<PAGE> 1
As filed with the Securities and Exchange Commission on September 4, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
RURAL/METRO CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 86-0746929
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
8401 East Indian School Road
Scottsdale, Arizona 85251
(Address of Principal executive offices)(zip code)
RURAL/METRO CORPORATION
Employee Stock Purchase Plan
(Full Title of the Plan)
John B. Furman
Acting President and Chief Executive Officer
RURAL/METRO CORPORATION
8401 East Indian School Road, Scottsdale, Arizona 85251
(602) 994-3886
(Telephone number, including area code, of agent for service)
This Registration Statement shall become effective immediately upon filing with
the Securities and Exchange Commission, and sales of the registered securities
will begin as soon as reasonably practicable after such effective date.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================
PROPOSED
PROPOSED MAXIMUM MAXIMUM
TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED SHARE PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per
share 300,000(1) $ 7.00 (2) $ 2,100,000 $ 619.50
===============================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Employee Stock Purchase Plan
by reason of any stock dividend, stock split, recapitalization or any
other similar transaction without receipt of consideration which results
in an increase in the number of outstanding shares of Common Stock of
Rural/Metro Corporation.
(2) Calculated solely for purposes of this offering under Rules 457(c) and
457(h) of the Securities Act of 1933, as amended, on the basis of the
average of the high and low sales prices for shares of Common Stock of
Rural/Metro Corporation on September 3, 1998.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Rural/Metro Corporation (the "Registrant") hereby incorporates
by reference into this Registration Statement, pursuant to General Instruction E
to Form S-8, the contents of the Registration Statement on Form S-8 (No.
33-80454) filed with the Securities and Exchange Commission (the "Commission")
on June 17, 1994 and amendments thereto:
Item 6. 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 8. Exhibits
Sequential
Exhibit Number Exhibit Page No.
- -------------- ------- --------
5 Opinion and consent of O'Connor, Cavanagh, Anderson,
Killingsworth & Beshears, a professional association.
10.36 Employee Stock Purchase Plan of Registrant, as
amended through November 20, 1997.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of O'Connor, Cavanagh, Anderson,
Killingsworth & Beshears, P.A. is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II.3
of this Registration Statement.
II.1
<PAGE> 3
Item 9. Undertakings
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement 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 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.
(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 Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
into 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. Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers or
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 Securities 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 whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II.2
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and 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 August 31, 1998.
RURAL/METRO CORPORATION
By /s/ Dean P. Hoffman
-----------------------------------
Dean P. Hoffman
Vice President, Financial Services
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints jointly and severally, Mark E. Liebner
and Dean P. Hoffman, 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 on Form S-8 has been signed below by the following
persons and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE POSITION DATE
--------- -------- ----
<S> <C> <C>
/s/ John B. Furman Acting President and Chief August 31, 1998
- ------------------ Executive Officer
John B. Furman (Principal Executive Officer)
/s/ Robert T. Edwards Executive Vice President and Director August 31, 1998
- ---------------------
Robert T. Edwards
/s/ Mark E. Liebner Senior Vice President, Chief Financial August 31, 1998
- ------------------- Officer and Treasurer (Principal
Mark E. Liebner Financial Officer)
/s/ Robert E. Ramsey Senior Vice President and Director August 31, 1998
- --------------------
Robert E. Ramsey
/s/ Dean P. Hoffman Vice President, Financial Services August 31, 1998
- ------------------- (Principal Accounting Officer)
Dean P. Hoffman
/s/ James H. Bolin Director August 31, 1998
- ------------------
James H. Bolin
</TABLE>
II.3
<PAGE> 5
<TABLE>
<S> <C> <C>
/s/ Cor J. Clement Director August 31, 1998
- ------------------
Cor J. Clement
/s/ Mary Anne Carpenter Director August 31, 1998
- -----------------------
Mary Anne Carpenter
/s/ Louis G. Jekel Director August 31, 1998
- ------------------
Louis G. Jekel
/s/ William C. Turner Director August 31, 1998
- ---------------------
William C. Turner
/s/ Henry G. Walker Director August 31, 1998
- -------------------
Henry G. Walker
/s/ Louis a. Witzeman Director August 31, 1998
- ---------------------
Louis A. Witzeman
</TABLE>
II.4
<PAGE> 6
Exhibit Index
Exhibit
No. Description
- ------- -----------
5 Opinion and consent of O'Connor, Cavanagh, Anderson,
Killingsworth & Beshears, a professional association.
10.36 Employee Stock Purchase Plan of Registrant, as
amended through November 20, 1997.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of O'Connor, Cavanagh, Anderson,
Killingsworth & Beshears, P.A. is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II.3
of this Registration Statement.
<PAGE> 1
[LETTERHEAD OF O'CONNOR CAVANAGH]
EXHIBIT 5
September 4, 1998
Rural/Metro Corporation
8401 East Indian School Road
Phoenix, Arizona 85251
RE: REGISTRATION STATEMENT ON FORM S-8
RURAL/METRO CORPORATION
Gentlemen:
As 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-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission on or about September 4, 1998 in
connection with the registration under the Securities Act of 1933, as amended,
of 300,000 shares of the Company's common stock, par value $0.01 per share, (the
"Common Stock") issuable pursuant to the Company's Employee Stock Purchase Plan
(the "ESPP"). The shares of Common Stock issuable pursuant to the ESPP are
referred to as 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 as amended through the date hereof;
B. The Bylaws of the Company, as amended through the date hereof;
C. Resolutions of the Board of Directors of the Company dated
September 12, 1997, reserving an aggregate of 300,000 shares
of the Company's Common Stock for issuance pursuant to the
ESPP; and
<PAGE> 2
O'CONNOR CAVANAGH
Rural/Metro Corporation
September 4, 1998
Page 2
D. The Registration Statement.
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 the Shares, when issued and sold in accordance with the terms of
the ESPP, 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 10.36
RURAL/METRO CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
AS AMENDED THROUGH NOVEMBER 20, 1997
ARTICLE I
PURPOSE
1.1 NAME. This Stock Purchase Plan shall be known as the
Rural/Metro Employee Stock Purchase Plan (the "Plan").
1.2 PURPOSE. The Plan is intended to provide a method whereby
employees of Rural/Metro Corporation, a Delaware corporation (the "Company"),
and one or more of its Subsidiary Corporations will have an opportunity to
acquire a proprietary interest in the Company through the purchase of shares of
the Common Stock of the Company.
1.3 QUALIFICATION. It is the intention of the Company to have
the Plan qualify as an "employee stock purchase plan" under section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"). The provisions of the
Plan shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
ARTICLE II
DEFINITIONS
2.1 BASE PAY. "Base Pay" shall mean the estimated annual
compensation of an Employee and (a) with respect to a salaried Employee, shall
be based on such Employee's current annual salary and (b) with respect to a
hourly Employee, shall be based on such Employee's RHE times such Employee's
regular straight-time hourly rate. Shift premium, bonuses, "skill-based" pay,
and other special payments, commissions (unless such commissions represent the
primary source of compensation, as determined by the Committee) and other
marketing incentive payments shall not be included in Base Pay. For purpose of
the foregoing, "RHE" for a full time Employee shall mean the sum of (i) 2080 and
(ii) 1.5 times the estimated number of overtime hours to be worked annually and
"RHE" for a part-time Employee shall mean 1040. If any Offering is a six month
Offering, the Base Pay shall be divided by one-half.
2.2 COMMITTEE. "Committee" shall mean the individuals
described in Article XI.
2.3 EMPLOYEE. "Employee" shall mean any person who is
customarily employed on a full-time or part-time basis by the Company and is
regularly scheduled to work more than 20 hours per week.
2.4 PARTICIPATING COMPANY. "Participating Company" shall mean
the Company and such Subsidiary Corporations as may be designated from time to
time by the Board of Directors of the Company.
1
<PAGE> 2
2.5 STOCK. "Stock" shall mean the Common Stock of the Company,
par value one cent ($.01).
2.6 SUBSIDIARY CORPORATION. "Subsidiary Corporation" shall
mean any present or future corporation which would be a "subsidiary corporation"
of the Company, as that term is defined in Code section 424.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 INITIAL ELIGIBILITY. Any Employee who shall have completed
30 days of continuous employment with a Participating Company and is employed by
a Participating Company on the date such Employee's participation in the Plan is
to become effective shall be eligible to participate in Offerings under the Plan
which commence on or after such 30 day employment period has concluded. Any
Corporation which becomes a Subsidiary Corporation after the initial Offering
Commencement Date shall become a Participating Company only upon the decision of
the Board of Directors of the Company to designate such Subsidiary Corporation
as a Participating Company and to extend the benefits of the Plan to its
eligible Employees. For any Subsidiary Corporation which becomes a Participating
Company in the Plan after July 1, 1994, a subsequent effective date shall be
designated with respect to its participation by the eligible Employees of such
Participating Company.
3.2 LEAVE OF ABSENCE. For purposes of participation in the
Plan, a person on leave of absence shall be deemed to be an Employee for the
first 90 days of such leave of absence and such Employee's employment shall be
deemed to have terminated at the close of business on the 90th day of such leave
of absence unless such Employee shall have returned to regular full-time or
part-time employment (as the case may be) prior to the close of business on such
90th day. Termination by a Participating Company of any Employee's leave of
absence, other than termination of such leave of absence on return to full time
or part time employment, shall terminate an Employee's employment for all
purposes of the Plan and shall terminate such Employee's participation in the
Plan and right to exercise any option.
3.3 RESTRICTIONS ON PARTICIPATION. Notwithstanding any
provisions of the Plan to the contrary, no Employee shall be granted an option
to participate in the Plan:
(a) if, immediately after the grant, such Employee
would own stock, and/or hold outstanding options to purchase stock, possessing
five percent or more of the total combined voting power or value of all classes
of stock of the Company (for purposes of this paragraph, the rules of section
424(d) of the Code shall apply in determining stock ownership of any Employee);
or
(b) which permits such Employee's rights to purchase
stock under all Employee stock purchase plans of the Company and all
Participating Companies to accrue at a rate which exceeds $25,000 in fair market
value of the stock (determined at the time such option is granted) for each
calendar year in which such option is outstanding.
3.4 COMMENCEMENT OF PARTICIPATION. An eligible Employee may
become a participant by completing the enrollment forms prescribed by the
Committee (including a purchase agreement and a payroll deduction authorization)
and filing such forms with the designated office of the
2
<PAGE> 3
Company prior to the Offering Commencement Date for the next scheduled Offering
(as such terms are defined below). Payroll deductions for a participant shall
commence on the next scheduled Offering Commencement Date when such Employee's
authorization for a payroll deduction becomes effective and shall continue in
effect for the term of this Plan, except to the extent such payroll deduction is
changed in accordance with this Section 3.4 or terminated in accordance with
Article VIII. The participant may, at any time, increase or decrease the rate of
the participant's payroll deduction by filing the appropriate form with the
designated office of the Company. The new rate shall become effective as of the
next applicable Offering Commencement Date.
ARTICLE IV
OFFERINGS
4.1 ANNUAL OFFERINGS. The Plan will be implemented by up to 10
annual offerings of the Company's Common Stock (the "Offerings") beginning on
the 1st day of July in each of the years 1994 through 2003, with each Offering
terminating on June 30 of the following year, provided, however, that each
annual Offering may, in the discretion of the Committee exercised prior to the
commencement thereof, be divided into two six-month Offerings commencing
respectively, on July 1 and January 1 and terminating six months thereafter. The
total number of shares issuable under the Plan shall be 450,000. As used in the
Plan, "Offering Commencement Date" means the January 1 or July 1, as the case
may be, on which the particular Offering begins and "Offering Termination Date"
means the June 30 or December 31 as the case may be, on which the particular
Offering terminates. Any decision of the Committee to adjust the number of
shares in an Offering must be made prior to the Offering Commencement Date of
that Offering.
ARTICLE V
PAYROLL DEDUCTIONS
5.1 PERCENTAGE OF PARTICIPATION. At the time an Employee files
authorization for payroll deduction and becomes a participant in the Plan, the
Employee shall elect to have deductions made from the Employee's pay on each
payday during the time the Employee is a participant in an Offering. Such
deductions shall be an amount equal to the Employee's Participation Amount
divided by the number of payroll periods occurring during the Offering. An
Employee's "Participation Amount" shall equal the rate of 1, 2, 3, 4, 5, 6, 7,
8, 9 or 10 percent (as elected by the Employee) times such Employee's Base Pay
in effect at the Offering Commencement Date of such Offering; provided, however,
that prior to any Offering Commencement Date, the Committee shall have the
discretion to limit deductions to less than 10 percent (but no less than 5
percent) for any Offering.
5.2 CALCULATION OF BASE PAY. An Employee's Base Pay of the
date of an Offering and whether an Employee is "part-time" shall be determined
in the discretion of the Company based on the provisions of this Plan. In
calculating an Employee's normal weekly rate of pay under this Section 6.1,
retroactive adjustments occurring during an Offering which are retroactive to
the last day prior to the Commencement Date of that particular Offering shall be
taken into account. In addition, if a participant's Base Pay includes
commissions, then the Committee may set such Employee's Base Pay based upon
averages and standards as determined in the discretion of the Committee.
3
<PAGE> 4
5.3 PARTICIPANT'S ACCOUNT. All payroll deductions made for a
participant shall be credited to such Employee's account under the Plan. A
participant may not make any separate cash payment into such account except when
on leave of absence and then only as provided in Section 5.5.
5.4 CHANGES IN PAYROLL DEDUCTIONS. A participant may
discontinue participation in the Plan as provided in Article VIII, but no other
change can be made during an Offering and, specifically, a participant may not
alter the amount of such participant's payroll deductions for that Offering.
5.5 LEAVE OF ABSENCE. If a participant goes on a leave of
absence, such participant shall have the right to elect: (a) to withdraw the
balance in such participant's account pursuant to Section 8.1 hereof, or (b) to
discontinue contributions to the Plan but remain a participant in the Plan, or
remain a participant in the Plan during such leave of absence, authorizing
deductions to be made from payments by the Company to the participant during
such leave of absence and undertaking to make cash payments to the Plan at the
end of each payroll period to the extent that amounts payable by the
Participating Company to such participant are insufficient to meet such
participant's authorized Plan deductions.
ARTICLE VI
GRANTING OF OPTION
6.1 NUMBER OF OPTION SHARES. On each Offering Commencement
Date, a participating Employee shall be deemed to have been granted an option to
purchase a maximum number of shares of the Stock of the Company equal to the
Participation Amount (as defined in Section 5.1 hereof) divided by the Option
Price of the stock of the Company on the applicable Offering Commencement Date,
determined as provided in Section 6.2 hereof.
6.2 OPTION PRICE. The Option Price of Stock purchased with
payroll deductions made during each Offering for a participant therein shall be
85 percent of the closing price of the Stock on the Offering Commencement Date
or the nearest prior business day on which trading occurred on the NASDAQ
National Market; provided, however, that for Offerings that commence on or after
January 1, 1998, the Option Price shall be the lower of (a) 85 percent of the
closing price of the Stock on the Offering Commencement Date or the nearest
prior business day on which trading occurred on the NASDAQ National Market; or
(b) 85 percent of the closing price of the Stock on the Offering Termination
Date or the nearest prior business day on which trading occurred on the NASDAQ
National Market.
ARTICLE VII
EXERCISE OF OPTION
7.1 AUTOMATIC EXERCISE. Unless a participant gives written
notice to the Company as hereinafter provided, such participant's option for the
purchase of stock granted under Section 6.1 hereof will be deemed to have been
exercised automatically on the Offering Termination Date applicable to such
Offering for the purchase of the number of full shares of Stock which the
accumulated payroll deductions in such Employee's account at that time will
purchase at the applicable Option Price (but not in excess of the number of
shares for which options have been granted to the Employee pursuant to Section
6.1 hereof), and any excess in such Employee's account at that time will be
returned to the participant.
4
<PAGE> 5
7.2 FRACTIONAL SHARES. Fractional shares will not be issued
under the Plan and any accumulated payroll deductions which would have been used
to purchase fractional shares will be, at the option of the Committee, either
(a) returned (without interest) to any Employee promptly following the
termination of an Offering, or (b) added to the Participation Amount and held
for the purchase of Stock in connection with the next Offering; provided,
however, that such amount (without interest) shall be refunded to any Employee
who provides the Company with a written request for a refund prior to the use of
such amount to purchase Stock at the end of the next Offering.
7.3 TRANSFERABILITY OF OPTION. During a participant's
lifetime, options held by such participant shall be exercisable only by that
participant.
7.4 DELIVERY OF STOCK. As promptly as practicable after the
Offering Termination Date of each Offering, the Company will deliver to each
participant, as appropriate, the Stock purchased upon exercise of such
Employee's option. All Stock delivered to each participant will contain a
restriction stating that such Stock is restricted from being transferred for a
period of one year from the date of issuance unless the Committee otherwise
consents. It is not the intention of the Committee to consent to transfers
except in extraordinary situations such as upon the death of a participant. The
Committee may withhold its consent to any such transfer in its absolute and sole
arbitrary discretion. Any transfer in violation of the legend placed on each
such stock certificate shall be void ab initio. In no event, however, shall
stock be forfeited for violation of the transfer restriction.
ARTICLE VIII
WITHDRAWAL
8.1 IN GENERAL. At any time prior to the last five days of an
Offering period, a participant may withdraw payroll deductions credited to such
participant's account under the Plan by giving written notice to the designated
office of the Company, which withdrawal notice shall be in form and substance as
decided by the Committee. All of the participant's payroll deductions credited
to the participant's account will be paid to the participant promptly after
receipt of such participant's notice of withdrawal, and no further payroll
deductions will be made from the participant's pay during such Offering or
during any subsequent Offering unless an Employee re-enrolls as provided in
Section 8.2 hereof. The Company may, at its option, treat any attempt by a
participant to borrow on the security of such participant's accumulated payroll
deductions as an election to withdraw such deductions.
8.2 EFFECT ON SUBSEQUENT PARTICIPATION. A participant's
withdrawal from any Offering will not have any effect upon such Employee's
eligibility to participate in any succeeding Offering or in any similar plan
which may hereafter be adopted by the Company. In order to be eligible for a
subsequent Offering, however, a participant who has withdrawn from an Offering
must satisfy the requirements of Section 3.4 hereof prior to the Offering
Commencement Date of the next succeeding Offering.
8.3 TERMINATION OF EMPLOYMENT. Upon termination of the
participant's employment for any reason, including retirement (but excluding
death or permanent disablement while in the employ of the Company or
continuation of a leave of absence for a period beyond 90 days), the payroll
deductions credited to such Employee's account will be returned to the Employee,
or, in the case of the Employee's death subsequent to the termination of such
Employee's employment, to the person or persons entitled thereto under Section
12.1 hereof.
5
<PAGE> 6
8.4 TERMINATION OF EMPLOYMENT DUE TO DEATH. Upon termination
of the participant's employment because of death or permanent disablement, the
participant or participant's beneficiary (as defined in Section 12.1 hereof)
shall have the right to elect, by written notice given to the designated office
of the Company prior to the earlier of the Offering Termination Date or the
expiration of a period of 60 days commencing with the termination of the
participant's employment, either:
(a) to withdraw all of the payroll deductions
credited to the participant's account under the Plan, or
(b) to exercise the participant's option on the next
Offering Termination Date and purchase the number of full shares of stock which
the accumulated payroll deductions in the participant's account at the date of
the participant's cessation of employment will purchase at the applicable option
price, and any excess in such account will be returned to said beneficiary,
without interest.
In the event that no such written notice of election shall be duly received by
the designated office of the Company, the beneficiary shall automatically be
deemed to have elected, pursuant to paragraph (b), to exercise the participant's
option.
8.5 LEAVE OF ABSENCE. A participant on leave of absence shall,
subject to the election made by such participant pursuant to Section 5.5 hereof,
continue to be a participant in the Plan so long as such participant is on
continuous leave of absence. A participant who has been on leave of absence for
more than 90 days and who therefore is not an Employee for the purpose of the
Plan shall not be entitled to participate in any Offering commencing after the
90th day of such leave of absence. Notwithstanding any other provisions of the
Plan, unless a participant on leave of absence returns to regular full time or
part time employment with the Company at the earlier of: (a) the termination of
such leave of absence or (b) three months from the 90th day of such leave of
absence, such participant's participation in the Plan shall terminate on
whichever of such dates first occurs.
ARTICLE IX
INTEREST
9.1 PAYMENT OF INTEREST. No interest will be paid or allowed
on any money paid into the Plan or credited to the account of any participant
Employee including any interest paid on any and all money which is distributed
to an Employee or such Employee's beneficiary pursuant to the provisions of
Sections 8.1, 8.3, 8.4 and 10.1 hereof.
ARTICLE X
STOCK
10.1 MAXIMUM SHARES. The maximum number of shares which shall
be issued under the Plan, subject to adjustment upon changes in capitalization
of the Company as provided in Section 12.4 hereof, shall be 450,000 shares. If
the total number of shares for which options are exercised on any Offering
Termination Date in accordance with Article VI exceeds the maximum number of
shares for the applicable Offering, the Company shall make a pro rata allocation
of the shares available for delivery and distribution in as nearly a uniform
manner as shall be practicable and as the Committee shall determine
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to be equitable, and the balance of payroll deductions credited to the account
of each participant under the Plan shall be returned to such participant as
promptly as possible.
10.2 PARTICIPANT'S INTEREST IN OPTION STOCK. The participant
will have no interest in stock covered by such Employee's option until such
option has been exercised.
10.3 REGISTRATION OF STOCK. Stock to be delivered to a
participant under the Plan will be registered in the name of the participant,
or, if the participant so directs by written notice to the designated office of
the Company prior to the Offering Termination Date applicable thereto, in the
names of the participant and one such other person as may be designated by the
participant, in the form and manner permitted by applicable law.
10.4 RESTRICTIONS ON EXERCISE. The Board of Directors may, in
its discretion, require as conditions to the exercise of any option that the
shares of Common Stock reserved for issuance upon the exercise of the option
shall have been duly listed, upon official notice of issuance, upon a stock
exchange or the NASDAQ National Market, and that either:
(a) a Registration Statement under the Securities Act
of 1933, as amended, with respect to said shares shall be effective, or
(b) the participant shall have represented at the
time of purchase, in form and substance satisfactory to the Company, that it is
such Employee's intention to purchase the shares for investment and not for
resale or distribution.
ARTICLE XI
ADMINISTRATION
11.1 APPOINTMENT OF COMMITTEE. The Board of Directors shall
appoint a committee (the "Committee") to administer the Plan, which shall
consist of no fewer than two (2) members of the Board of Directors. Members of
the Committee who are Employees shall be eligible to purchase stock under the
Plan.
11.2 AUTHORITY OF COMMITTEE. Subject to the express provisions
of the Plan, the Committee shall have plenary authority in its discretion to
interpret and construe any and all provisions of the Plan, to adopt rules and
regulations for administering the Plan, and to make all other determinations
deemed necessary or advisable for administering the Plan. The Committee's
determination on the foregoing matters shall be conclusive. The Committee may
delegate its authority as it deems necessary.
11.3 RULES GOVERNING THE ADMINISTRATION OF THE COMMITTEE. The
Board of Directors may from time to time appoint members of the Committee in
substitution for or in addition to members previously appointed and may fill
vacancies, however caused, in the Committee. The Committee may select one of its
members as its Chairman and shall hold its meetings at such times and places as
it shall deem advisable and may hold telephonic meetings. A majority of its
members shall constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. The Committee may correct any defect or
omission or reconcile any inconsistency in the Plan, in the manner and to the
extent it shall deem desirable. Any decision or determination reduced to writing
and signed by a majority of the members of the Committee shall be as fully
effective as if it had been made by a majority vote at a
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meeting duly called and held. The Committee may appoint a secretary and shall
make such rules and regulations for the conduct of its business as it shall deem
advisable.
ARTICLE XII
MISCELLANEOUS
12.1 DESIGNATION OF BENEFICIARY. A participant may file a
written designation of a beneficiary who is to receive any Stock and/or cash.
Such designation of beneficiary may be changed by the participant at any time by
written notice to the designated office of the Company. Upon the death of a
participant and upon receipt by the Company of proof of identity and existence
at the participant's death of a beneficiary validly designated by the
participant under the Plan, the Company shall deliver such Stock and/or cash to
such beneficiary. In the event of the death of a participant and in the absence
of a beneficiary validly designated under the Plan who is living at the time of
such participant's death, the Company shall deliver such Stock and/or cash to
the executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such Stock and/or cash to the spouse
or to any one or more dependents of the participant as the Company may
designate. No beneficiary shall, prior to the death of the participant by whom
he has been designated, acquire any interest in the Stock or cash credited to
the participant under the Plan.
12.2 TRANSFERABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive Stock under the Plan may be assigned, transferred, pledged, or
otherwise disposed of in any way by the participant other than by will or the
laws of descent and distribution. Any such attempted assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds in accordance with Article VIII.
12.3 USE OF FUNDS. All payroll deductions received or held by
the Company under this Plan may be used by the Company for any corporate purpose
and the Company shall not be obligated to segregate such payroll deductions.
12.4 ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
(a) If, while any options are outstanding, the
outstanding shares of Common Stock of the Company have increased, decreased,
changed into, or been exchanged for a different number or kind of shares or
securities of the Company through reorganization, merger, recapitalization,
reclassification, stock split (whether or not effected in the form of a stock
dividend), reverse stock split or similar transaction, appropriate and
proportionate adjustments may be made by the Committee in the number and/or kind
of shares which are subject to purchase under outstanding options and on the
option exercise price or prices applicable to such outstanding options. In
addition, in any such event, the number and/or kind of shares which may be
offered in the Offerings described in Article IV hereof shall also be
proportionately adjusted.
(b) Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the Company with
one or more corporations as a result of which the Company is not the surviving
corporation, or upon a sale of substantially all of the property or stock of the
Company to another corporation, the holder of each option then outstanding under
the Plan
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will thereafter be entitled to receive at the next Offering Termination Date
upon the exercise of such option for each share as to which such option shall be
exercised, as nearly as reasonably may be determined, the cash, securities
and/or property which a holder of one share of the Company's Common Stock was
entitled to receive upon and at the time of such transaction. The Board of
Directors shall take such steps in connection with such transactions as the
Board shall deem necessary to assure that the provisions of this Section 12.4
shall thereafter be applicable, as nearly as reasonably may be determined, in
relation to the said cash, securities and/or property as to which such holder of
such option might thereafter be entitled to receive.
12.5 AMENDMENT AND TERMINATION. The Board of Directors shall
have complete power and authority to terminate or amend the Plan; provided,
however, that the Board of Directors shall not, without the approval of the
stockholders of the Corporation (i) increase the maximum number of shares which
may be issued under the Plan (except pursuant to Section 12.4 hereof); or (ii)
amend the requirements as to the class of Employees eligible to purchase stock
under the Plan. No termination, modification, or amendment of the Plan may,
without the consent of an Employee then having an option under the Plan to
purchase stock, adversely affect the rights of such Employee under such option.
12.6 EFFECTIVE DATE. The original Plan was effective as of
July 1, 1994 and was thereafter approved by the holders of the majority of the
Common Stock present and represented at the annual meeting of the shareholders
held on December 8, 1994.
12.7 NO EMPLOYMENT RIGHTS. The Plan does not, directly or
indirectly, create any right for the benefit of any Employee or class of
Employees to purchase any shares under the Plan, or create in any Employee or
class of Employees any right with respect to continuation of employment by the
Company, and it shall not be deemed to interfere in any way with the Company's
right to terminate, or otherwise modify, an Employee's employment at any time.
12.8 EFFECT OF PLAN. The provisions of the Plan shall, in
accordance with its terms, be binding upon, and inure to the benefit of, all
successors of each Employee participating in the Plan, including, without
limitation, such Employee's estate and the executors, administrators or trustees
thereof, heirs and legatees, and any receiver, trustee in bankruptcy or
representative of creditors of such Employee.
12.9 GOVERNING LAW. The law of the State of Arizona will
govern all matters relating to this Plan except to the extent it is superseded
by the laws of the United States.
RURAL/METRO CORPORATION, a Delaware
corporation
By: /s/ Warren S. Rustand
--------------------------
Its: Chief Executive Officer
----------------------------
Attest:
/s/ Louis G. Jekel
- ------------------
Secretary
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ARTHUR ANDERSEN LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement 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,
September 3, 1998.
