 26,164
Provision for income taxes................ 9,364 42 1,688(9) 11,094
-------- ------- ------- --------
Net income.................................. $ 12,720 $ 3,329 $ (979) $ 15,070
======== ======= ======= ========
Earnings per common stock and common stock
equivalent................................ $ 1.04 $ 1.13
Weighted average number of common stock and
common stock equivalents outstanding...... 12,271 1,063(10) 13,334
</TABLE>

The accompanying notes to pro forma combined statements of income are
an integral part of this statement.

12
<PAGE> 14

NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME

(1) Reflects the results of operations of the respective acquisitions from the
dates of acquisition through the end of each respective period.

(2) Reflects the results of operations of the fiscal 1996 acquisitions from the
beginning of the period through the dates of acquisition and the fiscal
1997 acquisitions for the entire year ended June 30, 1996.

(3) Reflects the results of operations for the fiscal 1997 acquisitions from
the beginning of the period through the dates of acquisition.

(4) Adjustment for payroll and employee benefits expense to reflect the effects
of certain individuals of the acquired businesses not being employed by the
Company and to reflect the differences between the actual compensation paid
to officers of the businesses acquired and the aggregate compensation such
individuals would have received under the terms of employment agreements
with the Company as if the businesses had been acquired as of the beginning
of the period.

(5) Adjustment for depreciation to reflect the depreciation of fixed assets
using the straight-line method.

(6) Adjustment for amortization to reflect amortization of the cost in excess
of the fair value of net assets acquired over a 35-year period.

(7) Adjustment for other operating expenses to reflect the reduction of
expenses related to certain assets, including real estate and buildings,
not acquired and sellers' costs incurred in connection with the sale of
their respective businesses, had each of the acquisitions occurred as of
the beginning of the period.

(8) Adjustment for interest expense to reflect the interest expense related to
the debt issued in connection with the acquisitions.

(9) Adjustment for provision for income taxes to reflect the effect of the
adjustments described above and the tax effect of treating each acquisition
as if it had C corporation tax status.

(10) Adjustment for weighted average number of common stock and common stock
equivalents outstanding as if the common stock issued in connection with
certain of the acquisitions had occurred as of the beginning of the period.

13
<PAGE> 15

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data for the fiscal years
ended June 30, 1997, 1996, 1995, 1994 and 1993 is derived from the consolidated
financial statements of the Company which have been audited by Arthur Andersen
LLP, independent public accountants. The selected consolidated financial data
provided below should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Consolidated
Financial Statements of the Company and related notes thereto incorporated by
reference in this Prospectus.

<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
----------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE DATE)
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA
Revenue
Ambulance services............................ $257,488 $197,201 $127,461 $68,942 $52,539
Fire protection services...................... 42,163 38,770 32,274 30,502 28,165
Other......................................... 20,154 14,292 11,848 4,920 3,377
-------- -------- -------- ------- -------
Total revenue.......................... 319,805 250,263 171,583 104,364 84,081
Operating expenses
Payroll and employee benefits................. 170,833 135,464 90,843 54,750 44,178
Provision for doubtful accounts............... 43,424 31,036 22,263 13,658 11,083
Depreciation.................................. 12,136 9,778 6,654 4,369 3,522
Amortization of intangibles................... 4,660 3,569 2,074 584 448
Other operating expenses...................... 54,922 45,752 33,809 21,613 17,798
Loss contract/restructuring charge............ 6,026 -- -- -- --
-------- -------- -------- ------- -------
Operating income................................ 27,804 24,664 15,940 9,390 7,052
Interest expense, net........................... 5,720 5,108 3,059 1,780 2,896
-------- -------- -------- ------- -------
Income before income taxes and extraordinary
item.......................................... 22,084 19,556 12,881 7,610 4,156
Provision for income taxes...................... (9,364) (8,044) (5,288) (2,884) (1,471)
-------- -------- -------- ------- -------
Income before extraordinary item................ 12,720 11,512 7,593 4,726 2,685
Extraordinary item.............................. -- -- (693) -- --
-------- -------- -------- ------- -------
Net income.................................... $ 12,720 $ 11,512 $ 6,900 $ 4,726 $ 2,685
======== ======== ======== ======= =======
Net income available for common stock........... $ 12,720 $ 11,512 $ 6,900 $ 4,726 $ 2,685
======== ======== ======== ======= =======
Earnings per common stock and common stock
equivalent(1)
Income before extraordinary item.............. $ 1.04 $ 1.14 $ .92 $ .71 $ .63
Extraordinary item............................ -- -- (.08) -- --
-------- -------- -------- ------- -------
Net income............................. $ 1.04 $ 1.14 $ .84 $ .71 $ .63
======== ======== ======== ======= =======
Earnings per common stock and common stock
equivalent assuming full dilution(1).......... $ .61
=======
Weighted average number of common stock and
common stock equivalents outstanding..........
Primary....................................... 12,271 10,075 8,249 6,668 4,171
Fully diluted................................. 4,414
</TABLE>

14
<PAGE> 16

<TABLE>
<CAPTION>
JUNE 30,
----------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Working capital............................... $ 94,766 $ 55,402 $ 26,358 $23,915 $ 4,784
Total assets.................................. 364,066 230,114 159,430 88,247 45,816
Current portion of long-term debt(2).......... 9,814 6,610 8,377 3,590 9,827
Long-term debt, net of current portion(3)..... 144,643 60,731 53,282 13,339 15,382
Stockholders' equity.......................... 159,808 119,966 65,648 47,349 4,093
</TABLE>

- ---------------
(1) Primary and fully diluted earnings per share are considered to be the same
in all periods presented except for the year ended June 30, 1993.

(2) Includes balances outstanding under the Company's revolving credit facility
of $6,690,000 at June 30, 1993.

(3) Includes balances outstanding under the Company's revolving credit facility
of $134,000,000, $49,500,000 and $34,900,000 at June 30, 1997, 1996 and
1995, respectively.

15
<PAGE> 17

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with
the Selected Consolidated Financial Data and the Consolidated Financial
Statements of the Company and related notes appearing elsewhere in this
Prospectus or incorporated by reference in this Prospectus.

INTRODUCTION

The Company derives its revenue primarily from fees charged for ambulance
and fire protection services. The Company provides ambulance services in
response to emergency medical calls ("911" emergency ambulance services) and
non-emergency transport services (general transport services) to patients on
both a fee-for-service basis and nonrefundable subscription fee basis. Per
transport revenue depends on various factors, including the mix of rates between
existing markets and new markets and the mix of activity between "911" emergency
ambulance services and general transport services as well as other competitive
factors. Fire protection services are provided either under contracts with
municipalities or fire districts or on a nonrefundable subscription fee basis to
individual homeowners or commercial property owners.

Ambulance service fees are recorded net of Medicare, Medicaid, and other
reimbursement limitations and are recognized when services are provided.
Payments received from third-party payors represent a substantial portion of the
Company's ambulance service fee receipts. Provision for doubtful accounts is
made for the expected difference between ambulance services fees charged and
amounts actually collected. The Company's provision for doubtful accounts
generally is higher with respect to collections to be derived directly from
patients than for collections to be derived from third-party payors and
generally is higher for "911" emergency ambulance services than for general
ambulance transport services.

Because of the nature of the Company's ambulance services, it is necessary
to respond to a number of calls, primarily "911" emergency ambulance service
calls, which may not result in transports. Results of operations are discussed
below on the basis of actual transports since transports are more directly
related to revenue. Expenses associated with calls that do not result in
transports are included in operating expenses. The percentage of calls not
resulting in transports varies substantially depending upon the mix of general
transport and "911" emergency ambulance service calls in the Company's markets
and is generally higher in markets in which the calls are primarily "911"
emergency ambulance service calls. Rates in the Company's markets take into
account the anticipated number of calls that may not result in transports. The
Company does not separately account for expenses associated with calls that do
not result in transports.

Revenue generated under fire protection services contracts is recognized
over the life of the contract. Subscription fees received in advance are
deferred and recognized over the term of the subscription agreement, which
generally is one year.

Other revenue primarily consists of fees associated with alternative
transportation services and home health care services and are recognized when
the services are provided.

Other operating expenses primarily consist of rent and related occupancy
expenses, maintenance and repairs, insurance, fuel and supplies, travel and
professional fees.

The Company's net income for the year ended June 30, 1997 was $12.7 million
or $1.04 per share. This compares to net income of $11.5 million and $6.9
million, or $1.14 and $0.84 per share for the years ended June 30, 1996 and
1995, respectively. Included in 1995 net income is an extraordinary charge to
earnings of $0.7 million, net of a $0.5 million tax benefit, or $0.08 per share,
to reflect the loss on early extinguishment of debt. During fiscal 1997, the
Company completed the acquisition of eighteen ambulance service providers
operating in Arizona, Arkansas, Georgia, Indiana, Kentucky, New York, Ohio,
Pennsylvania and Ontario, Canada. The following discussion provides greater
detail of the Company's results of operations and liquidity and capital
resources.

16
<PAGE> 18

RESULTS OF OPERATIONS

The following table sets forth for the years ended June 30, 1997, 1996 and
1995, certain items from the Company's consolidated financial statements
expressed as a percentage of total revenue:

<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
-------------------------
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Revenue
Ambulance services................................ 80.5% 78.8% 74.3%
Fire protection services.......................... 13.2 15.5 18.8
Other............................................. 6.3 5.7 6.9
----- ----- -----
Total revenue............................. 100.0 100.0 100.0
Operating expenses
Payroll and employee benefits..................... 53.4 54.1 52.9
Provision for doubtful accounts................... 13.6 12.4 13.0
Depreciation...................................... 3.8 3.9 3.9
Amortization of intangibles....................... 1.5 1.4 1.2
Other operating expenses.......................... 17.1 18.3 19.7
Loss contract/restructuring charge................ 1.9 -- --
----- ----- -----
Operating income.................................... 8.7 9.9 9.3
Interest expense, net............................. 1.8 2.1 1.8
----- ----- -----
Income before income taxes and extraordinary item... 6.9 7.8 7.5
Provision for income taxes........................ 2.9 3.2 3.1
----- ----- -----
Income before extraordinary item.................... 4.0% 4.6% 4.4%
===== ===== =====
</TABLE>

YEAR ENDED JUNE 30, 1996 COMPARED TO YEAR ENDED JUNE 30, 1997

Revenue

Total revenue increased $69.5 million, or 27.8%, from $250.3 million for
the year ended June 30, 1996 to $319.8 million for the year ended June 30, 1997.
Approximately $43.6 million of this increase resulted from the acquisition of
ambulance service providers during fiscal 1997. Fire protection services revenue
increased by $3.4 million, and other revenue increased by $5.9 million.

Total ambulance transports increased by 205,000, or 28.9%, from 710,000 for
the year ended June 30, 1996 to 915,000 for the year ended June 30, 1997. The
acquisition of eighteen ambulance service companies during fiscal 1997 accounted
for 154,000 of these additional transports.

Fire protection services revenue increased due to rate increases for fire
protection services and greater utilization of the Company's services under
fee-for-service arrangements. The increase also resulted from the revenue
generated from new fire protection contracts awarded to the Company through
competitive bidding.

Operating Expenses

Payroll and employee benefit expenses increased $35.4 million, or 26.1%,
from $135.4 million for the year ended June 30, 1996 to $170.8 million for the
year ended June 30, 1997. This increase was primarily due to the acquisition of
nineteen companies during fiscal 1997. Payroll and employee benefits decreased
from 54.1% of total revenue for the year ended June 30, 1996 to 53.4% of total
revenue for the year ended June 30, 1997 as a result of operational
efficiencies.

Provision for doubtful accounts increased $12.4 million, or 40.0%, from
$31.0 million for the year ended June 30, 1996 to $43.4 million for the year
ended June 30, 1997. Provision for doubtful accounts increased from 12.4% of
total revenue for the year ended June 30, 1996 to 13.6% of total revenue for the
year ended

17
<PAGE> 19

June 30, 1997, reflecting the effect of the acquisition of ambulance service
providers operating in markets with a greater mix of "911" emergency activity.

Depreciation increased $2.3 million, or 23.5%, from $9.8 million for the
year ended June 30, 1996 to $12.1 million for the year ended June 30, 1997,
primarily due to increased property and equipment from recent acquisition
activity.

Amortization of intangibles increased by $1.1 million, or 30.6%, from $3.6
million for the year ended June 30, 1996 to $4.7 million for the year ended June
30, 1997. This increase was the result of increased intangible assets caused by
recent acquisition activity. Amortization of intangibles increased from 1.4% of
total revenue for the year ended June 30, 1996 to 1.5% for the year ended June
30, 1997.

Other operating expenses increased $9.2 million, or 20.1%, from $45.7
million for the year ended June 30, 1996 to $54.9 million for the year ended
June 30, 1997, primarily as a result of increased expenses associated with the
operation of the nineteen companies acquired during fiscal 1997. Other operating
expenses decreased from 18.3% of total revenue for the year ended June 30, 1996
to 17.1% of total revenue for the year ended June 30, 1997 as a result of
operational efficiencies.

The Company recorded a $6.0 million non-recurring pre-tax charge for the
year ended June 30, 1997. Included in this amount was an allowance of $3.2
million related to an unprofitable ambulance service contract. Also included was
a restructuring charge of $2.8 million relating to the integration of ambulance
company acquisitions. The charge consists primarily of severance costs and other
costs related to the elimination of redundant functions. Management expects the
integration to be completed during fiscal 1998.

Interest expense increased by $0.6 million, or 11.8%, from $5.1 million for
the year ended June 30, 1996 to $5.7 million for the year ended June 30, 1997.
This increase was caused by higher debt balances, reflecting increased
borrowings on the Company's revolving credit facility.

The Company's effective tax rate increased from 41.1% for the year ended
June 30, 1996 to 42.4% for the year ended June 30, 1997, primarily the result of
a higher percentage of the Company's taxable income being generated in higher
tax rate states and the effect of nondeductible goodwill generated in connection
with the acquisition of certain ambulance service providers.

YEAR ENDED JUNE 30, 1995 COMPARED TO YEAR ENDED JUNE 30, 1996

Revenue

Total revenue increased $78.7 million, or 45.9%, from $171.6 million for
the year ended June 30, 1995 to $250.3 million for the year ended June 30, 1996.
Approximately $56.1 million of this increase resulted from the acquisition of
ambulance service providers during fiscal 1996. Fire protection services revenue
increased by $6.5 million, and other revenue increased by $2.4 million.

Total ambulance transports increased by 241,000, or 51.4%, from 469,000 for
the year ended June 30, 1995 to 710,000 for the year ended June 30, 1996. The
acquisition of sixteen ambulance service companies during fiscal 1996 accounted
for 227,000 of these additional transports.

Fire protection services revenue increased due to rate increases for fire
protection services and greater utilization of the Company's services under
fee-for-service arrangements. The increase also resulted from the acquisition of
a fire protection service company during the first quarter of fiscal 1996 and
revenue generated from new fire protection contracts awarded to the Company
through competitive bidding.

Operating Expenses

Payroll and employee benefit expenses increased $44.6 million, or 49.1%,
from $90.8 million for the year ended June 30, 1995 to $135.4 million for the
year ended June 30, 1996. This increase was primarily due to the acquisition of
eighteen companies during fiscal 1996.

Provision for doubtful accounts increased $8.7 million, or 39.0%, from
$22.3 million for the year ended June 30, 1995 to $31.0 million for the year
ended June 30, 1996. Provision for doubtful accounts decreased

18
<PAGE> 20

from 13.0% of total revenue for the year ended June 30, 1995 to 12.4% of total
revenue for the year ended June 30, 1996, reflecting the effect of the
acquisition of ambulance service providers operating in markets with higher
receivable collections as a result of a greater mix of general transport
activity.

Depreciation increased $3.1 million, or 46.3%, from $6.7 million for the
year ended June 30, 1995 to $9.8 million for the year ended June 30, 1996,
primarily due to increased property and equipment from recent acquisition
activity.

Amortization of intangibles increased by $1.5 million, or 71.4%, from $2.1
million for the year ended June 30, 1995 to $3.6 million for the year ended June
30, 1996. This increase was the result of increased intangible assets caused by
recent acquisition activity. Amortization of intangibles increased from 1.2% of
total revenue for the year ended June 30, 1995 to 1.4% for the year ended June
30, 1996.

Other operating expenses increased $11.9 million, or 35.2%, from $33.8
million for the year ended June 30, 1995 to $45.7 million for the year ended
June 30, 1996, primarily as a result of increased expenses associated with the
operation of the eighteen companies acquired during fiscal 1996. Other operating
expenses decreased from 19.7% of total revenue for the year ended June 30, 1995
to 18.3% of total revenue for the year ended June 30, 1996 as a result of
operational efficiencies.

Interest expense increased by $2.0 million, or 64.5%, from $3.1 million for
the year ended June 30, 1995 to $5.1 million for the year ended June 30, 1996.
This increase was caused by higher debt balances, reflecting increased
borrowings on the Company's revolving credit facility.

The Company's effective tax rate increased from 41.0% for the year ended
June 30, 1995 to 41.1% for the year ended June 30, 1996, primarily the result of
a higher percentage of the Company's taxable income being generated in higher
tax rate states and the effect of nondeductible goodwill generated in connection
with the acquisition of certain ambulance service providers. This increase was
partially offset by tax planning strategies implemented by the Company during
fiscal 1996.

SEASONALITY AND QUARTERLY RESULTS

The following table reflects certain selected unaudited quarterly operating
results for each quarter of fiscal 1997 and 1996. The operating results of any
quarter are not necessarily indicative of results of any future period.

<TABLE>
<CAPTION>
SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30,
1995 1995 1996 1996 1996 1996 1997 1997
--------- -------- --------- --------- --------- -------- --------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Ambulance service.................. $43,404 $48,053 $51,789 $53,955 $59,028 $62,465 $69,161 $66,834
Fire protection.................... 9,255 9,435 9,813 10,267 10,305 10,349 10,551 10,958
Other revenue...................... 3,104 3,351 3,382 4,455 4,661 4,716 5,209 5,568
------- ------- ------- ------- ------- ------- ------- -------
Total revenue...................... 55,763 60,839 64,984 68,677 73,994 77,530 84,921 83,360
Operating Income................... 4,814 5,339 6,775 7,736 6,592 7,474 9,500 4,238
Net Income......................... 2,102 2,396 2,989 4,025 3,299 3,771 4,675 975
Earnings per common stock and common
stock equivalent: $ 0.23 $ 0.25 $ 0.31 $ 0.35 $ 0.28 $ 0.31 $ 0.38 $ 0.08
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>

The Company has historically experienced, and expects to continue to
experience, moderate seasonality in quarterly operating results. This
seasonality has resulted from a number of factors, including relatively higher
second and third fiscal quarter demand for transport services in the Company's
Arizona and Florida regions resulting from the greater winter populations in
those regions. The effect of the acquisition of ambulance service providers in
the northeastern and midwestern regions of the United States has reduced, and
will continue to reduce, the overall seasonality in operating results.

19
<PAGE> 21

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company has financed its cash requirements principally
through cash flow from operating activities, term and revolving indebtedness,
capital equipment lease financing, and the sale of stock through an initial
public offering in July 1993, generating net proceeds of approximately $19.5
million, and subsequent public stock offering in May 1994 and April 1996,
generating net proceeds of approximately $17.4 million and $34.8 million,
respectively.

During the year ended June 30, 1997, the Company used $11.1 million in cash
flow from operations compared with $1.4 million provided by operations in the
preceding year, due primarily to increases in accounts receivable, inventories
and prepaid expenses and decreases in accounts payable and accrued liabilities.

During September 1995, the Company funded a fully underwritten credit
agreement for a $125.0 million revolving credit facility. The Company used the
proceeds from the facility to repay the Company's then existing revolving credit
facility and its notes payable. Costs previously deferred related to certain
indebtedness resulted in an extraordinary charge to earnings of $693,000, net of
a $480,000 tax benefit, or $.08 per share in the year ended June 30, 1995. In
May 1997, the credit agreement was increased from $125.0 million to $175.0
million. Approximately $134.0 million was outstanding on the credit facility at
June 30, 1997. This six-year revolving credit facility is priced at the prime
rate or a LIBOR-based rate. The LIBOR-based rates range from LIBOR plus 0.75% to
LIBOR plus 1.75% depending upon the Company meeting certain financial covenants.
Beginning September 30, 1999, the amount available under the facility begins to
reduce at three-month intervals until the termination date at September 30,
2001. The facility is collateralized by the Company's accounts and notes
receivable, common stock of its subsidiaries and partnership interests. At
September 26, 1997, borrowings on the revolving credit facility were
approximately $150.0 million. At June 30, 1997, the Company had approximately
$37.0 million available under the revolving credit facility.

Exclusive of payments on the revolving credit facility, the Company repaid
$21.3 million of notes payable and capital lease obligations during the year
ended June 30, 1997 and $20.3 million during the year ended June 30, 1996.
Capital expenditures were $23.9 million during the year ended June 30, 1997
compared to $18.2 million during the prior year, of which $2.0 million was
financed through capital lease obligations in the year ended June 30, 1996.

During the year ended June 30, 1997, the Company purchased either all of
the issued and outstanding stock or certain of the assets of nineteen companies
operating in Arizona, Arkansas, Georgia, Indiana, Kentucky, New York, Ohio,
Pennsylvania and Ontario, Canada. The combined purchase price was $82.6 million.
The Company paid cash of $35.5 million, issued notes payable to sellers totaling
$4.5 million, issued 1.2 million shares of common stock to sellers (361,970
shares were related to pooling-of-interests transactions and the remaining
shares were valued at $18.7 million), and assumed $23.9 million of liabilities.
The Company funded the cash portion of the acquisitions through operating cash
flow and from the Company's revolving credit facility.

Subsequent to June 30, 1997 the Company purchased either all the issued and
outstanding stock or certain assets of four ambulance service providers with
operations in Alabama, Georgia, Mississippi, New Jersey, New York and Tennessee.
The combined purchase price of the operations accounted for as purchases was
$6.1 million. The Company paid cash of $3.7 million, issued notes payable to
sellers of $1.2 million and assumed $1.2 million of liabilities. The Company
issued 641,009 shares related to two of the acquisitions which were recorded as
pooling-of-interests transactions.

The Company expects that existing working capital, together with cash flow
from operations and additional borrowing capacity, will be sufficient to meet
its operating and capital needs for existing operations for the twelve months
subsequent to June 30, 1997. The Company is engaged in an active acquisition
program. The Company intends to fund any acquisitions that it consummates
through the use of cash from operations, credit facilities, seller notes payable
and the issuance of common stock. In addition, the Company may seek to raise
additional capital through public or private debt or equity financings. The
availability of these capital sources will depend upon prevailing market
conditions, interest rates and the financial condition of the Company.

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BUSINESS

INTRODUCTION

INDUSTRY CONSIDERATIONS

Public-sector entities, private companies, hospitals, and volunteer
organizations provide ambulance services. Public-sector entities often serve as
the first responder to requests for such emergency ambulance services and often
provide emergency ambulance transport. When the public sector serves as first
responder, private companies often serve as the second responder and support the
first responder as needed. The private sector provides the majority of general
ambulance services. It is estimated that the ambulance service industry includes
more than 10,000 providers of service, 2,000 or more of which are private. Most
commercial providers are small companies serving one or a limited number of
markets. Several multi-state providers, including the

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Company, have emerged through the acquisition and consolidation of smaller
ambulance service providers in recent years.

The growth in ambulance service expenditures has resulted from both an
increase in the number of transports and an increase in the average expenditures
per transport. The growth and aging of the population, the greater use of
outpatient care facilities and home care in response to health care cost
containment efforts, and increased patient travel between specialized treatment
health care facilities have increased the demand for emergency medical services
and general ambulance services. The increased availability of "911" emergency
service, the impact of educational programs on its use, and the practice of some
members of the population of utilizing a hospital's emergency room as the source
of their primary medical care also have increased the number of ambulance
transports. Industry considerations require ambulance service providers to
acquire more sophisticated emergency medical, dispatch, and communications
equipment, hire more highly trained personnel, and develop more sophisticated
dispatch and management systems to satisfy the faster response time and higher
quality of medical care assurance criteria required by municipalities and fire
districts for emergency ambulance services. Average expenditures per ambulance
transport have increased as a result of the additional costs to meet these
requirements. These requirements, combined with the fragmented nature of the
industry, are contributing to consolidation within the industry. Service
providers that do not have the financial or management resources to meet the
requirements for higher levels of service are candidates for acquisition.

Market reform continues to reshape the health care delivery system, with a
shift from fee-for-service providers to managed care providers. Managed care
providers are focusing on cost containment measures while seeking to provide the
most appropriate level of service at the most appropriate treatment facility.
While ambulances typically transport patients to the nearest treatment facility,
managed care providers are attempting to manage hospital utilization by working
with ambulance service providers to ensure transport of patients to affiliated
facilities and avoid unnecessary inter-facility transports. For non-life
threatening medical emergencies, managed care providers are beginning to explore
programs where plan members are encouraged to call the provider. Under this
program, a nurse will answer the call, analyze the medical situation, and
determine the best course of action and mode of transport. In an emergency
situation, an advanced life support ambulance will be dispatched. In certain
cases, patients could receive the required treatment level with a less costly
basic life support ambulance. However, to manage such a system, the managed care
provider must contract with an ambulance service provider that has the mix of
vehicles and geographic scope to cover the entire region served by the managed
care provider and can provide call center services.

Based on the Company's experience, the Company believes that its ambulance
and fire protection services are complementary. Municipal fire departments,
tax-supported fire districts, and volunteer fire departments constitute the
principal providers of fire protection services in the United States. In most of
the communities served by municipal fire departments and tax-supported fire
districts, the fire department is the first to respond to a call for emergency
medical services. Approximately 27,000 volunteer fire departments, covering
approximately 40% of the United States population, operate throughout the United
States. Volunteer fire departments range from departments comprised entirely of
volunteer personnel to departments that utilize one or more paid personnel
located at each station supplemented by volunteers who proceed directly to the
fire scene. In addition to providing fire protection services to municipalities
and tax-supported fire districts, the private sector also provides fire
protection services to industrial complexes, including airports, large
industrial and petrochemical plants, power plants, and other large
self-contained facilities.

STRATEGY

The Company's strategy is to enhance its position as a leading provider of
emergency services in the United States and in other countries. Key elements of
this strategy include the acquisition of ambulance service providers, increased
marketing efforts aimed at the needs of the public sector and health care
providers, expansion of fire protection services, integration of ambulance and
fire protection operations, and improved productivity. The Company seeks to
utilize key business competencies in communications and in logistics management
to expand service offerings to customers and to seek new potential customers
through key business alliances, joint ventures, or other strategic business
arrangements.

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Acquisition of Ambulance Service Providers

The Company seeks acquisitions that enable it to establish new service
areas both domestically and internationally and acquisitions that enable it to
expand its operations within its existing service areas. The Company believes
that the fragmented nature of the industry, combined with the lack of capital
and limited management systems that characterize many providers, continues to
provide an opportunity for the Company to acquire additional ambulance service
providers, including not-for-profit hospital-owned providers, that would benefit
from its management and operational systems, resulting in productivity gains and
enhanced levels of service.

The Company considers a number of factors in evaluating a proposed
acquisition candidate, including the quality of its management and medical
personnel, its historical operating results and future earnings potential, the
size and anticipated growth of its market, its relative position within that
market, and the competition to be encountered in such market. The Company pays
special attention to those potential service areas in which it can achieve
maximum productivity by achieving market leadership over a regional area, by
utilizing its ambulances to provide both "911" emergency and general ambulance
services, and by integrating ambulance services with fire protection services.
The Company continues to build its regional operations, which better position
the Company to serve the developing managed care customer base.

Increased Marketing Efforts Aimed at the Needs of the Public Sector and
Health Care Providers

In addition to expansion through acquisitions, the Company plans to expand
its general ambulance services through increased marketing efforts to hospitals,
health maintenance organizations, and other health care providers and its
emergency ambulance services through the pursuit of new contracts and alliances
with municipalities and fire districts. These efforts will focus on the
increased demand for emergency ambulance services caused by various factors,
including the growth and aging of the population, as well as on the increased
use of general ambulance services caused in part by increases in home health
care, patient travel between specialized health care facilities, and increased
requirements for transport to specific facilities operated by managed care
providers. The Company intends to respond to the needs of managed care providers
by delivering high quality, efficient, cost-effective services and the ability
to transport patients to the most appropriate treatment facility, particularly
in those geographic areas in which it has been able to achieve market
leadership. The Company intends to develop and offer innovative value-added
services to health care providers, such as access to a medical call center, to
better serve the demand management, telephone triage, and medical transport
needs of the managed care market. The Company believes that its communications
and logistics expertise will enable it to offer services that will improve the
responsiveness and cost-effectiveness of health care services in a managed care
environment. The Company expects to pursue alliances with health care providers
through the pursuit of service contracts, the development of relationships, and
through acquisitions of health care and safety related providers, which would
provide opportunities for the Company to integrate its services with such other
service providers. In addition, the Company will continue to seek to enter into
public/private alliances to compete for new business.

Expansion of Fire Protection Services

The Company plans to continue its efforts to expand its fire protection
services into areas not currently served. In seeking to expand its fire
protection services, the Company plans to emphasize the benefits of its services
in terms of lower per capita fire service costs, reduced insurance rates, and
lower loss of life and property resulting from its extensive experience, its
fire prevention initiatives, its management and operational systems, and its
system utilizing full-time fire fighters and part-time reservists. The Company's
strategy includes efforts to provide service to businesses and residences in
newly developed communities that have not yet arranged for fire protection
services as well as in areas served by volunteer fire departments and tax-
supported fire districts. The Company plans to respond to the economic pressures
on the public sector to reduce taxes and expenditures for emergency services by
offering the opportunity for the establishment of public/private alliances with
fire districts and municipalities. The Company also intends to pursue
opportunities to provide fire protection services to large industrial complexes,
including airports, large industrial and petrochemical plants, power plants, and
other self-contained facilities.

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Integration of Ambulance and Fire Protection Services

Building upon the Company's successful integration of ambulance and fire
services under its contract with the City of Scottsdale, the Company plans to
continue the integration of its fire and ambulance services in certain of its
service areas and to pursue opportunities to provide integrated services in new
service areas. The Company believes that its integration of such services can
provide operating economies, optimal coordination of the delivery of services,
efficiencies in the use of personnel and equipment, and enhanced levels of
service, especially in lower-utilization communities.

Productivity Improvement and Enhancement

The Company intends to utilize its management and operational systems to
achieve enhanced productivity and profitability in its existing operations and
in acquired operations. The centralization of key management and operating
systems permits the Company to achieve economies of scale at both the
operational and corporate levels.

The Company believes that the achievement of its goal of establishing
market leadership in its various service areas (through initial acquisitions,
follow-on acquisitions, alliances, and internal growth) will enable it to
continue to improve its productivity in those areas by enabling it to more
efficiently utilize its equipment and personnel, to better serve large regional
health care providers, and to more effectively market its services. In certain
cases, follow-on acquisitions in existing service areas enable the Company to
enhance its productivity in that service area to an extent greater than the size
of the acquisition itself.

CURRENT SERVICE AREAS

The Company provides its services in over 350 communities in the following
21 states, Canada, and Latin America:

<TABLE>
<S> <C> <C>
Alabama Iowa Ohio
Arizona Kentucky Oregon
Arkansas Louisiana Pennsylvania
California Mississippi South Carolina
Florida Nebraska South Dakota
Georgia New Jersey Tennessee
Indiana New York Texas
</TABLE>

The Company provides ambulance services in 19 states and Canada primarily
under the names Rural/Metro Ambulance and Rural/Metro Medical Services and under
the name Southwest Ambulance in some areas of Arizona. The Company may operate
under other names depending upon local statutes or contractual agreements. The
Company generally provides its ambulance services pursuant to a contract or
certificate of necessity on an exclusive or nonexclusive basis. It provides
"911" emergency ambulance services primarily pursuant to contracts or as a
result of providing fire protection services. Ambulance service contracts in
some service areas provide for the payment of a subsidy to the Company.

In some service areas, the Company is the only provider of both emergency
and general ambulance services. In other service areas, the Company competes for
general ambulance services. In all service areas, the Company responds to "911"
emergency calls if requested by a municipality or fire district, even in the
absence of a contract.

The Company provides fire protection services under the name Rural/Metro
Fire Department in six states and in Latin America. Fire protection services are
provided pursuant to master contracts or on a subscription basis.

AMBULANCE SERVICES

Emergency Medical Services

The Company generally provides emergency medical ambulance services
pursuant to contracts with counties, fire districts, and municipalities. These
contracts typically appoint the Company as the exclusive

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<PAGE> 26

provider of "911" emergency ambulance services in designated service areas and
require the Company to respond to every "911" emergency medical call in those
areas. The Company responds to virtually all "911" calls with advanced life
support ("ALS") ambulance units. The Company staffs its ALS ambulance units with
two paramedics or one paramedic and an emergency medical technician ("EMT") and
equips such units with ALS equipment (such as cardiac monitors, defibrillators,
and oxygen delivery systems) as well as pharmaceuticals and medical supplies.

Upon arrival at an emergency, the ALS crew members deploy portable life
support equipment, ascertain the patient's medical condition and, if required,
begin life support techniques and procedures that may include airway intubation,
cardiac monitoring, defibrillation of cardiac arrhythmias, and the
administration of medications and intravenous solutions. The crew also may
perform basic life support ("BLS") services which include basic airway
management, hemorrhage control, stabilization of fractures, emergency
childbirth, and basic vehicle extrication. As soon as medically appropriate, the
patient is placed on a portable gurney and carried into the ambulance. While a
paramedic monitors and treats the patient, the other crew member drives the
ambulance to a hospital designated either by the patient or the applicable
medical protocol. En route, the ALS crew alerts the hospital regarding the
patient's medical condition, and if necessary, the attending paramedic seeks
advice from a hospital emergency room physician as to treatment. Upon arrival at
the hospital, the patient generally is taken to the emergency room.

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<PAGE> 27

General Ambulance Services

The Company provides general ambulance services to patients requiring
either advanced or basic levels of medical supervision during transfer to and
from residences and health care facilities. These services may be provided when
a home-bound patient requires examination or treatment at a health care facility
or when a hospital inpatient requires tests or treatments (such as MRI testing,
CAT scans, dialysis, or chemotherapy treatment) available at another facility.
The Company utilizes ALS or BLS ambulance units to provide general ambulance
services depending on the patient's needs and the proximity of available units.
The Company staffs its BLS ambulance units with two EMTs and equips such units
with medical supplies and equipment necessary to administer first aid and basic
medical treatment.

The Company also provides critical care transport services to medically
unstable patients (such as cardiac patients and neonatal patients) who require
critical care while being transported between health care facilities. Critical
care services differ from ALS services in that the ambulance may be equipped
with additional medical equipment and may be staffed by a medical specialist
provided by the Company or by a health care facility to attend to a patient's
special medical needs.

In addition to ambulance services, the Company provides non-medical
transportation for the handicapped and certain non-ambulatory persons in certain
service areas. Such transportation generally takes place between residences or
nursing homes and hospitals or other health care facilities. In providing this
service, the Company utilizes vans that contain hydraulic wheelchair lifts or
ramps operated by drivers who generally are trained in cardiopulmonary
resuscitation ("CPR").

The Company provides general ambulance services, critical care transports,
and nonmedical transportation services pursuant to contracts with governmental
agencies, health care facilities, or at the request of a patient. Such services
may be scheduled in advance or provided on an as needed basis. Contracts with
managed care providers provide for reimbursement on a per transport basis or on
a "capitated" basis under which the Company receives a fixed fee per person per
month. The Company currently has a contract to provide non-emergency ambulance
transportation for Aetna Health Plan of Ohio's 550,000 managed care plan members
on a fee-for-service basis. The contract may evolve into a capitated format
after the service utilization patterns are firmly established.

Medical Personnel and Quality Assurance

Paramedics and EMTs must be state certified in order to transport patients
and to perform emergency care services. Certification as an EMT requires
completion of a minimum of 164 hours of training in a program designated by the
United States Department of Transportation and supervised by state authorities.
EMTs also may complete advanced training courses to become certified to provide
certain additional emergency care services, such as administration of
intravenous fluids and advanced airway management. In addition to completion of
the EMT training program, the certification as a paramedic requires the
completion of more than 800 hours of training in advanced patient care
assessment, pharmacology, cardiology, and clinical and field skills. Many of the
paramedics currently employed by the Company served as EMTs for the Company
prior to their certification as paramedics.

Local physician advisory boards develop medical protocols to be followed by
paramedics and EMTs in a service area. In addition, instructions are conveyed on
a case-by-case basis through direct communications between the ambulance crew
and hospital emergency room physicians during the administration of advanced
life support procedures. Both paramedics and EMTs must complete continuing
education programs and, in some cases, state supervised refresher training
examinations to maintain their certifications. Certification and continuing
education requirements for paramedics and EMTs vary among states and counties.

The Company maintains a commitment to provide high quality pre-hospital
emergency medical care. In each location in which the Company provides services,
a medical director, who usually is a physician associated with a hospital the
Company serves, monitors adherence to medical protocol and conducts periodic
audits of the care provided. In addition, the Company holds retrospective care
audits with its employees to evaluate compliance with medical and performance
standards.

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The Company was one of the first ambulance service providers to obtain
accreditation for many of its larger ambulance operations from the Commission on
Accreditation of Ambulance Services, a joint program between the American
Ambulance Association and the American College of Emergency Physicians. The
process is voluntary and evaluates numerous qualitative factors in the delivery
of services. The Company believes municipalities and managed care providers will
consider accreditation as one of the criteria in awarding contracts in the
future.

FIRE PROTECTION SERVICES

Fire protection services consist primarily of fire prevention and fire
suppression. Other fire protection related activities include hazardous material
containment, underwater search and recovery, mountain and confined space rescue,
and public education. The Company provides various levels of fire protection
services ranging from fire stations that are fully staffed 24 hours per day to
reserve stations. The Company generally provides its services to municipalities
and other governmental bodies pursuant to master contracts and to residences,
commercial establishments, and industrial complexes pursuant to subscription fee
and other fee-for-service arrangements. Federal and state governments contract
with the Company from time to time to suppress forest fires or wildfires on
government lands.

The Company has placed fire prevention and education in the forefront of
its fire protection services and has developed a comprehensive program to
prevent and minimize fires rather than emphasizing a standing army to respond to
fires that occur. The Company believes that effective fire protection requires
the intensive training of personnel, the effective utilization of fire
equipment, the establishment of effective communication centers for the receipt
of emergency calls and the dispatch of equipment and personnel, the
establishment and enforcement of strict fire codes, and community educational
efforts.

The Company seeks to provide quality fire protection services at reduced
costs. The Company believes that it provides fire protection services at a cost
significantly lower than the national average as a result of its emphasis on
fire prevention, its advanced systems, and its use of a combination of full-time
fire fighters and part-time reservists. Based upon generally available industry
data, the Company believes that fire loss per capita in the areas serviced by
the Company has been substantially less than the national average.

Fire Protection Personnel

The Company's ability to provide its fire protection services at relatively
low costs results from its efficient use of personnel in addition to its fire
prevention efforts. Typically, personnel costs represent more than two-thirds of
the cost of providing fire protection services. The Company has been able to
reduce its labor costs through a system that utilizes full-time firefighters
complemented by paid part-time reservists as well as a modified every other day
shift schedule. By using trained reservists on an as needed basis, the Company
has the ability to supplement full-time fire fighters on a cost-effective basis.
Reservists comprise approximately 45% of the Company's operational work force.

All full-time and reservist firefighters undergo extensive training, which
exceed the standards recommended by the National Fire Protection Association
("NFPA"), and must qualify for state certification before being eligible for
full-time employment by the Company. Since approximately 70% to 80% of the
Company's fire response activity consists of emergency medical response, all of
the Company's firefighters are trained EMTs and an increasing number of its
firefighters are paramedics. Ongoing training includes instruction in new fire
service tactics and fire fighting techniques as well as continual physical
conditioning.

Fire Response

An alarm typically results in the dispatch of one or more engine companies
(each of which consists of an engine and two to four firefighters, including a
captain), a fire chief, and such other equipment as circumstances warrant. The
amount of equipment and personnel depends upon the type, location, and severity
of the incident. The Company generally responds to emergency medical calls and
small fires (such as grass or dumpster fires not involving the risk of
spreading) with a single engine staffed by two firefighters. The

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<PAGE> 29

Company utilizes its dispatch capabilities to reposition equipment and
firefighters to maximize the availability and use of resources in a
cost-effective manner.

Fire Prevention

The Company believes that fire prevention programs result in both lower
fire loss and significant overall cost savings. The Company's fire prevention
programs include advice and recommendations for and the encouragement of various
fire prevention methods, including fire code design, building design to inhibit
the spread of fire, the design of automatic fire suppression sprinklers, fire
detector and smoke detector installations, the design of monitoring and alarm
systems, the placement and inspection of fire hydrants, fire code inspection and
enforcement, and the determination of fire cause and origin in arson suspected
fires. In addition, the Company's personnel perform community education programs
designed to reduce the risk of fire and increase the Company's community
profile.

The Company believes that its long standing public/private relationship
with the City of Scottsdale provides an example of an effective, cost-efficient
fire protection program. The Scottsdale program emphasizes the Company's
philosophy of fire prevention. With the cooperation and assistance of the
Company, the City of Scottsdale has designed comprehensive fire prevention
measures, including fire codes, inspections, and sprinkler and smoke detector
ordinances. The Company believes that as a result of strict fire codes, the
enactment of a sprinkler ordinance, and the effectiveness of the services
provided by the Company, Scottsdale's per capita cost for fire protection is 46%
lower than the national average and that its per capita fire loss is more than
200% less than the national average.

INDUSTRIAL FIRE PROTECTION SERVICES

The Company continues to seek opportunities to provide fire protection
services to large industrial complexes, such as airports, large industrial and
petrochemical plants, power plants, and other self-contained facilities. During
1996, the Company signed a three-year contract to provide firefighting and
hazardous materials response services to the Heath-Newark-Licking County Airport
Authority, located outside Columbus, Ohio and a four-year contract to provide
crash/rescue firefighting services at the Lafayette Regional Airport in
Lafayette, Louisiana. In 1997, the Company entered into a five-year contract to
provide crash/rescue firefighting services to three airports in Bolivia. The
Company intends to pursue similar contracts domestically and internationally.

FIRE TRAINING SERVICES AND PROTECTION SERVICES

The Company has instituted industrial fire training services and protection
services and provides sophisticated training for industrial, professional, and
specialized firefighters using live burn training to simulate realistic
firefighting situations. The training permits fire brigade and emergency
response teams to meet increased federal training requirements, the Occupational
Safety and Health Act ("OSHA"), and other regulatory requirements for work place
safety and on-site response teams.

The Company anticipates that its training services to industrial,
petrochemical, and other large private concerns will enhance its ability to
enter into contractual relationships to provide fire protection, security, and
other safety related services to these concerns and permit the complexes to
replace their fire brigades with professional firefighters and emergency
response teams. These activities have not resulted in significant revenue to
date. The combination of fire protection services with security services in
large industrial complexes has the potential to provide for greater efficiency
and utilization in the delivery of such services and to result in greatly
reduced cost to the industrial complexes for such services.

The Company utilizes its communications centers for home security, home
fire alarm monitoring and personal emergency response systems monitoring to
complement the emergency services it offers. The Company believes protection
services can be integrated with fire protection and ambulance services for
optimal efficiency and maximum cost-effectiveness. In August 1997, the Company
commenced a five-year contract to monitor global positioning satellite tracking
systems in vehicles.

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MANAGEMENT SYSTEMS

The Company utilizes sophisticated management systems, which it believes
enhance the productivity and profitability of the Company's existing operations
and enable it to enhance the productivity and profitability of acquired
operations. These systems permit the Company to achieve economies of scale at
the local operational level through the proper utilization of personnel and
equipment and at the corporate level through centralized systems for billings,
collections, purchasing, accounting, cash management, human resources, risk
management, and third-party reimbursement.

The Company has developed measurement systems that permit management to
monitor the performance level of each operation on a continual basis. The
Company's centralized management and information systems permit managers to
direct their attention primarily to operations. The systems include centralized
billings and collections procedures that provide for more efficient tracking and
collection of accounts receivable. Centralized purchasing permits the Company to
achieve significant discounts in the purchase of equipment and supplies through
a Company-developed catalogue from which managers select items needed for their
operations. Centralized third-party reimbursement allows the Company to maximize
the utilization of its expertise in Medicare, Medicaid, and other third-party
payor reimbursement programs and to ensure the most favorable classification for
all of the Company's operations under such programs.

The Company believes its investment in management systems and its effective
use of such systems represent key components in its success. The Company's
financial reporting system facilitates the Company's successful integration of
acquired companies. The Company is committed to an ongoing enhancement of its
systems to provide productive, timely information, and effective controls and
believes that its management systems have the capability to support sustained
long-term growth.

HUMAN RESOURCES

The Company strives to maximize the operational autonomy of its managers.
Managers receive extensive training in the use of management systems, customer
service, and supervisory practices. The Company's centralized human resources
division increases the Company's ability to assign the most appropriate
personnel for a position within any given operation and to reassign personnel as
necessary to meet operational needs. The human resources department participates
in all areas of training, career development, and succession planning of
employees and assesses the Company's personnel needs.

DISPATCH AND COMMUNICATIONS

The Company uses system status plans and flexible deployment systems to
position its ambulances within a designated service area because effective fleet
deployment represents a key factor in reducing response time and increasing
efficient use of resources. In certain service areas with a large volume of
calls, the Company analyzes data on traffic patterns, demographics, usage
frequency, and similar factors with the aid of computers to help it determine
optimal ambulance deployment and selection. The center that controls the
deployment and dispatch of ambulances in response to calls for ambulance service
may be owned and operated either by the applicable county or municipality or by
the Company itself. Each control center utilizes computer hardware and software
and sophisticated communications equipment and maintains responsibility for
fleet deployment and utilization 24 hours a day, seven days a week.

Depending on the emergency medical dispatch system used in a designated
service area, the public authority that receives "911" emergency medical calls
either dispatches the Company's ambulances directly from the public control
center or communicates information regarding the location and type of medical
emergency to the Company's control center which in turn dispatches ambulances to
the scene. In most service areas, the Company's control center receives the
calls from the police after the police have determined the call is for emergency
medical services. When the Company receives the "911" call, it dispatches one or
more ambulances directly from its control center while the call taker
communicates with the caller. All call takers and dispatchers are trained EMTs
with additional training that enables them to instruct a caller about applicable
pre-arrival emergency medical procedures, if necessary. In the Company's larger
control centers, a computer assists the dispatcher by analyzing a number of
factors, such as time of day, ambulance location, and

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historical traffic patterns, in order to recommend optimal ambulance selection.
In all cases, a dispatcher selects and dispatches the ambulance. While the
ambulance is en route to the scene, the ambulance receives information
concerning the patient's condition prior to the ambulance's arrival at the
scene.

The Company's communication systems allow the ambulance crew to communicate
directly with the destination hospital to alert hospital medical personnel of
the arrival of the patient and the patient's condition and to receive
instructions directly from emergency room personnel on specific pre-hospital
medical treatment. These systems also facilitate close and direct coordination
with other emergency service providers, such as the appropriate police and fire
departments, that also may be responding to a call.

Deployment and dispatch also represent important factors in providing
non-emergency ambulance services. The Company implements system status plans for
these services designed to assure appropriate response times to non-emergency
calls. The Company intends to establish call centers that will enable it to
implement demand management strategies for health care providers. Through its
strategic alliance with National Health Enhancement Systems, Inc., the Company
is working to develop a demand management system that integrates medical
protocols with the Company's logistics and "911" based communications expertise.
By combining telephone triage and medical transport services, the Company can
improve the responsiveness and cost-effectiveness of health care delivery in a
managed care system. Managed care providers could encourage their plan members
to contact a call center in non-life threatening emergencies. The call centers
are staffed by nurses who use medical protocols to analyze and triage the
medical situation and determine the best mode of transport. In non-emergency
situations, the call centers could dispatch a BLS ambulance rather than a more
expensive ALS ambulance. The call center can also direct the ambulance to
transport the patient to an affiliated facility specified by the managed care
center rather than to a non-member facility or a hospital emergency room,
thereby further reducing costs for the provider.

The Company utilizes communication centers in its fire protection
activities for the receipt of fire alarms and the dispatch of equipment and
personnel that are the same as or similar to those maintained for its ambulance
services. Response time represents an important criteria in the effectiveness of
fire suppression. Depending upon the area served, the Company's response time
from the receipt of a call to the arrival on the scene generally varies from 4
to 15 minutes. Response times depend on the level of protection sought by the
Company's customers in terms of fire station spacing, the size of the service
area covered, and the amount of equipment and personnel dedicated to fire
protection.

BILLINGS AND COLLECTIONS

The Company currently maintains 13 billing and payment processing centers
and a centralized billing and collection system at its headquarters in Arizona.
Invoices are generated at the regional level, and the account is processed by
the centralized system only if payment is not received in a timely manner.
Customer service is directed from each of the regional centers.

The Company derives a substantial portion of its ambulance fee collections
from reimbursement by third-party payors, including payments under Medicare,
Medicaid, and private insurance programs, typically invoicing and collecting
payments directly to and from those third-party payors. The Company also
collects payments directly from patients, including payments under deductible
and co-insurance provisions and otherwise. During fiscal 1995, 1996, and 1997,
the Company derived approximately 33%, 27%, and 26%, respectively, of its net
ambulance fee collections from Medicare, 12%, 11%, and 10%, respectively, from
Medicaid, 40%, 41%, and 38%, respectively, from private insurers (including
prepaid health plans and other non-government sources), and 15%, 21%, and 26%,
respectively, directly from patients. Companies in the ambulance service
industry maintain high provisions for doubtful accounts relative to companies in
other industries. Collection of complete and accurate patient billing
information during an emergency service call is sometimes difficult, and
incomplete information hinders post-service collection efforts. In addition, it
is not possible for the Company to evaluate the creditworthiness of patients
requiring emergency transport services. The Company's allowance for doubtful
accounts generally is higher with respect to revenue derived directly from
patients than for revenue derived from third-party payors and generally is
higher for transports resulting from "911" emergency calls than for general
transport requests.

30
<PAGE> 32

The Company has substantial experience in processing claims to third-party
payors and employs a collection staff specifically trained in third-party
coverage and reimbursement procedures. The Company uses specialized proprietary
software systems to specifically tailor the submission of claims to Medicare,
Medicaid, and certain other third-party payors and has the capability to
electronically submit claims to the extent third-party payors systems permit.
The Company's systems provide for accurate tracking of accounts receivable and
status pending payment, which facilitates the effective utilization of personnel
resources to resolve workload distribution and problem invoices. The Company
uses an automated dialer that preselects and dials accounts based on their
status within the billing and collection cycle, which optimizes the efficiency
of the collection staff. The Company believes that its experience in processing
third-party claims reduces the collection time of its receivables and results in
fewer rejected claims based on incomplete or inaccurate information.

State licensing requirements as well as contracts with counties,
municipalities, and health care facilities typically require the Company to
provide ambulance services without regard to a patient's insurance coverage or
ability to pay. As a result, the Company often does not receive compensation for
services provided to patients who are not covered by Medicare, Medicaid, or
private insurance. The anticipated level of uncompensated care and allowance for
uncollectible accounts may be considered in determining the Company's subsidy
and permitted rates under contracts with a county or municipality.

MARKETING AND SALES

Counties, fire districts, and municipalities generally award contracts to
provide "911" emergency services either through requests for competitive
proposals or bidding processes. In some instances in which the Company is the
existing provider, the county or municipality may elect to renegotiate the
Company's existing contract rather than re-bid the contract. The Company
believes that counties, fire districts, and municipalities consider the quality
of care, historical response time performance, and total cost, both to the
municipality or county and to the public, to be the most important factors in
awarding contracts. In addition, the Company will continue to seek to enter into
public/private alliances to compete for new business. The Company's alliance
with San Diego Fire & Life Safety Services allowed the entities to bid for and
win a contract to provide "911" and ambulance services throughout the city of
San Diego.

The Company markets its non-emergency ambulance services to hospitals,
health maintenance organizations, convalescent homes, and other health care
facilities that require a stable and reliable source of medical transportation
for their patients. The Company believes that its status as a "911" provider in
a designated service area increases its visibility and enhances its marketing
efforts for non-emergency services in that area. Contracts for non-emergency
services usually are based on criteria (such as quality of care, customer
service, response time, and cost) similar to those in contracts for emergency
services. The Company further believes that its strategy of building regional
operations will better position it to serve the developing managed care market.
The Company has implemented customer service training for all its personnel in
recognition of the increasing awareness of managed care providers to the
importance of customer service.

The Company markets its fire protection services to subscribers in rural
and suburban areas, volunteer fire departments, tax-supported fire districts and
municipalities, newly developed communities, and industrial complexes, including
airports, large industrial and petrochemical plants, power plants, and other
large self-contained facilities. The Company also provides fire protection
services to newly developed communities where the subscription fee is included
in the homeowner's association assessment.

CONTRACTS

The Company enters into contracts with counties, municipalities, and fire
districts to provide "911" emergency ambulance services in designated service
areas. These contracts typically specify maximum fees that the Company may
charge and set forth required criteria, such as response times, staffing levels,
types of vehicles and equipment, quality assurance, and insurance coverage.
Counties, municipalities, and fire districts also may require the Company to
provide a performance bond or other assurances of financial responsibility. The
amount of the subsidy, if any, that the Company receives from a county,
municipality, or fire district, and the rates that the Company may charge for
services under a contract for emergency ambulance services,

31
<PAGE> 33

depend in large part on the nature of the services rendered and performance
requirements. The four largest ambulance contracts accounted for 24%, 16%, and
13% of total revenue for the fiscal years ended June 30, 1995, 1996, and 1997,
respectively, with the contract with Orange County, Florida accounting for 9%,
7%, and 5%, respectively, of total revenue for the same periods. Rates to be
charged under the Orange County contract are agreed upon between the Company and
the county. The Company does not receive any subsidy from the county under this
contract.

The Company provides fire protection services pursuant to master contracts
or on a subscription basis. Master contracts provide for negotiated rates with
governmental entities. Certain contracts are performance based and require the
Company to meet certain dispatch and response times in a certain percentage of
responses. These contracts also set maximum thresholds for variances from the
performance criteria. These contracts establish the level of service required
and may encompass fire prevention and education activities as well as fire
suppression. Other contracts are level-of-effort based and require the Company
to provide a certain number of personnel for a certain time period for a
particular function, such as fire prevention or fire suppression. The largest of
these contracts accounted for 6%, 4%, and 3% of total revenue for the fiscal
years ended June 30, 1995, 1996, and 1997, respectively.

The Company provides fire protection services on a subscription basis in
areas where no governmental entity has assumed the financial responsibility for
providing fire protection. The Company derived approximately 56% of its fire
protection service revenue from subscriptions for fiscal 1995, 51% for fiscal
1996, and 50% for fiscal 1997. The Company had subscription contracts with
approximately 107,000 and 109,000 subscribing households as of June 30, 1996 and
1997, respectively, and approximately 3,000 commercial subscribers as of June
30, 1996 and 1997, primarily in Arizona, Knox County, Tennessee and Grants Pass,
Oregon. Subscription fees are collected annually in advance. Subscribers also
pay a membership fee upon subscribing for service. In the event that the Company
provides service for a nonsubscriber, the Company directly bills the property
owner for the cost of services rendered. The Company has developed a
computerized fire subscription billing system that allows the Company to monitor
accounts. The Company experienced renewal rates of approximately 88% during the
prior three fiscal years. Fire subscription rates are not currently regulated by
any government agency in the Company's service areas.

The Company's contracts generally extend for terms of three to five years,
with several contracts having terms of up to 10 years. The Company attempts to
renegotiate contracts substantially in advance of the expiration date and
generally has been successful in such renegotiations. The following table sets
forth certain information regarding the Company's five primary contracts at June
30, 1997 with counties, fire districts, and municipalities for ambulance
services and for fire protection services.

<TABLE>
<CAPTION>
EXPIRATION
TERM IN YEARS DATE TYPE OF SERVICE(1)
------------- --------------- ------------------
<S> <C> <C> <C>
Ambulance
Orange County,
Florida(2).............. 2 September 1998 911/General
Rochester, New York(3)..... 4 October 2000 911
Knox County,
Tennessee(4)............ 4 June 2002 911
Tucson, Arizona(5)......... 3 July 1997 911
Integrated Fire and Ambulance
Scottsdale, Arizona(6)..... 5 July 2001 911
</TABLE>

- ---------------
(1) Type of service for ambulance contracts indicates whether "911" emergency or
general ambulance services or both are provided pursuant to the contract.

(2) The contract was first entered into in 1962 by a provider that was acquired
by the Company in July 1984.

(3) The contract was first entered into in 1988 by a provider that was acquired
by the Company in May 1994.

(4) The contract was first entered into in July 1985 by the Company.

(5) The contract was first entered into in July 1993 by the Company. This
contract has been awarded to an ambulance service provider that is subject
to a pending acquisition by the Company.

(6) The contract was first entered into in 1952 by the Company. The contract has
two five-year renewal options exercisable by the City of Scottsdale.

32
<PAGE> 34

The Company also enters into contracts with hospitals, nursing homes, and
other health care facilities to provide non-emergency and critical care
ambulance services. These contracts typically designate the Company as the first
ambulance service provider contacted to provide non-emergency ambulance services
to those facilities and permit the Company to charge a base fee, mileage
reimbursement, and additional fees for the use of particular medical equipment
and supplies. The Company provides a discount in rates charged to facilities
that assume the responsibility for payment of the charges to the persons
receiving services.

COMPETITION

The ambulance service industry is highly competitive. The principal
participants include governmental entities (including fire districts), other
national ambulance service providers, large regional ambulance service
providers, hospitals, and numerous local and volunteer private providers. In
addition, there can be no assurance that counties, municipalities, fire
districts, hospitals, or health care facilities that presently contract for
ambulance services will not choose to provide ambulance services directly in the
future. The Company is experiencing increased competition from fire departments
to provide ambulance service. Several of the Company's current and potential
competitors have greater capital and other resources than the Company. Ambulance
service providers compete primarily on the basis of quality of service,
performance, and cost. The Company believes that counties, fire districts, and
municipalities consider quality of care, historical response time performance,
and cost to be the most important factors in awarding a contract, although other
factors, such as customer service, financial stability, and personnel policies
and practices, also may be considered. Although commercial providers often
compete intensely for business within a particular community, it is generally
difficult to displace a provider that has a history of satisfying the quality of
care and response time performance criteria established within the service area.
Moreover, significant start-up costs together with the long-term nature of the
contracts under which services are provided and the relationships many providers
have within their communities create barriers to providers seeking to enter new
markets other than through acquisition.

Fire protection services for residential and commercial properties are
provided primarily by tax-supported fire districts or municipalities, and
volunteer departments. Private providers represent a small portion of the total
fire protection market. The private sector provides fire protection services
primarily where a tax-supported fire district or municipality has decided to
contract for the provision of fire protection services. No assurance can be
given that fire districts or municipalities will continue to contract for fire
protection services. In areas where no governmental entity has assumed financial
responsibility for providing fire protection, the Company provides fire
protection services on a subscription basis. No assurance can be given that a
subscription area will not be annexed by a municipality or be converted to a
fire district that provides service directly rather than through a master
contract.

GOVERNMENTAL REGULATION

The Company's business is subject to governmental regulation at the
federal, state, and local levels. At the federal level, the Company is subject
to regulations under OSHA designed to protect employees of the Company. The
federal government also recommends standards for ambulance design and
construction, medical training curriculum, and designation of appropriate trauma
facilities. Various state agencies may modify these standards.

Each state in which the Company operates regulates various aspects of its
ambulance and fire business. State requirements govern the licensing or
certification of ambulance service providers, training and certification of
medical personnel, the scope of services that may be provided by medical
personnel, staffing requirements, medical control, medical procedures,
communication systems, vehicles, and equipment. The Company's contracts in its
current service areas typically prescribe maximum rates that the Company may
charge for services. The process of determining rates includes cost reviews,
analyses of levels of reimbursement from all sources, and determination of
reasonable profits. Rate setting agencies may set rates to compensate service
providers by requiring paying customers to subsidize those who do not or cannot
pay. Regulations applicable to ambulance services may vary widely from state to
state.

33
<PAGE> 35

Applicable federal, state, and local laws and regulations are subject to
change. The Company believes that it currently is in substantial compliance with
applicable regulatory requirements. These regulatory requirements, however, may
require the Company in the future to increase its capital and operating
expenditures in order to maintain current operations or initiate new operations.

REIMBURSEMENT

The Company must comply with various requirements in connection with its
participation in Medicare and Medicaid. Medicare is a federal health insurance
program for the elderly and for chronically disabled individuals, which pays for
ambulance services when medically necessary. Medicare uses a charge-based
reimbursement system for ambulance services and reimburses 80% of charges
determined to be reasonable by Medicare, subject to the limits fixed for the
particular geographic area. The patient is responsible for paying the balance of
the bill, and Medicare requires the Company to expend reasonable efforts to
collect the balance. In determining reasonable charges, Medicare considers and
applies the lowest of various charge factors, including the actual charge, the
customary charge, the prevailing charge in the same locality, the amount of
reimbursement for comparable services, or the inflation-indexed charge limit.

Medicaid is a combined federal-state program for medical assistance to
impoverished individuals who are aged, blind, or disabled or members of families
with dependent children. Medicaid programs or a state equivalent exist in all
states in which the Company operates. Although Medicaid programs differ in
certain respects from state to state, all are subject to federal requirements.
State Medicaid agencies have the authority to set levels of reimbursement within
federal guidelines. The Company receives only the reimbursement permitted by
Medicaid and is not permitted to collect from the patient any difference between
its customary charge and the amount reimbursed.

Like other Medicare and Medicaid providers, the Company is subject to
governmental audits of its Medicare and Medicaid reimbursement claims. The
Company has not experienced significant losses as a result of any such audit.

Government funding for health care programs is subject to statutory and
regulatory changes, administrative rulings, interpretations of policy,
determinations by intermediaries and governmental funding restrictions, all of
which could materially increase or decrease program reimbursements for ambulance
services. In recent years, Congress has consistently attempted to curb federal
spending on such programs. During June 1997, the Health Care Financing
Administration ("HCFA") issued proposed rules that would revise Medicare policy
on the coverage of ambulance services. Reimbursement is currently permitted if,
based on an assessment of the patient's condition, it is determined that ALS
service is medically necessary or if ALS response is required under "911"
contracts or state or local law. The new proposal would reimburse at ALS rates
only if ALS services were medically necessary. The proposed HCFA rules would
also require, among other things, that a physician's certification be obtained
prior to furnishing non-emergency ambulance service to patients, that certain
ambulance staffing requirements be maintained, that certain equipment be present
in each ambulance, and that certain additional information and documentation be
provided in order to qualify for reimbursement under the Medicare program. The
proposed rules have not been finalized. If implemented, such rules could result
in contract renegotiations or other action by the Company to offset any negative
impact of the proposed change in reimbursement policies.

During August 1997, President Clinton signed the "Balanced Budget Act of
1997" (the "Budget Act"). The Budget Act provides for certain changes to the
Medicare reimbursement system, including the development and implementation of a
prospective fee schedule, by January 2000, for ambulance services. The Budget
Act mandates that this fee schedule be developed through a negotiated rulemaking
process between HFCA and ambulance service providers and must consider the
following: (i) data from industry and other organizations involved in the
delivery of ambulance services, (ii) mechanisms to control increases in
expenditures for ambulance services, (iii) appropriate regional and operational
differences, (iv) adjustments to payment rates to account for inflation and
other relevant factors, and (v) the phase-in of payment rates under the fee
schedule in an efficient and fair manner. Charges for ambulance services
provided during calendar years 1998 and 1999 will be increased by the Consumer
Price Index (CPI) less one percentage point.

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<PAGE> 36

The Budget Act also stipulates that individual states may now elect to no
longer provide payment for Medicare cost-sharing for coinsurance, or copayments,
for Medicaid beneficiaries. Medicare coverage has been extended for certain
paramedic services provided in rural areas.

Certain actions to partially mitigate any adverse effect of these changes
could be taken by the Company. These actions could include renegotiation of
rates and contract subsidies provided in the Company's "911" ambulance service
contracts and changes in staffing of ambulance crews based upon the negotiation
for longer response times under ambulance service contracts to reduce operating
costs.

There can be no assurance whether the proposed HCFA rules, a prospective
fee schedule, or other proposals involving various aspects of Medicare
reimbursements will be adopted or the effect on the Company of any such
adoption. No assurance can be given that future funding levels for Medicare and
Medicaid programs will be comparable to present levels. Changes in the
reimbursement policies, or other government action, could adversely affect the
Company's business, results of operations, and financial condition.

INSURANCE

The Company carries a broad range of automobile and general liability,
comprehensive property damage, malpractice, workers' compensation, and other
insurance coverages that the Company considers adequate for the protection of
its assets and operations. The Company operates in some states that adhere to
legal standards that hold emergency service providers to a gross negligence
standard in the delivery of emergency medical care, thereby subjecting them to
less exposure for tort judgments. The Company is subject to accident claims as a
result of the normal operation of its fleet of ambulances and fire vehicles.
There can be no assurance, however, that the coverage limits of the Company's
policies will be adequate. A successful claim against the Company in excess of
its insurance coverage could have a material adverse effect on the Company and
its financial condition. Claims against the Company, regardless of their merit
or outcome, also may have an adverse effect on the Company's reputation and
business. The Company has undertaken to minimize its exposure through an active
risk management program.

EMPLOYEES

At September 26, 1997, the Company employed approximately 5,500 full-time
and 3,700 part-time employees, including approximately 6,500 involved in
ambulance services, 600 in fire protection services, 550 in integrated ambulance
and fire protection services, and 1,550 in management, administrative, clerical,
and billing activities. Of these employees, 2,700 are paramedics and 3,900 are
EMTs. The Company is a party to collective bargaining agreements relating to its
Rochester, New York operations and to certain of its ambulance services
employees in Arizona. The Company considers its relations with employees to be
good.

FACILITIES AND EQUIPMENT

The Company leases its principal executive offices in Scottsdale, Arizona.
The Company leases administrative facilities and other facilities used
principally for ambulance and fire apparatus basing, garaging and maintenance in
those areas in which it provides ambulance and fire protection services. The
Company also owns six administrative facilities and 11 other facilities within
its service areas. Aggregate rental expense was approximately $5.3 million and
$6.6 million during fiscal 1996 and 1997, respectively. At September 26, 1997,
the Company's fleet included 1,363 owned and 198 leased ambulances, 120 owned
and 15 leased fire vehicles and 250 owned and 15 leased other vehicles.

LEGAL PROCEEDINGS

The Company from time to time is subject to litigation arising in the
ordinary course of business. There can be no assurance that the Company's
insurance coverage will be adequate to cover all liabilities occurring out of
such claims. In the opinion of management, the Company is not engaged in any
legal proceedings expected to have a material adverse effect on the financial
condition or results of operations of the Company.

35
<PAGE> 37

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS, AND KEY EMPLOYEES

The following table sets forth information concerning each of the
directors, executive officers, and key employees of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------- --- -----------------------------------------------------------
<S> <C> <C>
Warren S. Rustand.......... 54 Chairman of the Board, Chief Executive Officer, and
Director(1)(2)(3)
Cor J. Clement............. 49 Vice Chairman of the Board and Director
James H. Bolin............. 45 President and Director(3)
Robert T. Edwards.......... 57 Executive Vice President and Director(3)
William R. Crowell......... 38 Senior Vice President -- Finance and Acquisitions
William F. Gillis.......... 49 Senior Vice President -- Enterprise Services & Chief
Information officer
Mark E. Liebner............ 45 Senior Vice President -- Chief Financial Officer &
Treasurer
Robert E. Ramsey, Jr....... 51 Senior Vice President and Director
James E. Stenger........... 54 Senior Vice President -- Executive Assistant to the
President
John E. Stuart............. 56 Senior Vice President -- Marketing & New Business
Development
Kurt R. Davis.............. 35 Vice President -- Public Affairs & Corporate Communications
Dean P. Hoffman............ 37 Vice President -- Financial Services
Michel A. Sucher, M.D...... 50 Vice President -- Medical Affairs
Atul Vashistha............. 31 Vice President -- Marketing and Business Development
Louis G. Jekel............. 56 Secretary and Director
William C. Turner.......... 68 Director(1)(2)(3)(4)(5)
Henry G. Walker............ 50 Director(1)(4)
Louis A. Witzeman.......... 72 Director(2)(4)
</TABLE>

- ---------------
(1) Member of the Human Resource/Compensation/Organization Committee.

(2) Member of the Nominating Committee.

(3) Member of the Executive Committee.

(4) Member of the Audit Committee.

(5) Member of the Senior Committee.

In March 1995, the Board of Directors established an Office of Chief
Executive; it is currently comprised of three members, Mr. Rustand, Mr. Bolin,
and Mr. Edwards. The Office of Chief Executive oversees the operation and
management of the Company and develops and implements strategic and long-range
planning for the Company.

WARREN S. RUSTAND has served as Chief Executive Officer of the Company
since August 1996, Chairman of the Board of Directors since May 1994, and a
member of the Board of Directors since August 1993. He also is a member of the
Office of Chief Executive. Mr. Rustand has been Chairman and Chief Executive
Officer of The Cambridge Company, Ltd., a merchant banking and management
consulting firm, since 1987. He has served as Chairman of Health Partners of
Arizona, a managed care provider, since February 1996. Mr. Rustand is also
Chairman of an additional company and director of four companies, including
LucasVarity PLC, a New York Stock Exchange listed company. Mr. Rustand served as
appointments secretary to President Ford from 1974 to 1976, and as special
assistant to Mr. Ford while he was Vice President in 1973 and 1974.

COR J. CLEMENT has served as a member of the Board of Directors since May
1992, and as Vice Chairman of the board of Directors since August 1994. Mr.
Clement served as the President and Chief Executive Officer of NVD, an
international provider of security and industrial fire protection services
headquartered in the Netherlands, from February 1980 until January 1997.

36
<PAGE> 38

JAMES H. BOLIN has served as the President of the Company since March 1995
and a member of its Board of Directors since February 1981. He also is a member
of the Office of Chief Executive. Mr. Bolin served as Senior Vice
President -- Ambulance Services of the Company from October 1991 until March
1995, Chief Financial Officer from October 1988 through September 1991, Senior
Vice President -- Finance from August 1986 through September 1988, and Vice
President -- Finance from April 1981 through July 1986. Mr. Bolin also is the
Chairman and Treasurer of the Rural/Metro ESOP Administrative Committee. Mr.
Bolin is a certified public accountant. Mr. Bolin will retire from his full-time
duties as President effective January 1, 1998. He will remain with the Company
in a part-time capacity and as a member of the Company's Board of Directors.

ROBERT T. EDWARDS has served as Executive Vice President of the Company
since October 1995 and a member of its Board of Directors since May 1993. He is
also a member of the Office of Chief Executive. He served as Senior Vice
President -- Fire Protection Services of the Company from August 1991 until
October 1995. He served as Vice President and General Manager of the Company's
Maricopa County operations from February 1989 to August 1991 and as Vice
President from July 1986 until August 1991. From 1978 to July 1986, Mr. Edwards
served in various capacities with the Company.

WILLIAM R. CROWELL has served as Senior Vice President -- Finance and
Acquisitions of the Company since July, 1997 after having served as Vice
President -- Financial Services of the Company since January 1993. Mr. Crowell
served as Director of Financial Services from July 1992 through December 1992.
Mr. Crowell served as Vice President -- Finance of Peter Piper, Inc., an
international franchisor and food-service retailer, from January 1990 through
June 1992 and as Assistant Corporate Controller of W.A. Krueger Co., a publicly
held printing company, from April 1988 through December 1989. Mr. Crowell is a
certified public accountant.

WILLIAM F. GILLIS has served as Senior Vice President -- Enterprise
Services and Chief Information Officer since July 1997. Mr. Gillis served as
President of Motorola's INFO Enterprises subsidiary from July 1992 through July
1996. From July 1996 until July 1997, he served as Interim Chief Information
Officer for the American Graduate School of International Management
(Thunderbird), where he has served on the Board of Trustees since 1992.
Concurrently, he formed ParentCare Corporation, an information service for the
progeny of elder Americans.

MARK E. LIEBNER has served as Senior Vice President of the Company since
August 1994 and as Chief Financial Officer of the Company since October 1991.
From October 1991 to August 1994, Mr. Liebner served as Vice President of the
Company. From July 1988 until September 1991, he was a Vice President of Van
Kampen Merritt, having served in a consulting capacity to the Company in
connection with its 1990 debt restructurings. From March 1982 until June 1988,
Mr. Liebner served as Vice President of Lloyds International Corporation, a
merchant banking affiliate of Lloyds Bank PLC.

ROBERT E. RAMSEY, JR. has served as Senior Vice President of the Company
and as a member of its Board of Directors since June 1997. Mr. Ramsey is
President and Chief Executive Officer of SW General, Inc. and affiliated
companies, which he founded in 1982. He is currently President of the Arizona
Ambulance Association. SW General, Inc. and affiliated companies were purchased
by the Company in June 1997.

JAMES E. STENGER has served as Senior Vice President -- Executive Assistant
to the President of the Company since July 1997. Mr. Stenger served as Vice
President -- Executive Assistant to the President of the Company from February
1989 through July 1997. He served as Vice President and General Manager of the
Company's Pima and Yuma Counties operations from February 1989 through June 1991
and as Vice President and General Manager of the Company's Maricopa County
operations from July 1987 through January 1989. He served in various capacities
with the Company from 1966 to June 1987.

JOHN E. STUART has served as Senior Vice President -- Marketing and New
Business Development of the Company since January 1996 after having served as
Senior Vice President -- Marketing of the Company from May 1993 through January
1996. Mr. Stuart served as Senior Vice President -- Service Establishments for
American Express Travel Related Services, Inc. in London from January 1990 until
joining the Company in

37
<PAGE> 39

May 1993 and as Senior Vice President -- Marketing and Sales of that company
from January 1988 through December 1989.

KURT R. DAVIS has served as Vice President -- Public Affairs and Corporate
Communications since August 1995. Mr. Davis joined the Company in February 1992
as Director of Governmental Relations. After an eighteen-month sabbatical in the
Arizona Governor's office, Mr. Davis returned to the Company in January 1995 as
National Director of Public Affairs. Mr. Davis served as Executive Director of
the Arizona Republican Party from 1987 through 1991, and as Director of
Intergovernmental Affairs and Issues Analysis in the Arizona Attorney General's
Office from 1991 until joining the Company.

DEAN P. HOFFMAN has served as Vice President -- Financial Services since
July 1997 after having served as Director of Finance from June 1994 to June
1997. Mr. Hoffman served as Director of Accounting and Budgets of Pinnacle West
Capital Corporation, a public utility and real estate holding company from June
1987 until October 1992. From October 1992 until June 1994, he was a business
consultant in private practice. Mr. Hoffman is a certified public accountant.

MICHEL A. SUCHER, M.D., has served as Vice President -- Medical Affairs of
the Company since January 1995. He served as National Medical Director for the
Company from 1984 to 1995. From 1974 to 1995, Dr. Sucher engaged in the private
practice of emergency medicine and held several positions at Scottsdale Memorial
Hospital, including the most recent position as President of the Medical Staff.
Dr. Sucher is board certified by the American Board of Emergency Medicine and is
a member of the American College of Emergency Physicians.

ATUL VASHISTHA has served as Vice President -- Marketing and Business
Development since September 1996. He served as Regional President of the
Company's Southern Arizona Operations from July 1994 through September 1996.
From December 1991 through July 1994, Mr. Vashistha served as the Company's
Director of Marketing and Sales.

LOUIS G. JEKEL has served as Secretary of the Company and as a member of
its Board of Directors since 1968. Mr. Jekel directs the Company's Wildland Fire
Protection Operations with the State of Arizona and the federal government. Mr.
Jekel is also the Secretary of the Rural/Metro ESOP Administrative Committee.
Mr. Jekel is a partner in the law firm of Jekel & Howard, Scottsdale, Arizona.

WILLIAM C. TURNER has been a member of the Board of Directors of the
Company since November 1993. Mr. Turner is currently Chairman and Chief
Executive of Argyle Atlantic Corporation, an international merchant banking and
management consulting firm; Chairman of the Avon International Advisory Council
for Avon Products, Inc.; a director of the Goodyear Tire & Rubber Company; a
director of Microtest, Inc. and a trustee and executive committee member of the
United States Council for International Business. Mr. Turner is also a former
United States Ambassador and permanent representative to the Organization for
Economic Cooperation and Development. Since returning to the United States from
his ambassador post in Paris, Mr. Turner has served on the boards of directors
and/or international advisory councils of ten major listed corporations.

HENRY G. WALKER has been a member of the Board of Directors of the Company
since September 1997. Since April 1997, he has served as President and Chief
Executive Officer of the Sisters of Providence Health System, comprised of
hospitals, long-term care facilities, physician practices, managed care plans,
and other health and social services. From 1996 to March 1997, Mr. Walker served
as President and Chief Executive Officer of Health Partners of Arizona, a
state-wide managed care company. From 1992 to 1996 he served as President and
Chief Executive Officer of TMCare, a healthcare delivery system. Mr. Walker is a
member of the National Advisory Council of The Healthcare Forum.

LOUIS A. WITZEMAN is the founder of the Company. Mr. Witzeman has served as
a member of the Board of Directors since the Company's formation in 1948,
currently serving as Chairman of the Board Emeritus. Mr. Witzeman served as
Chief Executive Officer of the Company until his retirement in 1980.

Directors hold office until their successors have been elected and
qualified. All officers serve at the pleasure of the Board of Directors. There
are no family relationships among any of the directors or officers of the
Company.

38
<PAGE> 40

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to
beneficial ownership of the Common Stock on October 1, 1997 by: (i) each
director; (ii) the Company's Chief Executive Officer and the Company's four
other most highly compensated executive officers; (the "Named Executive
Officers") (iii) all directors and executive officers of the Company as a group;
and (iv) each person known by the Company to be the beneficial owner of more
than five percent of the Common Stock.

<TABLE>
<CAPTION>
AMOUNT
BENEFICIALLY
OWNED
NAME OF BENEFICIAL OWNER (1)(2)(3) PERCENT
- ------------------------------------------------------------------------- ------------ -------
<S> <C> <C>
DIRECTORS AND NAMED EXECUTIVE OFFICERS:
Warren S. Rustand(4)..................................................... 171,750 1.3%
James H. Bolin(5)........................................................ 251,172 1.8
Cor J. Clement(6)........................................................ 23,750 *
Robert T. Edwards(7)..................................................... 173,946 1.3
Louis G. Jekel(8)........................................................ 144,013 1.1
Robert E. Ramsey, Jr. ................................................... 769,641 5.7
William C. Turner(9)..................................................... 23,000 *
Louis A. Witzeman(10).................................................... 132,498 1.0
Henry G. Walker.......................................................... 0 *
John E. Stuart(11)....................................................... 76,307 *
Mark E. Liebner(12)...................................................... 178,284 1.3
Executive officers and directors as a group (14 persons)................. 2,059,083 14.4%
5% STOCKHOLDERS:
ESOP(13)................................................................. 1,052,179 7.8%
</TABLE>

- ---------------
* Less than one percent

(1) Except as indicated, and subject to community property laws when
applicable, the persons named in the table above have sole voting and
investment power with respect to all shares of Common Stock shown as
beneficially owned by them.

(2) Includes shares of Common Stock issuable to the identified person pursuant
to stock options that may be exercised within 60 days after October 1,
1997. In calculating the percentage of ownership, such shares are deemed to
be outstanding for the purpose of computing the percentage of shares of
Common Stock owned by such person, but are not deemed to be outstanding for
the purpose of computing the percentage of shares of Common Stock owned by
any other stockholders.

(3) Excludes 29,298, 22,914, and 5,661 fully vested shares held by the ESOP for
the benefit of Messrs. Bolin, Edwards, and Jekel, respectively, and 45,
1,030, and 235 shares held by the ESOP for the benefit of Messrs. Rustand,
Liebner, and Stuart, respectively, that are 0%, 80%, and 60% vested,
respectively. Such persons have sole voting power with respect to the
shares held in their account by the ESOP.

(4) Includes 143,750 shares of Common Stock issuable upon exercise of stock
options.

(5) Includes 131,818 shares of Common Stock issuable upon exercise of stock
options and 119,354 shares held by the Bolin Revocable Trust UA dated
February 27, 1996, James H. Bolin and Sandra L. Bolin, Trustees.

(6) Includes 5,000 shares held by a partnership of which Mr. Clement is the
beneficial owner and 6,250 shares of Common Stock issuable upon exercise of
stock options.

(7) Includes 142,981 shares of Common Stock issuable upon exercise of stock
options.

(8) Includes 62,500 shares of Common Stock issuable upon exercise of stock
options and 81,336 shares held by a partnership of which Mr. Jekel is the
beneficial owner.

39
<PAGE> 41

(9) Includes 15,000 shares of Common Stock issuable upon exercise of stock
options.

(10) Includes 29,562 shares held by the Louis A. Witzeman, Jr. Family Investment
Limited Partnership, of which 150 shares are held for the benefit of other
family members. Also includes 56,875 shares of Common Stock issuable upon
the exercise of stock options.

(11) Includes 53,042 shares of Common Stock issuable upon exercise of stock
options.

(12) Includes 117,014 shares of Common Stock issuable upon exercise of stock
options.

(13) The address of the Rural/Metro Corporation Employee Stock Ownership Plan
(the "ESOP") is c/o Rural/Metro Corporation, 8401 East Indian School Road,
Scottsdale, Arizona 85251.

40
<PAGE> 42

DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock consists of 23,000,000 shares of
Common Stock, par value $0.01 per share (the "Common Stock") and 2,000,000
shares of Preferred Stock, par value $0.01 per share (the "Preferred Stock"). At
October 3, 1997, there were outstanding 13,452,141 shares of Common Stock held
by approximately 1,058 holders of record. No shares of Preferred Stock are
outstanding. All of the currently outstanding shares of Common Stock are, and
all shares of Common Stock included in the Registration Statement of which this
Prospectus forms a part, will be, validly issued, fully paid and non-assessable.

COMMON STOCK

The holders of Common Stock are entitled to one vote for each share on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, the holders of a majority of the stock entitled to vote in
any election of directors may elect all of the directors standing for election.
Subject to preferences that may be applicable to any then outstanding Preferred
Stock, the holders of Common Stock will be entitled to receive such dividends,
if any, as may be declared by the Board of Directors from time to time out of
legally available funds. Upon liquidation, dissolution or winding up of the
Company, the holders of Common Stock will be entitled to share ratably in all
assets of the Company that are legally available for distribution, after payment
of all debts and other liabilities and subject to the prior rights of holders of
any Preferred Stock then outstanding. The holders of Common Stock have no
preemptive, subscription, redemption, or conversion rights. The rights,
preferences and privileges of holders of Common Stock will be subject to the
rights of the holders of shares of any series of Preferred Stock that the
Company may issue in the future.

PREFERRED STOCK

Preferred Stock may be issued from time to time in one or more series. The
Board of Directors, without further approval of the stockholders, has the
authority to fix the rights and terms relating to dividends, conversion, voting,
redemption, liquidation preferences, sinking funds and any other rights,
preferences, privileges, and restrictions applicable to each such series of
Preferred Stock. A purpose of authorizing the Board of Directors to determine
such rights and preferences is to eliminate delays associated with a stockholder
vote on specific issuances. While providing flexibility in connection with
possible financings, acquisitions, and other corporate purposes, the issuance of
Preferred Stock, among other things, could adversely affect the voting power of
the holders of Common Stock and, under certain circumstances, be used as a means
of discouraging, delaying, or preventing a change in control of the Company.
There currently are no outstanding shares of Preferred Stock or any commitments
or options or other rights currently outstanding for the issuance of Preferred
Stock. The Company has no present plan to issue shares of its Preferred Stock.

DELAWARE GENERAL CORPORATION LAW AND CERTAIN CHARTER PROVISIONS

The provisions of the Company's Restated Certificate and Restated Bylaws
and the General Corporation Law summarized in the following paragraphs may have
the effect of discouraging, delaying, or preventing hostile takeovers, including
those that might result in a premium over the market price, or discouraging,
delaying, or preventing changes in control or management of the Company.

The Company is subject to the provisions of Section 203 of the General
Corporation Law. In general, this statute prohibits a publicly held Delaware
corporation from engaging, under certain circumstances, in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person becomes an interested
stockholder, unless either (i) prior to the date at which the stockholder became
an interested stockholder, the Board of Directors approved either the business
combination or the transaction in which the person becomes an interested
stockholder; (ii) the stockholder acquires more than 85% of the outstanding
voting stock of the corporation (excluding shares held by directors who are
officers or held in certain employee stock plans) upon consummation of the
transaction in which the stockholder becomes an interested stockholder; or (iii)
the business combination is approved by the Board of Directors and by two-thirds
of the outstanding voting stock of the corporation (excluding shares held by the

41
<PAGE> 43

interested stockholder) at a meeting of stockholders (and not by written
consent) held on or subsequent to the date of the business combination. An
"interested stockholder" is a person who, together with affiliates and
associates, owns (or at any time within the prior three years did own) 15% or
more of the corporation's voting stock. The Company has excluded from the
definition of "interested stockholder" any persons who, together with their
affiliates and associates, owned 15% or more of the Company's Common Stock on
May 27, 1993, the date on which the Company became a Delaware corporation.
Section 203 defines a "business combination" to include, without limitation,
mergers, consolidations, stock sales and asset based transactions, and other
transactions resulting in a financial benefit to the interested stockholder.

The Company's Restated Certificate and Restated Bylaws contain a number of
other provisions relating to corporate governance and to the rights of
stockholders. These provisions include (a) a classified Board of Directors; (b)
the authority of the Board of Directors to fill vacancies on the Board of
Directors; (c) the authority of the Board of Directors to issue series of
Preferred Stock with such voting rights and other powers as the Board of
Directors may determine; (d) notice requirements relating to nominations to the
Board of Directors and to the raising of business matters at stockholder
meetings; (e) a provision that special meetings of the stockholders may be
called only by the Chairman of the Board or the Board of Directors; (f) a
prohibition on stockholder action by written consent except with respect to
actions to which the Board of Directors has granted its prior approval and
consent; (g) a fair price provision, which is intended to ensure that
stockholders receive fair consideration for shares sold at all stages of
takeovers or attempted takeovers of the Company; (h) the authority of the Board
of Directors to consider certain factors including, without limitation, the
potential impact on employees and other constituents of the Company and the
communities in which the Company operates when evaluating certain matters such
as tender offers, merger proposals or sales of property or assets of the
Company; and (i) the requirement that certain "anti-takeover" provisions in the
Restated Bylaws and the Restated Certificate may be amended only by super
majority vote.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is American
Securities Transfer & Trust, Incorporated.

42
<PAGE> 44

PLAN OF DISTRIBUTION

This Prospectus covers 3,553,060 shares of Common Stock that may be issued
and sold by the Company from time to time in connection with the acquisition by
the Company of other businesses. It is expected that the terms of any such
acquisitions will be determined by negotiations with the owners or controlling
persons of the businesses to be acquired and that the shares of Common Stock
issued in connection with such acquisitions will be valued at prices reasonably
related to market prices current either at the time of agreement on the terms of
an acquisition or at or about the time of delivery of the shares.

SHARES ELIGIBLE FOR FUTURE SALE

In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated for purposes of Rule 144) who beneficially owns
restricted securities with respect to which at least one year has elapsed since
the later of the date the shares were acquired from the Company or from an
affiliate of the Company, is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of (i) 1% of the then
outstanding shares of Common Stock of the Company, or (ii) the average weekly
trading volume in Common Stock during the four calendar weeks preceding such
sale. Sales under Rule 144 also are subject to certain manner-of-sale provisions
and notice requirements and to the availability of current public information
about the Company. A person who is not an affiliate, has not been an affiliate
within three months prior to sale, and who beneficially owns restricted
securities with respect to which at least two years have elapsed since the later
of the date the shares were acquired from the Company or from an affiliate of
the Company, is entitled to sell such shares under Rule 144(k) without regard to
any of the volume limitations or other requirements described above.

The Company has filed a registration statement under the Securities Act to
register for offer and sale up to 3,965,625 shares of Common Stock reserved for
issuance pursuant to the exercise of stock options that may be granted under the
Company's stock option plans. Shares issued after the effective date of such
registration statement upon exercise of stock options issued under the Company's
stock option plans generally will be eligible for sale in the public market,
except that affiliates of the Company will continue to be subject to volume
limitations.

LEGAL MATTERS

The validity of the shares offered hereby will be passed upon for the
Company by O'Connor, Cavanagh, Anderson, Killingsworth & Beshears, a
Professional Association, Phoenix, Arizona.

43
<PAGE> 45

EXPERTS

The consolidated financial statements of the Company as of June 30, 1996
and 1997 and for each of the three years in the period ended June 30, 1997
incorporated by reference into this Prospectus and the Registration Statement of
which this Prospectus is a part, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated by reference upon the authority of such firm as
experts in auditing and accounting in giving said reports.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-4 (the "Registration Statement") under the Securities Act with respect to the
shares of Common Stock offered hereby. This Prospectus omits certain information
contained in or incorporated by reference in the Registration Statement of which
this Prospectus is a part, and reference is made to the Registration Statement
and the exhibits and schedules thereto for further information with respect to
the Company and the Common Stock offered hereby. Statements contained herein
concerning the provisions of any documents are not necessarily complete, and in
each instance reference is made to the copy of such document filed as an exhibit
to the Registration Statement. Each such statement is qualified in its entirety
by such reference.

44
<PAGE> 46

======================================================

NO PERSON HAS BEEN AUTHORIZED TO GIVE INFORMATION OR MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
MADE HEREBY. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Prospectus Summary.................... 3
Risk Factors.......................... 5
Price Range of Common Stock........... 9
Dividend Policy....................... 9
Unaudited Pro Forma Combined Financial
Data................................ 10
Selected Consolidated Financial
Data................................ 14
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 16
Business.............................. 21
Management............................ 36
Principal Stockholders................ 39
Description of Capital Stock.......... 41
Plan of Distribution.................. 43
Shares Eligible for Future Sale....... 43
Legal Matters......................... 43
Experts............................... 44
Additional Information................ 44
</TABLE>

======================================================
======================================================
3,553,040 SHARES

RURAL/METRO
CORPORATION

COMMON STOCK
--------------------

PROSPECTUS
--------------------
OCTOBER , 1997
======================================================
<PAGE> 47

[ALTERNATE PAGE]
PROSPECTUS

RURAL/METRO CORPORATION

COMMON STOCK

------------------------

This Prospectus, as appropriately amended or supplemented, may be used from
time to time principally by persons who have received shares of Common Stock,
$.01 par value (the "Common Stock" or the "Shares"), of Rural/Metro Corporation
(the "Company") in mergers or acquisitions of other businesses or properties
made by the Company, or their transferees or pledgees, and who wish to offer and
sell such Shares (such persons are herein referred to as the "Selling
Stockholder" or "Selling Stockholders") in transactions in which they and any
broker-dealer through whom such Shares are sold may be deemed to be underwriters
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"), as more fully described herein. The Company will not receive any of the
proceeds from the sale of Shares by the Selling Stockholders. Any comissions
paid or concessions allowed to any broker-dealer, and, if any broker-dealer
purchases such Shares as principal, any profits received on the resale of such
Shares, may be deemed to be underwriting discounts and commissions under the
Securities Act. Printing, certain legal, filing and other similar expenses of
this offering will be paid by the Company. Selling Stockholders will bear all
other expenses of this offering, including brokerage fees, any underwriting
discounts or commissions.

FOR INFORMATION CONTAINING CERTAIN FACTORS RELATING TO THIS OFFERING, SEE
"RISK FACTORS," BEGINNING ON PAGE 5.

------------------------

The date of this Prospectus is October , 1997.
<PAGE> 48

[ALTERNATE PAGE]

PLAN OF DISTRIBUTION

This Prospectus, as appropriately amended or supplemented, may be used from
time to time principally by persons who have received shares of Common Stock in
acquisitions made by the Company of other businesses or properties, or their
transferees or pledgees, who wish to offer and sell such Shares (such persons
are herein referred to as the "Selling Stockholder" or "Selling Stockholders")
in transactions in which they and any person acting on their behalf through whom
such Shares are sold may be deemed to be underwriters within the meaning of the
Securities Act. The Company will receive none of the proceeds from any such
sales. The Company will pay substantially all of the expenses incident to this
offering of the Shares by the Selling Stockholders to the public other than
commissions and discounts of underwriters, brokers, dealers or agents.

There presently are no arrangements or understandings, formal or informal,
pertaining to the distribution of the Shares described herein. Upon the Company
being notified by a Selling Stockholder that any material arrangements have been
entered into for the sale of Shares, to the extent required, the Company will
file, during any period in which offers or sales are being made, one or more
supplements to this Prospectus to set forth the names of Selling Stockholders
and any other material information with respect to the plan of distribution not
previously disclosed. In addition, any Shares which qualify for sale pursuant to
Section 4 of, or Rules 144 or 144A under, the Securities Act may be sold under
such provisions rather than pursuant to this Prospectus.

Selling Stockholders may sell the Shares being offered hereby from time to
time in transactions (which may involve crosses and block transactions) on the
Nasdaq National Market in negotiated transactions or otherwise at market prices
prevailing at the time of the sale or at negotiated prices or in transactions
directly to one or more purchasers, including pledgees in privately negotiated
transactions (including sales pursuant to pledges). Selling Stockholders may
sell some or all of the shares in transactions involving broker-dealers, who may
act either as agent or as principal. Broker-dealers participating in such
transactions as agent may receive commissions from Selling Stockholders (and, if
they act as agent for the purchaser of such Shares, from such purchaser), such
commissions computed in appropriate cases in accordance with the applicable
rules of the Nasdaq National Market, which commissions may be at negotiated
rates where permissible under such rules.

Participating broker-dealers may agree with Selling Stockholders to sell a
specified number of Shares at a stipulated price per share and, to the extent
such broker-dealer is unable to do so acting as an agent for Selling
Stockholders, to purchase as principal any unsold Shares at the price required
to fulfill the broker-dealer's commitment to Selling Stockholders. In addition
or alternatively, Shares may be sold by Selling Stockholders and/or by or
through other broker-dealers in special offerings or secondary distributions
pursuant to and in compliance with the governing rules of the Nasdaq National
Market, and in connection therewith commissions in excess of the customary
commissions prescribed by the rules of Nasdaq National Market may be paid to
participating broker-dealers, or, in the case of certain secondary
distributions, a discount or concession from the offering price may be allowed
to participating broker-dealers in excess of the customary commission.
Broker-dealers who acquire Shares as principal may thereafter resell such Shares
from time to time in transactions (which may involve crosses and block
transactions and which may involve sales to or through other broker-dealers,
including transactions of the nature described in the preceding two sentences)
on Nasdaq National Market, in negotiated transactions or otherwise, at market
prices prevailing at the time of sale or at negotiated prices, and in connection
with such resales may pay to or receive commissions from the purchaser of such
Shares.

Selling Stockholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation Regulation M, which provisions may limit the timing of purchases and
sales of any of the Shares by the Selling Stockholders. All of the foregoing may
affect the marketability of the Shares.

If the Shares are sold in an underwritten offering, the underwriters and
selling group members (if any) may engage in passive market making transactions
in the Common Stock on Nasdaq immediately prior to the

43
<PAGE> 49

[ALTERNATE PAGE]

commencement of the offering in accordance with Regulation M. Passive market
making presently consists of displaying bids on Nasdaq limited by the bid prices
of market makers not connected with such offering and purchases limited by such
prices and effected in response to order flow. Net purchases by a passive market
maker on each day are limited in amount to 30% of the passive market maker's
average daily trading volume in the Common Stock during the period of the two
full consecutive calendar months prior to the determination of the offering
price in connection with a sale pursuant to this Prospectus and must be
discontinued when such limit is reached. Passive market making may stabilize the
market price of the Common Stock at a level above that which might otherwise
prevail and, if commenced, may be discontinued at any time.

The Company may agree to indemnify each Selling Stockholder as an
underwriter under the Securities Act against certain liabilities, including
liabilities arising under the Securities Act. Each Selling Stockholder may
indemnify any broker-dealer that participates in transactions involving sales of
the Shares against certain liabilities, including liabilities arising under the
Securities Act.

SHARES ELIGIBLE FOR FUTURE SALE

44
<PAGE> 50

[ALTERNATE PAGE]

LEGAL MATTERS

The validity of the shares offered hereby will be passed upon for the
Company by O'Connor, Cavanagh, Anderson, Killingsworth & Beshears, a
Professional Association, Phoenix, Arizona.

EXPERTS

ADDITIONAL INFORMATION

45
<PAGE> 51

[ALTERNATE PAGE]

======================================================

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
Prospectus Summary................... 3
Risk Factors......................... 5
Price Range of Common Stock.......... 9
Dividend Policy...................... 9
Unaudited Pro Forma Combined
Financial Data..................... 10
Selected Consolidated Financial
Data............................... 14
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 16
Business............................. 21
Management........................... 36
Principal Stockholders............... 39
Description of Capital Stock......... 41
Plan of Distribution................. 43
Shares Eligible for Future Sale...... 44
Legal Matters........................ 45
Experts.............................. 45
Additional Information............... 45
</TABLE>

======================================================
======================================================
3,553,040 SHARES

RURAL/METRO
CORPORATION

COMMON STOCK
--------------------

PROSPECTUS
--------------------
OCTOBER , 1997
======================================================
<PAGE> 52

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's amended and restated Bylaws require the Company to indemnify
its directors, officers, employees and agents to the fullest extent permitted by
the Delaware General Corporation Law, including those circumstances in which
indemnification would otherwise be discretionary, except that the Company will
not be obligated to indemnify any such person (i) with respect to proceedings,
claims or actions initiated or brought voluntarily by any such person and not by
way of defense; (ii) for any amounts paid in settlement of an action indemnified
against by the Company without the proper written consent of the Company; or
(iii) in connection with any event in which the person did not act in good faith
and in a manner reasonably believed to be in, or not opposed to, the best
interests of the Company. In addition, the Company has entered or will enter
into Indemnity Agreements with each of its directors and officers providing for
indemnification of and advancement of expenses to the directors and officers to
the fullest extent permitted by law except (a) if and to the extent that payment
is made to the indemnitee under an insurance policy or otherwise; (b) if and to
the extent that a claim is decided adversely based on or attributable to the
indemnitee gaining any personal profit or advantage to which the indemnitee was
not legally entitled; (c) if and to the extent that the indemnifiable event
constituted or arose out of the indemnitee's willful misconduct or gross
negligence; or (d) if and to the extent that the proceeding is initiated by the
indemnitee against the Company or any of its officers or directors, unless the
Company has consented to or joined in the initiation of the proceeding. The
Delaware General Corporation Law contains an extensive indemnification provision
that permits a corporation to indemnify any person who is or was a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or she is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or proceeding if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.

The Company's Second Restated Certificate eliminates the personal liability
of the directors of the Company to the Company or its stockholders for monetary
damages for breach of their duty of care except to the extent that such
exemption from liability or limitation thereof is not permitted under the
Delaware General Corporation Law. The Delaware General Corporation Law prohibits
a corporation from eliminating or limiting the liability of a director (i) for
any breach of the director's duty of loyalty to the corporation or its
stockholders; (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law; (iii) for liability under
Section 174 of the Delaware General Corporation Law (relating to certain
unlawful dividends, stock purchases or stock redemptions); or (iv) for any
transaction from which the director derived any improper personal benefit.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ---------- ---------------------------------------------------------------------------------
<S> <C>
2 Plan and Agreement of Merger and Reorganization, dated as of April 26, 1993(1)
4 Specimen Certificate representing shares of Common Stock, par value $.01 per
share(1)
5 Opinion of O'Connor, Cavanagh, Anderson, Killingsworth & Beshears, P.A.
23.1 Consent of O'Connor, Cavanagh, Anderson, Killingsworth & Beshears, P.A. (to be
included in its Opinion filed as Exhibit 5)
</TABLE>

II-1
<PAGE> 53

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- ---------- ---------------------------------------------------------------------------------
<S> <C>
23.2 Consent of Arthur Andersen LLP
24 Powers of Attorney of Directors and Executive Officers (included on the Signature
Page of this Registration Statement)
</TABLE>

- ---------------
(1) Incorporated by reference to the Registration Statement on Form S-1 of the
Registrant (Registration No. 33-63448) filed May 27, 1993 and declared
effective July 15, 1993.

(b) Financial Statement Schedules

Schedule II Valuation and Qualifying Accounts incorporated by reference to
the Registrant's Annual Report on Form 10-K for the fiscal year ended June 30,
1997.

All other schedules have been omitted on the basis of immateriality or
because such schedules are not otherwise applicable.

ITEM 22. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes that:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Act").

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement.

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.

(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(c) (1) The undersigned registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.

II-2
<PAGE> 54

(2) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(d) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant, in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

(e) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents filed subsequent to the
effective date of the registration statement through the date of responding to
the request.

(f) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

II-3
<PAGE> 55

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Scottsdale, State of
Arizona, on the 7th day of October, 1997.

RURAL/METRO CORPORATION

By: /s/ JAMES H. BOLIN
------------------------------------
James H. Bolin, President

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints jointly and severally, Warren S. Rustand
and Mark E. Liebner, and each of them, as his true and lawful attorney-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as he might or
could do in person, hereby ratifying, and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ----------------------------------- -----------------

<C> <S> <C>
By: /s/ WARREN S. RUSTAND Chairman of the Board of Directors October 7, 1997
- ---------------------------------------- and Chief Executive Officer
Warren S. Rustand (Principal Executive Officer)

By: /s/ JAMES H. BOLIN President and Director October 7, 1997
- ---------------------------------------- (Principal Executive Officer)
James H. Bolin
By: /s/ ROBERT T. EDWARDS Executive Vice President and October 7, 1997
- ---------------------------------------- Director (Principal Executive
Robert T. Edwards Officer)

By: /s/ MARK E. LIEBNER Senior Vice President, Chief October 7, 1997
- ---------------------------------------- Financial Officer and Treasurer
Mark E. Liebner (Principal Financial Officer)

By: /s/ ROBERT E. RAMSEY Senior Vice President and Director October 7, 1997
- ----------------------------------------
Robert E. Ramsey

By: /s/ DEAN P. HOFFMAN Vice President, Financial Services October 7, 1997
- ---------------------------------------- (Principal Accounting Officer)
Dean P. Hoffman

By: /s/ COR J. CLEMENT Director October 7, 1997
- ----------------------------------------
Cor J. Clement
</TABLE>

II-4
<PAGE> 56

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ----------------------------------- -----------------

By: /s/ LOUIS G. JEKEL Director October 7, 1997
- ----------------------------------------
Louis G. Jekel

By: /s/ WILLIAM C. TURNER Director October 7, 1997
- ----------------------------------------
William C. Turner

By: /s/ HENRY G. WALKER Director October 7, 1997
- ----------------------------------------
Henry G. Walker

By: /s/ LOUIS A. WITZEMAN Director October 7, 1997
- ----------------------------------------
Louis A. Witzeman
</TABLE>

II-5

<PAGE> 1
Exhibit 23.1

October 6, 1997

Rural/Metro Corporation
8401 East Indian School Road
Scottsdale, Arizona 85251

RE: REGISTRATION STATEMENT ON FORM S-4

Ladies and Gentlemen:

As special legal counsel to Rural/Metro Corporation, a
Delaware corporation (the "Company"), we have assisted in the preparation of the
Company's Registration Statement on Form S-4 to be filed on or about October 7,
1997 with the Securities and Exchange Commission (the "Registration Statement"),
in connection with the registration under the Securities Act of 1933, as
amended, of the shares of common stock, par value $.01 per share, of the Company
covered by the Registration Statement (the "Shares"). The facts, as we
understand them, are set forth in the Registration Statement.

With respect to the opinion set forth below, we have examined
originals, certified copies, or copies otherwise identified to our satisfaction
as being true copies, only of the following:

A. The Second Restated Certificate of Incorporation of the
Company, as filed with the Secretary of State of the State of Delaware on
January 18, 1995;

B. The Bylaws of the Company, as amended through the date
hereof;

C. The Registration Statement;

D. The Resolutions of the Board of Directors of the Company
dated May 14, 1993 and September 12, 1997 relating to the organization of the
Company and the approval of the filing of the Registration Statement and the
transactions in connection therewith, respectively; and

E. The Opinion of Jekel & Howard, general counsel to the
Company, dated May 13, 1994, with respect to certain issues regarding the
Company and its subsidiaries;
<PAGE> 2
Rural/Metro Corporation
October 6, 1997
Page 2

F. Plan and Agreement of Merger and Reorganization (the
"Merger Plan"), dated May 27, 1993, by and among the Company, Rural/Metro
Corporation, an Arizona corporation ("Rural/Metro"), and R/M Acquisition, Inc.,
an Arizona corporation ("R/M");

G. Resolutions of each of the Company, Rural/Metro and R/M,
each dated May 14, 1993, approving the Merger Plan;

H. Articles of Merger, signed by the Company, Rural/Metro and
R/M, filed and approved by the Arizona Corporation Commission on May 27, 1993;

Subject to the assumptions that (i) the documents and
signatures examined by us are genuine and authentic and (ii) the persons
executing the documents examined by us have the legal capacity to execute such
documents, and subject to the further limitations and qualifications set forth
below, it is our opinion that, when (a) the Registration Statement as then
amended shall have been declared effective by the Commission, and (b) the Shares
have been duly issued, executed, authenticated, delivered, paid for and sold by
the Company as described in the Registration Statement, the Shares will be
validly issued, fully paid and nonassessable.

Please be advised that we are members of the State Bar of
Arizona, and our opinion is limited to the legality of matters under the laws of
the State of Arizona and the General Corporation Laws of the State of Delaware.
Further, our opinion is based solely upon existing laws, rules and regulations,
and we undertake no obligation to advise you of any changes that may be brought
to our attention after the date hereof.

We hereby expressly consent to any reference to our firm in
the Registration Statement, inclusion of this Opinion as an exhibit to the
Registration Statement, and to the filing of this Opinion with any other
appropriate governmental agency.

Very truly yours,

/s/ O'Connor, Cavanagh,
Anderson, Killingsworth &
Beshears, P.A.

<PAGE> 1
Exhibit 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-4 of our report dated August
21, 1997 included in Rural/Metro Corporation's Form 10-K for the year ended
June 30, 1997 and to all references to our firm included in this registration
statement.

ARTHUR ANDERSEN LLP

Phoenix, Arizona,
October 6, 1997.