SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant /x/
Filed by a Party other than the Registrant /_/

Check the appropriate box:

/_/ Preliminary Proxy Statement
/x/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

MATLACK SYSTEMS, INC.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)

________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

/_/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
/_/ $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

_____________________________________________________________________________

2) Aggregate number of securities to which transaction applies:

_____________________________________________________________________________

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*

_____________________________________________________________________________

4) Proposed maximum aggregate value of transaction:

_____________________________________________________________________________

/_/ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.

1) Amount previously paid: _________________________________________________

2) Form, Schedule or Registration No. ______________________________________

3) Filing party: ___________________________________________________________

4) Date filed: _____________________________________________________________

___________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.

MATLACK SYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 30, 1997

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

TO THE HOLDERS OF COMMON STOCK:

PLEASE TAKE NOTICE that the 1997 Annual Meeting of Shareholders of MATLACK
SYSTEMS, INC., a Delaware corporation, will be held on the First Floor, 1209
Orange Street, Wilmington, Delaware, on Thursday, January 30, 1997, at 9:30 A.M.
(Eastern Standard Time) for the following purposes:

1. To elect two Class II Directors to the Board of Directors;

2. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournment thereof.

The Proxy Statement dated December 20, 1996 is attached.

The Board of Directors has fixed the close of business on December 13, 1996
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting.

You are cordially invited to attend the Annual Meeting. If you cannot be
present in person, please sign and date the enclosed proxy and promptly mail it
in the enclosed return envelope which requires no United States postage. Any
shareholder giving a proxy has the right to revoke it any time before it is
voted.

BY ORDER OF THE BOARD OF DIRECTORS
MICHAEL B. KINNARD, Secretary

Dated: Wilmington, Delaware
December 20, 1996

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

YOU ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN
IT IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO UNITED STATES POSTAGE.

PROXY STATEMENT

MATLACK SYSTEMS, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 30, 1997

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

The information concerning the enclosed proxy and the matters to be acted
upon at the Annual Meeting of Shareholders to be held on January 30, 1997 (the
"Annual Meeting") is submitted to the shareholders for their information.

SOLICITATION OF AND POWER TO REVOKE PROXY

This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of MATLACK SYSTEMS, INC., a Delaware
corporation (the "Company"). Proxies solicited hereby are to be voted at the
Annual Meeting or at any adjournment thereof.

The mailing address for the Company's principal executive office is P.O.
Box 8790, Wilmington, Delaware 19899. This Proxy Statement and the form of proxy
were first sent to the Company's shareholders on December 20, 1996.

A form of proxy is enclosed. Each proxy submitted will be voted as directed
but, if not otherwise specified, proxies solicited by the Board of Directors of
the Company will be voted in favor of the candidates for election to the Board
of Directors as Class II Directors.

The solicitation of proxies will be by mail. It may be that further
solicitation of proxies will be made by telephone, telegram or interview with
some shareholders of the Company, following the original solicitation. All such
further solicitations will be made by regular officers and employees of the
Company, who will not be additionally compensated therefor, or its Transfer
Agent. The Company will bear the entire cost of all such solicitations, which
will be nominal and include reimbursements paid to brokerage firms and others
for their expenses in forwarding solicitation material regarding the meeting to
beneficial owners.

Each shareholder has the right to revoke his or her proxy at any time
before it is voted. A proxy may be revoked by filing with the Secretary of the
Company a written revocation or a duly executed proxy bearing a later date or by
voting in person at the Annual Meeting. Any shareholder may attend the Annual
Meeting and vote in person, whether or not such shareholder has previously given
a proxy.

ELECTION OF DIRECTORS

Two individuals are to be elected at the Annual Meeting to serve as Class
II Directors for a term of three years each, and until the election and
qualification of their successors. Four other individuals serve as directors but
are not standing for re-election because their terms as directors extend past
the Annual Meeting pursuant to provisions of the Company's Certificate of
Incorporation which provide for the election of directors for staggered terms,
with each director serving a three year term.

Unless a shareholder WITHHOLDS AUTHORITY, the proxy holders will vote FOR
the election of the persons named below to three year terms as directors.
Although the Board of Directors does not contemplate the possibility, in the
event a nominee is not a candidate or is unable to serve as a director at the
time of the election, unless the shareholder WITHHOLDS AUTHORITY, the proxies
will be voted for a nominee designated by the present Board of Directors to fill
such vacancy.

The name and age of each of the nominees, his principal occupation, the
period during which he has served as a director, together with the number of
shares of Common Stock beneficially owned by him, directly or indirectly, and
the percentage of outstanding shares that ownership represents, all as of the
close of business October 31, 1996 (according to information received by the
Company), are set forth below. Similar information is also provided for those
directors whose terms expire in future years.

SHARES OF PERCENT OF
NAMES OF PRINCIPAL SERVICE AS COMMON OUTSTANDING
NOMINEES OCCUPATION(1) DIRECTOR AGE STOCK(2) SHARES
- ---------------------------- -------------------------------------- --------------- ----------- ---------- ---------------

Class II (Term Expires 2000)

John W. Rollins, Jr. Chairman of the Board; President, 1988 to date 54 221,325(4) 2.5%
Chief Operating Officer and Director,
Rollins Truck Leasing Corp.*; Senior
Vice Chairman of the Board, Rollins
Environmental Services, Inc.** (3)

William B. Philipbar, Jr. Retired; Former President and Chief 1993 to date 71 1,606 --
Executive Officer, Rollins
Environmental Services, Inc.**

SHARES OF PERCENT OF
NAMES OF DIRECTORS WHOSE PRINCIPAL SERVICE AS COMMON OUTSTANDING
TERMS HAVE NOT EXPIRED OCCUPATION(1) DIRECTOR AGE STOCK(2) SHARES
- ---------------------------- -------------------------------------- --------------- ----------- ---------- ---------------
Class I (Term Expires 1999)

Patrick J. Bagley Vice President - Finance and 1988 to date 49 10,015 0.1%
Treasurer; Vice President - Finance
and Treasurer, Rollins Truck Leasing
Corp.*

Gerard J. Trippitelli President and Chief Executive 1988 to date 53 69,240 0.8%
Officer(3)

Class III (Term Expires 1998)

John W. Rollins Chairman of the Board and Chief 1988 to date 80 1,003,684(5) 11.5%
Executive Officer, Rollins Truck
Leasing Corp.*; Chairman of the Board
and Chief Executive Officer, Rollins
Environmental Services, Inc.**,
Chairman of the Board, Dover Downs
Entertainment, Inc.*** (3)

Henry B. Tippie Chairman of the Executive Committee; 1988 to date 69 300,000(6) 3.4%
Chairman of the Executive Committee
and Vice Chairman of the Board,
Rollins Truck Leasing Corp.*; Chairman
of the Executive Committee and
Director, Rollins Environmental
Services, Inc.**; Chairman of the
Board and Chief Executive Officer,
Tippie Services, Inc. (Management
Services); Vice Chairman of the Board,
Dover Downs Entertainment, Inc. ***

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

*Rollins Truck Leasing Corp. is engaged in the business of truck leasing.
**Rollins Environmental Services, Inc. is engaged in the business of industrial
waste disposal.
***Dover Downs Entertainment, Inc. operates a multi-purpose gaming and
entertainment complex.

(1) Except as noted, the nominees and other directors have held the positions of
responsibility set out in the above column (but not necessarily their
present titles) for more than five years. In addition to the directorships
listed in the above column, the following individuals also serve on the
board of directors of the following companies: John W. Rollins, Rollins,
Inc., RPC Energy Services, Inc., and FPA Corp.; John W. Rollins, Jr., Dover
Downs Entertainment, Inc.; Henry B. Tippie, Rollins, Inc. and RPC Energy
Services, Inc.; William B. Philipbar, Jr., Rollins Truck Leasing Corp. and
Rollins Environmental Services, Inc.; Patrick J. Bagley, Rollins
Environmental Services, Inc. and Dover Downs Entertainment, Inc.
(2) All shares are owned directly and of record.
(3) John W. Rollins is the father of John W. Rollins, Jr. Mr. Trippitelli is
married to a first cousin of Eugene C. Bonacci, a Named Executive of the
Company.
(4) Does not include 62,998* shares held as Co-Trustee and 3,000* shares held by
his wife.
(5) Does not include 24,268* shares held by his wife and 15,687* shares held by
his wife as Custodian for his minor children.
(6) Does not include 163,821* shares held as Co-Trustee; 5,500* shares held as
Trustee; 5,500* shares owned by his wife; 4,500* shares held by his wife as
Trustee for his children; and 27,000* shares owned by a partnership over
which Mr. Tippie has sole voting power.

- ------------------
* The Messrs. Rollins and Tippie disclaim any beneficial interest in these
holdings.

CAPITAL STOCK

The outstanding capital stock of the Company on December 13, 1996 consisted
of 8,758,846 shares of Common Stock, par value $l.00 per share. Holders of
Common Stock are entitled to one vote (non-cumulative) for each share of such
stock registered in their respective names at the close of business on December
13, 1996, the record date for determining shares entitled to notice of and to
vote at the Annual Meeting or any adjournment thereof.

The holders of a majority of the issued and outstanding Common Stock
constitute a quorum at any meeting of shareholders and the affirmative vote of a
majority of the shares present is required for shareholder approval, except for
certain proposals to amend the Certificate of Incorporation which require the
affirmative vote of the holders of a majority of all outstanding Common Stock
for approval. Other amendments to the Certificate of Incorporation concerning:
(a) special meetings of shareholders; (b) amendments to the by-laws; (c)
provisions relating to the Board of Directors; and (d) certain business
transactions, when not approved by a majority of the Board of Directors, require
the affirmative vote of 75% of the shares then entitled to be voted for
approval.

As of October 31, 1996, four persons were known to the Company to own
beneficially more than five percent (5%) of the outstanding shares of Common
Stock of the Company. The name and address of each such person together with the
number of shares so owned and the percentage of outstanding shares that
ownership represents and information as to Common Stock ownership of the Named
Executives identified in the Summary Compensation Table and the officers and
directors of the Company as a group (according to information received by the
Company) are set forth below:

NUMBER OF SHARES
AND NATURE OF
TITLE OF BENEFICIAL PERCENT OF
CLASS NAMES AND ADDRESSES OF BENEFICIAL OWNERS OWNERSHIP(1) CLASS
- ----------- -------------------------------------------- --------------------- -------------

Common John W. Rollins 1,003,684 11.5%
One Rollins Plaza
Wilmington, DE 19803

Common Dimensional Fund Advisors, Inc. 548,867(2) 6.3%
1299 Ocean Avenue, Suite 1100
Santa Monica, CA 90401

Common Alpine Capital, L.P., et al 1,742,750(3) 19.9%
201 Main Street, Suite 3100
Fort Worth, TX 76102

Common Rollins Properties, Inc. 600,000 6.9%
One Rollins Plaza
Wilmington, DE 19803

Common Gerard J. Trippitelli 69,240 .8%
One Rollins Plaza
Wilmington, DE 19803

Common Eugene C. Bonacci 39,659 .5%
One Rollins Plaza
Wilmington, DE 19803

Common All Directors and Officers as a Group 1,645,529 18.8%
(8 persons)

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

(1) As to officers and directors, owned directly and of record.

(2) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 548,867 shares of stock
as of September 30, 1996, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc. (the "Fund"), a registered open-end
investment company, or in series of The DFA Investment Trust Company (the
"Trust"), a

Delaware business trust, or the DFA Group Trust and the DFA Participating
Group Trust, investment vehicles for qualified employee benefit plans, all
of which Dimensional Fund Advisors Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.

Sole Voting Power = 404,075 shares*
Shared Voting Power = 0
Sole Dispositive Power = 548,867
Shared Dispositive Power = 0

*Persons who are officers of Dimensional also serve as officers of the Fund
and the Trust, each an open-end management investment company registered
under the Investment Company Act of 1940. In their capacity as officers of
the Fund and the Trust, these persons vote 75,650 additional shares which
are owned by the Fund and 69,142 shares which are owned by the Trust (both
included in Sole Dispositive Power above).

(3) Includes 1,573,794 shares held by Alpine Capital, L.P., a Texas limited
partnership ("Alpine") and 168,956 shares held by The Anne T. and Robert M.
Bass Foundation, a Texas non-profit corporation ("Foundation"). The two
general partners of Alpine are Robert W. Bruce III and Algenpar, Inc.
Algenpar, Inc. is a Texas corporation controlled by J. Taylor Crandall. Mr.
Bruce, through The Robert Bruce Management Co., Inc., shares investment
discretion over the shares held by the Foundation with Mr. Crandall, Anne T.
Bass and Robert M. Bass, who serve as directors of the Foundation.

BOARD OF DIRECTORS AND BOARD COMMITTEES

The Board of Directors held four regularly scheduled meetings during fiscal
year 1996. All members of the Board attended each meeting.

Audit Committee. The Audit Committee consists of William B. Philipbar,
Jr., Chairman, and Henry B. Tippie. The Audit Committee held two meetings during
the last fiscal year. The Committee's functions include consulting with the
Company's independent public accountants concerning the scope and results of the
audit, reviewing the evaluation of internal accounting controls and inquiring
into special accounting-related matters.

Executive Committee. The Executive Committee consists of Henry B. Tippie,
Chairman, John W. Rollins, John W. Rollins, Jr. and Gerard J. Trippitelli. The
Executive Committee held one meeting during the last fiscal year. The Executive
Committee has the power to exercise all of the powers and authority of the Board
of Directors in the management of the business and affairs of the Company in
accordance with the provisions of the by-laws of the Company. The Executive
Committee performs all of the functions of a compensation committee of the Board
of Directors.

Stock Option Committee. The Stock Option Committee consists of Henry B.
Tippie, Chairman, and John W. Rollins. Mr. Tippie and Mr. Rollins are
disinterested directors within the meaning of Rule 16b-3 of the Securities
Exchange Act of 1934. Neither participates in any Company stock option plan. The
Stock Option Committee held one meeting during the last fiscal year. The Stock
Option Committee administers the Company's outstanding Stock Options Plans
including the granting of options to various employees of the Company and its
subsidiaries.

The Company does not have a nominating committee of the Board of Directors.

DIRECTOR'S COMPENSATION

Directors who are not full-time employees of the Company or any of its
subsidiaries are paid an attendance fee of $750 for each Board of Directors or
committee meeting attended.

Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following report and
the Performance Graph on page 8 shall not be incorporated by reference into any
such filings.

REPORT OF THE EXECUTIVE AND STOCK OPTION COMMITTEES OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION

During fiscal year 1996, the members of the Executive Committee of the
Board of Directors held primary responsibility for determining executive
compensation levels.

The Company is engaged in a highly competitive industry. As a consequence,
the Company views its ability to attract and retain qualified executives as the
cornerstone of its future success. In order to accomplish this objective, the
Company has endeavored to structure its executive compensation in a fashion that
takes into account the Company's operating performance and the individual
performance of the executive. Of necessity, this analysis is subjective in
nature and not based upon a structured formula. The factors referred to above
are not weighted in an exact fashion.

Pursuant to the above compensation philosophy, the total annual
compensation of executive officers of the Company is made up of one or more of
three elements. The three elements are salary, an annual incentive compensation
package and, in some years, grants of stock options.

The salary of each executive officer is determined by the Executive
Committee. As previously stated, in making its determinations the Executive
Committee gives consideration to the Company's operating performance for the
prior fiscal year, increases in share value and the individual executive's
performance.

The annual incentive compensation package for executive officers is
developed by the Chief Executive Officer of the Company prior to the end of each
fiscal year. It is based upon a performance formula for the ensuing fiscal year.
That performance formula and incentive package is then reviewed by the Executive
Committee and is either accepted, amended or modified. Other than the CEO, none
of the members of the Executive Committee participate in the incentive program,
nor does any member of the Board of Directors, except for the CEO, who is also a
director. The CEO does not participate in the deliberations of the Executive
Committee when his salary or incentive is determined.

Awards under the Company's Stock Option Plans are purely discretionary, are
not based upon any specific formula, and may or may not be granted in any given
fiscal year. Grants made under and the administration of the Company's Stock
Option Plan is by disinterested directors within the meaning of Rule 16b-3 of
the Securities Exchange Act of 1934. When considering the grant of stock
options, the Stock Option Committee gives consideration to the overall
performance of the Company and the performance of individual employees.

CEO COMPENSATION

The CEO's compensation is determined by the Executive Committee and the
Stock Option Committee. As is the case with respect to the Named Executives, the
CEO's compensation is based upon the Company's operating performance and his
individual performance. The CEO's compensation consists of the same three
elements identified above with respect to Named Executives: salary; an annual
incentive; and, in some years, grants of stock options. The determination of
salary and the award of stock options, if any, are subjective and not based upon
any specific formula or guidelines. The determination of an annual incentive is
based on the amount by which the Company's pre-tax earnings exceed a target
established by the Executive Committee prior to the beginning of the fiscal
year. The target is revised annually. For fiscal year ending September 30, 1996,
the Company's pre-tax earnings did not exceed the target established by the
Executive Committee and, therefore, no incentive compensation was paid to Mr.
Trippitelli. The CEO is not a member of the Stock Option Committee and does not
participate in the deliberations of the Executive Committee when his salary or
incentive is determined.

Executive Committee
Henry B. Tippie, Chairman
John W. Rollins
John W. Rollins, Jr.
Gerard J. Trippitelli

Stock Option Committee
Henry B. Tippie, Chairman
John W. Rollins

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than ten percent of a registered
class of the Company's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC").
Officers, directors and greater than ten percent shareholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.

Based on its review of the copies of such forms received by it, the Company
believes that during its fiscal year ended 1996 all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with, except as follows: Gerard J. Trippitelli
inadvertently filed a late Form 4 with respect to shares he acquired through the
exercise of stock options.

COMMON STOCK PERFORMANCE

The following graph reflects a comparison of the cumulative total
shareholder return on the Company's common stock with the S&P Composite 500
Index and the S&P Truckers Index, respectively, for the five year period
commencing October 1, 1991 through September 30, 1996. The graph assumes that
the value of the investment in the Company's common stock and each index was 100
at September 30, 1991 and all dividends were reinvested. The comparisons in this
table are required by the Securities and Exchange Commission and, therefore, are
not intended to forecast or be necessarily indicative of any future return on
the Company's common stock.

IN PRINTED DOCUMENT CHART WAS INSERTED HERE.
THE PLOT POINTS FOLLOW.

YEARS
----------------------------------------------------------------
1991 1992 1993 1994 1995 1996
--------- --------- --------- --------- --------- ---------
Matlack Systems, Inc.................................. 100 176 364 395 355 268
S&P Composite 500 Index............................... 100 111 125 130 169 203
S&P Truckers Index.................................... 100 111 110 111 104 80

Assumes $100 invested on October 1, 1991

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The following directors serve on the Company's Executive Committee: John W.
Rollins, John W. Rollins, Jr., Henry B. Tippie and Gerard J. Trippitelli. Each
is an employee of the Company but none participates in the deliberations of the
Executive Committee with respect to his own compensation. John W. Rollins, John
W. Rollins, Jr. and Henry B. Tippie are members of the Executive Committees of
Rollins Truck Leasing Corp. and Rollins Environmental Services, Inc. The
Executive Committee of each of these two companies performs the functions of a
compensation committee. John W. Rollins and Henry B. Tippie serve on the
Compensation Committee of Dover Downs Entertainment, Inc. Patrick J. Bagley
serves as a director of Rollins Environmental Services, Inc. and Dover Downs
Entertainment, Inc.

EXECUTIVE COMPENSATION

Shown below is information concerning the annual compensation for services
in all capacities to the Company for the fiscal years ended September 30, 1994,
1995 and 1996, of those persons who were, at September 30, 1996, (i) the Chief
Executive Officer and (ii) the other most highly compensated executive officers
of the Company whose total annual salary exceeded $100,000 (the "Named
Executives"):

SUMMARY COMPENSATION TABLE

LONG TERM COMPENSATION
-------------------------------------
AWARDS
ANNUAL COMPENSATION ------------------------ PAYOUTS
------------------------------------- RESTRICTED STOCK -----------
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND SALARY BONUS COMP. (2) AWARDS(3) SARS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR (1) $ $ $ $ # $ $
- -------------------------- ----------- --------- --------- --------------- ------------- --------- ----------- -------------

Gerard J. Trippitelli 1996 261,250 -0- -- -0- 12,000 -0- -0-
President and CEO 1995 247,500 21,480 -- -0- 9,000 -0- -0-
1994 232,500 136,334 -- -0- -0- -0- -0-

Eugene C. Bonacci 1996 173,655 -0- -- -0- 9,000 -0- -0-
Senior Vice 1995 168,656 -0- -- -0- 6,000 -0- -0-
President and COO 1994 162,311 64,357 -- -0- -0- -0- -0-

- ------------------
(1) Fiscal years ending September 30.
(2) The only type of Other Annual Compensation for each of the named officers
was in the form of perquisites and was less than the level required for
reporting.
(3) No awards have ever been made.

OPTION AND STOCK APPRECIATION RIGHTS GRANTS IN LAST FISCAL YEAR

The following table sets forth stock options granted in the fiscal year
ending September 30, 1996 to each of the Company's Named Executives. Employees
of the Company and its subsidiaries are eligible for stock option grants based
on individual performance. The Company did not issue any stock appreciation
rights. The table also sets forth the hypothetical gains that would exist for
the options at the end of their eight-year terms, assuming compound rates of
stock appreciation of 0%, 5% and 10%. The actual future value of the options
will depend on the market value of the Company's Common Stock. All option
exercise prices are based on the market price on the grant date.

INDIVIDUAL GRANTS(1)
-------------------------------------------------- POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES OF STOCK
OPTIONS PRICE APPRECIATION FOR
GRANTED TO OPTION TERM (2)
OPTIONS EMPLOYEES EXERCISE ---------------------------------------
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#) YEAR ($/SH) DATE 0% 5% 10%
- ------------------------------------ --------- ------------- ----------- ----------- --- ------------ ------------

Gerard J. Trippitelli 12,000 6.6% $ 8.25 11/14/03 -- $ 47,268 $ 113,215
Eugene C. Bonacci 9,000 5.0% $ 8.25 11/14/03 -- $ 35,451 $ 84,911
All employees as a group (3) 181,200 100.0% $ 8.25 11/14/03 -- $ 713,747 $ 1,709,551
Total potential stock price appreciation from November 15,
1995 to November 14, 2003 for all stockholders at assumed
rates of stock price appreciation (4) -- $34,493,446 $82,617,892

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

(1) Options were granted on November 15, 1995.

(2) These amounts, based on assumed appreciation rates of 0% and the 5% and 10%
rates prescribed by the Securities and Exchange Commission rules, are not
intended to forecast possible future appreciation, if any, of the Company's
stock price. These numbers do not take into account certain provisions of
options providing for termination of the option following termination of
employment, nontransferability or phased-in vesting. The Company did not use
an alternative formula for a grant date valuation as it is not aware of any
formula which will determine with reasonable accuracy a present value based
on future unknown or volatile factors. Future compensation resulting from
option grants is based solely on the performance of the Company's stock
price.

(3) Based on 181,200 options granted on November 15, 1995 at an exercise price
of $8.25.

(4) Based on a price of $8.25 on November 15, 1995 and a total of 8,756,896
shares of Common Stock outstanding on October 31, 1996.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES

The following table summarizes option exercises during fiscal 1996 by the
Company's Named Executives, and the value of the options held by such persons as
of September 30, 1996. The Company has not granted and does not have any Stock
Appreciation Rights outstanding.

VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
VALUE OPTIONS AT OPTIONS AT
SHARES ACQUIRED REALIZED FY-END (#) FY-END ($)
NAME ON EXERCISE (#) ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
- ------------------------ ----------------- ------------- --------------------------- --------------------------

Gerard J. Trippitelli 6,812 $34,690 9,682 35,628 $9,546 $27,538
Eugene C. Bonacci 4,950 $29,419 7,750 24,950 $9,844 $20,825

- ------------------
(1) Fair market value of underlying security at exercise date less the exercise
price.

(2) The value of the Company's common stock on September 30, 1996 was $7.375 per
share.

LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR

There were no Long-Term Incentive Plan awards to the Named Executives
during fiscal year 1996.

DEFINED BENEFIT PLANS

The Company's Pension Plan is a non-contributory qualified employee defined
benefit plan. All full-time employees of the Company (except certain employees
covered by collective bargaining agreements) are eligible to participate in the
Pension Plan. Retirement benefits are equal to the sum of 1.35% of earnings up
to covered compensation, as that term is defined in the Plan, and 1.7% of
earnings above covered compensation. Covered compensation includes regular
salaries or wages, commissions, bonuses, overtime earnings and short-term
disability income protection benefits.

Retirement benefits are not subject to any reduction for Social Security
benefits or other offset amounts. An employee's benefits may be paid in certain
alternative forms having actuarially equivalent values. Retirement benefits are
fully vested at the completion of five years of credited service or, if earlier,
upon reaching age 55. The maximum annual benefit under a qualified pension plan
is currently $120,000 beginning at the Social Security retirement age (currently
age 65).

The Company maintains a non-qualified, defined benefit plan, called the
Excess Benefit Plan, which covers those participants of the Pension Plan whose
benefits are limited by the Internal Revenue Code. A participant in the Excess
Benefit Plan is entitled to a benefit equaling the difference between the amount
of the benefit payable without limitation and the amount of the benefit payable
under the Pension Plan.

Annual pension benefit projections for the Named Executives assume: (a)
that the participant remains in the service of the Company until age 65; (b)
that the participant's earnings continue at the same rate as paid in the fiscal
year ended September 30, 1996 during the remainder of his service until age 65;
and (c) that the Plans continue without substantial modification. The estimated
annual benefit at retirement for each of the Named Executives is: Gerard J.
Trippitelli, $104,020; and Eugene C. Bonacci, $58,740.

AUDITORS

The Board of Directors has not selected or recommended the name of an
independent public accounting firm for approval or ratification by the
shareholders. The Board of Directors believes that it will be in the best
interests of the shareholders if it is free to make such determination based
upon all factors that are then relevant.

KPMG Peat Marwick LLP served as the Company's auditors for the fiscal year
ended September 30, 1996. A representative of KPMG Peat Marwick LLP will be
present at the Annual Meeting and will have the opportunity to make a statement
should such representative so desire. Such representative also will be available
to answer questions raised orally.

During the fiscal year ended September 30, 1996, KPMG Peat Marwick LLP's
services rendered to the Company consisted of auditing the Company's financial
statements. In this connection, KPMG Peat Marwick LLP performed such tests of
the Company's accounting records and other auditing procedures as were required
by generally accepted auditing standards.

SHAREHOLDER PROPOSALS

Appropriate proposals of eligible shareholders (an eligible shareholder
must be a record or beneficial owner of at least 1% or $1,000 in market value of
securities entitled to be voted at the meeting and have held such securities for
at least one year) intended to be presented at the Company's next Annual Meeting
of Shareholders must be received by the Company no later than August 22, 1997
for inclusion in the Proxy Statement and form of proxy relating to that meeting.

MISCELLANEOUS

ON WRITTEN REQUEST OF ANY RECORD OR BENEFICIAL SHAREHOLDER OF THE COMPANY,
THE COMPANY WILL PROVIDE, FREE OF CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT
ON FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO. REQUESTS FOR A COPY OF FORM 10-K
SHOULD BE MADE IN WRITING AND ADDRESSED TO:

PATRICK J. BAGLEY
VICE PRESIDENT - FINANCE AND TREASURER
MATLACK SYSTEMS, INC.
P. O. BOX 8790
WILMINGTON, DELAWARE 19899

THE COMPANY WILL CHARGE REASONABLE OUT-OF-POCKET EXPENSES FOR THE
REPRODUCTION OF EXHIBITS TO FORM 10-K SHOULD A SHAREHOLDER REQUEST COPIES OF
SUCH EXHIBITS.

The Company's Annual Report for the fiscal year ended September 30, 1996
has been mailed to shareholders under separate cover.

The Board of Directors knows of no business other than the matters set
forth herein which will be presented at the meeting. Inasmuch as matters not
known at this time may come before the meeting, the enclosed proxy confers
discretionary authority with respect to such matters as may properly come before
the meeting and it is the intention of the persons named in the proxy to vote in
accordance with their judgment on such matters.

BY ORDER OF THE BOARD OF DIRECTORS
MICHAEL B. KINNARD, Secretary

Wilmington, Delaware
December 20, 1996

MATLACK SYSTEMS, INC.

PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF SHAREHOLDERS

Thursday, January 30, 1997, 9:30 A.M., E.S.T.

The undersigned hereby constitutes and appoints John W. Rollins and Michael
B. Kinnard, and each of them jointly and severally, proxies with full power of
substitution, to vote all shares of Common Stock which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Company to be held
on January 30, 1997 at 9:30 A.M. Eastern Standard Time, First Floor, 1209 Orange
Street, Wilmington, Delaware, or at any adjournment thereof, on all matters set
forth in the Notice of Annual Meeting and Proxy Statement dated December 20,
1996 as follows:

(Mark only one box)

1. ELECTION OF DIRECTORS

Nominees: John W. Rollins, Jr. and William B. Philipbar, Jr.

|_| VOTE FOR all nominees listed above; except vote withheld
from the following nominee (if any):

|_| VOTE WITHHELD FROM all nominees.

2. At their discretion, upon such matters as may properly come before the
Annual Meeting or any adjournment thereof.

(OVER)

(CONTINUED FROM OTHER SIDE)

The undersigned acknowledges receipt of the aforesaid Notice of Annual
Meeting and Proxy Statement, each dated December 20, 1996, grants authority to
any of said proxies, or their substitutes, to act in the absence of others, with
all the powers which the undersigned would possess if personally present at such
meeting, and hereby ratifies and confirms all that said proxies, or their
substitutes, may lawfully do in the undersigned's name, place and stead.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MATLACK
SYSTEMS, INC. AND THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH YOUR INSTRUCTIONS. IF NO CHOICE IS SPECIFIED BY YOU, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1.

Please sign below, date and return promptly.

- ------------------------------
Signature(s) of Shareholder(s)

DATED: January __, 1997

Signature(s) should conform to name(s) and title(s) stenciled hereon.
Executors, administrators, trustees, guardians and attorneys should add their
title(s) on signing.

NO POSTAGE IS REQUIRED IF THIS
PROXY IS RETURNED IN THE ENCLOSED
ENVELOPE AND MAILED IN THE
UNITED STATES.