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ROLLINS, INC.(Name of Registrant as Specified In Its Charter)(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)☒☐Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (set forth the amount on which the filing fee is calculated and state how it was determined).(1) Title of each class of securities to which transaction applies:(2) Aggregate number of securities to which transaction applies:(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11:(4) Proposed maximum aggregate value of transaction:(5) Total fee paid:☐☐Check box if any part of the fee is offset as providedFee computed on table in exhibit required by Item 25(b) per Exchange Act RuleRules 14a6(i)(1) and 0-11 (a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.(1) Amount Previously Paid:(2) Form, Schedule or Registration Statement No.:(3) Filing Party:(4) Date Filed:
SHAREHOLDERS
2024.
| BY ORDER OF THE BOARD OF DIRECTORS | |||||
 | |||||
Elizabeth B. Chandler | |||||
Secretary | |||||
Atlanta, Georgia | |||||
March | |||||
Table of Contents of the BoardWhether or not you expect to attend the annual meeting, please sign, date and return the enclosed proxy card promptly. Alternatively, you may give a proxy by telephone or over the internet by following the instructions on your proxy card or Notice. If you decide to attend the meeting, you may, if you wish, revoke the proxy and vote your shares in person.Letter from our Executive Chairman and Chief Executive OfficerTo our Stockholders/Shareholders,On behalf of the Board of Directors, we are pleased to share that we will hold our 20222024 Annual Meeting of StockholdersShareholders on Tuesday April 26th, 2022,23th, 2024, at 12:30 P.M.As a result ofThanks to our employees around the globe,team members, we had another year of tremendous growth and solid financial results in 2021.2023. Our operations performed well, and we had impressive growth in all of ourevery business lines.line. The strength of our brands enabled customers to select, retain and expand our services at very high levels. Living up to our brand promises is athe hallmark toof the longevity and sustainable business model that we have built at Rollins.MissionUpdated Strategic ObjectivesIn 2023, we assessed the business environment, as well as our own strengths and Strategic PlanThe complexityopportunities and have aligned around key strategic objectives that will help us to drive continued success for Rollins.First and foremost, we promote a people first mindset that emphasizes the importance of prioritizing the well-being and development of the individual, as well as our collective team, in all aspects of our business continuesbusiness. We put our customers and colleagues first, knowing that in order to riseprovide the best customer experience, we must focus on cultivating our position as the employer of choice in our industry. Our people are a key competitive advantage, so we acquire more companiesmust invest in tools, training and expanddevelopment opportunities that make working at Rollins an enjoyable and rewarding experience.When you put people first, you also build customer loyalty by ensuring that our global footprint. team members have the skills and resources needed to provide exceptional customer service. We are focused on building relationships and trust with our customers by consistently striving to exceed their expectations.Another key tenet of our culture is promoting a growth mindset throughout our business. Change is constant in today’s environment, so we must remain open and adaptable to new ideas for continuous growth.As Rollins has evolved overa complement to our growth mindset, our dedication to continuous improvement and operational efficiency is another key tenet of our strategy and culture. We approach our operations from the years to becoming a parent company to many strong brands, our mission and approach for supporting our acquired companies must evolve accordingly soperspective that we can drive and sustainimprove upon everything we do. We are constantly striving to improve our performance and growth. Over the past several months, we have undergone a concerted effort to revisit our Rollins story and clarify our role and mission so that we can optimize how we guide, govern, and support our rapidly growing company. From this effort, we have developed a new Strategic Plan framework that we will share later this year that is built to guide our actions as a parent company so we are in a better position to support our entire portfolio of brands. Continued COVID-19 ResponseOur success with implementingservice levels by optimizing our business continuity plan continued into 2021 with the constant business adjustment needed to deal with COVID-19. Our workforce was able to work-from-home successfully in order to continue to supportmodel and modernizing our Global Operations Group. As waves of the pandemic occurred throughout the year, we continued our issuance of personal protective equipment for all customer facing employees. The trust factor that our customers had in our technicians showed in the continued growth of our pest control and termite and ancillary services. Environmental, Social and GovernanceDuring 2021, we continued our journey to enhance our focus on Environmental, Social and Governance (ESG) matters in our brands. We have taken steps and are committed to improving our transparency and results in key areas related to our business and industry. business.We believe that our alignment around these practices improvekey strategic areas of focus will help us to grow faster than our peoplemarket, position our business for the future, and deliver value for all stakeholders, including our customers, our employees, and make good long-term business sense. A few results from 2021 include:our shareholders.●Appointed a Workplace Inclusion Director to lead our diversity, equity and inclusion initiatives;●Improvements in key safety metrics;●Reevaluated and strengthened our internal controls; and●Expansion of “Green” Services for our customers in some of our brands.
Board of Directors Refreshment
During 2021 we demonstrated that weUpdate
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Moving Forward
2024. On behalf of our Board of Directors and our employees around the world, we want to thank you for your continued support and investment in Rollins, Inc. We are excited forabout the future and our ability to deliver long-term shareholder returns.
 
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Gary W. Rollins
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PROXY STATEMENT
2024.
Three-for-two stock split – All shares, per share and market price data herein have been adjusted for the three-for-two stock split to stockholders of record on November 10, 2020, paid on December 10, 2020.
Shareholders.
Householding and Delivery of Notice or Proxy Materials
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MATTERS TO BE VOTED ON AND VOTES NEEDED FOR APPROVAL
PROPOSAL | VOTE NEEDED FOR APPROVAL AND EFFECT OF ABSTENTION AND BROKER NON-VOTES | |||||||
Proposal No. 1: The election of four Class | The election of the director nominees named herein will require the affirmative vote of a plurality of the votes cast by the shares of Company Common Stock entitled to vote in the election, provided that a quorum is present at the Annual Meeting. In the case of aplurality vote requirement (as in the election of directors), where no particular percentage vote is required, the outcome is solely a matter of comparing the number of votes cast for each nominee, with those nominees receiving the most votes being elected, and hence only votes for director nominees (and not abstentions or broker
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Proposal No. 2: To ratify the appointment of
| The affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the meeting is required to approve the ratification of the appointment of the 2024. Abstentions will have the effect of a vote against this proposal. Broker non-votes | |||||||
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There are no rights of appraisal or similar dissenter’s rights with respect to any matter to be acted upon pursuant to this Proxy Statement. It is expected that shares held of record and beneficially by officers and directors of the Company, which in the aggregate represent approximately 534.69% percent of the outstanding shares of Common Stock as of the record date, will be voted for the director nominees and for the ratification of the appointment of the Company’s independent registered public accounting firm, and for the proposal to approve the Rollins, Inc. 2022 Employee Stock Purchase Plan.
firm.
Meetings
| Executive Chairman of the Board | •Sets the agendas for Board meetings in consultation with the CEO, Corporate Secretary, and other members of the Board. •Presides over all Board meetings and the Annual Meeting of Shareholders. •Sees that all orders and resolutions of the Board are carried into effect. | ||||
| Chief Executive Officer | •Sets the operational leadership and strategic direction of the Company. •Sets the day-to-day leadership and performance of the Company. | ||||
| Lead Independent Director | •Serves as the liaison between the Executive Chairman, the Chief Executive Officer and the independent directors. •Sets the agendas for, and presides over, the executive sessions of the non-employee and independent directors. •Consults with the Executive Chairman and the Chief Executive Officer regarding information sent to the Board in connection with Board meetings. •Being available, if requested by the shareholders, when appropriate, for consultation and direct communication. | ||||
Our Board of Directors (the “Boardas described more below. The Company maintains an Enterprise Risk Management (“
strategies regarding workplace inclusion. The Board has adopted written charters for the Audit Committee, Human Capital Management and Compensation Committee andreceives updates from senior management throughout the Nominating and Corporate Governance Committee which are all availableyear on our website at www.rollins.com under the section titled “Governance – Governance Documents.” In addition, we have, from time to time, formed a special committeekey talent metrics for the purpose of evaluatingoverall workforce, including metrics related to workplace inclusion and approving certain transactions in which other directors ofalso receives reports on the Company’s recruiting, training and education, talent acquisition and career development programs.
Under our Corporate Governance Guidelines, directors are expected to attend all regular and special meetings ofdirector qualifies as independent unless the Board and Board committees upon which they serve. Directors are also expected to attendaffirmatively determines that the Annual Stockholders Meeting. Each incumbent director attended at least 75 percent ofhas no material relationship with the aggregate of the Board meetings held in 2021 and the meetings of the committees on which they served during 2021, and all members of the Board at that time attended last year’s Annual Stockholders Meeting.
The following table shows the current membership (“M”) and chairperson (“C”) of the Board and each of the Board committees, the number of Board and Board committee meetings held in 2021 and actions taken by unanimous written consent in lieu of meetings:
Board of Directors | Audit Committee | Executive Committee | Human Capital Management and Compensation Committee | Nominating and Corporate Governance Committee | |
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M |
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M | M |
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M | M | M | C | C | |
M |
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9 | 17 | — | 4 | 4 | |
— | — | 1 | — | 2 |
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Audit Committee
The Audit Committee is responsible for, among other things:
The Board has determined that eachA member of the Audit Committee is considered independent as defined bylong as he or she (i) does not accept any consulting, advisory, or compensatory fee from the rulesCompany, other than as a director or committee member; (ii) is not an affiliated person of the SECCompany or its subsidiaries; and (iii) otherwise meets the independence requirements of the NYSE and the NYSE.Company’s Independence Guidelines. The Board has alsoaffirmatively determined that all members of the Audit Committee are qualified as “Audit Committee Financial Experts” within the meaning of the rules of the SEC and that they have accounting and related financial management expertise within the meaning of independent under our Independence Guidelines, the NYSE listing standards. standards, the Exchange Act and SEC rules and regulations promulgated thereunder, the heightened standards required for Audit Committee members, and its charter.
Diversity Committee
In October 2021, the Board combined the role of the Diversity Committee with the Compensation Committee and changed the name of the Compensation Committee to the “Human Capital Management and Compensation Committee.” The Human Capital Management and Compensation Committee, among other things, is responsible for overseeing the Company’s diversity efforts as noted below. The previous function of the Diversity Committee until October 2021 was to monitor compliance with applicable non-discrimination laws. Eacheach member of the DiversityNominating and Corporate Governance Committee in 2021 was independent. Mr. Tippie served on the Diversity Committee until his retirement on April 12, 2021.
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Human Capital Management and Compensation Committee
The Human Capital Management and Compensation Committee is responsible for, among other things:
As noted above, in October 2021, the Board combined the role of the Diversity Committee with the Compensation Committee and changed the name of the Compensation Committee to the “Human Capital Management and Compensation Committee.” The Board also approved a written charter of the Human Capital Management and Compensation Committee which outlinesare “independent” under our Independence Guidelines, the Committee’s expanded responsibilities as outlined above. TheNYSE listing standards, the Exchange Act and SEC rules and regulations promulgated thereunder, and the respective charters of such committees.
Human Capital ManagementCompany during 2020, 2021, 2022 and Compensation Committee Interlocks and Insider Participation
The Human Capital Management and Compensation Committee consists of Messrs. Thomas2023 relating to foreign tax matters.
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Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible for, among other things:
The Company is not required by law ornominated non-management directors have been determined by the NYSE rulesBoard to have a nominating committee since we are a controlled corporation as described below under the heading “be independent, except Pamela R. Rollins.
Director Nominations
Qualifications
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pertaining to their directorships in order to maintain the necessary level of expertise to perform their responsibilities as directors. The Company also provides all directors with membership in the National Association of Corporate Directors.
NE
In addition, a shareholder intending to solicit proxies in support of non-Company director nominees must provide the notice required under SEC Rule 14a-19 to our Corporate Secretary no later than February 22, 2025.
Board Leadership Structure
The current leadership structure is comprised of a combined ChairmanLead Independent Director, any of the Board and Chief Executive Officer,committees or the non-management directors as a Vice Chairman and Assistant to the Chairman, and a Lead Independent Director. Currently, Gary W. Rollins servesgroup. Such communications should be addressed as Chairman of the Board and Chief Executive Officer. John F. Wilson, who previously served as President and Chief Operating Officer, currently serves as Vice Chairman and Assistant to the Chairman. Jerry W. Nix currently serves as the Lead Independent Director. The Board believes this represents the appropriate structure for the Company at this time. The Chairman of the Board and Chief Executive Officer provides general oversight and strategic planning for the Company with the assistance of the Vice Chairman, while the follows:
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Risk Oversight
“Risk” is an extremely broad concept that extends to multiple functional areas and crosses multiple disciplines. As such, risk may be addressed, from time to time, by the full Board or by one or more of the Committees of the Board. Senior management is responsible for identifying and managing material risks that we face while insurable risks and litigation risksdirectors are handled primarily by the risk management department. Senior management provides the Board with a summary of insurance coverages annually and updates as deemed necessary. Liquidity risk, credit risk and risks associated with our credit facilities and cash management are handled primarily by our finance department, which regularly provides a financial report to the Audit Committee and to the full Board. Operational, business, regulatory and political risks are handled primarily by senior executive management, which regularly provides various operational reports to, among others, the Audit Committee, the Executive Committee and the full Board. The Human Capital Management and Compensation Committee assesses and monitors risks relating to the Company’s corporate officer compensation policies and practices.
Cybersecurity has become a particularly acute area of risk for companies of all sizes and in all industries, including our company. While management is primarily responsible for our cybersecurity program and managing our cybersecurity risks, including our procedures and day-to-day operations, our Audit Committee oversees our risk management program which includes oversight of cybersecurity risks. The Audit Committee reviews our cybersecurity risks and incidents and any other risks and incidents relevant to our information technology systems controls and security.
In performing its oversight responsibilities, our Audit Committee receives regular quarterly reports from our Chief Information Security Officer and also reviews our information technology and cybersecurity risk profile. We use a variety of security products and vendors to protect our information technology infrastructure and data. Our programs continue to adapt and mature as threats continue to evolve. We maintain data encryption, monitoring, loss prevention, data storage, identity/authentication controls, including two-factor authentication tools, anti-malware and anti-virus solutions, and other solutions as appropriate. We also perform penetration tests and cyber simulations to practice our incident response procedures. Our cybersecurity plans are reviewed on an annual basis, and we prioritize new and updated programs as needed to respond to the cybersecurity risks we may face. We train employees on cybersecurity risks, conduct annual tabletop exercises and generate internal phishing campaigns to assess the effectiveness of the training. We also regularly review our privacy policies to ensure compliance with all applicable data privacy regulations.
Director Independence and NYSE Requirements
Controlled Company Exemption
We have elected to be treated as a “controlled company” as defined by New York Stock Exchange Section 303A.00. This Section provides that a controlled company need not comply with the requirements of Sections 303A.01, 303A.04 and 303A.05 of the New York Stock Exchange Listed Company Manual. Section 303A.01 requires that listed companies have a majority of independent directors. As a controlled company, this Section does not apply to us. Sections 303A.04 and 303A.05 require that listed companies have a nominating and corporate governance committee and a compensation committee, in each case composed entirely of independent directors, and that each of these committees must have a charter that addresses both the committee’s purpose and responsibilities and the need for an annual performance evaluation by the committee. While we have a nominating and corporate governance committee and a compensation committee, we are not required to and do not comply with all of the provisions of Sections 303A.04 and 303A.05. We are a “controlled company” because a group that includes our Chairman and Chief Executive Officer, Gary W. Rollins, and certain companies under his control, possess in excess of fifty percent of our voting power. This means that Mr. Rollins has the ability to determine the outcome of the election of directors at our annual meetings and to determine the outcome of many significant corporate transactions, many of which only require the approval of a majority of our voting power. Such a concentration of voting power could also have the effect of delaying or preventing a third party from acquiring us at a premium.
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Our Audit Committee is composed of three “independent” directors as defined by the Company’s Corporate Governance Guidelines, the NYSE rules, the Exchange Act and SEC rules and regulations promulgated thereunder, and our Audit Committee Charter. Our Human Capital Management and Compensation is also entirely composed of “independent” directors. Our Board of Directors has concluded that each member of the Audit Committee, as well as Mr. Lawley, Mr. Morrison, Mr. Cynkus (until his resignation on December 31, 2021) and Mr. Tippie (until his retirement on April 12, 2021) and Ms. Sams are or with respect to former directors were, “independent” under our Corporate Governance Guidelines and the NYSE listing standards.
Independence Guidelines
Under the NYSE listing standards, to be considered independent, a director must be determined to have no material relationship with the Company other than as a director. The NYSE standards set forth a nonexclusive list of relationships, which are conclusively deemed material.
Our Independence Guidelines are posted on our website at www.rollins.com under the section titled “Governance –Governance Documents” and include categorical standards for determining independence in specified situations.
Audit Committee Charter
Under our Audit Committee Charter, in accordance with NYSE listing requirements and the Exchange Act, all members of the Audit Committee must be independent of management and the Company. A member of the Audit Committee is considered independent as long as he or she (i) does not accept any consulting, advisory, or compensatory fee from the Company, other than as a director or committee member; (ii) is not an affiliated person of the Company or its subsidiaries; and (iii) otherwise meets the independence requirements of the NYSE and the Company’s Investor Relations – Corporate Governance Guidelines.
Nonmaterial Relationships
After reviewing all of” section. All communications received from interested parties are forwarded to the relationships between the members of the Audit Committee, as well as Messrs. Cynkus, Tippie, Morrison, Lawley and Ms. Sams, on the one hand, and the Company, on the other hand, the Board of Directors determined that all of the relationships fell within the categorical standards for independence set forth in the Independence Guidelines, except as follows:
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As required by the Independence Guidelines, the Board of Directors unanimously concluded that the above listed relationships would not affect the independent judgment of the independent directors, based on their experience, character and independent means, and therefore do not preclude an independence determination. All members of the Audit Committee are also independent under the heightened standards required for Audit Committee members.
Our non-management directors meet at regularly scheduled executive sessions without management. In accordance with the NYSE corporate governance listing standards, Mr. Nix was elected by the Board of Directors as the Lead Independent Director uponor the retirement of Mr. Tippie fromnon-management directors will be forwarded directly to the Board, and currently presides during these executive sessions.
appropriate addressee(s).
We have
and Ethics
Director Communications
The Company also has a process for interested parties, including stockholders, to send communications to
| Audit Committee | |||||
Current Members: Susan R. Bell (Chair) Donald P. Carson Patrick J. Gunning Gregory B. Morrison | Key Responsibilities: •Appoints and meets independently with the Company’s independent registered public accounting firm to audit the Company’s financial statements. •Assesses the independence and oversees the performance of the Company’s independent registered public accounting firm. •Pre-approves all audit and all permissible non-audit services to be performed by the Company’s independent registered public accounting firm. •Discusses with the Company’s independent registered public accounting firm all matters required to be discussed under the standards of the Public Company Accounting Oversight Board and the SEC or other regulations. •Reviews the Company’s financial statements and critical accounting policies and estimates. •Reviews the adequacy and effectiveness of our internal controls and disclosure controls and procedures. •Assesses the performance of the Company’s internal audit department. •Reviews the Company’s insider trading and anti-corruption policies. •Oversees procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. •Reviews and discusses with management the Company’s internal control procedures associated with the Company’s sustainability reporting. •Oversees the Company’s ERM process and cybersecurity risk management, including reviewing reports and updates received by management on a quarterly and as-needed basis. | ||||
| Human Capital Management and Compensation Committee | |||||
Current Members: Jerry W. Nix (Chair) Gregory B. Morrison Louise S. Sams | Key Responsibilities: •Reviews the Company’s executive compensation philosophy and strategy. •Reviews and approves the corporate goals and objectives relevant to the compensation of the Company’s CEO and executive officers. •Evaluates the performance of the Company’s CEO and executive officers. •Reviews the compensation of the Company’s non-employee directors for service on the Board and its committees and recommends changes to the Company’s director compensation program as appropriate. •Determines the stock ownership guidelines for the Company’s CEO, executive officers, and other key executives and monitors compliance with such guidelines. •Approves grants of awards under the Company’s equity incentive plans and adopts or modifies policies that govern such plans. The Committee may from time to time, in its discretion, delegate its authority under such plans to another committee of the Board or to one or more directors, which it has done for non-NEO stock grants. •Retains an independent Compensation Consultant and oversees the qualifications, performance, and independence of the Compensation Consultant. •Receives updates from senior management throughout the year on key talent metrics for the overall workforce, including metrics related to workplace inclusion and also receives reports on the Company’s recruiting, training and education, talent acquisition and career development programs. •Oversees the Company's succession plan for its management. •Oversees the development and management of the Company’s human capital management strategy and policies, including but not limited to those policies and strategies regarding workplace inclusion. | ||||
| Nominating and Corporate Governance Committee | |||||
Current Members: Jerry W. Nix (Chair) Donald P. Carson P. Russell Hardin Louise S. Sams | Key Responsibilities: •Determines the appropriate qualifications required of the members of the Board. •Recommends Board committee chairs and assignments. •Recommends to our Board nominees for director and considers any nominations properly made by a shareholder. •Makes recommendations to our Board regarding the agenda for our annual shareholders’ meetings and with respect to appropriate action to be taken in response to any shareholder proposals. •Conducts periodic reviews of the composition and size of the Board and its committees, as well as the frequency and procedures of Board meetings. •Oversees compliance with key corporate governance policies, including the company’s Corporate Governance Guidelines and Independence Guidelines. •Reviews and approves related party transactions. •Reviews and monitors the Company’s sustainability and business practices, policies, programs and public disclosures. •Reviews and assesses the adequacy of the Company’s Code of Business Conduct and Ethics. | ||||
| Name | Board of Directors | Audit Committee | Human Capital Management and Compensation Committee | Nominating and Corporate Governance Committee | ||||||||||
| Gary W. Rollins | C | |||||||||||||
| Susan R. Bell | M | C | ||||||||||||
| Donald P. Carson | M | M | M | |||||||||||
| Jerry E. Gahlhoff, Jr. | M | |||||||||||||
| Patrick J. Gunning | M | M | ||||||||||||
| P. Russell Hardin | M | M | ||||||||||||
| Gregory B. Morrison | M | M | M | |||||||||||
| Jerry W. Nix | M | C | C | |||||||||||
| Pamela R. Rollins | M | |||||||||||||
| Louise S. Sams | M | M | M | |||||||||||
| John F. Wilson | M | |||||||||||||
| # of Meetings Held | 12(1) | 7 | 5 | 4 | ||||||||||
| # of actions Taken by Written Consent | 3 | — | 1 | — | ||||||||||
Mr. Jerry W. Nix
c/o Internal Audit Department Rollins, Inc.
2170 Piedmont Road, N.E.
Atlanta, Georgia 30324
The above instructions for communicationsmeet in at least two regularly scheduled executive sessions per year without management. Our non-management directors meet at regularly scheduled executive sessions without management. In accordance with the directors are also posted on our website at www.rollins.com under the “Investor Relations – Corporate Governance” section. All communications received from interested parties are forwarded to the Board of Directors. Any communication addressed solely toNYSE corporate governance listing standards, Mr. Nix, as the Lead Independent Director, orpresides over the executive sessions. All current and nominated non-management directors willhave been determined by the Board to be forwarded directly to the appropriate addressee(s).
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DIRECTOR COMPENSATION
2021
Cash Compensation
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Board/Committee | Board/Committee | Annual Chair Retainer ($) | Annual Non-Chair Retainer ($) | Meeting Attendance Fee ($) | Board/Committee | Annual Chair Cash Retainer ($) | Annual Equity Award ($) | Annual Non-Chair Cash Retainer ($) | |||||||||
Board of Directors | Board of Directors | - | 100,000 | 2,500 | |||||||||||||
Audit Committee (1) | Audit Committee (1) | 20,000 | - | 2,500 | |||||||||||||
Human Capital Management and Compensation Committee | Human Capital Management and Compensation Committee | 10,000 | - | 2,000 | |||||||||||||
Diversity Committee | 6,000 | - | 1,500 | ||||||||||||||
Nominating and Corporate Governance Committee | Nominating and Corporate Governance Committee | 6,000 | - | 1,500 | |||||||||||||
Name Fees Earned or Paid in Cash All Other Compensation ($) Total Susan R. Bell 192,000 - 192,000 Donald P. Carson 62,500 - 62,500 Harry J. Cynkus 125,000 125,000 Patrick J. Gunning 162,500 - 162,500 Thomas J. Lawley, MD 140,500 - 140,500 Gregory B. Morrison 66,500 - 66,500 Jerry W. Nix 178,000 - 178,000 Pamela R. Rollins (1) 125,000 13,467 138,467 Henry B. Tippie (2) 57,500 - 57,500 63. INFORMATION REGARDING DIRECTOR NOMINEES AND CONTINUING DIRECTORS Name Class Age Director Since Current Term Expires DIRECTOR NOMINEES: Susan R. Bell III 59 2021 2022 Donald P. Carson III 72 2021 2022 Louise S. Sams III 64 - - John F. Wilson III 64 2013 2022 CONTINUING DIRECTORS: Jerry E. Gahlhoff, Jr. I 49 2021 2023 Patrick J. Gunning I 62 2021 2023 Gregory B. Morrison I 62 2021 2023 Jerry W. Nix I 76 2020 2023 Gary W. Rollins II 77 1981 2024 Pamela R. Rollins II 65 2015 20242021 (1)The Chairperson of the Audit Committee also receives an additional $2,500 for preparing to conduct each quarterly Audit Committee meeting.162023 Director Compensation TableThe following table sets forth the compensation paid to our directorsNon-Employee Directors for services rendered as a director for the year ended December 31, 2021.2023. Three of our directors, Messrs. Gary W. Rollins, John F. Wilson and Jerry E. Gahlhoff, Jr. are employees of the Company, and their employee compensation information is set forth in the “Summary Compensation Table” on page 43 under the “Executive Compensation” section of this Proxy Statement. Directors that are our employees do not receive any additional compensation for services rendered as a director.13
($)
($)(1)Amounts shown for Ms. Rollins in the “All Other Compensation” column reflect the incremental costs to the Company for Ms. Rollins’ personal use of the Company’s airplane.(2)Mr. Tippie retired from the Board on April 12, 2021.Changes Made to the Non-Employee Director Compensation Program for 2022Equity CompensationUnder the Director Compensation Program in effect in 2021, our Non-Employee Directors did not receive equity. In October 2021, the Human Capital Management and Compensation Committee and the Board approved There are no currently anticipated changes to the Director Compensation Program. Such changes included an annual equity grantnon-employee director compensation for 2024.Name Fees Earned or
Paid in Cash
($)Annual RestrictedStock Award(1)($)All OtherCompensation(2)($)Total
($)Susan R. Bell 130,000 100,000 — 230,000 Donald P. Carson 100,000 100,000 — 200,000 Patrick J. Gunning 100,000 100,000 — 200,000 P. Russell Hardin 100,000 100,000 — 200,000 Gregory B. Morrison 100,000 100,000 — 200,000 Jerry W. Nix 116,000 100,000 — 216,000 Pamela R. Rollins(2)100,000 100,000 27,591 227,591 Louise S. Sams 100,000 100,000 — 200,000 (1)Amounts in this column represent the form of restricted stock under the Company’s 2018 Stock Incentive Plan with a grant date fair value of $45,000. The restricted stock will be granted on the third business day following the Annual Meeting of Stockholders and will vest immediately on the grant date.In addition to the equity compensation to beawards granted to the Non-Employee Directors described above,non-employee directors, calculated in accordance with FASB ASC Topic 718. The amounts reported in this column represent the Human Capital Management and Compensation Committee andfair value of the Board also approvedtotal number of shares issued to each director rounded up to the eliminationnearest whole dollar. These equity grants must be held for a period of Board and committee meeting fees effective January 1, 2022. Our Non-Employee Directors will continue to receive an annual cash retainerone (1) year from the date of the grant.(2)Amounts shown for Ms. Rollins in the amount“All Other Compensation” column reflect the incremental costs to the Company for Ms. Rollins’ personal use of $100,000the Company’s aircraft, as well as the tax gross-up of such usage. For further information, please see "Certain Relationships and Committee Chairs will continue to receive additional annual cash retainers as outlinedRelated Party Transactions" on page 13 above. All retainers are payable in equal quarterly installments in arrears.Non-Employee Director Stock Ownership GuidelinesUnder Stock Ownership Guidelines (“Guidelines”), Non-Employee Directors are required to beneficially own, within five years of their initial grant,from the date they become subject to the Guidelines, common stock of the Company equal toin value at least three times the non-employee director annual equity retainer.cash retainer determined as of the last day of the prior fiscal year with the average closing price of the prior 90 days. Non-Employee Directors are prohibited from selling Company stock granted to such director by the Company for a period of one (1) year from the date of such grant and until such director is in compliance with their ownership requirement under these Stock Ownershipthe Guidelines.1417Information Regarding Director Nominees and Continuing DirectorsThe following table sets forth the names, ages as of March 1, 2022,2024, and certain other information for each of the nominees for election as a director at the Annual Meeting and for each of the continuing members of our Board following the Annual Meeting. Full biographical information follows the table.Name Class Age Independent Director Since Current Term
ExpiresGary W. Rollins Gary W. Rollins Gary W. Rollins II 79 No 1981 2024 Pamela R. Rollins Pamela R. Rollins II 67 No 2015 2024 P. Russell Hardin P. Russell Hardin II 66 Yes 2023 2024 Dale E. Jones Dale E. Jones II 64 Yes - CONTINUING DIRECTORS: Jerry E. Gahlhoff, Jr. Jerry E. Gahlhoff, Jr. Jerry E. Gahlhoff, Jr. I 51 No 2021 2026 Patrick J. Gunning Patrick J. Gunning I 64 Yes 2021 2026 Gregory B. Morrison Gregory B. Morrison I 64 Yes 2021 2026 Susan R. Bell III 61 Yes 2021 2025 Donald P. Carson III 74 Yes 2021 2025 Louise S. Sams III 66 Yes 2022 2025 John F. Wilson III 66 No 2013 2025
Donald P. Carson has served as a Director of Rollins, Inc. since 2021. Mr. Carson brings extensive financial and strategic experience to our Board of Directors. Mr. Carson is the founder of Don Carson Associates, LLC, and co-founder of The Ansley Capital Group, LLC, Ansley Securities LLC, and Cardez Hospitality Group, LLC. Mr. Carson In Ms. Sams’ role as President, Turner Broadcasting System International, Inc., Ms. Sams was responsible for production, distribution and ad sales relating to all kids and entertainment television networks and media services offered by Turner outside of the U.S. and Canada, distribution and commercial operations of CNN’s international services, and Turner’s international joint ventures. Prior to joining Turner in 1993 as a corporate attorney, Ms. Sams was an associate at White & Case, specializing in mergers and Ms. Sams currently serves as a member of the Board of Directors of CoStar Group John F. Wilson has served as a Director of Rollins, Inc. since 2013, and as Vice Chairman of the Company since 2020. Mr. Wilson has extensive knowledge of the Company’s business and industry having served in various roles of increasing responsibility at the Company for over 26 years. He previously served as Vice President of the Company from 2011 to 2013, President and Chief Operating Officer of the Company from 2013 to 2020, and as President of Orkin, AUDIT MATTERS rules. The Audit Committee also reappointed Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2024. Shareholders are being asked to ratify that selection at the Annual Meeting. This report of the Audit Committee is required by the SEC and, in accordance with the SEC’s rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed “soliciting material” or “filed” under either the Securities Act or the Exchange Act. 2021 2020 Audit Fees (1) $ 2,123,000 $ 1,932,000 Audit-Related Fees - All Other Fees - - Total (2) $ 2,123,000 $ 1,932,000 EXECUTIVE OFFICERS Elizabeth B. Chandler joined Rollins in 2013 as Vice President and General Counsel. Ms. Chandler was appointed to Corporate Secretary in January 2018. In 2017, Ms. Chandler assumed responsibility for the Risk Management and Internal Audit groups. Before joining Rollins, Ms. Chandler served as Vice President, General Counsel and Corporate Secretary for Asbury Automotive from 2009 to 2012. Prior to that, Ms. Chandler served as city attorney for the City of Atlanta from 2006 to 2009, as Vice President, Assistant General Counsel and Corporate Secretary for Mirant Corp. from 2000 to 2006 and as an Associate and Partner at Troutman Pepper from 1988 to 1995 and from 1995 to 2000, respectively. COMPENSATION DISCUSSION AND ANALYSIS Named Executive Officer Position with the Company in Gary W. Rollins Executive Chairman of the Board Executive Vice President, John F. Wilson Vice Chairman Vice President, General Counsel and Corporate Secretary ✓ ✓ Shareholders ✓ ✓ ✓ ✓ General Compensation Objectives and Guidelines The Committee, with the assistance of its compensation consultant, used peer group benchmarking (as described under the heading titled “18Key Attributes, Experience and Skills of Director Nominees and Continuing DirectorsDirector NomineesGary W. Rollins
Gary W. Rollins has served as a Director of Rollins, Inc. since 1981, and as Chairman of the Board since 2020. He previously served as the Vice Chairman of the Company. Mr. Rollins is the former Chief Executive Officer of the Company, a role he held from 2001 to 2022. Mr. Rollins has extensive knowledge of the Company’s business and industry having started out as a technician with the Company and serving in various roles of increasing responsibility for over 56 years, all the way up to CEO. Under Mr. Rollins’ leadership as CEO over the past 20 years, the Company has experienced dramatic expansion that has significantly increased its value and global footprint. In 2020, Mr. Rollins was named one of Atlanta’s Most Admired CEOs by the Atlanta Business Chronicle. In 2021, he received the Crown Leadership Lifetime Achievement Award from Pest Control Technology and Syngenta for his decades of success supporting the industry. This award is determined by previous Crown Leadership Award recipients and is one of the most prestigious industry awards that is only given to those who have dedicated more than 25 years to advancing pest control.Mr. Rollins has played an active role in upholding his strong family legacy of philanthropy. Under his guidance and passion for giving, Rollins’ employees have supported the United Way of Greater Atlanta since 1985. Over the course of our 42-year history with United Way, Rollins has raised over $21 million through employee donations and company matches that went to local communities in need. Mr. Rollins has been instrumental in instilling a culture of serving our community and has established Rollins as a community leader.Mr. Rollins is currently a Director of Marine Products Corporation and RPC, Inc., roles he has held since 2001 and 1984, respectively. He previously served as the Non-Executive Chairman of both companies from 2020 to 2022. Mr. Rollins also previously served as a Director of Genuine Parts Company from 2005 to 2017. Mr. Rollins received a BS in Business Administration from the University of Tennessee.
Pamela R. RollinsCommunity LeaderPam R. Rollins is the granddaughter of O. Wayne Rollins, the founder of Rollins, Inc., and is a 3rd generation member of a 5th generation family. Ms. Rollins worked as a real estate manager under her grandfather’s direction and guidance from 1979 to 1984, after which, she focused on raising her two children, Michael and Margaret. Upon returning to the workforce, Ms. Rollins was employed with the Orkin Exterminating Company in customer service for 10 years.Ms. Rollins is currently a Director the Marine Products Corporation and RPC, Inc. as well as a Director and Officer of LOR, Inc. and the Rollins Holding Company. Ms. Rollins has served as a Director of Rollins, Inc. since 2015 and has extensive knowledge of the Company’s business and industry.Ms. Rollins serves as a Trustee on the boards of the O. Wayne Rollins Foundation, the Ma-Ran Foundation, the Rollins Child Development Center and Young Harris College. Ms. Rollins holds a B.A. Degree from Stephens College with a major in Family and Community Studies.19
P. Russell HardinPresident of the Robert W. Woodruff FoundationMember of the Nominating and Corporate Governance CommitteeP. Russell Hardin has served as a Director of Rollins, Inc. since April 2023. He currently serves as the President of the Robert W. Woodruff Foundation, Joseph B. Whitehead Foundation, Lettie Pate Evans Foundation and Lettie Pate Whitehead Foundation, roles he has held since 2006. Mr. Hardin joined the Foundations’ staff in 1988 and became President in 2006. Previously, Mr. Hardin practiced law with the Atlanta firm of King & Spalding from 1982 to 1987. Currently, Mr. Hardin has served as a trustee of Northwestern Mutual Life Insurance Company since 2011 and serves as a director of Genuine Parts Company, a role he has held since 2017. He also serves as a director on the Truist Atlanta Advisory Council and The Commerce Club in Atlanta.Mr. Hardin offers the Board extensive experience in the areas of finance, management, strategic planning, philanthropy, governance, and law. Mr. Hardin received his Bachelor of Arts degree with high distinction from the University of Virginia in 1979, and a Juris Doctorate degree with honors from Duke University School of Law in 1982.
Dale E. Jones
Chief Executive Officer, Magna Vista PartnersDale E. Jones is a new nominee for Director of Rollins, Inc. Mr. Jones has served as Chief Executive Officer of Magna Vista Partners, a global leadership consulting firm, since September 2022. He has also served as a senior advisor to Diversified Search Group, an executive search firm, since January 2022, where he previously served as President and Chief Executive Officer from January 2015 to December 2021 and as President from October 2013 to January 2015. Prior to that, Mr. Jones served as Vice Chairman and partner of the CEO and Board Practice in the Americas at Heidrick & Struggles from 2009 to 2013. From 2007 to 2009, he served as Chief Executive Officer of PlayPumps International and as Executive Vice President of Revolution LLC, a venture capital firm that funded a philanthropic initiative to provide clean drinking water to Africa. Mr. Jones held several executive leadership positions at Heidrick & Struggles from 1999 to 2007.
Mr. Jones has served on the boards of directors of Chick-fil-A, Inc., a fast food restaurant chain, since January 2021, and of Outset Medical, Inc., a medical technology company, since 2022. Previously, he served on the boards of directors of Northwestern Mutual, a financial services company, from 2007 to May 2022, of Kohl’s Corporation, an omnichannel retailer, from 2008 to 2016, and of Hughes Supply from 2003 to 2006 (prior to its acquisition by The Home Depot). He also has served on the Advisory Board of Crider Foods since 2023. Mr. Jones has extensive knowledge and experience with business strategy, board issues and corporate governance, and human capital. Mr. Jones holds a B.A. from Morehouse College.20Continuing Directors 
Susan R. BellRetired Partner, Ernst & Young LLPChairperson of the Audit CommitteeSusan R. Bell has served as a Director of Rollins, Inc. since January 2021. Ms. Bell brings extensive risk oversight, financial and strategic experience to our Board of Directors. Ms. Bell retired as partner from Ernst & Young LLP in 2020 after a 36-year career in public accounting. At Ernst & Young LLP, Ms. Bell served as both an audit and business advisory partner, led the Southeast Risk Advisory practice and served as the Atlanta Office Managing Partner. Prior to working at Ernst & Young LLP, Ms. Bell started her career at Arthur Andersen LLP in 1984 where she served as an audit partner from 1996 to 2002. Ms. Bell has extensive experience with accounting and auditing, internal controls over financial reporting, enterprise risk management, financial IT systems implementations and testing, process improvement, strategic planning, diversity and inclusion initiatives, mergers and acquisitions, dispositions, initial public debt and equity offerings and other U.S. and international capital markets transactions.Ms. Bell currently serves as a member of the Board of Directors of RPC, Inc., Marine Products Corporation and First Advantage Corporation, roles she has held since 2021, and also serves on the audit committees of those corporations. In addition,corporations and on the compensation committee of First Advantage Corporation. She also is audit committee chair for First Advantage Corporation. Ms. Bell is the past president of IWF Georgia Inc., a non-profit affiliate of IWF Global, and serves on its board of directors. She also serves on the Adkerson School of Accountancy Advisory Board at Mississippi State University. She has served on a number of other non-profit boards in a variety of leadership roles including as past chair of the non-profits,board of United Way of Greater Atlanta, audit and finance committee chair of the National Center for Civil &and Human Rights and IWF Georgia, an international women’s forum.the Woodruff Arts Center, and finance committee chair of the Atlanta Historical Society. Ms. Bell graduated summa cum laude from Mississippi State University with a Bachelor of Professional Accountancy and is a Certified Public Accountant in Georgia and Tennessee.15
Donald P. CarsonPresident of RFA Management Company,Co-founder and Managing Director, The Ansley Capital Group, LLCPresident of Nevada Oversight, Inc. and GWR PTC,Ansley Securities LLC,Member of the Nominating and Corporate Governance CommitteeMember of the Audit Committeecurrently servespreviously served as President of RFA Management Company, LLC, an Atlanta-based family office, a role he has held sincefrom 2019 to 2022, and which he previously held from 2003 to 2013. Mr. Carson also has served as President of Nevada Oversight, Inc. since 2019 and President of GWR PTC, LLC, since 2020, all of which are Nevada private trust companies. Mr. Carson worked for many years in the investment and commercial banking industry, primarily for Wachovia Bank, N.A. from 1977 to 1997. During this time, he was head of the international banking and investment banking businesses. After leaving Wachovia, Mr. Carson became a partner of Paradigm Capital where he was employed from 1998 to 1999 and later co-founded The Ansley Capital Group, LLC and Ansley Securities, LLC.LLC, where he is a Managing Director. Mr. Carson currently serves as a director of LOR, Inc. and Rollins Holding Company, Inc., roles he has held since 2003. He also currently serves as a trustee of Beloit College and Board Chair forserves on the board of Black Mountain College Museum + Arts Center. Mr. Carson is also a trustee of The Gary W. Rollins Foundation. He is a director of Catheter Precision, LLC, and a trustee of The Cook and Bynum Fund, a publicly traded mutual fund. Mr. Carson appears on numerous recordings for Telarc and Deutsche Grammophon with Atlanta Symphony Orchestra Chorus. Four of these recordings have earned Grammys. Mr. Carson is also a trustee of The Gary W. Rollins Foundation. Mr. Carson received a Bachelor of Arts degree in Music Composition from Beloit College, and a Master of Business Administration in Finance from the University of Chicago. He also is a graduate of the American GraduateThunderbird School of Global Management.21
Jerry E. Gahlhoff, Jr.
Chief Executive Officer and PresidentJerry E. Gahlhoff Jr. has served as a Director of Rollins, Inc. since 2021. In 2022, Mr. Gahlhoff was elected by the Board of Directors to serve as Chief Executive Officer of the Company, effective January 1, 2023, in addition to his role as President, a role he has held since 2020. Mr. Gahlhoff also served as Chief Operating Officer of the Company from 2020 to 2022. Prior to that, Mr. Gahlhoff served as President of the Company’s Specialty Brands and Vice President of Human Resources from 2016 to 2020, and as a Division President from 2011 to 2016. Mr. Gahlhoff joined the Company as part of the HomeTeam acquisition in 2008.
Mr. Gahlhoff has been instrumental in driving the Company’s growth initiatives and has extensive knowledge of the Company’s business and industry having served in various roles of increasing responsibility at the Company for over 22 years. Mr. Gahlhoff serves on the Board of Directors of Zoo Atlanta. Mr. Gahlhoff received a Master of Science in Entomology from the University of Florida.
Patrick J. GunningRetired Partner, Ernst & Young LLPMember of the Audit Committee
Patrick J. Gunning has served as a Director of Rollins, Inc. since January 2021. Mr. Gunning brings extensive risk oversight and financial and strategic experience to our Board of Directors. Mr. Gunning previously served as the Chief Financial Officer of the Robert W. Woodruff Arts Center, Inc., a non-profit organization, from November 2020 to June 2022. In June 2020, Mr. Gunning retired as a partner from Ernst & Young LLP, a role he held since May 2002, after a 39‑year career in public accounting. Mr. Gunning held multiple leadership roles at Ernst & Young LLP including Southeast Region Leader of the Financial Accounting Advisory Services practice, Southeast Area Industry Leader of the Retail and Consumer Products practice, and lead audit partner for numerous publicly traded and privately owned companies.Prior to joining Ernst & Young LLP, Mr. Gunning worked at Arthur Andersen LLP from 1981 to 2002, where he served as a partner, lead audit partner for numerous publicly traded and privately owned companies, and Assurance Division Leader. Mr. Gunning currently serves on the Boards of Directors of RPC, Inc. and Marine Products, Inc. At both companies, he chairs the Audit Committees and is a member of the Nominating and Governance Committees and Human Capital and Compensation Committees, all roles he has held since 2021. Mr. Gunning also currently serves on the Board of Trustees of the Robert W. Woodruff Arts Center, serving on its Finance and Audit Committees. Mr. Gunning received a Bachelor of Business Administration degree in Accountancy from the University of Notre Dame, and he is a Certified Public Accountant in the state of Georgia.
Gregory B. MorrisonRetired Senior Vice President and Corporate Chief Information Officer, Cox Enterprises, Inc.Member of the Audit CommitteeMember of the Human Capital Management and Compensation Committee22
acquisitions.Gregory B. Morrison has served as a Director of Rollins, Inc. since 2021. He is the former Senior Vice President and Corporate Chief Information Officer for Cox Enterprises, Inc., a role he held from February 2002 until his retirement in January 2020. During his 18 years at Cox, Mr. Morrison was responsible for providing corporate strategic planning, policy development and management of all information technology systems and overseeing cybersecurity matters. Prior to his role at Cox, Mr. Morrison served as Executive Vice President and Chief Operating Officer of RealEstate.com in 2000 and held various information and technology leadership roles at Prudential Financial from 1989 to 2002.Mr. Morrison has extensive knowledge and expertise with cybersecurity, large-scale business transformations and the development of key technological advances that help improve manual business processes. Mr. Morrison was named among the industry’s top performing Chief Information Officers who have shown unparalleled leadership to drive innovation and transformation in businesses. Mr. Morrison has served as Chairman of the Clark Atlanta University Board of Trustees since 2004. Mr. Morrison was a commissioned officer in the US Army from 1982 to 1989. Mr. Morrison received a Bachelor of Science in Mathematics and Physics from South Carolina State University, and a Master of Science in Industrial Engineering from Northwestern University.
Louise S. SamsRetired Executive Vice President and General Counsel, of Turner Broadcasting System, Inc.Member of the Human Capital Management and Compensation CommitteeMember of the Nominating and Corporate Governance CommitteeLouise S. Sams washas served as a Director of Rollins since 2022. She previously served as the Executive Vice President and General Counsel of Turner Broadcasting System, Inc. (“Turner”Turner”), a television and media conglomerate, from 2000 until September 2019. Ms. Sams also served as President, Turner Broadcasting System International, Inc. from September 2003 until May 2012. As General Counsel, Ms. Sams oversaw legal work relating to all of the business activities of Turner and its subsidiaries worldwide. Ms. Sams managed a global legal department overseeing licensing, clearance and production of content for the Turner television networks and related media services, the sale and distribution of those networks, protection of intellectual property, employment matters, litigation, and transactional work, such as acquisitions and joint ventures. Most recently, Ms. Sams’ focus was on issuesSams also served as President, Turner Broadcasting System International, Inc. from September 2003 until May 2012. Ms. Sams has extensive experience related to technology, information security, use of data and consumer privacy, as well as enterprise-wide risk management. acquisitions and securities law. 16D and Z Media Acquisitions and Loop Industries, positions she has held since December 2019 January 2021 and April 2021, respectively. Ms. Sams serves on the Audit Committee of Costar and the Audit and Compensation and Governance Committees of Loop Industries and on the Audit and Compensation Committees of D and Z Media. In addition,Industries. Ms. Sams currently chairsserves on the following non-profit boards: Princeton University, where she is Chair of the Board of Trustees and in that capacity also chairsChair of the Executive Committee, Board Development Committee and Compensation Committee. Ms. Sams also serves on the Board ofCommittee; High Museum of Art in Atlanta,Atlanta; Woodruff Arts Center; The Westminster Schools,Schools; and Meals on Wheels, Atlanta, where she chairs the Development Committee. Ms. Sams received a J.D. from the University of Virginia School of Law, and a B.A. from Princeton University, where she graduated magna cum laude.23
John F. WilsonVice Chairman of the Board
John F. WilsonVice-ChairmanLLC.LLC from 2009 to 2013. Prior to these executive roles with the Company, Mr. Wilson held roles at the Company as sales inspector, branch manager, Central Commercial Region Manager, Atlantic Division Vice President, and President of the Southeast Division.Mr. Wilson received a Bachelor of Business Administration in Business Management from the University of Tennessee.Continuing Directors
Jerry E. Gahlhoff, Jr.President and Chief Operating OfficerJerry Gahlhoff Jr. has served as a Director of Rollins, Inc. since 2021. Mr. Gahlhoff has extensive knowledge of the Company’s business and industry having served in various roles of increasing responsibility at the Company for over 22 years. Mr. Gahlhoff currently serves as the President and Chief Operating Officera member of the Company, roles he has held since August 2020. Prior to that, Mr. Gahlhoff served as President of the Company’s Specialty Brands and Vice President of Human Resources from 2016 to 2020, and as a Division President from 2011 to 2016. Mr. Gahlhoff joined the Company as part of the HomeTeam acquisition in 2008. Mr. Gahlhoff received a Master of Science in Entomology from the University of Florida.17
Patrick J. GunningChief Financial Officer at The Woodruff Arts CenterRetired Partner, Ernst & Young LLPMember of the Audit CommitteePatrick J. Gunning has served as a Director of Rollins, Inc. since January 2021. Mr. Gunning brings extensive risk oversight and financial and strategic experience to our Board of Directors. Mr. Gunning currently serves as the Chief Financial Officer of the Woodruff Arts Center, a non-profit organization, a role he has held since November 2020. Mr. Gunning retired as a partner from Ernst & Young LLP in June 2020, a role he held since May 2002, after a 39-year career in public accounting. Mr. Gunning held multiple leadership roles at Ernst & Young LLP including Southeast Region Leader of the Financial Accounting Advisory Services practice, Southeast Area Industry Leader of the Retail and Consumer Products practice, and lead audit partner for numerous publicly traded and privately owned companies. Prior to joining Ernst & Young LLP, Mr. Gunning worked at Arthur Andersen LLP from 1981 to 2002, where he served as a partner, lead audit partner for numerous publicly traded and privately owned companies, and Assurance Division Leader. Mr. Gunning currently serves on the Board of Directors of RPC, Inc. and Marine Products Corporation, rolespositions he has held since 2021. Mr. Gunning received a Bachelor of Business Administration in Accountancy from the University of Notre Dame.
Gregory B. MorrisonFormer Senior Vice President and Corporate Chief Information Officer, Cox Enterprises, Inc.Member of the Human Capital Management and Compensation CommitteeGregory B. Morrison has served as a Director of Rollins, Inc. since 2021. He is the former Senior Vice President and Corporate Chief Information Officer for Cox Enterprises, Inc., a role he held from February 2002 until his retirement in January 2020. Prior to his role at Cox, Mr. Morrison served as Executive Vice President and Chief Operating Officer of RealEstate.com in 2000 and held various information and technology leadership roles at Prudential Financial from 1989 to 2002. Mr. Morrison has extensive knowledge and expertise with large-scale business transformations and technology deployments. Mr. Morrison was named among the industry's top performing CIOs who have shown unparalleled leadership to drive innovation and transformation in businesses. Mr. Morrison also serves on the board of directors of Veritex Holdings and Veritiv Corp, roles he has held since 2016 and 2021, respectively. Mr. Morrison was a commissioned officer in the US Army from 1982 to 1989. Mr. Morrison received a Bachelor of Science in Mathematics and Physics from South Carolina State University, and a Master of Science in Industrial Engineering from Northwestern University. 24
Jerry W. NixFormer Vice Chairman, Executive Vice President and Chief Financial Officer of Genuine Parts CompanyLead Independent Director of thePROPOSAL 1:ELECTION OF DIRECTORSOverviewOur Board of DirectorsChairperson of the Human Capital Management and Compensation CommitteeChairperson of the Nominating and Corporate Governance CommitteeMember of the Audit CommitteeMember of the Executive CommitteeJerry W. Nix has served as a Director of Rollins, Inc. since 2020. Mr. Nix brings extensive risk oversight, financial, operational, and strategic experience to our Board of Directors. Mr. Nix retired from Genuine Parts Company in 2013,18where he served as Vice Chairman from 2005 to 2013, Chief Financial Officer from 2000 to 2013 and as Executive Vice President from 2000 to 2005. Prior to joining Genuine Parts in 1978, Mr. Nix was an auditor with Ernst & Young from 1974 to 1978 and a pilot in the U.S. Air Force from 1968 to 1974. Mr. Nix currently serves on the Board of Directors of RPC, Inc., and Marine Products Corporation, roles he has held since 2020 and on various civic and non-profit boards. Mr. Nix received a Bachelor of Science in Education from Mississippi State University and a Bachelor of Science in Accounting from the University of Florida.
Gary W. RollinsChairman of the Board and Chief Executive OfficerChairperson of the Executive CommitteeGary W. Rollins was elected a Director of Rollins, Inc. in 1981. Mr. Rollins has extensive knowledge of the Company’s business and industry, serving over 53 years at the Company. In 2021, Mr. Rollins received the Lifetime Achievement Award from PCT and Syngenta for his decades of success supporting the pest control industry. He serves as Chairman of the Company and continues to serve as Chief Executive Officer. He previously served as the Vice Chairman of the Company. Mr. Rollins serves as the Non-Executive Chairman of Marine Products Corporation and RPC, Inc. He has served as a Director of Marine Products Corporation since 2001 and a Director of RPC, Inc. since 1984. Mr. Rollins previously served as a Director of Genuine Parts Company from 2005 to 2013. Mr. Rollins received a Bachelors degree in Business Administration from the University of Tennessee at Chattanooga.
Pamela R. RollinsCommunity LeaderPamela R. Rollins has served as a Director of Rollins, Inc. since 2015. Ms. Rollins is the niece of Gary W. Rollins, the Company’s Chairman of the Board and Chief Executive Officer. Ms. Rollins is a Trustee of Young Harris College and The O. Wayne Rollins Foundation, a Trustee Emeritus of The Schenck School, a board member of The National Monuments Foundation and a former board member of The Lovett School. Ms. Rollins has served as a Director of RPC, Inc. since 2019 and Marine Products Corporation since 2017. Ms. Rollins received a Bachelor of Arts in Family Community Studies from Stephens College.19PROPOSAL 1:ELECTION OF DIRECTORSOverviewOur board of directors is currently composed of teneleven members. In accordance with our Amended and Restated By-Laws, our Board is divided into three classes of directors. At the Annual Meeting, four Class III directors will be electeddirector nominees are up for a three-year term to succeed those whose terms expire, so that the term of office of one class of directors shall expire in eachelection this year. Each director’s term continues until the Annual Meeting of Shareholders in 2027 or until the election and qualification of his or her successor, or such director’s earlier death or resignation. SixThe nominees for election at the 2024 Annual Meeting are now directors of the Company, with the exception of Mr. Jones who is standing for election for the first time. Seven other individuals serve as directors but are not standing for re-election because their terms as directors extend past this Annual Meeting pursuant to provisions of the Company’s Amended and Restated By-Laws, which provide for the election of directors for staggered terms, with each director serving a three-year term.NomineesAt the Annual Meeting, Messrs. John F. WilsonRollins, Hardin and Donald P. CarsonJones and Mmes. Susan R. Bell and Louise S. SamsMs. Rollins will be nominated to serve as Class III Directors. The nomineesII Directors to be elected for election at the 2022 Annual Meeting are now directors of the Company, with the exception of Ms. Sams who is standing for election for the first time.a three-year term expiring in 2027. Unless authority is withheld, the proxy holders will vote for the election of each director nominee named below as a director.above. Although management does not contemplate the possibility, in the event any nominee is not a candidate or is unable to serve as director at the time of the election, unless authority is withheld, the proxies will be voted for any nominee who shall be designated by the present Board of Directors and recommended by the Nominating and Corporate Governance Committee to fill such vacancy. Thomas J. Lawley, MD, who is currently serving as a Class III Director, is not standing for re-election at the Annual Meeting.Our Board of Directors recommends a vote FOR the Class IIIII director nominees above.2025Report of the Audit CommitteeManagement is responsible for the Company’s system of internal control over financial reporting, the preparation of its consolidated financial statements in accordance with accounting principles generally accepted in the United States, and the financial reporting process, including management’s assessment of internal control over financial reporting (ICFR).The Company’s independent registered public accounting firm is responsible for performing an integrated independent audit of the Company’s consolidated financial statements and management reports on ICFR in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) and for issuing reports thereon. The Audit Committee’s responsibility is generally to monitor and oversee these processes, as described in the Audit Committee Charter. It is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and in accordance with generally accepted accounting principles; that is the responsibility of management. The Audit Committee presently consists of threefour independent directors, all of whom are considered financially literate under NYSE rules.In fulfilling its oversight responsibilities with respect to the year ended December 31, 2021,2023, the Audit Committee:●Approved the engagement and terms of service of Grant Thornton LLP as the Company’s independent registered public accounting firm for the year ended December 31, 2021;●Reviewed with management and the Company’s independent registered public accounting firm, the interim financial information included in the Company’s Forms 10-Q prior to the Forms 10-Q being filed with the SEC, as well as the financial information in each quarterly earnings release;•Approved the engagement and terms of service of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ended December 31, 2023;●Reviewed and discussed with the Company’s management (including internal audit) and the Company’s independent registered public accounting firm, the audited consolidated statements of financial position of the Company as of December 31, 2021 and 2020 and the related statements of income, comprehensive earnings, stockholders’ equity and cash flows for each of the three years ended December 31, 2021 including the related footnotes and financial statement schedule, and the related ICFR;•Reviewed with management and the Company’s independent registered public accounting firm, the interim financial information included in the Company’s Forms 10-Q prior to the Forms 10-Q being filed with the SEC, as well as the financial information in each quarterly earnings release;●Discussed with the Company’s independent registered public accounting firm matters required to be discussed by the applicable requirements of the PCAOB and the SEC; and●Received from the Company’s independent registered public accounting firm the written disclosures and the letter in accordance with the requirements of the PCAOB regarding the firm’s communications with the Audit Committee concerning independence, and discussed with such firm its independence from the Company.•Reviewed and discussed with the Company’s management (including internal audit) and the Company’s independent registered public accounting firm, the audited consolidated statements of financial position of the Company as of December 31, 2023 and 2022 and the related statements of income, comprehensive earnings, shareholders’ equity and cash flows for each of the three years ended December 31, 2023 including the related footnotes and financial statement schedule, and the related ICFR;•Discussed with the Company’s independent registered public accounting firm matters required to be discussed by the applicable requirements of the PCAOB and the SEC; and•Received from the Company’s independent registered public accounting firm the written disclosures and the letter in accordance with the requirements of the PCAOB regarding the firm’s communications with the Audit Committee concerning independence, and discussed with such firm its independence from the Company.Based upon the review and discussions referred to previously, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements of financial position of the Company and subsidiaries as of December 31, 2021 and 2020 and the related statements of income, comprehensive earnings, stockholders equity and cash flows for each of the three years ended December 31, 2021 be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20212023 for filing with the SEC.In giving its recommendation to the Board of Directors, the Audit Committee has relied on (i) management’s representation that such financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States of America; and (ii) the reports of the Company’s independent registered public accounting firm with respect to such financial statements and related internal controls.Respectfully submitted by the Audit Committee of the Board of DirectorsSusan R. Bell, ChairpersonDonald P. CarsonPatrick J. GunningJerry W. Nix2126Independent Registered Public Accounting FirmPrincipal AuditorGrant Thornton LLP served as the Company’s independent registered public accounting firm for the fiscal years ended December 31, 2021 and 2020.The Audit Committee has appointed Grant Thornton LLP as Rollins, Inc.’sconducted a competitive selection process to determine the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022.2023. The Committee invited several public accounting firms to participate in this process, including Grant Thornton LLP, has servedthe Company’s independent registered public accounting firm for the fiscal year ended December 31, 2022. As a result of this process, following the review and evaluation of proposals from participating firms, on March 24, 2023, the Committee approved the appointment of Deloitte & Touche LLP as the Company’s independent auditors since 2004registered public accounting firm for the fiscal year ending December 31, 2023. On the same date, the Audit Committee approved the dismissal of Grant Thornton as the Company’s independent registered public accounting firm.Grant Thornton’s reports on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2022 and 2021 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.During the fiscal years ended December 31, 2022 and 2021, and the subsequent interim period through March 24, 2023, there were: (i) no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-Kbetween the Company and Grant Thornton on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to Grant Thornton’s satisfaction, would have caused Grant Thornton to make reference thereto in their reports; and (ii) no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K.During the fiscal years ended December 31, 2022 and 2021 and the subsequent interim period through March 24, 2023, neither the Company nor anyone on its behalf consulted with Deloitte regarding: (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report nor oral advice was provided to the Company that Deloitte concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue; (ii) any matter that was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions; or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K.Deloitte & Touche LLP is considered by management to be well qualified. Representatives of Grant ThorntonDeloitte & Touche LLP are expected to be present at the annual meeting, and they will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.Audit Fees of the Independent Registered Public Accounting Firm2023 Audit Fees(1)(1)$Audit fees represent fees for professional services provided in connection with the integrated audit of our financial statements, including internal controls over financial reporting, review of our quarterly financial statements, and audit services provided in connection with other statutory or regulatory filings.2,066,251 Audit-Related Fees — All Other Fees(2)$ 1,895 Total $ 2,068,146 (2)The amount shown in 2020 represents an increase of $82,000 in audit fees previously reported in the Company’s 2021 Proxy Statement. Audit fees for 2020 were adjusted to include final audit billings and 2020 audit services provided in connection with other statutory or regulatory filings.(1)Audit fees represent fees for professional services provided in connection with the integrated audit of our financial statements, including internal controls over financial reporting, review of our quarterly financial statements, and audit services provided in connection with other statutory or regulatory filings.(2)Includes fees primarily related to subscription services.27Pre-approval of ServicesAll of the services described above were pre-approved by the Company’s Audit Committee.Committee or the Audit Committee’s Chairperson in accordance with the Company’s Audit and Non-Audit Services Preapproval Policy. The Audit Committee has determined that the payments made to its independent registered public accounting firm for these services are compatible with maintaining such auditors’ independence. All of the hours expended on the principal accountant’s engagement to audit the financial statements of the Company for the years 2021 and 2020year 2023 were attributable to work performed by full-time, permanent employees of the principal accountant. The Committee has no pre-approval policies or procedures other than as set forth below.The Audit Committee is directly responsible for the appointment and termination, compensation, and oversight of the work of the independent registered public accounting firm, including resolution of disagreements between management and the independent registered public accounting firm regarding financial reporting. The Audit Committee, or one or more members of the Committee, as may be delegated from time to time, is responsible for pre-approving all audit and non-audit services provided by the independent public accountants and ensuring that they are not engaged to perform the specific non-audit services proscribed by law or regulation. The Audit Committee also delegated pre-approval authority to the Chairperson, and the Chairperson may further delegate approval authority to another member22of the Committee from time to time. The decisions of any Audit Committee member to whom pre-approval authority is delegated must be presented to the full Audit Committee at its next scheduled meeting.28PROPOSAL 2:RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMOverviewThe Audit Committee of the Board of Directors has appointed Grant ThorntonDeloitte & Touche LLP as the Company’s independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2022.2024. During fiscal 2021, Grant Thornton2023, Deloitte & Touche LLP served as our independent registered public accounting firm. Representatives of Grant ThorntonDeloitte & Touche LLP are expected to attend the annual meeting and will have the opportunity to respond to appropriate questions and, if they desire, to make a statement.Although we are not required to seek ratification of this appointment, the Audit Committee and the Board of Directors believes it is appropriate to do so. If stockholdersshareholders do not ratify the appointment of Grant ThorntonDeloitte & Touche LLP, the current appointment will stand, but the Audit Committee will consider the stockholdershareholder action in determining whether to retain Grant ThorntonDeloitte & Touche LLP as our independent registered public accounting firm for future fiscal years.Our Board of Directors recommends a vote FOR the ratification of the appointment of Grant ThorntonDeloitte & Touche LLP as the Company’s independent registered public accounting firm for the 20222024 fiscal year.2329PROPOSAL 3:PROPOSAL TO APPROVE THE ROLLINS, INC. 2022 EMPLOYEE STOCK PURCHASE PLANOverview and Reason for ProposalOn February 22, 2022, the Board approved the Rollins’ Inc. 2022 Employee Stock Purchase Plan (the “ESPP” or the “Plan”), subject to stockholder approval at the Annual Meeting. If approved by the stockholders, 1,000,000 shares of Common Stock will be reserved for issuance under the Plan, and the Plan will be effective on April 26, 2022. Notwithstanding the foregoing, no offering under the Plan shall commence until the shares of Stock to be offered under the Plan have been registered with the SEC on a Form S-8. The Company intends that the Plan shall constitute an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).The purpose of the Plan is to provide eligible employees of the Company and its designated subsidiaries with the opportunity to purchase shares of Company Common Stock (“Stock”) through payroll deductions. The Company believes that participation in the Plan will (i) provide eligible employees with a convenient means of acquiring an equity interest through payroll deductions; (ii) enhance eligible employees’ sense of participation in the Company; (iii) increase eligible employees’ interest in the success of the Company; and (iv) provide an additional incentive for eligible employees to remain employed by the Company or such designated subsidiary. The closing price of Stock on March 1, 2022 on the New York Stock Exchange was $33.16.Summary Description of the PlanThe following is a summary of the material provisions of the Plan and is qualified in its entirety by reference to the Plan document, which is attached to this Proxy Statement as Appendix A and incorporated herein by reference. Stockholders are urged to read the actual text of the Plan in its entirety.AdministrationThe Human Capital Management and Compensation Committee of the Board (the “Administrator”) shall be responsible for the administration of the Plan and shall have the power in connection with such administration to interpret the Plan, to establish rules and procedures it deems appropriate to administer the Plan, and to take such other action in connection with such administration as it deems necessary or equitable under the circumstances. The Administrator shall also have the power to delegate the duty to perform such administrative functions as the Administrator deems appropriate under the circumstances, and any action taken in accordance with such delegation shall be considered the action of the Administrator.EligibilityAll employees of the Company or a Designated Subsidiary are eligible to participate in the Plan, with the exception of an employee who would own (immediately after the grant of an option under the Plan) Stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or of its parent or subsidiary corporations based on the rules set forth in sections 423(b)(3) and 424 of the Code; provided, however, that an employee who is a member of a collective bargaining unit that has elected, on behalf of its members, not to participate in the Plan in accordance with the requirements of Code Section 423 shall not be treated as an Eligible Employee while such election remains in effect. All officers of the Company and its Designated Subsidiaries are eligible to participate in the Plan, with the exception of Gary W. Rollins, the Chairman and Chief Executive Officer, due to Mr. Rollins’ beneficial ownership of more than 5% of Rollins’ stock. As of March 1, 2022, approximately 16,500 employees of the Company and its subsidiaries are expected to be eligible to participate in the Plan. In the future, the Administrator may, in its discretion, exclude certain classes of employees from participating in the Plan, as set forth therein. 24Offering Periods and Purchase DateUnless otherwise established by the Administrator prior to the beginning of an offering period, all offering periods will be of approximately six months’ duration. If approved by the stockholders at the Annual Meeting, the Company anticipates the first offering period to commence on July 1, 2022 and continue until December 30, 2022, and that subsequent offering periods would begin each January 1 and July 1 (or the next trading day, if such date is not a trading day.) Subject to the requirements of Section 423 of the Code, the Administrator may create special offering periods for individuals who become Eligible Employees solely in connection with the acquisition of a majority interest in another company or business by a stock acquisition, merger, reorganization or purchase of assets. The purchase date for each offering period shall be the last day of such offering period, or if such date is not a day on which the Stock is traded on the New York Stock Exchange, the last such trading day immediately preceding such date.Payroll DeductionsTo participate in an offering period, an Eligible Employee shall be required to properly complete and timely file a payroll deduction authorization form with the Administrator before the end of an enrollment period preceding the offering period. Such authorization form shall specify the specific dollar amount (unless the Administrator determines that contributions may be designated as a percentage of compensation) to be deducted from his or her compensation each pay period during the offering period for which such payroll deduction authorization is in effect. The Administrator may also establish uniform rules regarding (i) the types of compensation from which deductions may be taken; (ii) limitations on the dollar amounts (or percentages of compensation) that may be withheld from a participant’s compensation; and (iii) required minimum contribution levels, provided that all such limitations shall satisfy the requirements of Section 423(b)(5) of the Code with respect to an offering. A participant may not make any contribution to his or her account except through payroll deductions; provided, however, that the Administrator may allow participants to make contributions by check or other means instead of payroll deductions if, for any offering, the Administrator determines that such other contributions are permissible under Section 423 of the Code.Unless otherwise determined by the Administrator with respect to an offering, a participant shall have the right to make one amendment to their payroll deduction authorization after the end of an Enrollment Period to reduce or to stop the payroll deductions which he or she previously authorized. The Administrator may establish procedures and deadlines by which participants must make such amendments to a payroll deduction authorization.Purchase PriceThe purchase price per share of Stock to be sold to participants under the Plan shall be the lesser of (i) ninety percent (90%) of the fair market value of a share of Stock on the first day of the offering period; or (ii) ninety percent (90%) of the fair market value of a share of Stock on the purchase date. If such percentage results in a fraction of one cent, the purchase price shall be increased to the next highest full cent. The Administrator may adjust the purchase price in its sole discretion with respect to an offering, provided that the purchase price shall not be less than the lesser of (i) eighty-five percent (85%) of the fair market value of a share of Stock on the first day of the offering period; or (ii) eighty-five percent (85%) of the fair market value of a share of Stock on the purchase date. In no event shall the purchase price be less than the par value of a share of stock.Options; Purchase LimitationsAs of the first day of each offering period, each participant shall automatically be deemed to have been granted an option to purchase such whole and fractional shares of Stock (not to exceed 10,000 shares, subject to adjustment under the Plan as described below) as may be purchased with the payroll deductions credited to the participant’s account during the applicable offering period. On the last day of each offering period, the payroll deductions accumulated for each participant during the offering period will be applied automatically to purchase shares of Stock at the purchase price in effect for the offering period. No option granted by operation of the Plan to any Eligible Employee shall permit his or her rights to purchase shares of Stock under the Plan or under any other employee stock purchase plan (within the meaning of Section 423 of the Code) of the Company and its parent or any of its subsidiaries at a rate which exceeds $25,000 of the fair market value of25such stock for any calendar year. Such fair market value shall be determined as of the first day of the offering period for which the option is granted.Adjustment for Changes in SharesThe number of shares of Stock covered by outstanding options granted pursuant to the Plan and the related purchase price and the number of shares of Stock available under the Plan shall be adjusted by the Board in an equitable manner to reflect any change in the capitalization of the Company, including, but not limited to such changes as dividends paid in the form of Stock or Stock splits. Furthermore, the Board shall adjust (in a manner which satisfies the requirements of Section 424(a) of the Code), the number of shares of Stock available under the Plan and the number of shares of Stock covered by options granted under the Plan and the related option prices in the event of any corporate transaction described in Section 424(a) of the Code. Any such adjustment may create fractional shares of Stock or a right to acquire a fractional share. An adjustment made by the Board shall be conclusive and binding on all affected persons.Voluntary Account WithdrawalA participant may elect to withdraw the entire balance credited to his or her account for an offering period by filing an amended payroll deduction authorization with the Administrator on or before the purchase date for such period. If a participant makes such a withdrawal election, such balance shall be paid to him or her in cash (without interest) as soon as practicable after such amended payroll deduction authorization is filed, and no further payroll deductions shall be made on his or her behalf for the remainder of such offering period. If a participant dies on or before a purchase date and the Administrator has timely notice of his or her death, the Administrator shall deem such participant to have elected to withdraw the entire balance credited to his or her account. Termination of Eligibility; TransferabilityIf a participant’s employment as an Eligible Employee terminates on or before the purchase date for an offering period for any reason whatsoever, his or her account shall be distributed in cash as soon as practicable immediately before the date his or her employment terminated. Neither the balance credited to a participant’s account nor any rights to the exercise of an option or to receive shares of Stock under the Plan may be assigned, encumbered, alienated, transferred, pledged, or otherwise disposed of in any way by a participant during his or her lifetime or by any other person during his or her lifetime, and any attempt to do so shall be without effect; provided, however, that the Administrator in its absolute discretion may treat any such action as an election by a participant to withdraw the balance credited to his or her account. Shares of Stock acquired under the Plan may not be sold or transferred, other than by will or laws of descent and distribution or to joint ownership with a participant’s spouse, for a period of 12 months following the purchase date on which such shares were acquired.Termination; AmendmentThe Plan may be amended by the Board from time to time to the extent that the Board deems necessary or appropriate in light of, and consistent with, Section 423 of the Code and the laws of the State of Delaware, and any such amendment shall be subject to the approval of the Company’s stockholders to the extent such approval is required under Section 423 of the Code or the laws of the State of Delaware or to the extent such approval is required under applicable law or stock exchange listing requirements. Without limiting the foregoing, any amendment to increase the number of shares that may be purchased under the Plan (other than an increase merely reflecting an adjustment) shall be effective only if approved by the Company’s stockholders. The Board also may terminate the Plan or any offering made under the Plan at any time. If not earlier terminated by the Board, the Plan will terminate when all shares of Stock authorized for issuance thereunder have been issued.26New Plan BenefitsBenefits and purchases of Stock under the Plan depend on elections made by participants and the fair market value of the Stock on dates in the future. As a result, it is not possible to determine the benefits that will be received by executive officers and other employees in the future under the Plan. As noted above, our Chairman and Chief Executive Officer is ineligible to participate in the Plan. Each participant is limited to the $25,000 annual purchase restriction as well as the participant and offering period restrictions described above. Directors who are not also employees are not eligible to participate in the Plan.Federal Income Tax ConsequencesThe following is a summary of the material U.S. federal income tax consequences associated with the purchase of Stock under the Plan under current federal tax laws. The summary does not address tax rates or non-U.S., state or local tax consequences, nor does it address employment tax or other federal tax consequences except as noted.The Plan is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code. In general, a participant will not recognize U.S. federal taxable income until the sale or other disposition of the shares of Stock purchased under the Plan. Upon such sale or disposition, the participant will generally be subject to tax in an amount that depends on the participant’s holding period with respect to the shares.If the shares are sold or disposed of more than one year from the date of purchase and more than two years after the first day of the offering period in which they were purchased, or upon the participant’s death while owning the shares, the participant will recognize ordinary income in an amount generally equal to the lesser of: (i) an amount equal to 10% of the fair market value of the shares on the first day of the offering period (or such other percentage equal to the applicable purchase price discount), and (ii) the excess of the sale price of the shares over the purchase price. Any additional gain will be treated as long-term capital gain. If the shares held for the periods described above are sold and the sale price is less than the purchase price, then there will be no ordinary income and the participant will recognize a long-term capital loss in an amount equal to the excess of the purchase price over the sale price of the shares.If the shares are sold or otherwise disposed of before the expiration of the holding periods described above, other than following the participant’s death while owning the shares, the participant generally will recognize as ordinary income an amount equal to the excess of the fair market value of the shares on the date the shares were purchased over the purchase price. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on the participant’s holding period with respect to the shares.The Company is not entitled to a deduction for amounts taxed as ordinary income or capital gain to a participant except to the extent of ordinary income recognized upon a sale or disposition of shares prior to the expiration of the holding periods described above.Our Board of Directors recommends a vote “FOR” approval of the Rollins, Inc. 2022 Employee Stock Purchase Plan27The following narratives summarize the business experience over at least the last five years of our current executive officers, other than Messrs. Rollins, Wilson and Gahlhoff, whose business experience is described above in the section titled “Information Regarding Director Nominees and Continuing Directors” on page 15.18.Julie K. Bimmerman, Interim
Kenneth D. Krause, Executive Vice President, Chief Financial Officer and Treasurer, 5449Julie K. BimmermanKenneth D. Krause has served as the Company’s InterimExecutive Vice President, Chief Financial Officer and Treasurer of Rollins since July 2021, when she assumedSeptember 2022. Prior to joining Rollins, Mr. Krause served as the duties of principal financial officer and principal accounting officer. Ms. Bimmerman also serves asSenior Vice President, - FinanceChief Financial Officer, Chief Strategy Officer and Investor RelationsTreasurer of the Company, a role she has held since May 2018. PriorMSA Safety, Inc. from 2015 to that, Ms. Bimmerman2022. He also served in various other leadership roles at MSA Safety, Inc. with increasing levels of responsibility from 2006 to 2015. Prior to MSA Safety, Inc., Mr. Krause was a senior manager in the Company’s business divisions, including Managing Directoraudit practice of Finance from May 2016 to May 2018, Managing DirectorKPMG, an international accounting firm.Mr. Krause currently serves as a member of Rollins Independent Brands from May 2015 to May 2016 and Vice Presidentthe Metro Atlanta Chamber Board of Finance/Corporate Controller - HomeTeam Pest Defense from January 2011 to May 2015. Ms. BimmermanDirectors. Mr. Krause received a Bachelor of Science in Business Administration in- Accounting from Slippery Rock University and an MBA from the University of Texas at Arlington.Pittsburgh Katz Graduate School of Business. He is a CPA with inactive status in the state of Pennsylvania.
Elizabeth B. Chandler, Vice President, General Counsel and Corporate Secretary, 5860
Ms. Chandler has been a board member of the Atlanta Beltline Partnership, Inc. and the Georgia Research Alliance, since 2017 and 2022, respectively. She also has served on the Advisory Board of Crider Foods since 2023. Ms. Chandler received a Bachelor of Business Administration in International Business and a Juris Doctorate from the University of Georgia.3028This Compensation Discussion and Analysis describes our executive compensation program and provides an overview of how the Human Capital Management and Compensation Committee made compensation decisions in 20212023 for each of our named executive officers, which consist of our Principal Executive Officer, each person who served as our Principal Financial Officer, at any time during the fiscal year 2021, and the next three most highly-compensated executive officers (other than our Principal Executive Officer and Principal Financial Officer) who were serving in such capacity at the end of the fiscal year 2021.2023. For a complete understanding of the executive compensation program, this disclosure should be read in conjunction with the "Summary Compensation Table" on page 43 and other executive compensation-related disclosures included in this Proxy Statement.In fiscal 2021,2023, our named executive officers were:2021Jerry E. Gahlhoff, Jr. President and Chief Executive Officer Julie Bimmerman (1) Interim Chief Financial Officer and Treasurerand Assistant toof the ChairmanJerry E. Gahlhoff, Jr.President and Chief Operating OfficerElizabeth ChandlerPaul E. Northen (2)Former Senior Vice President, Chief Financial Officer and TreasurerFormer Senior Vice President focused on Sustainability(1)Ms. Bimmerman assumed the role of Interim Chief Financial Officer and Treasurer effective on July 27, 2021.(2)Mr. Northen stepped down from his role as Senior Vice President, Chief Financial Officer and Treasurer and transitioned to a new role as Senior Vice President focused on Sustainability, effective on July 27, 2021. Mr. Northen subsequently resigned from the Company effective on March 14, 2022.Executive Compensation Practices and Governance PoliciesWhat We Do What We Don’t Do Pay for PerformanceThe majorityA component of our named executive officers’ total compensation is directly linked to the Company’s performance.x No Short-Selling or Derivatives TradingOur Insider Trading Policy prohibits named executive officers (like all our employees and directors) from short selling our securities and from purchasing or selling derivatives. They (and our directors) are also subject to additional prohibitions on pledging.Align the Interests of Executives with those of Our StockholdersEquity compensation represents a significant portion of our named executive officers’ total compensation.x No Guaranteed Base Salary Increases or BonusesWe do not provide guaranteed base salary increases or guaranteed bonuses.Stock Ownership GuidelinesWe maintain strong stock ownership requirements for our directors, executive officers and other key employees.x No Executive Pension Plans or SERPsWe only maintain a deferred compensation plan and a standard 401(k) plan.Independent Compensation CommitteeOur Human Capital Management and Compensation Committee is composed solely of independent directors.Independent Compensation ConsultantOur Human Capital Management and Compensation Committee directly retains an independent compensation consultant.Risk AssessmentOur corporate officers’ compensation program has been designed and is periodically reviewed to ensure that it does not encourage inappropriate risk-taking.Clawback PolicyIn 2023, we adopted a Clawback Policy which provides certain triggers for mandatory recovery of erroneously awarded compensation.3129What We Don’t DoxNo Excise Tax Gross-UpsOur named executive officers are not entitled to excise tax gross-ups under any of our compensation programs or policies.xNo Hedging or PledgingUnder our Insider Trading Policy, we prohibit our employees, including our named executive officers and the members of our board of directors, from hedging or pledging our securities.xNo Employment ContractThere are no agreements or understandings between the Company and any executive officer that guarantee continued employment or guarantee any level of severance or compensation, including incentive or bonus payments other than standard annual award grant agreements.The Company is engaged in a highly competitive industry. The success of the Company depends on our ability to attract and retain highly qualified and motivated executives. In order to accomplish this objective, we have endeavored to structure our executive compensation program in a fashion that gives our Human Capital Management and Compensation Committee the flexibility to take into account our operating performance and the individual performance of our executive officers.The Human Capital Management and Compensation Committee endorses the philosophy that executive compensation should reflect Company performance and the contribution of executive officers to that performance. Our compensation policy is designed to achieve three fundamental objectives:●attract and retain qualified executives;●motivate performance to achieve Company objectives; and●align the interests of our executives with the long-term interests of the Company’s stockholders.•attract and retain qualified executives;
not promote excessive risk-taking.
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equity-based compensation makes executives “think like owners” and, therefore, aligns their interests with those of our stockholders.
Fiscal 20212023 Named Executive Officer Compensation Details
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Compensation Elements
officers. The following table sets forth information regarding each of the three core elements of target compensation for the executive officers in 2021,2023, including a description of each element.
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Base Salary | Fixed cash compensation based on each executive officer’s role, responsibilities, competitive market positioning, and individual performance.
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his responsibilities. Mr. Krause and Ms. Chandler both received a 4% merit increase to their base salaries. IncentiveThe graphics below reflect the approximate general distribution of the three core elements of compensation earned or awarded for fiscal 2023 by our CEO, and on average, by our named executive officers under the Company’s 2023 Executive Bonus Plan and 2018 Stock Incentive Plan:
Fixed Compensation
15%VariableCompensation85%Fixed Compensation
26%VariableCompensation74%The numbers presented in the charts above are calculated in accordance with the presentation in the "Summary Compensation Table" on page 43. Accordingly, the cash incentive component consists of the cash bonuses actually paid out for 2023 performance, but the RSAs and PSUs are valued at fair value on the grant date. Actual value ultimately received by the named executive officers ("NEOs") with respect to these awards may be greater or lesser than the grant date fair value. Fixed compensation presented in the chart consists of base salary and does not include elements presented under the “All Other Compensation” columns in the "Summary Compensation Table." The numbers presented for “Other Named Executive Officers” are averaged for simplicity of presentation, but the mix for individual NEOs varies depending upon their role and responsibilities, as the Human Capital Management and Compensation Committee has deemed appropriate. Base SalaryBase salary represents the fixed elementportion of the compensation of our executive officersthree core elements described above and is an important element of compensation intended to attract and retain qualified executives. The Human Capital Management and Compensation Committee reviews the base salaries of our executive officers each year as part of its annual review of our executive compensation program, with input from our CEO (except with respect to his own base salary). In making its determinations, the Human Capital Management and Compensation Committee gives consideration to our operating performance for the prior fiscal year and the individual executive’s performance. Base salary increases are not automatic or guaranteed.313320212023 Base Salary AdjustmentsBased upon the recommendation of Mr. Rollins,In 2023, the Human Capital Management and Compensation Committee adjusted the base salarysalaries of the Company’s named executive officers as follows:Named Executive Officer 2022 Salary 2023 Salary % Increase Gary W. Rollins $ 1,449,000 $ 1,449,000 — % Jerry E. Gahlhoff, Jr. $ 690,000 $ 1,000,000 44.9 % Kenneth D. Krause $ 675,000 $ 702,000 4.0 % John F. Wilson $ 983,250 $ 400,000 (59.3) % Elizabeth B. Chandler $ 517,500 $ 538,200 4.0 % The 44.9% increase in Mr. Gahlhoff from $525,000 to $600,000 (representing a 14% increase) in January 2021 in connection with his promotion to President and Chief Operating Officer in September 2020. The Human Capital Management and Compensation also adjusted theGahlhoff’s base salary for 2023 was made due to Mr. Gahlhoff’s increased responsibilities resulting from his assumption of Ms. Bimmerman from $204,194 to $255,000 (representing a 24.9% increase) based upon the recommendationduties of Messrs. Rollins and Gahlhoff in July 2021 in connection with Ms. Bimmerman’s new role as Interim Chief FinancialExecutive Officer and Treasurer. No otherPrincipal Executive Officer, as well as those of President, effective January 1, 2023. Mr. Krause's salary adjustments wereactually paid in 2022 was prorated for the portion of the year he was employed by the Company. This proration of salary is reflected in the "Summary Compensation Table" on page 43. The 59.3% decrease in Mr. Wilson’s base salary for 2023 was made due to executive officersthe decrease in 2021.Performance-Based Incentive Cash Compensation PlanIn January 2021,February 2023, the Human Capital Management and Compensation Committee approved the terms of the Company’s 2021 Performance Based Incentive Cash CompensationRollins, Inc. 2023 Executive Bonus Plan for Executive Officersits named executive officers (the “2021 Cash IncentiveExecutive Bonus Plan”), which replaced and superseded the 2018 Cash Incentive2022 Executive Bonus Plan. Under the 2021 Cash IncentiveExecutive Bonus Plan, the named executive officers have an opportunity to earn bonuses of up to a certain percent of each executive officer’sindividual’s annual base salariessalary upon the achievement of bonus performance goals approved by the Human Capital Management and Compensation Committee. Such bonus performance goals consist offor the Company’s and individual’s achievement of specific levels of one or more2023 Executive Bonus Plan consisted of the following three targeted financial measures:●revenue to plan;●pre-tax profit plan achievement; and●individual key operating initiatives.•revenue to plan; and
All offully aligned with overall Company performance.
The maximum performance-based cash incentive forrespect to each of the named executive officers for fiscal 2021 is summarized in the table below. Awards earned in 2021 under the 2021 Cash Incentive Plan were accrued in 2021 and paid in January 2022.
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Revenue to Plan Performance Goal
The revenue to plan performance-based cash incentive targets for each of the named executive officers for fiscal 2021 is summarized in the table below:
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The minimum achievement of revenue to plan for the named executive officers to be eligible to earn a bonus under this performance goal of the 2021 Cash Incentive Plan was 20 percent. This performance goal for the plan in 2021 was a 6.6 percent increase in revenue. Because the actual increase in Company revenue to plan in 2021 was 105.3 percent, this resulted in bonuses of 60 percentpercentage of annual base salary, for Mr. Rollins, 8.7each of our named executive officers:
| Named Executive Officer | Target Bonus Opportunity for Pre-Tax Profit Element | Target Bonus Opportunity for Revenues Element | Total Target Bonus Opportunity | ||||||||
| Gary W. Rollins | 80% | 45% | 125% | ||||||||
| Jerry E. Gahlhoff, Jr | 90% | 60% | 150% | ||||||||
| Kenneth D. Krause | 60% | 40% | 100% | ||||||||
| John F. Wilson | 50% | 25% | 75% | ||||||||
| Elizabeth B. Chandler | 45% | 30% | 75% | ||||||||
plan.
The pre-tax profit
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(1) The actual maximum 2021 performance-based cash incentive that Ms. Bimmerman was eligibleuse discretion to receive for the achievement of the pre-tax profit to plan performance goal under both the 2021 Cash Incentive Plan (8.7%) and the RSC Bonus Plan (10.2%) is prorated based on the number of days Ms. Bimmerman participated in each plan in 2021.
The minimum growth in the Company’sadjust pre-tax profit for 2021 to be eligible for a bonus was 95 percent and the Company’s 2021impact of unusual or exceptional charges. Company performance, resulted in an actual achievement in pre-tax profit to plan of 110.6 percent. This resulted in bonuses of 90following this adjustment, equaled 103.6 percent of annual base salary for Mr. Rollins, 75 percent of annual base salary for Mr. Wilson, 18.9 percent of annual base salary for Ms. Bimmerman, 70 percent of annual base salary for Mr. Gahlhoff, and 45 percent of annual base salary for Ms. Chandler. Mr. Northen did not receive a bonus payout under thisthe performance goal for 2021 pursuant to the terms of his bonus agreement.
2021 Individual Key Operating Initiatives
In 2021, all executive officers with the exception of Messrs. Rollins and Wilson were also eligible to receive a cash bonus upon the achievement of their respective KOIs. In 2021, the followinggoal. Therefore, each named executive officers that participated in this performance goal were eligible to receive a cash bonus for achievementofficer received 115% of the initiatives tied to the following KOIs:
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The Company’s performance in 2021 resulted in atarget bonus of 6.8 percent of annual base salaryopportunity for Ms. Bimmerman, a bonus of 8 percent of annual base salary for Mr. Gahlhoff Jr., and a bonus of 6 percent of annual base salary for Ms. Chandler. Mr. Northen did not receive a bonus payout under this performance goal for 2021 pursuant to the terms of his bonus agreement.
The amount of bonuses under each performance componentelement of the Company’s 2021 Cash Incentive Plan is determined based upon straight-line interpolation of the applicable formula for each such component without the use of discretion. plan.
2023.
At the Company’s annual meeting of stockholders held on April 24, 2018, the stockholders approved
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of theCompany’s 2018 Stock Incentive Plan, the Human Capital Management and Compensation Committee may grant stock options, stock appreciation rights and any other type of award valued by reference to (or otherwise based on) shares, including, without limitation, restricted stock, restricted stock units, performance accelerated restricted stock, performance stock and performance units, not to exceed a maximum of 225,000 shares during any fiscal year for any one individual. All share, per share and market price data herein have been adjusted for the three-for-two stock split to stockholders of record on November 10, 2020, paid on December 10, 2020.
The 2018 Stock Incentive Plan allows for a wide variety of stock-basedunits. Equity-based awards such as stock options and restricted stock awards. In recent years,are generally used by the Company has awarded time-lapse restricted stock in lieuas a tool to encourage retention and align the interest of granting stock options. The terms and conditionsour executives with those of these awards are described in more detail below.
our shareholders. Awards under the 2018 Stock Incentive Plan are purely discretionary are not based upon any specific formula and may or may not be granted in any given fiscal year. ForIn 2023, the past three years, we have grantedequity component of compensation for named executive officers (as well as certain other employees) continued to include grants of time-lapse restricted stock to various employees, including our named executive officers,("RSAs"), as in early January during our regularly scheduled meeting ofpast years. However, in 2023 the Human Capital Management and Compensation Committee during whichadjusted the Committee reviewsmix of equity grants to these individuals to feature performance share units (“PSUs”). The PSUs will cliff vest after three years based upon the Company’s successful achievement of certain financial performance goals and feature a TSR “Modifier,” as described in more detail below. This mix of equity is designed to continue providing alignment of our executive compensation program. Consistentprogram with this practice, the interests of our shareholders and link longer term compensation of our executives to longer term performance of the Company.
(1)The number of PSUs shown in this column represents the total number of shares that would cliff vest assuming the Revenue CAGR and Adjusted EBITDA Margin goals are met at the target level, and the TSR Modifier would cliff vest at target level. The vesting conditions of the PSUs are described in more detail below under "Terms of PSUs." | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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The amount of the aggregate stock-based awards to our named executive officers in any given year is influenced by the Company’s overall performance.many factors. The amount of each grant to our named executive officers is influenced in part by the Human Capital Management and Compensation Committee’s subjective assessment of each individual’s respective contributions to achievement of the Company’s long-term goals and objectives. In evaluating individual performance for these purposes, the Human Capital Management and Compensation Committee considers the overall contributions of executive management as a group and the Committee’s subjective assessment of each individual’s relative contribution to that performance rather than specific aspects of each individual’s performance over a short-term period. It is our expectation to continue yearly grants of restricted stock awards and performance share units to selected executives, although we reserve the right to modify or discontinue this or any of our other compensation practices at any time. Grants are made under our 2018 Stock Incentive Plan and the plan is administered pursuant
Prior toJanuary 2022, all of our time-lapse restricted stock awards have had the same features. For awards of time-lapse restricted stock granted prior to January 2022,features and the shares vest one-fifth per year beginning on the second anniversary of the grant date. For awards of time-lapse restricted stock granted in January 2022, the shares vest one-fifth per year beginning on the first anniversary of the grant date. For awards of time-lapse restricted stock granted in 2023, the shares vest one-fourth per year beginning on the first anniversary of the grant date. For awards of time-lapse restricted stock granted in 2024, the shares will vest one-fifthone-third per year beginning on the first anniversary of the grant date. Time-lapse restricted shares have full voting and dividend rights. However, until the shares vest, they cannot be sold, transferred or pledged. Should the executive leave our employment or move to a lesser position for any reason prior to the vesting dates (other than due to death or disability), the unvested shares will be forfeited unless the Human Capital Management and Compensation Committee decides otherwise. In the event of a “change in control” as determined by the Board, of Directors, all unvested restricted shares shall vest immediately.
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The 2023 PSUs are composed of 3 components, as described below.
| Name | Revenue CAGR | Adjusted EBITDA Margin | TSR Modifier | Total | ||||||||||
| Gary W. Rollins | 7,500 | 7,500 | 7,500 | 22,500 | ||||||||||
| Jerry E. Gahlhoff, Jr | 12,088 | 12,088 | 12,088 | 36,264 | ||||||||||
| Kenneth D. Krause | 4,850 | 4,850 | 4,850 | 14,550 | ||||||||||
| John F. Wilson | 1,375 | 1,375 | 1,375 | 4,125 | ||||||||||
| Elizabeth B. Chandler | 1,388 | 1,388 | 1,388 | 4,164 | ||||||||||
Compensation Setting Process
Role of the Human Capital Management and Compensation CommitteeUnder its charter, the Human Capital Management and Compensation Committee is responsible for, among other things:•reviewing our overall executive compensation philosophy and strategy, including base salary, performance-based incentive cash compensation, and equity-based grants, to confirm that the strategy supports our compensation policy; and●reviewing our overall executive compensation philosophy and strategy, including base salary, performance-based incentive cash compensation, and equity-based grants, to ensure that the strategy supports our compensation policy; and
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Committee may also, from time to time, and in its discretion, form andformally delegate all or a portion of its authority with respect to the executive officers to subcommittees; provided that such subcommittees must meet the Committee’s composition requirements set forth in its Chartercharter or under any applicable federal or state laws.
The Role of Stockholder Say-on-Pay Votes
We provide our stockholders with the opportunity to cast an advisory vote on executive compensation (a “say-on-pay proposal”) every three years. At our annual meeting of stockholders held in April 2020, a substantial majority of the votes cast on the say-on-pay proposal were voted in favor of the proposal. The Human Capital Management and Compensation Committee believes this affirms the stockholders’ support of our approach to executive compensation. The stockholders voted to hold a say-on-pay advisory vote on executive compensation every three years, and the Board resolved to accept the stockholders’ recommendation. As a result, the advisory vote on executive compensation will be held again at the 2023 annual meeting of stockholders. The Human Capital Management and Compensation Committee will continue to consider the outcome of our say-on-pay votes when making future compensation decisions for our executive officers.
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The Human Capital Management and Compensation Committee considered the peer group benchmarking analysis provided by Mercer comparing the compensation components of salary, annual incentives, long-term incentives, and total compensation of the Company’s CEO and other executive officers relative to pay programs of the selected peer group. The Human Capital Management and Compensation Committee believes the Company’s executive compensation program is fair, competitive with marketplace practices and effective in enhancing shareholder value.
| Company Name | Industry | ||||
| ABM Industries Incorporated | Environmental and Facilities Services | ||||
| Brightview Holdings, Inc. | Environmental and Facilities Services | ||||
| The Brink's Company | Security and Alarm Services | ||||
| Casella Waste Systems, Inc. | Environmental and Facilities Services | ||||
| Clean Harbors, Inc. | Environmental and Facilities Services | ||||
| Comfort Systems USA, Inc. | Construction and Engineering | ||||
| Frontdoor, Inc. | Specialized Consumer Services | ||||
| Harsco Corporation | Environmental and Facilities Services | ||||
| Healthcare Services, Group, Inc. | Diversified Support Services | ||||
| Iron Mountain Incorporated | Other Specialized REITs | ||||
| Lennox International Inc. | Building Products | ||||
| The Scotts Miracle-Gro Company | Fertilizers and Agricultural Chemicals | ||||
| Service Corporation International | Specialized Consumer Services | ||||
| Stericycle, Inc. | Environmental and Facilities Services | ||||
| Terminix Global Holdings, Inc. | Specialized Consumer Services | ||||
| Unifirst Corporation | Diversified Support Services | ||||
| US Ecology, Inc. | Environmental and Facilities Services | ||||
| Waste Connections, Inc. | Environmental and Facilities Services | ||||
Guidelines
| Title | |||||
| Chairman of the Board | Ownership equal to 5 times base salary | ||||
| Other Rollins Officers, | Ownership equal to 3 times base salary | ||||
| Division | Ownership equal to 2 times base salary | ||||||
Participants under the Guidelines have a period of fourfive years in which to satisfyadhere to the Guidelines, from the date of appointment to a qualifying position.Guidelines. Participants who become subject to these Guidelines after January 1, 2022 will have their individual ownership requirementamount established based upon their annual base salary at the time they became subject to the Guidelines and the Company’s average closing common stock price for the prior 90 day90-day period. Promotions into a different position category will require recalculation of a participant’sParticipant’s ownership requirementsamounts, as appropriate. Once established, a participant’s ownership requirement does not change as a result of changes in their base salary or fluctuations in the Company’s common stock price. After the Guidelines are met, participants are required to retain a minimum of 20% of any future equity awards.
Prohibition on
Under our
Clawback Policy
Ouris required to prepare an accounting restatement. This policy is intended to comply with the SEC and NYSE requirements. The policy requires mandatory recuperation of certain incentive-based compensation regardless of fault or involvement. Also, our executive bonus agreements contain a provision that provides that, among other things, if any bonus amount is paid as a result of misrepresented or inaccurate performance, the Company may require repayment of some or all of the excess bonus paid, subject to applicable laws. This recoupment policy reflects the Company’s high ethical standards and strict compliance with accounting and other regulations applicable to public companies. As all incentives and awards remain within the discretion of the Human Capital Management and Compensation Committee, the Committee also retains the ability to take any restatements or adjustments into account in subsequent years. In addition, the Sarbanes-Oxley Act requires in the case of accounting restatements that result from material non-compliance with SEC financial reporting requirements, that the Chief Executive Officer and Chief Financial Officer must disgorge bonuses and other incentive-based compensation and profits on stock sales received during the 12 months12-months following publication of the restated financials, if the non-compliance results from misconduct.
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Tax Deductibility of Compensation
Thomas J. Lawley, M.D.
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EXECUTIVE OFFICER COMPENSATION & BENEFITS
There are no agreements or understandings between the Company and any executive officer that guarantee continued employment or guarantee any level of severance or compensation, including incentive or bonus payments, other than annual equity and bonus grant agreements.
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Name and Principal Position | Year |
| Salary |
| Bonus |
| Stock Awards |
| Non-Equity Incentive Plan Compensation ($)(3) |
| Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($) |
| All Other Compensation |
| Total |
Gary W. Rollins | 2021 | | 1,400,000 | | - | | 4,458,000 | | 2,100,000 | | - | | 435,601 | | 8,393,601 |
Chairman and Chief Executive Officer | 2020 | | 1,152,308 | | - | | 2,846,575 | | 1,170,300 | | 10,385 | | 295,627 | | 5,475,195 |
| 2019 | | 1,100,000 | | - | | 2,630,400 | | 803,000 | | 17,850 | | 229,604 | | 4,780,854 |
Julie K. Bimmerman | 2021 | | 255,000 | | 7,231 | | 167,175 | | 87,538 | | - | | 12,216 | | 529,160 |
Interim Chief Financial Officer and Treasurer | 2020 | | - | | - | | - | | - | | - | | - | | - |
| 2019 | | - | | - | | - | | - | | - | | - | | - |
John F. Wilson | 2021 | | 950,000 | | - | | 2,229,000 | | 1,187,500 | | - | | 39,344 | | 4,405,844 |
Vice Chairman and Assistant to the Chairman | 2020 | | 853,846 | | - | | 1,469,200 | | 819,144 | | 20,168 | | 14,933 | | 3,177,291 |
| 2019 | | 830,000 | | - | | 1,359,360 | | 560,250 | | 424,463 | | 13,749 | | 3,187,822 |
Jerry E. Gahlhoff, Jr. | 2021 | | 600,000 | | - | | 1,300,250 | | 708,000 | | | | 32,155 | | 2,640,405 |
President and Chief Operating Officer | 2020 | | 412,654 | | - | | 393,011 | | 269,921 | | 16,539 | | 11,909 | | 1,104,034 |
| 2019 | | - | | - | | - | | - | | - | | - | | |
Elizabeth B. Chandler | 2021 | | 500,000 | | - | | 835,875 | | 355,000 | | - | | 32,132 | | 1,723,007 |
Vice President, General Counsel and Corporate Secretary | 2020 | | 421,000 | | - | | 550,950 | | 220,150 | | - | | 30,491 | | 1,222,591 |
| 2019 | | 380,000 | | - | | 307,200 | | 116,280 | | - | | 27,685 | | 831,165 |
Paul E. Northen | 2021 | | 650,000 | | - | | 1,114,500 | | - | | - | | 41,304 | | 1,805,804 |
Former Senior Vice President and Chief Financial Officer | 2020 | | 564,923 | | - | | 734,600 | | 328,670 | | - | | 32,926 | | 1,661,119 |
Former Senior Vice President focused on Sustainability | 2019 | | 535,000 | | - | | 679,680 | | 205,440 | | - | | 28,074 | | 1,448,194 |
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Equity Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | |||||||||||||||||||
| RSA | PSU | |||||||||||||||||||||||||
| Gary W. Rollins | 2023 | 1,449,000 | — | 1,628,100 | 802,915 | 2,148,142 | 545,489 | 6,573,646 | ||||||||||||||||||
| Executive Chairman | 2022 | 1,449,000 | — | 3,564,000 | — | 2,173,500 | 573,704 | 7,760,204 | ||||||||||||||||||
| 2021 | 1,400,000 | — | 4,458,000 | — | 2,100,000 | 435,601 | 8,393,601 | |||||||||||||||||||
| Jerry E. Gahlhoff, Jr. | 2023 | 1,000,000 | — | 2,623,955 | 1,294,070 | 1,785,000 | 40,864 | 6,743,889 | ||||||||||||||||||
| President and Chief Operating Officer | 2022 | 690,000 | — | 1,188,000 | — | 759,000 | 42,836 | 2,679,836 | ||||||||||||||||||
| 2021 | 600,000 | — | 1,300,250 | — | 708,000 | 32,155 | 2,640,405 | |||||||||||||||||||
| Kenneth D. Krause | 2023 | 702,000 | — | 1,052,838 | 519,206 | 835,380 | 228,470 | 3,337,894 | ||||||||||||||||||
| Executive Vice President, Chief Financial Officer | 2022 | 212,885 | 930,000 | 2,500,034 | — | 337,500 | 465,624 | 4,446,043 | ||||||||||||||||||
| and Treasurer | 2021 | — | — | — | — | — | — | — | ||||||||||||||||||
| John F. Wilson | 2023 | 400,000 | — | 298,485 | 147,173 | 355,000 | 38,163 | 1,238,821 | ||||||||||||||||||
| Vice Chairman and Assistant to the Chairman | 2022 | 983,250 | — | 1,485,000 | — | 1,229,063 | 43,390 | 3,740,703 | ||||||||||||||||||
| 2021 | 950,000 | — | 2,229,000 | — | 1,187,500 | 39,344 | 4,405,844 | |||||||||||||||||||
| Elizabeth B. Chandler | 2023 | 538,200 | — | 301,199 | 148,528 | 480,344 | 36,019 | 1,504,290 | ||||||||||||||||||
| Vice President, General Counsel and Corporate | 2022 | 517,500 | — | 356,400 | — | 388,125 | 36,913 | 1,298,938 | ||||||||||||||||||
| Secretary | 2021 | 500,000 | — | 835,875 | — | 355,000 | 32,132 | 1,723,007 | ||||||||||||||||||
(1)The amounts reported in this column represent for Mr. Krause, a one-time cash sign-on bonus and a one-time make-whole cash bonus in the amounts of $500,000 and $430,000, respectively, paid pursuant to the terms of the Offer Letter dated July 25, 2022, between the Company and Mr. Krause. (2)The amounts reported in these columns represent the aggregate grant date fair value of restricted stock and performance share units awarded to |
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Name | Perquisites (a) | Company Contribution to 401(k) Plan | Total |
Gary W. Rollins | 422,551 | 13,050 | 435,601 |
Julie K. Bimmerman | - | 12,216 | 12,216 |
John F. Wilson | 26,294 | 13,050 | 39,344 |
Jerry E. Gahlhoff, Jr. | 19,105 | 13,050 | 32,155 |
Elizabeth B. Chandler | 19,082 | 13,050 | 32,132 |
Paul E. Northen | 28,254 | 13,050 | 41,304 |
(a) The amounts shown in this column include:
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Grants of Plan-Based Awards in 2021
The shares of Common Stock disclosed in the table below represent grants of restricted Common Stock under our 2018 Stock Incentive Plan during the fiscal years 2023, 2022 and 2021, as applicable, in accordance with FASB ASC Topic 718. Because these values are determined as of the date of grant and based on certain assumptions, including assumptions regarding the outcome of certain performance and market conditions, actual values received by the NEOs may be lower or higher from the numbers presented here. Please refer to Note 13 – Stockholder Equity to our consolidated financial statements contained in our 2023 Form 10-K for the period ending December 31, 2023, for a discussion of the assumptions used in these computations. When calculating the amounts shown in this table, we have disregarded all estimates of forfeitures. The fair value presented for the PSUs assumes that the 3-year CAGR and the Adjusted EBITDA Margin portions of the award will cliff vest at target levels, and fair value for these portions of the PSUs was calculated by multiplying this target number of shares by the closing price on the grant date. A Monte Carlo simulation was used to value the TSR Modifier portion of the award, since the modifier is subject to a market condition, and this requires certain assumptions to be made. Significant assumptions used in the Monte Carlo valuation included volatility rate of 32% and a risk-free interest rate of 4.38%. If the maximum level of performance is achieved, the grant date fair values of the PSUs would be $1,605,831 for Gary W. Rollins; $2,588,141 for Mr. Gahlhoff; $1,038,413 for Mr. Krause; $294,346 for Mr. Wilson; and $297,057 for Ms. Chandler.
| Perquisites | ||||||||||||||||||||||||||
| Name | Personal Use of Aircraft(a) ($) | Auto Allowance ($) | Use of Executive Dining Room(b) ($) | Executive Physical ($) | Relocation Expenses(c) ($) | Company Contribution to 401(k) Plan ($) | Tax Gross- Ups(d) ($) | Total ($) | ||||||||||||||||||
| Gary W. Rollins | 333,710 | 22,124 | 141,902 | 2,605 | — | 13,725 | 31,423 | 545,489 | ||||||||||||||||||
| Jerry E. Gahlhoff, Jr. | — | 27,139 | — | — | — | 13,725 | — | 40,864 | ||||||||||||||||||
| Kenneth D. Krause | — | 36,674 | — | — | 125,353 | 13,725 | 52,718 | 228,470 | ||||||||||||||||||
| John F. Wilson | — | 21,877 | — | 2,561 | — | 13,725 | — | 38,163 | ||||||||||||||||||
| Elizabeth B. Chandler | — | 19,293 | — | 3,001 | — | 13,725 | — | 36,019 | ||||||||||||||||||
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(3) | Estimated Future Payouts Under Equity Incentive Plan Awards(4) | All Other Awards: Number of Shares of Stock or Units(5) (#) | Grant Date Fair Value of Stock or Units Awards(6) ($) | ||||||||||||||||||||||||||||||||
| Name | Award Type | Grant Date(1) | Committee Approval Date(2) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||
| Gary W. Rollins | RSA | 2/16/2023 | 2/14/2023 | — | — | — | — | — | — | 45,000 | 1,628,100 | ||||||||||||||||||||||||
| PSU | 2/16/2023 | 2/14/2023 | — | — | — | 9,000 | 22,500 | 45,000 | — | 802,915 | |||||||||||||||||||||||||
| Cash Incentive | — | — | 1,358,438 | 1,811,250 | 2,264,063 | — | — | — | — | — | |||||||||||||||||||||||||
| Jerry E. Gahlhoff, Jr. | RSA | 2/16/2023 | 2/14/2023 | — | — | — | — | — | — | 72,525 | 2,623,955 | ||||||||||||||||||||||||
| PSU | 2/16/2023 | 2/14/2023 | — | — | — | 14,505 | 36,264 | 72,525 | — | 1,294,070 | |||||||||||||||||||||||||
| Cash Incentive | — | — | 1,125,000 | 1,500,000 | 1,875,000 | — | — | — | — | — | |||||||||||||||||||||||||
| Kenneth D. Krause | RSA | 2/16/2023 | 2/14/2023 | — | — | — | — | — | — | 29,100 | 1,052,838 | ||||||||||||||||||||||||
| PSU | 2/16/2023 | 2/14/2023 | — | — | — | 5,820 | 14,550 | 29,100 | — | 519,206 | |||||||||||||||||||||||||
| Cash Incentive | — | — | 526,500 | 702,000 | 877,500 | — | — | — | — | — | |||||||||||||||||||||||||
| John F. Wilson | RSA | 2/16/2023 | 2/14/2023 | — | — | — | — | — | — | 8,250 | 298,485 | ||||||||||||||||||||||||
| PSU | 2/16/2023 | 2/14/2023 | — | — | — | 1,650 | 4,125 | 8,250 | — | 147,173 | |||||||||||||||||||||||||
| Cash Incentive | — | — | 225,000 | 300,000 | 375,000 | — | — | — | — | — | |||||||||||||||||||||||||
| Elizabeth B. Chandler | RSA | 2/16/2023 | 2/14/2023 | — | — | — | — | — | — | 8,325 | 301,199 | ||||||||||||||||||||||||
| PSU | 2/16/2023 | 2/14/2023 | — | — | — | 1,665 | 4,164 | 8,325 | — | 148,528 | |||||||||||||||||||||||||
| Cash Incentive | — | — | 302,738 | 403,650 | 504,563 | — | — | — | — | — | |||||||||||||||||||||||||
| | | | | | | | |
| | | | | | All Other | | Grant Date |
| | | | Estimated Possible Payouts Under | | Awards: Number | | Fair Value of |
| | | | Non-Equity Incentive Plan Awards | | of Shares of | | Stock and |
Name | | Grant Date (1) | | Target ($)(2) | | Stock or Units (#) | | Options Awards (3) |
Gary W. Rollins |
| 1/26/2021 | | 2,100,000 |
| 120,000 |
| 4,458,000 |
| | | | | | | | |
Julie K. Bimmerman | | 1/26/2021 | | 94,769 | | 4,500 | | 167,175 |
| | | | | | | | |
John F. Wilson |
| 1/26/2021 | | 1,187,500 |
| 60,000 |
| 2,229,000 |
| | | | | | | | |
Jerry E. Gahlhoff, Jr. |
| 1/26/2021 | | 720,000 |
| 35,000 |
| 1,300,250 |
| | | | | | | | |
Elizabeth B. Chandler |
| 1/26/2021 | | 375,000 |
| 22,500 |
| 835,875 |
| | | | | | | | |
Paul E. Northen (4) | | 1/26/2021 | | 650,000 | | 30,000 | | 1,114,500 |
42
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The Company does not have any outstanding option awards held by the executives named in our Summary Compensation Table.
| | | | |
| | | | |
| | Stock Awards | ||
Name |
| Number of Shares or Units of Stock That Have Not Yet Vested (#)(1) | | Market Value of Shares or Units of Stock That Have Not Yet Vested ($) |
Gary W. Rollins | | 28,350 | (2) | 969,854 |
| | 56,700 | (3) | 1,939,707 |
| | 78,300 | (4) | 2,678,643 |
| | 82,200 | (5) | 2,812,062 |
| | 116,250 | (6) | 3,976,913 |
| | 120,000 | (7) | 4,105,200 |
Julie K. Bimmerman | | 1,575 | (2) | 53,881 |
| | 3,900 | (5) | 133,419 |
| | 7,200 | (6) | 246,312 |
| | 4,500 | (7) | 153,945 |
John F. Wilson | | 13,500 | (2) | 461,835 |
| | 27,000 | (3) | 923,670 |
| | 40,500 | (4) | 1,385,505 |
| | 42,480 | (5) | 1,453,241 |
| | 60,000 | (6) | 2,052,600 |
| | 60,000 | (7) | 2,052,600 |
Jerry E. Gahlhoff, Jr. | | 3,600 | (2) | 123,156 |
| | 8,100 | (3) | 277,101 |
| | 10,800 | (4) | 369,468 |
| | 11,400 | (5) | 389,994 |
| | 16,050 | (6) | 549,071 |
| | 35,000 | (7) | 1,197,350 |
Elizabeth B. Chandler | | 1,800 | (2) | 61,578 |
| | 3,780 | (3) | 129,314 |
| | 8,100 | (4) | 277,101 |
| | 9,600 | (5) | 328,416 |
| | 22,500 | (6) | 769,725 |
| | 22,500 | (7) | 769,725 |
Paul E. Northen | | 5,625 | (2) | 192,431 |
| | 13,500 | (3) | 461,835 |
| | 20,250 | (4) | 692,753 |
| | 21,240 | (5) | 726,620 |
| | 30,000 | (6) | 1,026,300 |
| | 30,000 | (7) | 1,026,300 |
43
| Restricted Stock Awards | Performance Share Unit Awards | |||||||||||||||||||
| Name | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares of Stock That Have Not Vested ($) | Number of Unearned Units That Have Not Vested (#) | Market Value of Unearned Units That Have Not Vested ($) | ||||||||||||||||
| Gary W. Rollins | 26,100 | (1) | 1,139,787 | 45,000(7) | 1,965,150(9) | |||||||||||||||
| 41,100 | (2) | 1,794,837 | ||||||||||||||||||
| 69,750 | (3) | 3,045,983 | ||||||||||||||||||
| 96,000 | (4) | 4,192,320 | ||||||||||||||||||
| 96,000 | (5) | 4,192,320 | ||||||||||||||||||
| 45,000 | (6) | 1,965,150 | ||||||||||||||||||
| Jerry E. Gahlhoff, Jr. | 3,600 | (1) | 157,212 | 72,525(7) | 3,167,167(9) | |||||||||||||||
| 5,700 | (2) | 248,919 | ||||||||||||||||||
| 9,630 | (3) | 420,542 | ||||||||||||||||||
| 28,000 | (4) | 1,222,760 | ||||||||||||||||||
| 32,000 | (5) | 1,397,440 | ||||||||||||||||||
| 72,525 | (6) | 3,167,167 | ||||||||||||||||||
| Kenneth D. Krause | 48,791 | (8) | 2,130,703 | 29,100(7) | 1,270,797(9) | |||||||||||||||
| 29,100 | (6) | 1,270,797 | ||||||||||||||||||
| John F. Wilson | 13,500 | (1) | 589,545 | 8,250(7) | 360,278(9) | |||||||||||||||
| 21,240 | (2) | 927,551 | ||||||||||||||||||
| 36,000 | (3) | 1,572,120 | ||||||||||||||||||
| 48,000 | (4) | 2,096,160 | ||||||||||||||||||
| 40,000 | (5) | 1,746,800 | ||||||||||||||||||
| 8,250 | (6) | 360,278 | ||||||||||||||||||
| Elizabeth B. Chandler | 2,700 | (1) | 117,909 | 8,325(7) | 363,553(9) | |||||||||||||||
| 4,800 | (2) | 209,616 | ||||||||||||||||||
| 13,500 | (3) | 589,545 | ||||||||||||||||||
| 18,000 | (4) | 786,060 | ||||||||||||||||||
| 9,600 | (5) | 419,232 | ||||||||||||||||||
| 8,325 | (6) | 363,553 | ||||||||||||||||||
44
OPTION EXERCISES AND STOCK VESTED
Stock Awards | ||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) |
Gary W. Rollins | 131,700 | 4,824,495 |
Julie K. Bimmerman | 4,305 | 155,770 |
John F. Wilson | 64,620 | 2,368,067 |
Jerry E. Gahlhoff, Jr. | 19,500 | 711,779 |
Elizabeth B. Chandler | 11,490 | 420,404 |
Paul E. Northen | 31,185 | 1,145,806 |
45
| Stock Awards | ||||||||
| Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | ||||||
| Gary W. Rollins | 146,250 | 5,280,350 | ||||||
| Jerry E. Gahlhoff, Jr. | 28,710 | 1,036,896 | ||||||
| Kenneth D. Krause | 24,395 | 891,637 | ||||||
| John F. Wilson | 71,620 | 2,585,498 | ||||||
| Elizabeth B. Chandler | 18,390 | 662,936 | ||||||
PENSION BENEFITS
The Company’s Retirement Income Plan, a trustee defined benefit pension plan, provided monthly benefits upon retirement at or after age 65 to eligible employees. In the second quarter of 2005, the Company’s Board of Directors approved a resolution to cease all future retirement benefit accruals under the Retirement Income Plan effective June 30, 2005. During September 2019, the Company settled its fully funded pension plan through a combination of lump sum payments to participants, payments to the Pension Benefit Guaranty Corporation, and the purchase of a group annuity contract. Retirement income benefits were based on the average of the employee’s compensation from the Company for the five consecutive complete calendar years of highest compensation during the last ten consecutive complete calendar years (“final average compensation”) immediately preceding June 30, 2005. The estimated annual benefit payable at the later of retirement or age 65 for each named executive officer is disclosed in the following table:
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46
NONQUALIFIEDNON-QUALIFIED DEFERRED COMPENSATION
| | | | | |
| Executive | Registrant | Aggregate | Aggregate | Aggregate |
| contributions in last | contributions in last | earnings/(losses) | withdrawals/ | balance at last |
| FY | FY | in last FY | distributions | FYE |
Name | ($)(1) | ($) | ($)(2) | | ($) |
Gary W. Rollins | — | — | 20,465 | — | 128,090 |
Julie K. Bimmerman | — | — | — | — | — |
John F. Wilson | 91,346 | — | 120,111 | — | 2,596,497 |
Jerry E. Gahlhoff, Jr. | — | — | 14,186 | — | 128,858 |
Elizabeth B. Chandler | — | — | — | — | — |
Paul E. Northen | 31,750 | — | 1,668 | — | 33,418 |
| Name | Executive contributions in last FY(1) ($) | Registrant contributions in last FY ($) | Aggregate earnings/(losses) in last FY(2) ($) | Aggregate withdrawals/ distributions | Aggregate balance at last FYE ($) | ||||||||||||
| Gary W. Rollins | - | - | (15,725) | - | 125,496 | ||||||||||||
| Jerry E. Gahlhoff, Jr. | - | - | (15,745) | - | 122,863 | ||||||||||||
| Kenneth D. Krause | - | - | - | - | - | ||||||||||||
| John F. Wilson | 350,631 | - | 202,657 | - | 3,668,192 | ||||||||||||
| Elizabeth B. Chandler | - | - | - | - | - | ||||||||||||
47
which is prior to a Termination Event. Generally, the Deferred Compensation Plan allows a participant to elect to receive distributions under the Deferred Compensation Plan in installments or lump-sum payments.
48
401(k) PLAN
49
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
end of the year, including due to death, disability, retirement, or change in control.
50
| Equity Awards | |||||||||||
| Name | Number of shares underlying unvested stock (#) | Unrealized value of unvested stock ($) | |||||||||
| Gary W. Rollins | Retirement | - | - | ||||||||
| Death | 388,950 | 16,985,447 | |||||||||
| Disability | 212,789 | 9,292,521 | |||||||||
| Change in Control | 388,950 | 16,985,447 | |||||||||
| Jerry E. Gahlhoff, Jr. | Retirement | - | - | ||||||||
| Death | 175,630 | 7,669,762 | |||||||||
| Disability | 79,669 | 3,479,156 | |||||||||
| Change in Control | 175,630 | 7,669,762 | |||||||||
| Kenneth D. Krause | Retirement | - | - | ||||||||
| Death | 87,591 | 3,825,099 | |||||||||
| Disability | 36,092 | 1,576,141 | |||||||||
| Change in Control | 87,591 | 3,825,099 | |||||||||
| John F. Wilson | Retirement | - | - | ||||||||
| Death | 169,740 | 7,412,546 | |||||||||
| Disability | 97,352 | 4,251,402 | |||||||||
| Change in Control | 169,740 | 7,412,546 | |||||||||
| Elizabeth B. Chandler | Retirement | - | - | ||||||||
| Death | 59,700 | 2,607,099 | |||||||||
| Disability | 32,347 | 1,412,624 | |||||||||
| Change in Control | 59,700 | 2,607,099 | |||||||||
| | | | | | |
| | | | Stock Awards | ||
|
| |
| Number of shares |
| |
| | | | underlying unvested stock | | Unrealized value of unvested |
Name | | |
| (#) | | stock ($) |
Gary W. Rollins | | Retirement | | — | | — |
| | Death | | 481,800 | | 16,482,378 |
| | Disability | | 220,958 | | 7,558,985 |
| | Change in Control | | 481,800 | | 16,482,378 |
Julie K. Bimmerman | | Retirement | | — | | — |
| | Death | | 17,175 | | 587,557 |
| | Disability | | 6,436 | | 220,191 |
| | Change in Control | | 17,175 | | 587,557 |
John F. Wilson | | Retirement | | — | | — |
| | Death | | 243,800 | | 8,329,451 |
| | Disability | | 110,858 | | 3,792,464 |
| | Change in Control | | 243,800 | | 8,329,451 |
Jerry E. Gahlhoff, Jr. | | Retirement | | — | | — |
| | Death | | 84,950 | | 2,906,140 |
| | Disability | | 33,253 | | 1,137,601 |
| | Change in Control | | 84,950 | | 2,906,140 |
Elizabeth B. Chandler | | Retirement | | — | | — |
| | Death | | 68,280 | | 2,335,859 |
| | Disability | | 25,452 | | 870,701 |
| | Change in Control | | 68,280 | | 2,335,859 |
Paul E. Northen (1) | | Retirement | | — | | — |
| | Death | | — | | — |
| | Disability | | — | | — |
| | Change in Control | | — | | — |
Accrued Pay and Regular Retirement Benefits. The amounts shown in the table above do not include payments and benefits to the extent they are provided on a non-discriminatory basis to salaried employees generally upon termination of employment. These include:
PAY RATIO DISCLOSURE during fiscal year 2023. Median Employee annual total compensation for 2021 $ 44,843 PEO annual total compensation for 2021 $ 8,393,601 Ratio of PEO to Median Employee compensation for 2021 187:1•Non-Qualified Deferred CompensationChange in Control or Severance. The Company does not have any severance for its executive officers. However, upon the occurrence of a “Change in Control,” as determined by the Board of Directors, all unvested restricted stock shall immediately vest.5153Pay Ratio DisclosureAs required by the SEC rules, we are providing the ratio of our median employee’s annual total compensation (the median of the total compensation of all our employees, excluding our principal executive officer) to the total annual compensation of Mr. Gary W. Rollins,Jerry E. Gahlhoff, Jr., who served as our principal executive officer (“PEO”).The purpose of the required disclosure is to provide a measure of the equitability of pay within the organization. We believe our compensation philosophy and process yield an equitable result.Median Employee annual total compensation for 2023 $ 57,200 PEO annual total compensation for 2023 $ 6,743,889 Ratio of PEO to Median Employee compensation for 2023 118:1
The median employee was identified in 2020 using the methodology described below. The Company is using the same median employee in the presentation above because the Company does not believe that there has been a change in its employee population or employee compensation arrangements that would materially impact the pay ratio disclosure.
local equivalent.
| Value of Initial Fixed $100 Investment Based on: | ||||||||||||||||||||||||||
| Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(1) | Average Compensation Actually Paid to Non-PEO NEOs ($)(2) | Total Shareholder Return ($)(3) | Peer Group Total Shareholder Return ($)(4) | Net Income ($)(5) | Pre-Tax Profit ($)(6) | ||||||||||||||||||
| 2023 | 6,743,889 | 9,226,265 | 3,163,663 | 4,851,471 | 207 | 194 | 434,957,000 | 586,257,000 | ||||||||||||||||||
| 2022 | 7,760,204 | 9,213,035 | 2,629,526 | 2,960,216 | 171 | 151 | 368,599,000 | 498,917,000 | ||||||||||||||||||
| 2021 | 8,393,601 | 6,163,785 | 2,220,844 | 905,146 | 158 | 159 | 356,565,000 | 482,485,000 | ||||||||||||||||||
| 2020 | 5,475,195 | 14,029,693 | 2,094,217 | 5,109,905 | 179 | 121 | 266,756,000 | 362,716,000 | ||||||||||||||||||
| Year | Non-PEO NEOs | |||||||
| 2023 | Gary W. Rollins, Kenneth D. Krause, John F. Wilson and Elizabeth B. Chandler | |||||||
| 2022 | Jerry E. Gahlhoff, Jr., Kenneth D. Krause, Julie K. Bimmerman, John F. Wilson and Elizabeth B. Chandler | |||||||
| 2021 | Jerry E. Gahlhoff, Jr., P. Edward Northen, Julie K. Bimmerman, John F. Wilson and Elizabeth B. Chandler | |||||||
| 2020 | Jerry E. Gahlhoff, Jr., Randall R. Rollins, P. Edward Northen, John F. Wilson and Elizabeth B. Chandler | |||||||
| 2023 | 2022 | 2021 | 2020 | |||||||||||||||||||||||
| PEO ($) | Average non-PEO NEOs ($) | PEO ($) | Average non-PEO NEOs ($) | PEO ($) | Average non-PEO NEOs ($) | PEO ($) | Average non-PEO NEOs ($) | |||||||||||||||||||
| Summary Compensation Table Total | 6,743,889 | 3,163,663 | 7,760,204 | 2,629,526 | 8,393,601 | 2,220,844 | 5,475,195 | 2,094,217 | ||||||||||||||||||
Subtraction of Stock Awards | (3,918,025) | (1,224,611) | (3,564,000) | (1,224,687) | (4,458,000) | (1,129,360) | (2,846,575) | (1,143,772) | ||||||||||||||||||
Addition of Year-End Equity Value | 5,735,845 | 1,792,816 | 4,384,800 | 1,426,419 | 4,105,200 | 834,724 | 4,541,888 | 1,004,490 | ||||||||||||||||||
Change in Fair Value of Stock Awards granted in Prior Year | 562,771 | 1,042,907 | 827,616 | 147,338 | (1,758,348) | (283,712) | 6,399,417 | 1,249,230 | ||||||||||||||||||
| Addition of Fair Value Stock Awards that were granted and vested in the same FY | — | — | — | — | — | — | — | 768,180 | ||||||||||||||||||
Change in Fair Value of Stock Awards granted during any prior FY that met the vesting conditions as of the end of the applicable FY | (11,764) | (24,458) | (399,921) | (62,357) | (321,024) | (64,051) | 308,943 | 1,096,205 | ||||||||||||||||||
| Subtraction of Stock Awards that failed to meet the vesting conditions | — | — | — | — | — | (708,066) | — | — | ||||||||||||||||||
| Subtraction of Aggregate Change in Actuarial Present Value of Accumulated Benefit Under Defined Benefit and Pension | — | — | — | — | — | — | (10,385) | (7,801) | ||||||||||||||||||
| Application of dividends or other earnings paid during applicable FY prior to vesting date | 113,549 | 101,155 | 204,336 | 43,977 | 202,356 | 34,767 | 161,210 | 49,157 | ||||||||||||||||||
| Compensation Actually Paid | 9,226,265 | 4,851,471 | 9,213,035 | 2,960,216 | 6,163,785 | 905,146 | 14,029,693 | 5,109,905 | ||||||||||||||||||
| Revenue | ||
| Pre-Tax Profit | ||
| Stock Price | ||
| Adjusted EBITDA | ||
information obtained from them and from our records. Based on our knowledge of stock transactions, our review of copies of reports filed under Section 16(a)information available to us during fiscal year 2023, and written representations furnishedmade to us by the reporting persons, we believe that all persons subject to the reporting requirements of Section 16(a) filed the required reports onwere made in a timely basis during the fiscal year ended December 31, 2021, with the exceptionmanner other than one Form 4 for each of a Form 3Gary W. Rollins, John F. Wilson, Jerry E. Gahlhoff, Jr., Kenneth D. Krause, Elizabeth B. Chandler and Traci Hornfeck, which was inadvertentlywere filed one day late on January 14, 2021 on behalf of Patrick J. Gunning.
52
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information concerning our equity compensation plans as of December 31, 2021:
Number of Securities | |||
Remaining Available for | |||
Number of Securities To | Weighted Average | Future Issuance Under | |
Be Issued Upon Exercise | Exercise Price of | Equity Compensation | |
of Outstanding Options, | Outstanding Options, | Plans (Excluding Securities | |
Warrants and Rights | Warrants and Rights | Reflected in Column (1) | |
Plan Category | (A) | (B) | (C) |
Equity compensation plans approved by security holders | 2,716,602 | 6,618,640 | |
Equity compensation plans not approved by security holders | — | — | — |
Total | 2,716,602 | — | 6,618,640 |
53
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
| | | | |
| | | | |
|
| Amount Beneficially |
| Percent of Outstanding |
Name and Address of Beneficial Owner | | Owned (1) | | Shares |
5% Stockholders: | | | | |
Gary W. Rollins, Chairman and Chief Executive Officer |
| 254,075,293 | (2) | 51.6% |
The Vanguard Group |
| 25,101,858 | (3) | 5.1% |
Named Executive Officers: | | | | |
Julie M. Bimmerman | | 57,890 | (4) | ** |
John F. Wilson | | 836,580 | (5) | ** |
Jerry E. Gahlhoff, Jr. |
| 180,589 | (6) | ** |
Elizabeth B. Chandler |
| 102,137 | (7) | ** |
Paul E. Northen |
| 54,386 | (8) | ** |
Directors and Director Nominees: | | | | |
Susan R. Bell | | 150 | | ** |
Donald P. Carson | | - | | ** |
Patrick J. Gunning | | - | | ** |
Thomas J. Lawley, MD | | 10,125 | | ** |
Gregory B. Morrison | | - | | ** |
Jerry W. Nix | | - | | ** |
Pamela R. Rollins | | 6,068,993 | (9) | 1.2% |
Louise S. Sams | | - | | ** |
All Directors and Executive Officers as a group (14 persons) |
| 261,267,330 | (10) | 53.1% |
54
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|
|
| Name and Address of Beneficial Owner | Amount Beneficially Owned(1) | Percent of Outstanding Shares | |||||||||
| 5% Shareholders: | |||||||||||
| The Significant Shareholder Group | 204,184,624 | (2) | 42.14 | % | |||||||
| Gary W. Rollins Voting Trust U/A dated September 14, 1994 | 180,238,857 | (3) | 37.20 | % | |||||||
| R. Randall Rollins Voting Trust U/A dated August 25, 1994 | 180,238,857 | (4) | 37.20 | % | |||||||
| LOR, Inc. | 171,507,258 | (5) | 35.40 | % | |||||||
| The Vanguard Group | 32,226,294 | (6) | 6.65 | % | |||||||
| Blackrock, Inc. | 28,515,437 | (7) | 5.89 | % | |||||||
| Named Executive Officers: | |||||||||||
| Gary W. Rollins | 15,404,743 | (8) | 3.18 | % | |||||||
| Jerry E. Gahlhoff, Jr. | 302,130 | (9) | ** | ||||||||
| Kenneth D. Krause | 104,078 | (10) | ** | ||||||||
| John F. Wilson | 725,731 | (11) | ** | ||||||||
| Elizabeth B. Chandler | 99,709 | (12) | ** | ||||||||
| Directors and Director Nominees: | |||||||||||
| Susan R. Bell | 3,859 | ** | |||||||||
| Donald P. Carson | 3,709 | ** | |||||||||
| Patrick J. Gunning | 3,709 | ** | |||||||||
| P. Russell Hardin | 7,927 | ** | |||||||||
| Dale E. Jones | - | ** | |||||||||
| Gregory B. Morrison | 3,709 | ** | |||||||||
| Jerry W. Nix | 3,709 | ** | |||||||||
| Pamela R. Rollins | 6,136,686 | (13) | 1.27 | % | |||||||
| Louise S. Sams | 3,709 | ** | |||||||||
| All Directors, Director Nominees and Named Executive Officers as a group (14 persons) | 22,709,355 | (14) | 4.69 | % | |||||||
55
limited liability company (LOR, Inc. is the managing member of RCTLOR, LLC). The reporting person disclaims beneficial ownership of these shares except to the extent of the reporting person’s pecuniary interest.
A group that includes the Company’s Chairman and Chief Executive Officer, Gary W. Rollins, and certain companies under his control (the “Controlled
Transactions with RPC, Inc.
The Company provides certain administrative services to RPC, Inc. (“RPC”) (a company of which Mr. Gary Rollins is also Chairman,
Transactionsentered into an underwriting agreement (the “
Purchase (“
During the year ended 2021,several underwriters named in Schedule I thereto (the “
Pilot Sharing Agreement
During the year ended 2021,1933, as amended.
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Administrative Services Agreement
The Company also provides certain administrative services to LOR and also rents office, hangerprovides for customary indemnification by each of the Company, LOR and storage space to LOR. Charges to LOR (or corporations which are subsidiaries of LOR) for rentthe Underwriters against certain liabilities.
Lear Lease Agreement
Administrative Arrangements
Agreement
Legal Fees
Our Amended and Restated Bylaws require that the Company pay reasonable legal fees and expenses on behalf of our directors and officers that are named in certain legal proceedings. Pursuant to that provision, in connection with the SEC Investigation described in Note 13 – Commitments and Contingencies to our consolidated financial statements contained in our 2021 Form 10-K for the period ending December 31, 2021, during the year ended December 31, 2021, the Company paid legal expenses on behalf of certain current and former directors and officers in the aggregate amount of $1.3 million.
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STOCKHOLDERSHAREHOLDER PROPOSALS
Shareholders.
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OTHER MATTERS
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Proxy Statement contains forward-looking statements. Forward-looking statements withininclude statements regarding our expectations, beliefs, intentions or strategies regarding the meaningfuture, including with respect to business, financial, operational, compensation and environmental, social/and or governance matters; statements of the Private Securities Litigation Reform Actassumptions underlying any of 1995. Allthe foregoing statements; and all other statements other thanthat are not statements of historical facts, containedincluding but not limited to those set forth above under "Updated Strategic Objectives" in this Proxy Statement, including statements regarding future operations are forward-looking statements.the Letter from our Executive Chair of the Board. In some cases, forward- looking statements may be identified by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “expect,” “objective,” “plan,” “potential,” “seek,” “grow,” “target,” “if,” or the negative of these terms and similar expressions intended to identify forward-looking statements. Forward-looking statements are made subject to the safe harbor provisions of the federal securities laws pursuant to Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements primarily on our current opinions, expectations, beliefs, plans, objectives, assumptions and projections about future events and trends that we believe may affect us. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Proxy Statement may not occur and actual results may differ materially and adversely from those anticipated or implied in the forward-looking statements. You should read this Proxy Statement with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. In addition, these forward-looking statements are subject to a number of risks, uncertainties and assumptions relating to our business, including the effect of broader economic and market conditions on our customers, our ability to execute our business and growth strategies and to achieve sustainability goals, the impact of the global supply environment and other macroeconomic conditions, and all those described in the section titled “Risk Factors” set forth in Part I, Item 1A, and in the rest of our 2021 Annual Report2023 Form 10-K and in our other SEC filings. Forward-looking statements speak only as of the date of this Proxy Statement, and you should not put undue reliance on any forward-looking statements. We assume no obligation to publicly update or revise any forward-looking statements because of new information, future events, changes in assumptions or otherwise, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. While we believe that such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.5966
2022 EMPLOYEE STOCK PURCHASE PLAN1.PurposeThe purpose of the Rollins, Inc. 2022 Employee Stock Purchase Plan (the “Plan”) is to provide Eligible Employees of Rollins, Inc. (the “Company”) and its Designated Subsidiaries with the opportunity to purchase shares of Stock through payroll deductions. The Company believes that participation in the Plan will provide Eligible Employees with a convenient means of acquiring an equity interest through payroll deductions, enhance Eligible Employees’ sense of participation in the Company, increase Eligible Employees’ interest in the success of the Company, will provide an additional incentive for Eligible Employees to remain in the employ of the Company or such Designated Subsidiary. The Company intends that the Plan constitute an “employee stock purchase plan” within the meaning of Code Section 423 and, further, intends that any ambiguity in the Plan or any related Offering be resolved to effect such intent.This Plan is first effective as of the date on which the Plan is approved by the shareholders of the Company; provided, however, that such shareholder approval occurs on a date no later than twelve (12) months following the date the Plan is approved by the Board of Directors of the Company. Notwithstanding the foregoing, no Offering under the Plan shall commence until the shares of Stock to be offered under the Plan have been registered with the Securities and Exchange Commission on a Form S-8.3.DefinitionsAdministrator for each Participant for each Offering Period to record the payroll deductions made on his or her behalf to purchase Stock under the Plan.duly authorized delegate. 3.6Designated Subsidiarymeans, with respect to a particular Offering Period, a Subsidiary Corporation thatthe Administrator has designated as eligible to participate in the Plan. Unless otherwise determined by the Administrator with respect to a particular Offering, each U.S. Subsidiary Corporation of the Company that is considered a corporation for U.S. tax purposes shall be a Designated Subsidiary.3.7Eligible Employeemeans each employee of the Company or a Designated Subsidiary Corporation exceptan employee who would own (immediately after the grant of an option under the Plan) stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or of its parent or Subsidiary Corporation based on the rules set forth in Code Sections 423(b)(3) and 424. The Administrator may, prior to the Enrollment Period for an offering under the Plan and on a uniform and nondiscriminatory basis, determine that the Eligible Employees with respect to such Offering will not include:(a)an employee who has been employed less than 2 years (within the meaning of Code Section 423(b)(4)(A)) (or such lesser period of time as may be determined by the Administrator);A-1
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In addition, an employee who is a member of a collective bargaining unit that has elected, on behalf of its members, not to participate in the Plan in accordance with the requirements of Code Section 423, shall not be treated as an Eligible Employee while such election remains in effect.
elect to participate in the Plan for such Offering Period. The Administrator shall establish the timing and duration of each Enrollment Period.
New York Stock Exchange on such date, or, if there are no reported transactions on such date, on the immediately preceding date on which a transaction is reported.
made pursuant to an offering under the Plan. Unless otherwise established by the Administrator prior to the beginning of an Offering Period, all Offering Periods will be of six months’ duration. In addition, unless otherwise provided by the Administrator with respect to an Offering, if the first day of an Offering Period is not a business day, then the Offering Period shall begin on the next following business day; and if the last day of an Offering Period is not a business day, then the Offering Period shall end on the most recent business day before such day. In no event shall any Offering Period exceed 27 months.
3.12 Participantmeans for each Offering Period an Eligible Employee who has satisfied the requirements set forth in Section 7 to participate in such Offering Period.
Subsidiary, whichever employs such Participant as of such date.
form which an Eligible Employee shall be required to properly complete and timely file with the Administrator before the end of an Enrollment Period in order to participate in the Plan for the related Offering Period. The Administrator shall establish rules and procedures relating to the means by which Eligible Employees may submit Payroll Deductions (which may include online or electronic enrollment) and the times during which Payroll Deduction Authorizations must be submitted.
from time to time.
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a Trading Day, the last trading day immediately preceding such date).
be the lesser of (a) ninety percent (90%) of the Fair Market Value of a share of Stock on the first day of the Offering Period or (b) ninety percent (90%) of the Fair Market Value of a share of Stock on the Purchase Date. If such percentage results in a fraction of one cent, the Purchase Price shall be increased to the next highest full cent. The Administrator may adjust the Purchase Price in its sole discretion with respect to an Offering, provided that the Purchase Price shall not be less than the lesser of (a) eighty-five percent (85%) of the Fair Market Value of a share of Stock on the first day of the Offering Period or (b) eighty-five percent (85%) of the Fair Market Value of a share of Stock on the Purchase Date. In no event shall the Purchase Price be less than the par value of a share of stock.
with the Company in which each corporation in such chain (except for the last corporation in such chain) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, as determined pursuant to Section 424(f).
Offerings to purchase shares of Stock shall be made to Participants in accordance with the Plan from time to time at the discretion of the Administrator. The Administrator will determine the terms of each Offering, provided that each Offering shall satisfy the requirements of Code Section 423(b)(5).
Subject to adjustment as provided in Section 15, a maximum of 1,000,000 shares of Stock shall be reserved for purchase from the Company upon the exercise of options granted under Section 9 of the Plan. Any shares of Stock which are subject to options granted as of the first day of an Offering Period but which are not purchased on the related Purchase Date shall again become available under the Plan. Shares purchased under the Plan will be, at the Company’s discretion, either newly issued shares, shares already owned by the Company (treasury stock), or shares purchased for Participants in the open market, or any combination of the foregoing. For each Offering, options will be granted to all Eligible Employees of any corporation whose employees are granted any of such options by reason of their employment by that corporation in such Offering.
The Administrator shall be responsible for the administration of the Plan and shall have the power in connection with such administration to interpret the Plan, to establish rules and procedures it deems appropriate to administer the Plan, and to take such other action in connection with such administration as it deems necessary or equitable under the circumstances. The Administrator also shall have the power to delegate the duty to perform such administrative functions as the Administrator deems appropriate under the circumstances and any action taken in accordance with such delegation shall be considered the action of the Administrator. Any person or committee to whom the duty to perform an administrative function is delegated shall act on behalf of and shall be responsible to the Administrator for such function. Any action or inaction by or on behalf of the Administrator under the Plan shall be final and binding on each Eligible Employee, each Participant and on each other person who makes a claim under the Plan based on the rights, if any, of any such Eligible Employee or Participant under the Plan.
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Deduction Authorization to the Administrator on or before the last day of the Enrollment Period for an Offering. Unless otherwise provided by the Administrator, only employees who are Eligible Employees on the first day of an Enrollment Period, and whose employment as an Eligible Employee continues until the start of the related Offering, may participate in the Offering. Employment as an Eligible Employee shall not be treated as interrupted by a transfer directly between the Company and any Designated Subsidiary which is participating in the Offering or between one Designated Subsidiary participating in the Offering and another Designated Subsidiary participating in the same Offering.
The Administrator may establish uniform rules regarding (i) the types of compensation from which deductions may be taken, (ii) limitations on the dollar amounts (or percentages of compensation) that may be withheld from a Participant’s compensation, and (iii) required minimum contribution levels, provided that all such limitations shall satisfy the requirements of Code Section 423(b)(5) with respect to an Offering.
to his or her Account as of the pay day as of which the deduction is made. All payroll deductions shall be held by the Company, by the Company’s agent or by one, or more than one, Designated Subsidiary (as determined by the Administrator) as part of the general assets of the Company or any such Designated Subsidiary, and each Participant’s right to the payroll deductions credited to his or her Account shall be those of a general and unsecured creditor. No interest or earnings shall be credited to a Participant’s Account. The Company, the Company’s agent or such Designated Subsidiary shall have the right to withhold on payroll deductions to the extent such person deems necessary or appropriate to satisfy applicable tax laws.
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A Participant may elect to withdraw the entire balance credited to his or her Account for an Offering Period by filing an amended Payroll Deduction Authorization with the Administrator on or before the Purchase Date for such period. If a Participant makes such a withdrawal election, such balance shall be paid to him or her in cash (without interest) as soon as practicable after such amended Payroll Deduction Authorization is filed, and no further payroll deductions shall be made on his or her behalf for the remainder of such Offering Period. If a Participant dies on or before a Purchase Date and the Administrator has timely notice of his or her death, the Administrator shall deem such Participant to have elected to withdraw the entire balance credited to his or her Account under this Section 12.
If a Participant’s employment as an Eligible Employee terminates on or before the Purchase Date for an Offering Period for any reason whatsoever, his or her Account shall be distributed in cash as soon as practicable as if he or she had elected to withdraw his or her Account under Section 12 immediately before the date his or her employment terminated. However, if a Participant is transferred directly between the Company and a Designated Subsidiary or between one Designated Subsidiary and another Designated Subsidiary while he or she has a Payroll Deduction Authorization in effect, his or her employment shall not be treated as terminated merely by reason of such transfer and any such Payroll Deduction Authorization shall (subject to all the terms and conditions of the Plan) remain in effect after such transfer.
Neither the balance credited to a Participant’s Account nor any rights to the exercise of an option or to receive shares of Stock under the Plan may be assigned, encumbered, alienated, transferred, pledged, or otherwise disposed of in any way by a Participant during his or her lifetime or by any other person during his or her lifetime, and any attempt to do so shall be without effect; provided, however, that the Administrator in its absolute discretion may treat any such action as an election by a Participant to withdraw the balance credited to his or her Account in accordance with Section 12.
The number of shares of Stock covered by outstanding options granted pursuant to the Plan and the related Purchase Price and the number of shares of Stock available under the Plan shall be adjusted by the Board in an equitable manner to reflect any change in the capitalization of the Company, including, but not limited to such changes as dividends paid in the form of Stock or Stock splits. Furthermore, the Board shall adjust (in a manner which satisfies the requirements of Code Section 424(a)) the number of shares of Stock available under the Plan and the number of shares of Stock covered
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by options granted under the Plan and the related option Prices in the event of any corporate transaction described in Code Section 424(a). Any such adjustment under this Section 15 may create fractional shares of Stock or a right to acquire a fractional share. An adjustment made under this Section 15 by the Board shall be conclusive and binding on all affected persons.
Subject to the requirements of Code Section 423, the Administrator may, in its sole and absolute discretion, create special Offering Periods for individuals who become Eligible Employees solely in connection with the acquisition of a majority interest in another company or business by a stock acquisition, merger, reorganization or purchase of assets and, notwithstanding anything in the Plan to the contrary, may provide for special Purchase Dates for Participants who will cease to be Eligible Employees solely in connection with the disposition of all or a portion of any Designated Subsidiary or a portion of the Company, which Offering Periods and Purchase Dates granted pursuant thereto shall, notwithstanding anything stated herein, be subject to such terms and conditions as the Administrator considers appropriate under the circumstances. To the extent permissible under Code Section 423, in determining whether an individual is an Eligible Employee, the Administrator may, in its sole discretion, include service with a corporation, prior to its becoming a Subsidiary, or with a trade or business prior to its acquisition by the Company or a Subsidiary.
This Plan may be amended by the Board from time to time to the extent that the Board deems necessary or appropriate in light of, and consistent with, Code Section 423 and the laws of the State of Delaware, and any such amendment shall be subject to the approval of the Company’s shareholders to the extent such approval is required under Code Section 423 or the laws of the State of Delaware or to the extent such approval is required under applicable law or stock exchange listing requirements. Without limiting the foregoing, any amendment to increase the number of shares that may be purchased under the Plan (other than an increase merely reflecting an adjustment pursuant to Section 15) shall be effective only if approved by the Company’s shareholders. The Board also may terminate the Plan or any Offering made under the Plan at any time.
All Payroll Deduction Authorizations and other communications from a Participant to the Administrator under, or in connection with, the Plan shall be deemed to have been filed with the Administrator when actually received in the form specified by the Administrator at the location, or by the person, designated by the Administrator for the receipt of such Payroll Deduction Authorizations and communications.
No offer under the Plan shall constitute an offer of employment, and no acceptance of an offer under the Plan shall constitute an employment agreement or in any way affect the right of the Company or a Designated Subsidiary to terminate an Eligible Employee. Any such offer or acceptance shall have no bearing whatsoever on the employment relationship between any Eligible Employee and the Company or any subsidiary of the Company, including a Designated Subsidiary. Finally, no Eligible Employee shall be induced to participate in the Plan by the expectation of employment or continued employment.
The headings to sections in the Plan have been included for convenience of reference only. Except as otherwise expressly indicated, all references to sections in the Plan shall be to sections of the Plan. This Plan shall be interpreted and construed in accordance with the laws of the State of Delaware.
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