<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 1, 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 OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
8401 EAST INDIAN SCHOOL ROAD, SCOTTSDALE, ARIZONA 85251
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
RURAL/METRO CORPORATION STOCK GRANT AGREEMENTS
(FULL TITLE OF PLAN)
JOHN B. FURMAN
RURAL/METRO CORPORATION
8401 EAST INDIAN SCHOOL ROAD
SCOTTSDALE, ARIZONA 85251
(NAME AND ADDRESS
OF AGENT FOR SERVICE)
(602) 994-3886
(TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
with a copy to:
JEAN E. HARRIS, ESQ.
SCOTT K. WEISS, ESQ.
O'CONNOR, CAVANAGH, ANDERSON,
KILLINGSWORTH & BESHEARS, P.A.
ONE EAST CAMELBACK, SUITE 1100
PHOENIX, ARIZONA 85012-1656
This Registration Statement shall become effective immediately upon
filing with the Securities and Exchange Commission, and sales of registered
securities will begin as soon as reasonably practicable after such effective
date.
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<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Title of Securities Amount to be Proposed Proposed maximum Amount of
to be Registered registered maximum aggregate offering registration fee
offering price per price
share
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 4,000 Shares $9.9375(1) $39,750 $12.05
======================================================================================================================
</TABLE>
(1) Calculated solely for purposes of this offering under Rules 457(c) and
457(h) of the Securities Act of 1933, as amended (the "Securities
Act"), using the average of the high and low sales prices for the
Common Stock of Rural/Metro Corporation on November 25, 1998, as
reported on the Nasdaq National Market.
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 197,117 SHARES OF THE REGISTRANT'S COMMON STOCK REGISTERED ON FORM
S-8, REGISTRATION NO. 33-07457, WHICH REGISTRATION FEE HAS BEEN PREVIOUSLY PAID.
As provided by Rule 415 of the Securities Act, this Registration Statement
includes a prospectus conforming to the requirements of Form S-3 under the
Securities Act for use in connection with the reoffer and resale of the shares
registered for reoffer and resale hereunder.
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<PAGE> 3
201,117 SHARES
RURAL/METRO CORPORATION
COMMON STOCK
Certain stockholders of Rural/Metro Corporation (the "Company") are
using this Prospectus to offer shares of the Company's common stock that they
received from the Company pursuant to restricted stock grants. Some of these
stockholders may be considered to be "affiliates" of the Company, as defined in
Rule 405 under the Securities Act of 1933.
The Company expects that sales made pursuant to this Prospectus will be
made
- - in broker's transactions;
- - in transactions directly with market makers; or
- - in negotiated sales or otherwise.
The selling stockholders will determine when they will sell their
shares, and in all cases they will sell their shares at the current market price
or at negotiated prices at the time of the sale. The Company will not receive
any of the proceeds from these sales.
The brokers and dealers that the selling stockholders utilize in
selling these shares may receive compensation in the form of underwriting
discounts, concessions, or commissions from the sellers or purchasers of the
shares. Any compensation may exceed customary commissions. The selling
stockholders and the brokers and dealers that they utilize may be deemed to be
"underwriters" within the meaning of the securities laws, and any commissions
received and any profits realized by them on the sale of shares may be
considered to be underwriting compensation.
The shares of Common Stock are listed on the Nasdaq National Market
under the symbol "RURL." On November 25, 1998, the last reported sale price of
the Common Stock as reported on the Nasdaq National Market was $9.81 per share.
-------------------------
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED
UNDER "RISK FACTORS," BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
-------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is December 1, 1998.
<PAGE> 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934 (the "Exchange Act")
are hereby incorporated 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, 1998; and
2. The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1998.
Each document filed subsequent to the date of this Prospectus pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering shall be deemed to be incorporated by reference in
this Prospectus and shall be part hereof from the date of filing of such
document.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any document described
above. Requests for such copies should be directed to Rural/Metro Corporation,
8401 East Indian School Road, Scottsdale, Arizona 85251, Attention: Investor
Relations Department, telephone (602) 994-3886.
Any statement 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 that 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 the Registration Statement or this
Prospectus.
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<PAGE> 5
PROSPECTUS SUMMARY
This summary highlights information contained in this Prospectus. This
summary is not complete and may not contain all of the information investors
should consider before purchasing the Company's common stock. Investors should
read the entire Prospectus carefully. 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 those discussed
under "Risk Factors."
THE COMPANY
The Company is a leading provider of health and safety services, which
include "911" emergency ambulance and general transport services, fire
protection services, and other safety and health care related services, to
municipal, residential, commercial, and industrial customers. The Company
currently serves over 450 communities in 26 states, the District of Columbia,
Canada, and Latin America. 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 and
fire protection services in the world. Ambulance services and fire protection
services accounted for approximately 81% and 10%, respectively, of the Company's
revenue for the fiscal year ended June 30, 1998.
Based on generally available industry data, the Company believes that
expenditures for ambulance services in the United States are between $4 billion
and $7 billion. 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 transport 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 hospital emergency rooms
as the source of their primary medical care also have increased the number of
ambulance transports. 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, have contributed and 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 benefits larger ambulance services providers, which can service a larger
portion of a managed care provider's needs. Market reform continues to reshape
the health care delivery system, with a shift from fee-for-service relationships
to managed care organizations. Managed care organizations are focusing on
cost-containment measures while seeking to provide the most appropriate level of
service at the most appropriate treatment facility. In Latin America, the
business model also encompasses mobile health care utilizing call centers,
telephone triage, and house calls by doctors and nurses. In Canada, the Company
contracts with the Ontario Ministry of Health to provide ambulance transport
services in certain municipalities in Ontario.
Volunteer fire departments, tax-supported fire districts, and municipal
fire departments constitute the primary providers of fire protection services in
the United States. Since emergency medical response represents a significant
portion of fire response activity within fire departments, the Company believes
that its ambulance and fire protection services operations are complementary.
The Company also believes that its integration of such services can provide
operating economies, 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 alliances in fire protection and other safety-related services.
The Company also provides crash/rescue fire fighting and hazardous materials
response services at locations in several states and at three airports in
Bolivia.
The Company's strategy is to leverage its experience and competencies
in communications and logistics management to enhance its position as a leading
provider of health and safety services in the United States and other countries.
Key elements of this strategy include the acquisition of ambulance service
providers and strategic alliances. Having established a regional presence in
many geographic locations, the Company currently is focusing on the following:
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<PAGE> 6
- - expansion of services and increased marketing efforts to meet the
evolving needs of the public sector and health care providers;
- - expansion and integration of fire protection, health, and community
safety services;
- - productivity improvement and enhancement;
- - entrance into international markets
The Company seeks to improve productivity, expand service offerings to
customers, and attract new customers through key business alliances, joint
ventures, or other cooperative business arrangements, both domestically and
internationally.
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.
4
<PAGE> 7
RISK FACTORS
Investing in shares of the Company's common stock involves substantial
risks. Investors should carefully consider the following factors and other
information in this Prospectus before deciding to purchase shares of the
Company's common stock. The Company is uncertain about the future of its
business and has made a number of assumptions and projections in preparing this
Prospectus. The Company generally uses words like "anticipate," "estimate,"
"expect," "project," "believe" and "intend" and other words and terms of similar
meaning in connection with any discussion of future operating or financial
performance. These assumptions and projections may turn out to be wrong for many
reasons, including the reasons discussed below.
THE COMPANY HAS SIGNIFICANT INDEBTEDNESS
The Company has significant indebtedness. As of June 30, 1998, the
Company owed lenders 1.4 times the Company's total stockholders' equity, based
on $252.4 million of consolidated indebtedness and $177.8 million of
stockholders' equity. In March 1998, the Company sold $150 million of 7 7/8%
senior notes due in 2008. At the same time as this debt offering, the Company
renegotiated its then existing $200 million bank revolving credit facility to
create a parity loan with the senior notes and to extend the maturity of the
credit facility to March 2003. The Company used the proceeds from the senior
notes to repay the then current outstanding bank revolving credit facility.
The senior notes were issued under an agreement among the Company,
certain of its subsidiaries as guarantors, and the First National Bank of
Chicago as trustee. The agreement permits the Company to incur additional debt
under certain conditions, and the Company expects to incur such additional debt
by obtaining advances on the bank revolving credit facility. The Company's
ability to repay the senior notes and other debt depends on its future operating
performance, which is affected by governmental regulations, the state of the
economy, financial factors, and other factors, certain of which are beyond the
Company's control. The Company cannot provide assurance that it will generate
sufficient funds to enable it to make its periodic debt payments.
The Company's leverage and related covenants could materially and
adversely affect its competitive position and its ability to withstand adverse
economic conditions. Furthermore, its debt and related covenants could make it
more difficult for the Company to make material acquisitions, obtain future
financing, or take advantage of business opportunities that may arise. If the
Company is unable to service its debt, the Company will be required to pursue
alternative means of repayment, which could include restructuring or refinancing
some or all of its debt, raising additional equity, or selling all or a portion
of its tangible and/or intangible assets. The Company cannot provide assurance
that it could implement any of these strategies on satisfactory terms.
The amount of the Company's debt could also have important
consequences, including the following:
- - impairing its ability to obtain additional financing in the future for
operating expenses, acquisitions, or general corporate purposes;
- - dedicating its cash flow from operations to making periodic principal
and interest payments on debt, instead of using these funds for
operations;
- - requiring constant monitoring of the Company's financial condition to
ensure that it complies with all of the required debt covenants;
- - limiting the Company's ability to incur additional debt, create other
liens, pay dividends, or sell assets; and
- - making the Company vulnerable to industry changes, including new laws
and changing economic conditions.
5
<PAGE> 8
LENDERS IMPOSE RESTRICTIVE COVENANTS ON THE COMPANY
As stated above, the agreement governing the terms of the senior notes
contains certain covenants limiting the Company's ability to
- - incur certain additional debt - create certain liens
- - pay dividends - issue guarantees
- - redeem capital stock - enter into transactions with affiliates
- - make certain investments - sell assets
- - issue capital stock of - complete certain mergers and
subsidiaries consolidations.
A breach of any of these covenants could result in an event of default
under the agreement for the senior notes. In addition, the revolving credit
facility contains other more restrictive covenants and requires the Company to
satisfy certain financial tests, including a total debt leverage ratio, a total
debt to total capitalization ratio and a fixed charge ratio. The Company's
ability to satisfy those tests can be affected by events both within and beyond
its control, and the Company cannot provide assurance that it will be able to
meet these tests. The Company's breach of any of these covenants could cause a
default under the revolving credit facility or the agreement for the senior
notes, resulting in possible difficulties with customers, personnel, or others.
THE COMPANY OPERATES THROUGH ITS SUBSIDIARIES
The Company is a holding company and conducts substantially all of its
operations through its subsidiaries. In order for the Company to make its
periodic debt payments, it must have access to the cash flow of its
subsidiaries, whether through loans, dividends, distributions, or otherwise. The
Company's ability to make its debt payments could be subject to legal,
contractual, and other restrictions that could hinder or prevent it from gaining
access to this cash flow. Each subsidiary is a separate and distinct legal
entity from the Company and, unless it is acting as a guarantor of the senior
notes, has no obligation, contingent or otherwise, to pay any amounts due in
respect of the senior notes or to make any amounts available for payment. The
holders of any debt of the Company's subsidiaries will be entitled to payment
from the assets of such subsidiaries prior to the holders of any general,
unsecured obligations of the Company, including the senior notes and the
guarantees of certain of its subsidiaries. As of June 30, 1998, the Company's
subsidiaries had $16.6 million of debt.
THE COMPANY DEPENDS 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 18% of total revenue for the fiscal year ended June 30, 1997 and
12% of total revenue for the fiscal year ended June 30, 1998. One of these
contracts accounted for approximately 5% of total revenue for the fiscal year
ended June 30, 1997 and 4% of total revenue for the fiscal year ended June 30,
1998. The loss or cancellation of any one or more of these contracts could have
a material adverse effect on the Company's business, financial condition, cash
flow, and results of operations. The Company cannot provide assurance that it
will be successful in retaining its existing contracts or in obtaining new
contracts for emergency ambulance services or for fire protection services.
In addition, the Company's contracts with municipalities and fire
districts and with managed care organizations and health care providers are
short term or open-ended or for periods ranging from two years to five years.
During such periods, the Company may determine that a contract is no longer
favorable and may seek to modify or terminate the contract. When making such a
determination, the Company could consider factors, such as weaker than expected
transport volume, geographical issues adversely affecting response times, and
delays in implementing technology upgrades. The Company faces certain risks in
attempting to terminate unfavorable contracts prior to their expiration because
of the possibility of forfeiting performance bonds and the potential adverse
political and public relations consequences. The Company's inability to
terminate or amend
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<PAGE> 9
unfavorable contracts could have a material adverse effect on its business,
financial condition, cash flows, and results of operations. 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.
THE COMPANY FACES RISKS ASSOCIATED WITH RAPID GROWTH, INTEGRATION, AND
ACQUISITION
In order for the Company's strategy with respect to ambulance services
to succeed, the Company must integrate and successfully operate the ambulance
service providers that it acquires. The process of integrating management,
operations, facilities, and accounting and billing and collection systems and
other information systems requires continued investment of time and resources
and can involve difficulties, which could have a material adverse effect on the
Company's business, financial condition, cash flows, and results of operations.
Unforeseen liabilities and other issues also could arise in connection with the
operation of businesses that the Company acquires. The Company's acquisition
agreements contain purchase price adjustments, rights of set-off, and other
remedies in the event that certain unforeseen liabilities or issues arise in
connection with an acquisition. However, these purchase price adjustments,
rights of set-off, and other remedies may not be sufficient to compensate the
Company in the event that any liabilities or other issues arise.
The Company seeks strategic acquisition opportunities in the regular
course of its business. There can be no assurance that the Company will be able
to identify additional suitable companies to acquire, that it will be able to
complete these acquisitions, or that it will be able to integrate any such
acquired companies successfully into its operations. Consolidation in the
ambulance industry has resulted in fewer acquisition candidates. Acquiring
companies involves numerous short-term and long-term risks, including the
following:
- - diversion of management's attention;
- - failure to retain key personnel of the acquired company;
- - adverse consequences to cash flow until accounts receivable of the
acquired company are fully integrated;
- - incompatibility of acquired systems;
- - loss of net revenue of the acquired company;
- - possible regulatory issues of the acquired company;
- - compliance with laws and regulations of new jurisdictions; and
- - facing competitors with greater knowledge of local markets.
The Company expects to use primarily cash and its common stock to
acquire companies in the future. 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 additional debt or equity
financings. The Company cannot provide assurance that its operations will
generate sufficient cash for acquisitions or that any additional financings will
be available if and when needed or on terms acceptable to the Company.
The market price of the Company's common stock impacts the Company's
ability to complete acquisitions. The market price of the Company's common stock
may affect the willingness of the Company to use its common stock to acquire
other companies and the willingness of potential acquired companies or their
owners to accept the Company's common stock. In addition, the market price
performance of the Company's common stock may make raising funds more difficult
and costly. As a result of a decline in the market price of the Company's common
stock in the fourth quarter of fiscal 1998, the pace of acquisitions utilizing
the
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Company's common stock has declined. Continued weakness in the market price of
the Company's common stock could adversely affect the Company's ability or
willingness to make additional acquisitions. Declines in the market price of
the Company's common stock could cause previously acquired companies to seek
adjustments to purchase prices or other remedies to offset the decline in value.
THE COMPANY DEPENDS ON REIMBURSEMENTS BY THIRD-PARTY PAYORS AND INDIVIDUALS
The Company receives a substantial portion of its payments for
ambulance services from third-party payors (including Medicare, Medicaid, and
private insurers). The Company received approximately 74% of its ambulance fee
collections from such third-party payors during fiscal 1997, including 26% from
Medicare. In fiscal 1998, the Company received approximately 79% of ambulance
fee collections from these third parties, including 29% from Medicare.
The reimbursement process is complex and involves lengthy delays. The
Company from time to time experiences such delays. Third-party payors are
continuing their efforts to control expenditures for health care, including
proposals to revise reimbursement policies. The Company recognizes revenue when
the Company provides ambulance services; however, there can be lengthy delays
before the Company receives payment. In addition, third-party payors may
disallow, in whole or in part, requests for reimbursement based on assertions
that certain amounts are not reimbursable or additional supporting documentation
is necessary. Retroactive adjustments can change amounts realized from
third-party payors. The Company is subject to governmental audits of its
Medicare and Medicaid reimbursement claims and can be required to repay these
agencies if a finding is made that the Company was incorrectly reimbursed.
Delays and uncertainties in the reimbursement process adversely affect the level
of accounts receivable, increase the overall costs of collection, and may
adversely affect the Company's working capital and cause the Company to incur
additional borrowing costs.
The Company also faces the continuing risk of nonreimbursement to the
extent that uninsured individuals require emergency ambulance service in service
areas where an adequate subsidy is not provided. Amounts not covered by
third-party payors are the obligations of individual patients.
The Company establishes an allowance for doubtful accounts based on
credit risk applicable to certain types of payors, historical trends, and other
relevant information. The Company reviews its allowance for doubtful accounts on
an ongoing basis and may increase such allowances from time to time, including
when it determines that the level of effort and cost of collection of certain
accounts receivable is unacceptable. The Company's accounts receivable and
related allowance for doubtful accounts at June 30, 1997 and 1998 were as
follows:
<TABLE>
<CAPTION>
June 30,
-------------------
1997 1998
------- -------
(in millions)
<S> <C> <C>
Accounts receivable $ 142.8 $ 224.2
Less: allowance for doubtful accounts (35.8) (69.6)
------- -------
Accounts receivable, net $ 107.0 $ 154.6
======= =======
</TABLE>
The allowance for doubtful accounts at June 30, 1998 includes a $17.9
million additional provision for doubtful accounts recorded in the fourth
quarter of fiscal 1998. The Company believes that the increase in accounts
receivable relates to significant acquisition activity and recent revenue
growth. The Company also attributes the increases in accounts receivable and the
increased age of those accounts to certain factors, including the following:
- - delays in payments from certain third-party payors, particularly in
certain of the Company's regional billing areas; and
- - a general industry trend of third party payors taking more time to
reimburse these amounts.
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In addition, the Company believes certain transitional aspects of the
integration of acquired companies into the Company's centralized billing and
collection function has resulted in increases in the amount and age of accounts
receivable during the transition period.
The risks associated with third-party payors and uninsured individuals
and the Company's failure to monitor and manage accounts receivable successfully
could have a material adverse effect on the Company's business, financial
condition, cash flows, and results of operations. The Company cannot provide
assurance that its collection policies and allowances for doubtful accounts
receivable will be adequate.
PROPOSED RULES MAY ADVERSELY AFFECT THE COMPANY'S REIMBURSEMENT RATES OF
COVERAGE
During June 1997, the Health Care Financing Administration 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 (as discussed below), have not yet been withdrawn. The
proposed rules have not been finalized.
In addition, the "Balanced Budget Act of 1997" became law in August
1997. This new law in part provides for the development, negotiation, and
implementation of prospective fee schedule for Medicare reimbursement of
ambulance services by January 2000. The new law also reduces the annual rate
adjustment for Medicare reimbursements from the Consumer Price Index (CPI) to
CPI less one percentage point.
The new law requires that, beginning January 1, 2000, ambulance service
providers accept assignment whereby the Company receives payment directly from
Medicare and accepts such amount, along with the co-pay and deductible paid by
the patient, as payment in full. The new law also applies the Skilled Nursing
Facility Prospective Payment System to a limited number of ambulance trips to
and from nursing homes. This application could require the Company to negotiate
new contracts or arrangements with skilled nursing facilities to provide
ambulance services. The new law also stipulates that individual states may now
elect not to provide payment for cost-sharing for coinsurance, or copayments,
for dual-qualified (Medicare and Medicaid) beneficiaries.
If the proposed rules were to be finalized prior to the negotiation of
a prospective fee schedule as stipulated in the new law, and the Company were
unable to mitigate the effect of the new rules, the Company's business,
financial condition, cash flows, and results of operations could be adversely
affected. 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 payments and
reimbursements. A reduction in coverage or reimbursement rates by third-party
payors, or an increase in the Company's cost structure relative to the rate of
increase in the CPI, could have a material adverse effect on the Company's
business, financial condition, cash flows, and results of operations.
CERTAIN STATE AND LOCAL GOVERNMENTS REGULATE RATE STRUCTURES AND LIMIT 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 ambulance services 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 9% of total revenue for fiscal 1997 and
13% of total revenue for fiscal 1998. The Company cannot provide assurance that
it 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.
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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. The Company could be
unsuccessful in negotiating or maintaining profitable contracts with
municipalities and fire districts.
THE COMPANY FACES ADDITIONAL RISKS ASSOCIATED WITH ITS INTERNATIONAL OPERATIONS
The Company plans to expand its presence in international health and
safety and other related services markets. Although the Company currently
maintains operations in Canada and in Latin America, the Company may not be
successful in expanding its international operations. As the Company expands its
international operations, in addition to other business risks discussed herein,
it increasingly will be subject to various risks associated with international
operations, including the following:
- - management of a multi-national organization
- - fluctuations in currency exchange rates
- - compliance with local laws and other regulatory requirements and
changes in such laws and requirements
- - restrictions on the repatriation of funds
- - inflationary conditions
- - employment and severance issues
- - political and economic instability
- - war or other hostilities
- - expropriation or nationalization of assets
- - overlap of tax structures
- - renegotiation or nullification of contracts.
The inability to effectively manage these and other risks could have a material
adverse effect on the Company's business, financial condition, cash flows, and
results of operations.
The Company's revenue from international operations is denominated
primarily in the currencies of the countries in which it operates. A decrease in
the value of such foreign currencies relative to the U.S. dollar could result in
losses from currency exchange rate fluctuations. As the Company continues to
expand its international operations, exposures to gains and losses on foreign
currency transactions may increase. The Company does not currently engage in
foreign currency hedging transactions. In the future, the Company may seek to
limit such exposure by entering into forward-foreign exchange contracts or
engaging in similar hedging strategies. Any currency exchange strategy may be
unsuccessful in avoiding exchange-related losses, and the failure to manage
currency risks effectively may have a material adverse effect on the Company's
business, financial condition, cash flows, and results of operations. In
addition, revenue of the Company earned in foreign countries may be subject to
taxation by more than one jurisdiction, thereby adversely affecting the
Company's earnings.
NUMEROUS GOVERNMENTAL ENTITIES REGULATE THE COMPANY'S BUSINESS
Numerous federal, state, local, and foreign 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 that traditionally have applied
only to governmental bodies. Federal, state, local, or foreign governments could
- - change existing laws or regulations;
- - adopt new laws or regulations that increase the Company's cost of doing
business;
- - lower reimbursement levels; or
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<PAGE> 13
- - otherwise adversely affect the Company's business, financial condition,
cash flows, and results of operations.
The Company and businesses acquired by the Company could encounter
difficulty in complying with all applicable laws and regulations.
HEALTH CARE REFORMS AND COST CONTAINMENT MAY AFFECT THE COMPANY'S BUSINESS
Numerous legislative proposals have been considered that would result
in major reforms in the U.S. 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. Changing industry
practices could have an adverse effect on the Company's business, financial
condition, cash flows, accounts receivable realization, and results of
operations.
COMPETITION
The ambulance service industry is highly competitive. Ambulance and
general transport service providers compete primarily on the basis of quality of
service, performance, and cost. In order to compete successfully, the Company
must make continuing investments in its fleet, facilities, and operating
systems. The Company believes that counties, fire districts, and municipalities
consider the following factors in awarding a contract:
- - quality of medical care
- - historical response time performance
- - customer service
- - financial stability
- - personnel policies and practices
The Company currently competes with the following entities to provide
ambulance services:
- - governmental entities (including fire districts)
- - hospitals
- - other national ambulance service providers
- - large regional ambulance service providers
- - local and volunteer private providers
Municipalities, fire districts, and health care organizations that
currently contract for ambulance services could choose to provide ambulance
services directly in the future. The Company is experiencing increased
competition from fire departments in providing emergency ambulance service. Some
of the Company's current competitors and certain potential competitors have or
have access to 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
these 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 who subscribe for this service.
The Company cannot provide assurance that
- - it will be able to obtain additional fire protection business on a
contractual or subscription basis;
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<PAGE> 14
- - fire districts or municipalities will not choose to provide fire
protection services directly in the future; or
- - areas in which the Company provides services through subscriptions will
not be converted to tax-supported fire districts or annexed by
municipalities.
THE COMPANY DEPENDS ON ITS MANAGEMENT AND OTHER KEY PERSONNEL
The Company's success depends upon its ability to recruit and retain
key personnel. The Company could experience difficulty in retaining its current
key personnel or in attracting and retaining necessary additional key personnel.
Low unemployment in certain market areas currently makes the recruiting,
training, and retention of full-time and part-time personnel more difficult and
costly, including the cost of overtime wages.
The Company's internal growth and its expansion into new geographic
areas, including international markets, 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 Company has entered into employment agreements with
certain of its executive officers and certain other key personnel. The Company
maintains "key person" insurance on several of its key executive officers.
CONTROL BY CURRENT STOCKHOLDERS
As of September 30, 1998, the Company's directors, executive officers,
and their affiliates beneficially own approximately 13% of the outstanding
shares of the Company's common stock. The Company's Employee Stock Ownership
Plan holds approximately 6% of the outstanding shares of the Company's common
stock. Accordingly, these persons, acting as a group, could significantly
influence the election of the Company's directors and the outcome of matters
requiring approval by the stockholders of the Company.
ANTI-TAKEOVER PROVISIONS
Certain provisions of the Company's certificate of incorporation and
Delaware law could make it more difficult for a third party to acquire control
of the Company, even if a change in control might be beneficial to stockholders.
This could discourage potential takeover attempts and could adversely affect the
market price of the Company's common stock.
VOLATILITY OF STOCK
The market price of the Company's common stock has been volatile since
the Company's initial public offering in July 1993. The period was initially
marked by generally rising stock prices, favorable industry conditions, and
improved operating results by the Company. The Company experienced a significant
decline in its stock price in the fourth quarter of fiscal 1998 as a result of
various factors, including the following:
- - less favorable industry trends;
- - an increase in its provision for doubtful accounts;
- - an increase in its operating expenses;
- - general stock market conditions; and
- - the previously identified risk factors.
The trading price of the Company's common stock in the future could be
subject to various factors, including the following:
- - wide fluctuations in response to quarterly variations in operating
results of the Company and others in its industry;
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<PAGE> 15
- - 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;
- - the inability of the Company to make any acquisitions; 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 could adversely affect the market price of the Company's common
stock. The market price and volatility of the Company's common stock could
increase the risk of litigation, including from owners of companies previously
acquired by the Company.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of common stock in the public market could
adversely affect prevailing market prices. As of September 30, 1998, there were
14,465,598 shares of common stock outstanding, 10,580,502 shares of which were
freely transferable without restriction under the securities laws, unless held
by an "affiliate" of the Company, as that term is defined under the securities
laws. The Company also has outstanding 321,072 restricted shares, as that term
is defined under Rule 144 under the securities laws, 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 6,700,000 shares of common stock for issuance in connection with
acquisitions (of which 3,564,047 shares have been issued), which are generally
freely tradeable after their issuance under Rule 145 of the securities laws,
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 up to 6,000,000 shares of common stock for
issuance pursuant to the Company's stock option plans. As of September 30, 1998,
approximately 800,000 stock options had been exercised and options to purchase
approximately 3,697,000 shares were outstanding. 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 dilute earnings per share, and the sale
of such shares could depress the market price of the Company's common stock.
YEAR 2000 ISSUES
The Company has implemented a year 2000 compliance program designed to
ensure that the Company's medical equipment, ambulance and fire dispatch
systems, and computer systems and applications will function properly beyond
1999. The Company's assessments of this equipment and systems, both internally
developed and purchased from third-party vendors, is nearly complete. The
Company will continue to monitor new medical equipment, ambulance and fire
dispatch systems, and computer systems and applications that the Company adds in
its operations to ensure that these systems will function properly beyond 1999.
The results of the assessments completed to date have indicated that the
Company's medical equipment, ambulance and fire dispatch systems, and computer
systems and applications will either function properly beyond 1999, can be
upgraded, or in the case of certain ambulance and fire dispatch systems, will be
replaced in order to obtain compliance. If the Company's medical equipment,
ambulance and fire dispatch systems, and computer systems and applications are
not year 2000 compliant in a timely manner, the Company's business operations
could be adversely affected and the Company may incur unanticipated expenses to
remedy any problems not addressed by these compliance efforts.
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<PAGE> 16
The failure of third-party payors, such as private insurers, managed
care providers, health care organizations, preferred provider organizations, and
federal and state government agencies that administer Medicare and/or Medicaid,
to adequately address their year 2000 issues could impact their ability to
reimburse the Company for services provided or otherwise adversely affect the
Company's business, financial condition, cash flows, and results of operations.
The Company also depends upon the ability of telephone systems to
function properly beyond 1999 in order for the Company to receive incoming calls
for service to its ambulance and fire dispatch systems. The failure of telephone
service providers to adequately provide service could impact the Company's
ability to dispatch ambulance and fire protection services in a timely manner.
To date, the Company has not completed its contingency plan in the
event that its medical equipment, ambulance and fire dispatch systems, computer
systems and applications, telephone systems, systems of third-party payors, or
any other components of its business operations fail to operate in compliance
with the year 2000 date change. The Company expects to develop contingency plans
by the end of fiscal 1999.
The cost of the Company's year 2000 compliance program has not had and
is not expected to have a material impact on the Company's results of
operations, financial condition, or liquidity. The Company could experience
material adverse consequences in the event that the Company's year 2000
compliance program is not successful or its vendors or third-party payors are
not able to resolve their year 2000 compliance issues in a timely manner.
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<PAGE> 17
SELLING STOCKHOLDERS
The following table sets forth (i) the name of each of the selling
stockholders, or their respective legatees, heirs, or legal representatives
(collectively, the "Selling Stockholders"), all of whom are current or former
employees or directors of the Company, (ii) the number of shares of Common Stock
of the Company beneficially owned by each Selling Stockholder as of November 20,
1998, and (iii) the number of shares of Common Stock that each Selling
Stockholder may offer and sell pursuant to this Prospectus. The shares to be
offered hereunder may be sold from time to time subject to vesting and other
forfeiture restrictions.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK
NUMBER OF ACQUIRED
SHARES OF PURSUANT TO THE STOCK
COMMON GRANT AGREEMENT AND
STOCK WHICH MAY BE OFFERED
NAME OWNED (1)(2)(3) PERCENT PURSUANT HERETO
- -------------------------------------------------- ------------------ ----------- --------------------------
<S> <C> <C> <C>
Warren S. Rustand(4) 245,249 1.7 27,500
Bolin Revocable Trust(5) 261,367 1.8 4,166
Robert T. Edwards(6) 204,894 1.4 4,166
Cor J. Clement(7) 33,250 * 12,500
Louis G. Jekel Family Limited Partnership(8) 139,299 1.0 8,325
Louis A. Witzeman(9) 137,998 1.0 8,333
Mark E. Liebner(10) 211,066 1.4 52,500
John E. Stuart(11) 64,277 * 12,500
William R. Crowell(12) 125,246 * 5,000
Kenneth R. Kelley(13) 11,652 * 8,500
Mark D. McConnell(14) 85,549 * 7,870
James E. Stenger(15) 173,041 1.2 2,775
Clinton C. Vardeman(16) 9,500 * 9,500
C. Ian Sym-Smith(17) 50,832 * 33,482
Jack E. Brucker(18) 29,667 * 4,000
</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
November 20, 1998. 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 22,914, 5,661, 1,030, 3,305, 15,292, and 3,290 fully vested
shares held by the ESOP for the benefit of Messrs. Edwards, Jekel,
Liebner, McConnell, Stenger, and Vardeman, respectively, and 45, 235
and 372 shares held by the ESOP for the benefit of Messrs. Rustand,
Stuart, and Crowell, respectively, that are 20%, 60% and 80% vested,
respectively. Such persons have sole voting power with respect to the
shares held in their account by the ESOP.
(4) Includes 216,250 shares of Common Stock issuable upon exercise of stock
options. Mr. Rustand was the Chief Executive Officer and President of
the Company from August 1996 until his resignation in August 1998. Mr.
Rustand was the Chairman of the Board of Directors from May 1994 until
August 1998.
(5) Includes 159,735 shares of Common Stock issuable upon exercise of stock
options held by James H. Bolin and 101,632 shares held by the Bolin
Revocable Trust UA dated February 27, 1996, James H. Bolin and
15
<PAGE> 18
Sandra L. Bolin, Trustees. Mr. Bolin is currently a Director and
consultant of the Company and was the President of the Company from
March 1995 until his retirement in January 1998.
(6) Includes 178,814 shares of Common Stock issuable upon exercise of
stock options. Mr. Edwards served as Executive Vice President of the
Company since October 1995 and was a Director of the Company from May
1993 until November 1998. Mr. Edwards has announced his retirement
effective January 1, 1999 and will serve as a consultant to the Company
for six months thereafter.
(7) Includes 8,750 shares of Common Stock issuable upon exercise of stock
options.
(8) Includes 65,000 shares of Common Stock issuable upon exercise of stock
options held by Louis G. Jekel; 3,175 shares held by the Louis G. Jekel
Charitable Remainder Trust UA dated March 1, 1996; and 71,124 shares
held by the Louis G. Jekel Family Limited Partnership of which Mr.
Jekel is a beneficial owner.
(9) 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 59,375 shares of Common
Stock issuable upon the exercise of stock options.
(10) Includes 149,347 shares of Common Stock issuable upon exercise of stock
options.
(11) Includes 49,083 shares of Common Stock issuable upon exercise of stock
options. Mr. Stuart served as Senior Vice President - Marketing and New
Business Development of the Company from May 1993 until November 1997.
(12) Includes 108,060 shares of Common Stock issuable upon exercise of stock
options.
(13) Mr. Kelley was Vice President - Management Information Systems of the
Company from December 1990 until July 1996.
(14) Includes 77,584 shares of Common Stock issuable upon exercise of stock
options. Mr. McConnell served as Vice President - Regional General
Manager of the Company from February 1995 to August 1996 and as
Regional President of the Company until November 1998.
(15) Includes 122,226 shares of Common Stock issuable upon exercise of stock
options. Mr. Stenger served as a Vice President of the Company from
February 1989 until July 1997. Mr. Stenger also served as Senior Vice
President - Executive Assistant to the President/CEO of the Company
from July 1997 until his retirement in November 1998.
(16) Mr. Vardeman served as Vice President - Regional General Manager of the
Company from August 1994 to August 1996 and as Regional President of
the Company until January 1998.
(17) Mr. Sym-Smith was Chairman of the Board of the Company from 1988
through May 1994 and a member of the Board of Directors through
December 1994.
(18) Includes 25,667 shares of Common Stock issuable upon exercise of stock
options.
PLAN OF DISTRIBUTION
This Prospectus, as appropriately amended or supplemented, may be used
from time to time principally by persons who were granted shares of Common Stock
pursuant to restricted stock grants, or their transferees, pledgees, donees,
legatees, heirs, or legal representatives 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 has granted registration rights
to certain of the Selling Stockholders. The Registration Statement of which this
Prospectus forms a part is intended to satisfy these registration rights. 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 at market prices prevailing at the time of sale, at
prices related to such prevailing market prices, at negotiated prices, at fixed
prices, or in transactions
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<PAGE> 19
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 underwritten
and selling group members (if any) may engage in passive market making
transactions in the Common Stock on Nasdaq immediately prior to the 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.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by O'Connor, Cavanagh, Anderson, Killingsworth &
Beshears, a professional association, Phoenix, Arizona.
EXPERTS
The consolidated financial statements of the Company as of June 30,
1997 and 1998 and for each of the three years in the period ended June 30, 1998
incorporated by reference in this prospectus and in the Registration Statement
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated herein in
reliance upon the authority of said firm as experts in auditing and accounting
in giving said reports.
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<PAGE> 20
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Exchange Act, and, in accordance therewith, files reports and other information
with the Securities and Exchange Commission (the "Commission"). Reports, proxy
and information statements filed by the Company with the Commission pursuant to
the informational requirements of the Exchange Act 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, 7 World Trade Center, Suite 1300, New
York, New York 10048; and Chicago Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60604. Copies of such material may
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Room 1024, Judiciary Plaza, Washington, D.C. 20549, at prescribed
rates. The public may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. The Common Stock of
the Company is quoted on The Nasdaq National Market. In addition, reports, proxy
statements and other information concerning the Company (symbol: RURL) can be
inspected and copied at the offices of the National Association of Securities
Dealers, Inc. at 1735 K Street, N.W. Washington, D.C. 20006. 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 side can be accessed at
http://www.sec.gov.
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<PAGE> 21
===============================================================================
NO DEALER, SALESPERSON, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS 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 THE
SECURITIES BY ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
WOULD BE UNLAWFUL OR TO ANY PERSON TO WHOM IT IS UNLAWFUL. UNDER NO
CIRCUMSTANCES SHALL THE DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE PURSUANT TO
THIS PROSPECTUS CREATE ANY IMPLICATION THAT INFORMATION CONTAINED IN THIS
PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
--------------------
TABLE OF CONTENTS
Incorporation of Certain
Documents by Reference .................................................. 2
Prospectus Summary ........................................................ 3
Risk Factors .............................................................. 5
Selling Stockholders ...................................................... 15
Plan of Distribution ...................................................... 16
Legal Matters ............................................................. 17
Experts ................................................................... 17
Available Information ..................................................... 18
================================================================================
201,117 SHARES
RURAL/METRO
CORPORATION
COMMON STOCK
--------------------
PROSPECTUS
--------------------
--------------------
DECEMBER 1, 1998
================================================================================
19
<PAGE> 22
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents or information have been filed by the
Registrant with the Securities and Exchange Commission (the "Commission") and
are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
June 30, 1998, as amended, or the latest prospectus filed pursuant to
Rule 424(b) under the Securities Act of 1933, as amended, that contains
audited financial statements for the Registrant's latest fiscal year
for which such statements have been filed.
(b) All other reports filed with the Commission pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 since the end of the
fiscal year covered by the documents of the Registrant referred to in
(a) above.
(c) The description of the Registrant's Common Stock, par value $.01 per
share, which is contained in the Registrant's Registration Statement on
Form 8-A filed July 8, 1993, as amended by Form 8-A/A filed February 2,
1995.
All documents and information filed by the Registrant pursuant to
Sections 13(a), 13(c), 14, and 15(d) of the Securities Exchange Act of 1934,
after the date of this Registration Statement and prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
of the securities offered under this Registration Statement have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part of this Registration Statement
as of the date of filing of such documents. Any statement 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 Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is incorporated or deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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
20
<PAGE> 23
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 7. EXEMPTION FROM REGISTRATION CLAIMED.
Certain of the shares being reoffered or resold pursuant to this
Registration Statement were issued to the Selling Stockholders in reliance upon
an exemption from registration pursuant to Section 4(2) of the Securities Act of
1933, as amended (the "Securities Act"), as a transaction not involving a public
offering pursuant to certain employee benefit plans, as defined in Rule 405 of
the Securities Act.
ITEM 8. EXHIBITS.
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------------- -----------------------------------------------------
10 Stock Grant Agreements(1)
23.1 Consent of Arthur Andersen LLP
24 Powers of Attorney of Directors and Executive Officers
(included on the Signature Page of this Registration
Statement)
- -----------------
(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.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or
sells securities, a post-effective amendment to this
Registration Statement to:
(i) include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
21
<PAGE> 24
(ii) 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 in the Registration Statement;
and
(iii) 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:
(i) to treat each post-effective amendment as a
new registration statement of the securities
offered, and the offering of the securities
at that time to be the initial bona fide
offering thereof;
(ii) 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 referenced
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; and
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 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 of 1933 and will be governed by the final adjudication of such issue.
(3) To file a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
22
<PAGE> 25
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 November 30, 1998.
RURAL/METRO CORPORATION
By: /s/ John B. Furman
---------------------------------------------
John B. Furman, President and Chief Executive
Officer (Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints jointly and severally, John B. Furman 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 or her and
in his or her 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
or she 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 by the following persons in
the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ----------------------------------------------- -----------------------
<S> <C> <C>
/s/ John B. Furman
- ------------------------------------------
John B. Furman President, Chief Executive Officer and November 30, 1998
Director (Principal Executive Officer)
/s/ Robert E. Ramsey
- ------------------------------------------
Robert E. Ramsey Executive Vice President and Director November 30, 1998
/s/ Mark E. Liebner
- ------------------------------------------
Mark E. Liebner Senior Vice President, Chief Financial November 30, 1998
Officer and Treasurer (Principal Financial
Officer)
/s/ Dean P. Hoffman
- ------------------------------------------
Dean P. Hoffman Vice President, Financial Services (Principal November 30, 1998
Accounting Officer)
/s/ James H. Bolin
- ------------------------------------------
James H. Bolin Vice Chairman of the Board of Directors November 30, 1998
/s/ Cor J. Clement
- ------------------------------------------
Cor J. Clement Chairman of the Board of Directors November 30, 1998
/s/ Mary Anne Carpenter
- ------------------------------------------
Mary Anne Carpenter Director November 30, 1998
/s/ Louis G. Jekel
- ------------------------------------------
Louis G. Jekel Vice Chairman of the Board of Directors November 30, 1998
</TABLE>
23
<PAGE> 26
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ----------------------------------------------- -----------------------
<S> <C> <C>
/s/ William C. Turner
- ------------------------------------------
William C. Turner Director November 30, 1998
/s/ Henry G. Walker
- ------------------------------------------
Henry G. Walker Director November 30, 1998
/s/ Louis A. Witzeman
- ------------------------------------------
Louis A. Witzeman Director November 30, 1998
</TABLE>
24
<PAGE> 1
EXHIBIT 23.1
ARTHUR ANDERSEN LLP
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
September 28, 1998 included in Rural/Metro Corporation's Form 10-K for the year
ended June 30, 1998 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
November 24, 1998
