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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2001
Commission file number 0-22056
Rural/Metro Corporation
(Exact name of registrant as specified in its charter)
Delaware 86-0746929
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8401 East Indian School Road, Scottsdale, Arizona 85251
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (480) 994-3886
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
Preferred Stock Purchase Rights
(Title of Class)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of October 8, 2001 the aggregate market value of the voting stock
held by non-affiliates of the registrant, computed by reference to the closing
sales price of such stock as of such date on the Nasdaq SmallCap Market, was
$8,470,444. Shares of Common Stock held by each officer and director and by each
person who owned 5% or more of the outstanding Common Stock have been excluded
in that such persons may be deemed to be affiliates. This determination of
affiliate status is not necessarily conclusive.
As of October 8, 2001, there were 15,100,180 shares of the registrant's
Common Stock outstanding.
Documents Incorporated By Reference
None
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Rural/Metro Corporation (the "Company") hereby amends its Report on Form
10-K for the year ended June 30, 2001 by adding thereto Items 10, 11, 12 and 13,
as set forth below.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
NAME AGE POSITIONS WITH THE COMPANY
---- --- --------------------------
Cor J. Clement, Sr. 53 Chairman of the Board and Director(3)
Jack E. Brucker 49 President, Chief Executive Officer and Director
John S. Banas III 39 Senior Vice President and General Counsel
Randall L. Harmsen 50 Vice President - Finance, Chief Accounting Officer
Mary Anne Carpenter 56 Director(1)(4)
Louis G. Jekel 60 Vice Chairman of the Board, Secretary and Director(3)
William C. Turner 72 Director(1)(2)(3)(4)
Henry G. Walker 54 Director(1)(3)(4)
Louis A. Witzeman 76 Director(2)
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(1) Member of the Human Resource/Compensation/Organization Committee.
(2) Member of the Nominating Committee.
(3) Member of the Executive Committee.
(4) Member of the Audit Committee.
COR J. CLEMENT, SR. has served as Chairman of our Board of Directors since
August 1998 and as a member of our Board of Directors since May 1992. Mr.
Clement served as Vice Chairman of the Board of Directors from August 1994 to
August 1998. Mr. Clement served as the President and Chief Executive Officer of
NVD, an international provider of security and industrial fire protection
services headquartered in the Netherlands, from February 1980 until his
retirement in January 1997.
JACK E. BRUCKER has served as our President and Chief Executive Officer
since February 2000 and has been a member of our Board of Directors since
February 2000. Mr. Brucker served as our Senior Vice President and Chief
Operating Officer from December 1997 until February 2000. Mr. Brucker founded
and served as President of Pacific Holdings, a strategic consulting firm, from
July 1989 until December 1997. Mr. Brucker served as President of Pacific
Precision Metals, a consumer products company, from September 1987 until June
1989.
JOHN S. BANAS III has served as our Senior Vice President and General
Counsel since September 1999. Mr. Banas served as General Counsel at SpinCycle
Inc., a nationwide chain of branded coin-operated laundromats, from 1998 to
September 1999. From 1995 to 1998, he was Senior Corporate Counsel to Lam
Research Corporation in Fremont, California; and from 1992 to 1995 served as
corporate, real estate, and environmental counsel at the law firm of Wilson,
Sonsini, Goodrich & Rosati in Palo Alto, California. Mr. Banas served as
litigation counsel from 1989 to 1992 at the law firm of Thelen, Marrin, Johnson
& Bridges (now Thelen, Reid & Priest) in San Francisco, California.
RANDALL L. HARMSEN has served as Vice President of Finance, Chief
Accounting Officer, and Corporate Controller since July 2000. Mr. Harmsen served
as Vice President of Network Management and Chief Financial Officer for United
Healthcare of Arizona Inc. in Phoenix, Arizona, from 1997 until the time he
joined our company. From 1994 to 1997, he was Vice President of Finance for
Carondelet Health Care Corporation in Tucson, Arizona. From 1989 to 1994, Mr.
Harmsen served as Chief Financial Officer for Presbyterian Healthcare Services
in Albuquerque, New Mexico; and from 1977 to 1989, he was Chief Financial
Officer for St. Luke's Hospital in Davenport, Iowa.
2
MARY ANNE CARPENTER has been a member of our Board of Directors since
January 1998. Ms. Carpenter served as Executive Vice President and Executive
Committee member of First Health Group Corp., a publicly traded managed health
care company, from January 1993 until her retirement in May 2001. From October
1991 until January 1993, Ms. Carpenter served as Senior Vice President, and from
July 1986 through October 1991, as Vice President of First Health Group Corp.
Ms. Carpenter has served on panels for several other national health care
organizations.
LOUIS G. JEKEL has served as our Secretary and as a member of our Board of
Directors since 1968 and as Vice Chairman of our Board of Directors since August
1998. Mr. Jekel directs our Wildland Fire Protection Operations with the State
of Arizona and the federal government. Mr. Jekel is a partner in the law firm of
Jekel & Howard, Scottsdale, Arizona.
WILLIAM C. TURNER has been a member of our Board of Directors since
November 1993. Mr. Turner is currently Chairman and Chief Executive of Argyle
Atlantic Corporation, an international merchant banking and management
consulting firm; a trustee of the United States Council for International
Business; a trustee and past Chairman of the American Graduate School of
International Management (Thunderbird); a Board member and former Chairman of
the Board of Directors of Mercy Ships International, Incorporated; and Chairman
of the Board of Directors of WorldWide Talk. Mr. Turner is also a former United
States Ambassador and permanent representative to the Organization for Economic
Cooperation and Development.
HENRY G. WALKER has been a member of our Board of Directors since September
1997. Since April 1997, he has served as President and Chief Executive Officer
of the Sisters of Providence Health System, comprised of hospitals, long-term
care facilities, physician practices, managed care plans, and other health and
social services. From 1996 to March 1997, Mr. Walker served as President and
Chief Executive Officer of Health Partners of Arizona, a state-wide managed care
company. From 1992 to 1996, he served as President and Chief Executive Officer
of Health Partners of Southern Arizona, a healthcare delivery system. Mr. Walker
is a member of the National Advisory Council of the Healthcare Forum, and also
serves as a director of Consolidated Catholic Healthcare a private non-profit
company.
LOUIS A. WITZEMAN is the founder of our company. Mr. Witzeman has served as
a member of our Board of Directors since our formation in 1948, currently
serving as Chairman of the Board Emeritus. Mr. Witzeman served as our Chief
Executive Officer until his retirement in 1980.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and officers, and
persons who own more than 10% of a registered class of our equity securities to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Officers, directors and greater than 10% stockholders are
required by Securities and Exchange Commission regulation to furnish us with
copies of all Section 16(a) forms they file.
Based solely on our review of the copies of such forms received by us
during the fiscal year ended June 30, 2001, and written representations that no
other reports were required, except as set forth below, we believe that each
person who, at any time during such fiscal year, was a director, officer or
beneficial owner of more than 10% of our common stock complied with all Section
16(a) filing requirements during such fiscal year. Cor Clement, Louis Jekel,
Mary Anne Carpenter, William Turner, Henry Walker and Louis Witzeman did not
timely file Forms 5 for the fiscal year ended June 30, 2000 reporting annual
option grants under the 1992 Stock Option Plan. The late reportings were made on
Forms 5 for the fiscal year ended June 30, 2001. In addition, (i) amended Forms
5 for the fiscal years ended June 30, 1999 and June 30, 2001 were filed by Cor
Clement to correct the reported annual option grant and to disclose the
disposition of shares of common stock, respectively; and (ii) an amended Form 5
for the fiscal year ended June 30, 2001 was filed by Louis Jekel to disclose
disposition of shares of common stock. We attribute these late and amended
filings to an oversight due to errors in our internal procedures which have been
rectified. In making these disclosures, we have relied solely on written
representations of our directors and executive officers, and copies of the
reports that they have filed with the Commission.
3
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY OF CASH AND OTHER COMPENSATION
The following table sets forth the total compensation received for services
rendered to us in all capacities for the fiscal years ended June 30, 1999, 2000,
and 2001 by our Chief Executive Officer and our four most highly compensated
executive officers who were in office at June 30, 2001. The table also sets
forth this information for one other executive officer who is no longer with our
company at June 30, 2001, whose aggregate cash compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION AWARDS
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ANNUAL COMPENSATION RESTRICTED SECURITIES ALL OTHER
NAME AND PRINCIPAL --------------------------------- STOCK UNDERLYING COMPENSATION
POSITION AT YEAR-END YEAR SALARY($)(1) BONUS($) AWARD(S)($) OPTIONS(#) ($)(2)
-------------------- ---- ------------ -------- ----------- ---------- ------
Jack E. Brucker 2001 $447,077 $43,600 $ -- 200,000 $ 3,200
Chief Executive Officer 2000 $314,246 $ -- $ -- 21,000 $ 3,200
and President(3) 1999 $250,000 $25,000 $45,000(4) 39,000 $65,559(5)
Dr. Michel Sucher 2001 $201,923 $19,500 $ -- 75,000 $ 3,200
Former Senior Vice President 2000 $184,231 $ -- $ -- 12,500 $ 3,200
and Chief Medical Officer(6) 1999 $175,000 $ -- $ -- 21,600 $ 3,200
Robert B. Hillier 2001 $215,385 $20,000 $ -- 75,000 $ 2,008
Former Senior Vice President and 2000 $170,385 $ -- $ -- 12,500 $ 2,008
Chief Administrative Officer(6) 1999 $137,500 $ -- $ -- 21,600 $ 2,600
John S. Banas III 2001 $207,800 $18,020 $ -- 150,000 $ --
Senior Vice President and 2000 $126,438 $ -- $ -- 17,500 $ --
General Counsel(6)
Randall L. Harmsen (6) 2001 $182,577 $ -- $ -- -- $ --
Vice President of Finance 2000 $ -- $ -- $ -- 20,000 $ --
1999 $ -- $ -- $ -- -- $ --
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(1) Other annual compensation did not exceed the lesser of $50,000 or 10% of
the total salary and bonus for any of the officers listed.
(2) Unless otherwise indicated, consists of company-matching contributions to
our 401(k) plan paid in cash.
(3) Mr. Brucker became our President and Chief Executive Officer in February
2000. From December 1997 until February 2000, Mr. Brucker served as our
Senior Vice President and Chief Operating Officer.
(4) Represents fair market value of restricted stock grants that vested in
December 1998.
(5) We paid Mr. Brucker $62,359 in fiscal 1999 for relocation costs, including
moving expenses and closing costs on the sale of his former residence.
(6) Dr. Sucher and Mr. Hillier became executive officers of our Company during
February 2000. Mr. Hillier joined our company during October 1997. Mr.
Hillier's employment terminated in January 2001 and Dr. Sucher's employment
terminated in July 2001. Mr. Banas joined our Company in September 1999 and
Mr. Harmsen joined our Company in July 2000.
4
OPTION GRANTS
The following table represents the options granted to the listed officers
in the last fiscal year and the value of the options.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
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NUMBER OF SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS OPTIONS GRANTED TO EXERCISE OR GRANT DATE
GRANTED(#)(1) EMPLOYEES IN FISCAL YEAR BASE PRICE($/SH) EXPIRATION DATE PRESENT VALUE$(2)
------------- ------------------------ ---------------- --------------- -----------------
John S. Banas III 150,000(3) 9.5% $1.50 8/21/10 $ 97,155
Jack E. Brucker 200,000(4) 12.6% $2.00 4/20/10 $187,995
Randall L. Harmsen 0 --% $ -- -- $ --
Robert B. Hillier 75,000(5) 4.7% $1.50 8/21/10 $ 48,578
Dr. Michel Sucher 75,000(6) 4.7% $1.50 8/21/10 $ 48,578
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(1) Except as otherwise indicated, all of the options vest and become
exercisable as follows: one-third at grant date in August 2000, one-third
in August 2001, and one-third in August 2002.
(2) The hypothetical present value of the options at the date of grant was
determined using the Black-Scholes option pricing model. The Black-Scholes
model estimates the present value of an option by considering a number of
factors, including the exercise price of the option, the volatility of our
common stock, the dividend rate, the term of the option, the time it is
expected to be outstanding, and interest rates. The Black-Scholes values
were calculated using the following assumptions: (a) a risk-free interest
rate of 4.74%; (b) a dividend yield of 0.00%; (c) an expected life of the
option after vesting of 2.35 years; and (d) an expected volatility of
72.66%.
(3) Mr. Banas' options vest and become exercisable as follows: one-third at
grant date in August 2000, one-third in August 2001, and one-third in
August 2002.
(4) Mr. Brucker's options vest and become exercisable as follows: one-fourth at
grant date in April 2000, one-fourth in April 2001, one-fourth in April
2002, and one-fourth in April 2003.
(5) Mr. Hillier's employment terminated in January 2001, at which time 50,000
of these options were canceled pursuant to the terms of the options.
(6) Dr. Sucher's employment terminated in July 2001, and all of the unvested
options will expire October 8, 2002 pursuant to the terms of his severance
agreement.
5
OPTION HOLDINGS
The following table represents certain information respecting the options
held by the listed officers as of June 30, 2001. None of the officers listed
exercised options during fiscal 2001.
FISCAL YEAR-END OPTIONS HELD
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
OPTIONS AT FISCAL YEAR-END(#)(1)
--------------------------------
NAME EXERCISABLE UNEXERCISABLE
---- ----------- -------------
Jack E. Brucker 174,000 107,000
John S. Banas III 63,333 104,167
Randall L. Harmsen 13,334 6,666
Robert B. Hillier 72,934 --
Dr. Michel Sucher 118,920 54,166
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(1) None of the unexercised options listed had any value at fiscal year-end,
because the exercise price of all of the options held by the listed
officers was greater than $0.90, which was the closing sales price of our
common stock as quoted on the Nasdaq SmallCap Market on June 29, 2001.
EMPLOYMENT AGREEMENTS
The Board of Directors recently approved employment agreements with Jack E.
Brucker, President and Chief Executive Officer, and John S. Banas III, Senior
Vice President and General Counsel. The agreements, as described below, are
structured to provide for the long-term retention and motivation of the
Company's current senior executives.
Effective July 1, 2001, we entered into a new employment agreement with
Jack E. Brucker for a five-year term expiring July 1, 2006, which automatically
renews for one-year periods. Mr. Brucker receives a base salary of $600,000, and
participates in our management incentive program, stock option plans and other
generally available benefit programs. Mr. Brucker also received a signing bonus
of $200,000, 50% of which was payable to him on July 1, 2001, and 50% of which
is payable by July 1, 2002. Mr. Brucker's employment agreement provides that
should his employment agreement terminate or fail to be renewed without cause or
for good reason, as defined, or should we propose to modify his employment
agreement in a manner which gives him good reason to terminate the employment
agreement, he will receive his base salary and other benefits for the greater of
(i) two years, or (ii) five years minus the number of days between July 1, 2001,
and the termination of employment. If Mr. Brucker terminates his employment
agreement without good reason (and for reasons other than health
considerations), he will not receive any severance benefits and will pay us a
sum equal to the net base salary received by him during the period equal to the
greater of (i) two years preceding termination of employment, or (ii) five years
minus the number of days between July 1, 2001 and the date of termination of
employment. Mr. Brucker has agreed not to compete against us after termination
for the greater of (i) two years, or (ii) five years minus the number of days
between July 1, 2001 and the date of termination. Mr. Brucker may elect to
shorten the period to not less than 12 months. Upon such election, or if Mr.
Brucker elects to solicit clients, employees, or otherwise competes with us at
any time after his termination of employment or discloses confidential
information, we will no longer be obligated to pay any further severance
benefits.
6
In April 2001, we entered into an employment agreement with Mr. Banas for a
two-year term expiring April 23, 2003, which automatically renews for one-year
periods thereafter. Mr. Banas receives a base salary of $240,000, and is
entitled to participate in our management incentive program, stock option plans
and other generally available benefit programs. Mr. Banas' employment agreement
provides that should his employment agreement terminate or fail to be renewed
without cause or for good reason, as defined, or should we propose to modify his
employment agreement in a manner which gives him good reason to terminate the
employment agreement, he will receive his base salary and other benefits for 24
months. If Mr. Banas terminates his employment agreement without good reason, he
will not receive any severance benefits. Mr. Banas has agreed not to compete
against us for 24 months after the effective date of termination. Mr. Banas may
elect to shorten the period to 12 months. Upon such election, or if Mr. Banas
elects to solicit clients, employees, or otherwise competes with us at any time
after termination or discloses confidential information, we will no longer be
obligated to pay any further severance benefits.
Employment agreements with Mr. Hillier and Dr. Sucher expired in December
2000. Due to Mr. Hillier's employment termination on January 13, 2001 and Dr.
Sucher's employment termination on July 12, 2001, Mr. Hillier and Dr. Sucher are
entitled to receive certain severance benefits, including base salary and other
benefits provided by the agreements for one year from the date of termination.
Change of control agreements entered into by Messrs. Brucker, Sucher,
Hillier, and Banas provide that in the event of a change of control (as defined)
and the surviving entity or individuals in control do not offer such persons
employment, terminate their employment without cause (as defined), or such
persons terminate their employment for good reason (as defined), such persons
will receive a lump sum equal to (A) 150% (200% in the case of Mr. Brucker) of
(i) their applicable annual base salary, and (ii) the amount of incentive
compensation paid or payable to them during the calendar year preceding the
calendar year in which the change of control occurs, plus (B) the full amount of
any payments due under such employee's employment agreement. In addition, each
executive would be entitled to receive certain benefits, including the
acceleration of exercisability of their stock options or the payment of the
value of such stock options if they are not accelerated or replaced with
comparable options. The health and other benefits received under the change of
control agreement will be reduced or eliminated to the extent such benefits are
received under the executive's employment agreement. The aggregate amount of
benefits is capped at 2.99 times the amount of annualized includable
compensation received by the executive as determined under the Internal Revenue
Code. Any payments received under the change of control agreement may be reduced
by amounts we pay such executive under their respective employment agreements.
Mr. Hillier's and Dr. Sucher's change of control agreements terminated upon
their employment termination.
7
During January 2000, John Furman resigned as our President and Chief
Executive Officer. Pursuant to the terms of his employment agreement, Mr. Furman
will receive a severance benefit equivalent to his then existing annual base
salary of $420,000 through January 2002. In connection with the employment
agreement, we granted Mr. Furman stock options to purchase 100,000 shares of our
common stock. These stock options continued to vest and remain exercisable
through April 2002.
DIRECTOR COMPENSATION AND OTHER INFORMATION
Officers who serve on the Board of Directors receive no additional
compensation. We paid a director's fee in fiscal 2001 to Mr. Clement, our
Chairman of the Board of Directors, of $45,000 plus reimbursement for expenses
for each Board or committee meeting he attended. We pay all other non-employee
Board members, with the exception of Mr. Witzeman, an annual retainer of
$15,000. Non-employee directors, with the exception of Mr. Jekel, also receive
$1,000 for each Board meeting attended, $500 for each Board meeting participated
in telephonically, $500 for each committee meeting attended, and $250 for each
committee meeting participated in telephonically. We also pay $2,500 annually to
any non-employee chairman of each of the committees of the Board of Directors.
Under the terms of our 1992 Stock Option Plan, non-employee directors receive
(i) stock options to purchase 10,000 shares upon their first election to the
Board of Directors and options to purchase 2,500 shares at the meeting of the
Board of Directors held immediately after the annual meeting of stockholders
(except that the Chairman of the Board receives stock options to acquire 5,000
shares), and (ii) each year each non-employee Board member receives stock
options to acquire a number of shares equal to 1,000 shares for each $0.05
increase in our earnings per share over the previous fiscal year, subject to a
maximum of 5,000 shares of stock per non-employee Board member. Messrs. Jekel
and Witzeman receive compensation for consulting services, which includes
serving on the Board of Directors. See "Certain Relationships and Related
Transactions." In fiscal 2001, we granted to the following individuals options
to purchase the following shares of common stock as consideration to serve as a
director: 5,000 to Mr. Clement, and 2,500 to each of Messrs. Jekel, Turner,
Walker, Witzeman, and Ms. Carpenter. The options have an exercise price of $2.00
per share.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended June 30, 2001, our Human
Resource/Compensation/Organization Committee consisted of Messrs. Walker,
Turner, and Witzeman and Ms. Carpenter, currently directors of the Company. The
heading "Certain Relationships and Related Transactions" below also describes
certain other relationships and transactions with current or former board
members.
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ITEM 12. SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS, AND OFFICERS
The following table sets forth certain information with respect to
beneficial ownership of our common stock on October 29, 2001 by (i) each
director; (ii) the executive officers set forth in the Summary Compensation
Table under the section entitled "Executive Compensation;" (iii) all of our
directors and executive officers as a group; and (iv) each person known by us to
be the beneficial owner of more than 5% of our common stock.
AMOUNT
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED(1)(2)(3) PERCENT(2)
------------------------ -------------- ----------
DIRECTORS AND NAMED EXECUTIVE OFFICERS:
Jack E. Brucker 306,000(4) 2.0
John S. Banas III 131,979(4) *
Mary Anne Carpenter 22,500(4) *
Cor J. Clement, Sr. 38,250(4) *
Randall L. Harmsen. 24,445(4) *
Robert B. Hillier 72,934(4) *
Louis G. Jekel 134,963(5) *
Dr. Michel Sucher 153,005(4) 1.0
William C. Turner 38,000(4) *
Henry G. Walker 25,500(4) *
Louis A. Witzeman 140,273(6) *
Executive officers and directors
as a group (9 persons) 861,410 5.5
5% STOCKHOLDERS:
ESOP 816,617(7) 5.4
Ernst Matthijs Hendrik Van der Lee, Ernst-Willem
Van der Lee, Nicolaas P. Monteban, Mark J. Rosman,
Mark S. Howells and Bruce W. Derrick 2,057,923(8) 13.6
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* Less than 1%
(1) Except as indicated, and subject to community property laws when
applicable, the persons named in the table above have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by them.
(2) The percentages shown are calculated based upon 15,100,180 shares of common
stock outstanding on October 29, 2001. The number and percentages shown
include the shares of common stock actually owned as of October 29, 2001
and the shares of common stock that the identified person or group had a
right to acquire within 60 days after October 29, 2001. In calculating the
percentage of ownership, shares that the identified person or group had the
right to acquire within 60 days after October 29, 2001 are deemed to be
outstanding for the purpose of computing the percentage of shares of common
stock owned by such person, but are not deemed to be outstanding for the
purpose of computing the percentage of shares of common stock owned by any
other stockholders.
(3) Excludes the following fully vested shares of common stock held by the ESOP
for the benefit of the following individuals: four shares for Mr. Brucker
and 1,097 shares for Dr. Sucher. These persons have sole voting power with
respect to the shares held in their account by the ESOP.
(4) Represents shares of common stock issuable upon exercise of stock options
with respect to the following persons: Mr. Brucker, 306,000 shares; Mr.
Banas, 117,500 shares; Ms. Carpenter, 20,000 shares; Mr. Clement, 21,250
shares; Mr. Harmsen, 13,334 shares; Mr. Hillier, 72,934 shares; Dr. Sucher,
118,920 shares; Mr. Turner, 27,500 shares; and Mr. Walker, 22,500 shares.
(5) Includes 52,500 shares of common stock issuable upon exercise of stock
options; 3,175 shares held by the Louis G. Jekel Charitable Remainder Trust
UA dated March 1, 1996; 5,664 shares held by an IRA for the benefit of Mr.
Jekel; and 71,124 shares held by a partnership of which Mr. Jekel is the
beneficial owner.
(6) Includes 85,273 shares held by the Louis A. Witzeman, Jr. Family Investment
Limited Partnership, of which 6,650 shares are held for the benefit of
other family members. Also includes 52,500 shares of common stock issuable
upon the exercise of stock options.
9
(7) Represents 816,617 shares of common stock owned by the Rural/Metro
Corporation Employee Stock Ownership Plan. Participants under the ESOP have
voting power as to shares allocated to their account and the ESOP trustee
has voting power as to unallocated shares and as to any shares for which
participants have chosen not to vote. The ESOP has sole dispositive power
over all of these shares of common stock. The address of the Rural/Metro
Corporation Employee Stock Ownership Plan is c/o Rural/Metro Corporation,
8401 East Indian School Road, Scottsdale, Arizona 85251.
(8) Represents 2,057,923 shares of common stock beneficially owned by a group
consisting of Ernst Matthijs Hendrik Van der Lee, Ernst-Willem Van der Lee,
Nicolaas P. Monteban, Mark J. Rosman, Mark S. Howells and Bruce W. Derrick.
Messrs. Van der Lee, Van der Lee, Monteban, Rosman, Howells and Derrick
have sole voting and dispositive power of all of such shares. The address
of Messrs. Van der Lee, Van der Lee, Monteban, Rosman, Howells and Derrick
is c/o P. Robert Moya, Esq., Quarles & Brady Streich Lang, Two North
Central Avenue, Phoenix, Arizona 85004. Information is based solely on the
group's Schedule 13D/A filed with the Securities and Exchange Commission
dated August 28, 2001.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We paid approximately $130,000 during the year ended June 30, 2001 for
legal services to Jekel & Howard, of which Mr. Jekel, a member of our Board of
Directors, is a principal. Mr. Jekel is a participant in our ESOP. We paid Mr.
Jekel $30,000 during the year ended June 30, 2001 for additional services
rendered in connection with our forestry fire fighting services.
We paid approximately $46,000 during the year ended June 30, 2001 to Louis
A. Witzeman, a member of our Board of Directors, under leases for five fire and
ambulance stations. These leases may be cancelled by us at any time. Mr.
Witzeman received $98,000 during the fiscal year ended June 30, 2001 for fire
protection and EMS advisory and consulting services and for serving on the Board
of Directors. We also provide Mr. Witzeman with an automobile for personal use.
We believe that all of the related party transactions listed above were
provided on terms no less favorable to us than could have been obtained from
unrelated firms or third parties. All future transactions between us and our
officers, directors, and principal stockholders are expected to be on terms no
less favorable to us than could be obtained from unaffiliated persons and will
require the approval of our independent directors.
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
RURAL/METRO CORPORATION
By: /s/ JACK E. BRUCKER
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Jack E. Brucker
President and Chief Executive Officer
October 29, 2001
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