1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
/X/ THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1995

/ / Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (No Fee Required)

For the Transition period from to
--------------- --------------
Commission File Number: 0-13821

ROTO-ROOTER, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 31-1078130
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

2500 Chemed Center, 255 East Fifth Street, Cincinnati, Ohio 45202-4726
(Address of principal executive offices) (Zip Code)

(513) 762-6690
(Registrant's telephone number, including area code)

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 $1 Per Share

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.
---

The aggregate market value of the voting stock held by non-affiliates of
the registrant, based upon the closing price of said stock on the NASDAQ
National Market on March 11, 1996 ($31.50 per share), was $60,561,711.

At March 11, 1996, 5,153,006 shares of Roto-Rooter, Inc.
Common Stock (par value $1 per share) were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

DOCUMENT WHERE INCORPORATED
-------- ------------------

1995 Annual Report to Stockholders (Specified Portions) Parts I, II and IV
Proxy Statement for Annual Meeting Part III
to be held May 20, 1996.

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ROTO-ROOTER, INC.

1995 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

PAGE

PART I

Item 1. Business............................................. 1
Item 2. Properties........................................... 3
Item 3. Legal Proceedings.................................... 4
Item 4. Submission of Matters to a Vote of Security Holders.. 5
-- Executive Officers of the Registrant................. 5

PART II

Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters................................. 6
Item 6. Selected Financial Data.............................. 6
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations................. 6
Item 8. Financial Statements and Supplementary Data.......... 6
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure................. 7

PART III

Item 10. Directors and Executive Officers of the Registrant... 7
Item 11. Executive Compensation............................... 7
Item 12. Security Ownership of Certain Beneficial Owners
and Management...................................... 7
Item 13. Certain Relationships and Related Transactions....... 7

PART IV

Item 14. Exhibits, Financial Statement Schedule and
Reports on Form 8-K................................. 7

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PART I

ITEM 1. BUSINESS.

GENERAL

Roto-Rooter, Inc. was incorporated in Delaware in 1983 as a wholly owned
subsidiary of Chemed Corporation, a Delaware corporation, and on August 31, 1984
succeeded to the business of Chemed's Roto-Rooter Group, the substantial portion
of which business Chemed acquired in 1980. As used herein, "Company" and
"Roto-Rooter" refers to Roto-Rooter, Inc. and its subsidiaries and "Chemed"
refers to Chemed Corporation and its subsidiaries.

In September 1984, the Company sold in a private placement 719,991 shares
of its common stock, par value $1 per share (the "Common Stock"), and in June
1985, Chemed sold in a public offering 1,100,000 shares of Common Stock. Chemed
owns 2,990,333 shares of Common Stock or approximately 58 percent of the
outstanding shares of Common Stock.

Roto-Rooter conducts its business in one business segment. All significant
revenues relate to providing repair and maintenance services to residential,
commercial, industrial and municipal customers through both company-owned and
franchised operations.

DESCRIPTION OF BUSINESS

Roto-Rooter is the nation's largest provider of sewer and drain cleaning
services. The Company provides sewer and drain cleaning and plumbing repair and
maintenance services through company-owned operations and franchised operations
located in all 50 states, Canada and Japan. The Company also manufactures and
purchases for resale sewer and drain cleaning equipment, cable, and other
products and accessories for its company-owned operations and for sale to its
independent franchisees. Roto-Rooter is one of the oldest franchising businesses
in the United States, having established its first franchise in 1936. In August
1991, the Company and Chemed, respectively, purchased 70% and 30% of Convenient
Home Services, Inc., which changed its name to Service America Systems, Inc. in
July of 1994 ("Service America"). Service America is engaged primarily in the
air conditioning and appliance maintenance and repair business in Florida
primarily through the sale of service contracts which generally cover a one-year
period. In July 1993, Service America completed the acquisition of all the
outstanding shares of common stock of Encore Service Systems, Inc. ("Encore"),
which is also principally engaged in the air conditioning and appliance
maintenance and repair business through service contracts in Florida and
Arizona. As a percent of total operating revenue, sewer and drain cleaning
repair and maintenance services represent 32 percent, plumbing repair and
maintenance services represent 24 percent, air conditioning and appliance repair
and maintenance services represent 32 percent, and all other classes represent
12 percent. Other information called for by this item is included within Note 2
of the Notes to Consolidated Financial Statements appearing on page 14 of the
1995 Annual Report to Stockholders and is incorporated herein by reference.

PRODUCT AND MARKET DEVELOPMENT

Roto-Rooter engages in a continuing program for the development and
marketing of new products and services under the Roto-Rooter name.

Since 1981, the Company has developed and introduced four drain-care
products for residential and commercial use which are distributed principally
through the Roto-Rooter service technicians directly to residential customers
and commercial accounts.

Plumbing repair services were first introduced in a company-owned service
location in 1981. These services are provided primarily to residential and
commercial accounts

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by licensed plumbers who are Company employees. The Company has been able to use
its existing staff and facilities in the development of its plumbing repair
businesses. All company-owned operations are providing plumbing repair and
maintenance services to the markets they serve, except for some company-owned
contractor operations. The Company does not presently plan to enter the plumbing
contracting business for new construction.

Cleaning of large diameter pipes is an additional service provided to
industrial and municipal customers by several company-owned operations. The
types of pipes cleaned include sanitary and storm sewer pipes and pipes used for
industrial processes. These pipes are cleaned by a variety of methods using
mechanical equipment and high-pressure water jets. Although the drain pipes in
homes generally are four to six inches in diameter, the diameters of pipes used
in industrial and municipal systems are as large as six feet.

FRANCHISE AGREEMENTS

The Company maintains written franchise agreements with its independent
franchisees. The form of franchise agreement in general use by the Company since
early 1990 provides that the franchisee is licensed and franchised to perform
and sell services relating to sewer and drain cleaning under the Roto-Rooter(R)
and related trademarks and service marks in accordance with specified methods,
techniques, and standards only within a designated geographic area. The
franchisee is not permitted to use any of the Company's marks in connection with
the sale of any products or the performance of other services except as
expressly authorized by the Company. A franchisee is required to actively and
continuously advertise, promote, and sell sewer and drain cleaning services
under the Roto-Rooter(R) service mark; to maintain an office and service
facility only within his territory; and to comply at all times with quality and
service standards specified by the Company.

Generally, franchise agreements provide for a five-year term and, upon
expiration, each franchisee has the right to enter into a new franchise
agreement with Roto-Rooter upon the terms and conditions as are then being
offered by Roto-Rooter to other renewing franchisees. Under Roto-Rooter's
current franchising program, a new franchisee pays an initial franchise fee of
$5,000. Thereafter, each franchisee pays a monthly fee to Roto-Rooter which is
based upon the population within his territory.

The franchise agreement provides for a Base Monthly Franchise Fee according
to Roto-Rooter's current fee schedule which (i) is determined by the current
population in the territory, and (ii) is thereafter adjusted annually during the
term of the agreement to reflect increases or decreases in the Consumer Price
Index. This form of franchise agreement enables Roto-Rooter's franchise fee
income from continuing franchisees to increase in proportion to inflation during
the life of each agreement.

SERVICE MARKS AND TRADEMARKS

The Company regards its corporate name, service marks, and trademarks to be
important to its identification and of significant value in the conduct of the
business. The Company owns the following names, phrases, and designs which are
registered on the Principal Register of the United States Patent and Trademark
Office: "Roto-Rooter," the Roto-Rooter logo, and "And Away Go Troubles Down the
Drain."

The Company vigorously polices the uses and practices associated with its
service marks and trademarks. The Company is unaware of any ongoing
infringements which may have a material adverse effect on its overall business
or the validity of any such mark.

COMPETITION

All aspects of the sewer, drain, and pipe cleaning, and appliance and
plumbing repair and maintenance businesses are highly competitive. Competition
is, however,

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fragmented in most markets with local and regional firms providing the primary
competition. The principal methods of competition are advertising, range of
services provided, speed and quality of customer service, service guarantees,
and pricing.

SEASONALITY

Roto-Rooter's total operating revenues have minimal seasonality.

GOVERNMENT REGULATIONS

Roto-Rooter's franchising activities are subject to various federal and
state franchising laws and regulations, including the rules and regulations of
the Federal Trade Commission (the "FTC") regarding the offering or sale of
franchises. The rules and regulations of the FTC require that Roto-Rooter
provide all prospective franchisees with specific information regarding the
franchise program and Roto-Rooter in the form of a detailed franchise offering
circular. In addition, a number of states require Roto-Rooter to register its
franchise offering prior to offering or selling franchises in the state. Various
state laws also provide for certain rights in favor of franchisees, including
(i) limitations on the franchisor's ability to terminate a franchise except for
good cause, (ii) restrictions on the franchisor's ability to deny renewal of a
franchise, (iii) circumstances under which the franchisor may be required to
purchase certain inventory of franchisees when a franchise is terminated or not
renewed in violation of such laws, and (iv) provisions relating to arbitration.

Roto-Rooter's operations are also subject to various federal, state, and
local laws and regulations regarding environmental matters and other aspects of
the operation of a sewer and drain cleaning and plumbing services business. For
certain other activities, such as septic tank pumping, Roto-Rooter is subject to
state and local environmental health and sanitation regulations. Compliance with
federal, state and local laws governing discharge of materials into the
environment have not had nor are expected to have a material effect upon the
operations of the Company. Roto-Rooter's ability to engage in the plumbing
repair business is also subject to certain limitations and restrictions imposed
by state and local licensing laws and regulations.

Service America's operations are regulated by the Florida and Arizona
Departments of Insurance. In accordance with certain Florida regulatory
requirements, Service America maintains cash with the Department of Insurance
and is also required to maintain additional unencumbered reserves. In addition,
Service America's air conditioning and appliance repair and maintenance business
is also subject to certain limitations imposed by state and local business laws
and regulations.

Roto-Rooter, to the best of its knowledge, is currently in compliance in
all material respects with the laws and regulations affecting its operations.
While Roto-Rooter cannot currently predict the effect which any future
legislation, regulations, or interpretations may have upon its operations, it
does not anticipate any changes that would have a material adverse impact on its
operations.

EMPLOYEES

On December 31, 1995, Roto-Rooter had a total of 2,599 employees; 2,542
were located in the United States and 57 were located in Canada.

ITEM 2. PROPERTIES.

The major facilities operated by Roto-Rooter are listed below:

Location Type Owned Leased
- ------------------- ----------------------- -------------- --------------

Cincinnati, OH Office and service 24,000 sq. ft. 24,000 sq. ft.
facilities

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6

Location Type Owned Leased
- ------------------- ----------------------- -------------- --------------

West Des Moines, IA Office, manufacturing 29,000 sq. ft. --
and distribution center
facilities

Northeastern U.S. Office and service 43,000 sq. ft. 47,000 sq. ft.
Area (1) facilities

Central U.S. Area Office and service 27,000 sq. ft. 41,000 sq. ft.
(2) facilities

Mid-Atlantic U.S. Office and service 54,000 sq. ft. 81,000 sq. ft.
Area (3) facilities

Western U.S. Office and service 19,000 sq. ft. 38,000 sq. ft.
Area (4) facilities

Canada (5) Office and service -- 13,000 sq. ft.
facilities

- --------------------
(1) Comprising locations in Baltimore and Jessup, Maryland; Stoughton and
Woburn, Massachusetts; Stratford and Bloomfield, Connecticut; West
Seneca, West Hempstead, Staten Island, Rochester, Farmingdale and
Hawthorne, New York; and Cranston, Rhode Island.

(2) Comprising locations in Atlanta and Decator, Georgia; Birmingham,
Alabama; Charlotte, North Carolina; Hilliard and Cleveland, Ohio;
Memphis and Nashville, Tennessee; Wilmerding, Pennsylvania; St. Louis,
Missouri; and Little Rock, Arkansas.

(3) Comprising locations in Pennsauken and North Brunswick, New Jersey;
Jacksonville, Medley, Pompano Beach, Ft. Myers, St. Petersburg, Boca
Raton, Daytona Beach, Miami and Orlando, Florida; Virginia Beach and
Fairfax, Virginia; Levittown, Pennsylvania; Raleigh, North Carolina;
and Newark, Delaware.

(4) Comprising locations in Houston and San Antonio, Texas; Addison, Elk
Grove Village and Posen, Illinois; Denver, Colorado; Honolulu, Hawaii;
Minneapolis, Minnesota; Tacoma, Washington; and Phoenix, Arizona.

(5) Comprising locations in Delta, British Columbia; Winnipeg, Manitoba;
and Boucherville, Quebec.

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

All "owned" property is held in fee and is not subject to any major
encumbrance. "Leased" properties are occupied under rental agreements having
terms ranging up to eleven years and providing, in some instances, for payment
by Roto-Rooter of insurance, property taxes, and building operating expenses.
Roto-Rooter considers all of these facilities to be in good operating condition
and generally adequate for its present and currently anticipated needs.

ITEM 3. LEGAL PROCEEDINGS.

On July 18, 1995, an association of certain Roto-Rooter franchisees filed a
lawsuit in the United States District Court for the Southern District of
Florida, Miami Division, against Roto-Rooter Corporation, Roto-Rooter, Inc. and
Chemed Corporation. In January 1996, this proceeding was transferred to the
United States District Court for the Southern District of Iowa, Central
Division. Plaintiffs allege that the defendants breached the franchise
agreements and the implied covenant of good faith and fair dealing by requiring
that renewing franchisees execute the franchise agreements

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with certain revised provisions. These provisions cover fees, advertising
expenditures, territorial rights, termination, trademarks and sales reporting.
Plaintiffs seek a declaratory judgment that these are unreasonable revisions
which are impermissible under the terms of the franchise agreement. Plaintiffs
also seek unspecified amounts of compensatory damages, lost profits, lost future
profits, lost goodwill, costs and attorneys' fees. The Company disputes these
claims and will vigorously defend its rights under the franchise agreement. The
Company believes that the disposition of this matter will not have a material
effect on the financial position of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

EXECUTIVE OFFICERS OF THE COMPANY

The executive officers of the Company are as follows:

Name Age Office First Elected
- ------------------ --- ----------------------------- --------------------

Edward L. Hutton 76 Chairman December 30, 1983(1)
Kevin J. McNamara 42 Vice Chairman August 2, 1994(2)
William R. Griffin 52 President and Chief Executive May 13, 1985(3)
Officer
Douglas B. Harper 52 Executive Vice President May 18, 1992(4)
Patrick L. Johnson 42 Vice President December 30, 1983(5)
Brian A. Brumm 41 Vice President, Treasurer May 13, 1985(6)
and Chief Financial Officer
Lawrence J. Gillis 61 Vice President May 20, 1991(7)

(1) Mr. E. L. Hutton is Chairman of the Company and, since November 1993,
has served as Chairman and Chief Executive Officer of Chemed.
Previously, from 1970 to November 1993, he served as President and
Chief Executive Officer of Chemed. He is the father of Mr. Thomas C.
Hutton, a director of the Company.

(2) Mr. K. J. McNamara is Vice Chairman of the Company and is President of
Chemed and has held these positions since August 1994. From August 1986
to August 1994, he served as Secretary and General Counsel of the
Company. Previously, he served as an Executive Vice President,
Secretary and General Counsel of Chemed from November 1993, August 1986
and August 1986 to August 1994, respectively. From May 1992 to November
1993, he held the position of Vice Chairman of Chemed; and from August
1986 to May 1992, he served as Vice President of Chemed.

(3) Mr. W. R. Griffin is President and Chief Executive Officer of the
Company, after having previously (May 1984-May 1985) served as its
President. He is also an Executive Vice President of Chemed and has
held this position since May 1991.

(4) Mr. D. B. Harper is the Executive Vice President of the Company, after
having previously (December 1983 - May 1992) served as Vice President.
Since October 1980, Mr. Harper has served as President of Roto-Rooter
Corporation, a subsidiary.

(5) Mr. P. L. Johnson is a Vice President of the Company and is also
President and Chief Executive Officer of Service America and has held
these positions since December 1983 and April 1993, respectively.
Previously, from August 1991 to April 1993 he was Vice Chairman and
Chief Executive Officer of Service America. From September 1986 to
September 1993 he also served as Senior Vice President of Roto-Rooter
Services Company. From January 1984 to September 1986, he was a Vice
President of Roto-Rooter Services Company.

(6) Mr. B. A. Brumm is a Vice President and the Treasurer and Chief
Financial Officer of the Company and has held these positions since
1985.

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(7) Mr. L. J. Gillis is a Vice President of the Company and has held this
position since May 20, 1991. Since October 1994, he has served as
President of Roto- Rooter Services Company. Previously, he served as
its Senior Vice President- Operations from February 1991 to October
1994. From November 1983 to February 1991, he served as a Vice
President of Roto-Rooter Services Company.

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

Each executive officer holds office until the annual election at the next
annual organizational meeting of the Board of Directors of the Company which is
scheduled to be held on May 20, 1996.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

The Company's Common Stock (par value $1 per share) is included in the
NASDAQ Stock Market and is traded under the symbol ROTO. The range of the high
and low market prices for the Company's Common Stock and dividends paid per
share for each quarter of 1994 and of 1995 is set forth below.

CLOSING

Dividends Paid
High Low Per Share
------------------------------------------------------------------

------------------------------------------------------------------
1995
------------------------------------------------------------------

First Quarter $28 $19-1/2 $.15
Second Quarter 28-1/2 24-1/2 .15
Third Quarter 37 28 .17
Fourth Quarter 37-3/4 30-1/2 .17

1994
------------------------------------------------------------------

First Quarter $32 $28 $.14
Second Quarter 32 24 .14
Third Quarter 26-1/2 22-1/2 .15
Fourth Quarter 25-3/4 19-1/2 .15

Future dividends are necessarily dependent upon Roto-Rooter's earnings and
financial condition and other factors not presently determinable.

As of March 11, 1996, there were approximately 197 stockholders of record
of the Company's Common Stock. This number only includes stockholders of record
and does not include stockholders with shares beneficially held for those in
nominee name or within clearinghouse positions of brokers, banks or other
institutions. The Company believes its stockholders number more than 900.

ITEM 6. SELECTED FINANCIAL DATA.

The information called for by this Item for the five years ended December
31, 1995 is set forth on pages 22 and 23 of the Company's 1995 Annual Report to
Stockholders and is incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

The information called for by this Item is set forth on pages 19 through 21
of the Company's 1995 Annual Report to Stockholders and is incorporated herein
by reference.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The consolidated financial statements, together with the report thereon of
Price Waterhouse LLP dated February 1, 1996, appearing on pages 9 through 18 of
the Company's 1995 Annual Report to Stockholders and the Unaudited Quarterly
Financial Data appearing on page 18 of the Company's 1995 Annual Report to
Stockholders are incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.

The Directors of the Company are:

Edward L. Hutton Douglas B. Harper
William R. Griffin Will J. Hoekman
Brian A. Brumm Thomas C. Hutton
James A. Cunningham Patrick L. Johnson
Naomi C. Dallob Sandra E. Laney
Charles H. Erhart, Jr. Kevin J. McNamara
Neal Gilliatt Timothy S. O'Toole
Lawrence J. Gillis D. Walter Robbins, Jr.
Jerome E. Schnee

Except for the information relating to Mr. Schnee, the additional
information required under this Item with respect to directors and executive
officers is set forth in the Company's 1996 Proxy Statement and in Part I hereof
under the caption "Executive Officers of the Registrant" and is incorporated
herein by reference. Mr. Schnee, who is 54 years old, is a Professor of
Management at the University of Cincinnati College of Business Administration
("College") and has held this position since September 1988. From September 1988
to May 1994, he also served as Dean of the College. He is also a director of
National Sanitary Supply Company.

ITEM 11. EXECUTIVE COMPENSATION.

Information required under this Item is set forth in the Company's 1996
Proxy Statement which is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Information required under this Item is set forth in the Company's 1996
Proxy Statement which is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Information required under this Item is set forth in the Company's 1996
Proxy Statement which is incorporated herein by reference.

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PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K.

EXHIBITS

2. Exchange Agreement, dated August 31, 1984, between Chemed
Corporation and Roto-Rooter, Inc.*

3.1 Certificate of Incorporation of Roto-Rooter, Inc.*

3.2 By-Laws of Roto-Rooter, Inc.*

10.1 Executive Salary Protection Plan of Roto-Rooter, Inc., as
amended May 17, 1993.*,**

10.2 1984 Stock Incentive Plan of Roto-Rooter, Inc., as amended
through May 20, 1991.*,**

10.3 1978 Stock Incentive Plan of Chemed Corporation, as amended
through May 20, 1991.*,**

10.4 1981 Stock Incentive Plan of Chemed Corporation, as amended
through May 20, 1991.*,**

10.5 1983 Incentive Stock Option Plan of Chemed Corporation, as
amended through May 20, 1991.*,**

10.6 1986 Stock Incentive Plan of Chemed Corporation, as amended
through May 20, 1991.*,**

10.7 1988 Stock Incentive Plan of Chemed Corporation, as amended
through May 20, 1991.*,**

10.8 Service America Systems, Inc. Retirement and Savings Plan.*,**

10.9 Roto-Rooter Management Company Deferred Compensation Plan.*,**

10.10 Amendment No. 1 to Roto-Rooter Management Company Deferred
Compensation Plan, effective January 1, 1993.*,**

10.11 Roto-Rooter Management Company Deferred Compensation Plan No.
2, effective October 1, 1993.*,**

10.12 Roto-Rooter 1987 Stock Incentive Plan, as amended through May
20, 1991.*,**

10.13 1990 Stock Incentive Plan of Roto-Rooter, as amended through
May 20, 1991.*,**

10.14 1993 Stock Incentive Plan of Roto-Rooter, effective May 17,
1993.*,**

10.15 1991 Convenient Home Services Stock Option Plan.*,**

10.16 Service America Deferred Compensation Plan.*,**

10.17 1990 Standard Form of Roto-Rooter Franchise Agreement.*

10.18 1995 Standard Form of Roto-Rooter Franchise Agreement.*

10.19 Employment Agreements with Executives.*,**

10.20 Amendment No. 5 to Employment Agreement with William R.
Griffin.**

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10.21 Amendment No. 5 to Employment Agreement with Douglas B. Harper.
**

10.22 Amendment No. 5 to Employment Agreement with Lawrence Gillis.**

10.23 Amendment No. 5 to Employment Agreement with Patrick L.
Johnson.**

10.24 Amendment No. 5 to Employment Agreement with Brian A. Brumm.**

10.25 License Agreement between Roto-Rooter Corporation and
Roto-Rooter Services Company.*

10.26 Roto-Rooter 1995 Stock Incentive Plan**

10.27 Split Dollar Agreements with Executives.**

11. Computation of Per Share Earnings

13. 1995 Annual Report to Stockholders.

21. Subsidiaries of Roto-Rooter, Inc.

23. Consent of Independent Accountants

24. Powers of Attorney

27. Financial Data Schedule +

* This exhibit is being filed by means of incorporation by reference (see
Index to Exhibits). Each other exhibit is being filed with this report.

** Management contract or compensatory plan or arrangement.

+ Not filed herewith.

FINANCIAL STATEMENT SCHEDULE

See Index to Financial Statements and Financial Statement Schedule on
page S-1.

REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the quarter ended December 31,
1995.

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SIGNATURES

Pursuant to the requirements 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.

ROTO-ROOTER, INC.

March 26, 1996 By /s/ William R. Griffin
----------------------------
William R. Griffin
President and Chief
Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ Edward L. Hutton Chairman and a Director )
- ---------------------- )
Edward L. Hutton )
)
)
)
/s/ William R. Griffin President and Chief Executive )
- ---------------------- Officer and a Director (Principal )
William R. Griffin Executive Officer) )
)
)
/s/ Brian A. Brumm Vice President, Treasurer )-March 26, 1996
- ------------------ and Chief Financial Officer )
Brian A. Brumm and a Director (Principal )
Financial and Accounting Officer) )
)
)
James A. Cunningham* Thomas C. Hutton* ) )
Charles H. Erhart, Jr.* Patrick L. Johnson* ) )
Neal Gilliatt* Sandra E. Laney* ) )
Lawrence J. Gillis* Kevin J. McNamara*- )-Directors )
Douglas B. Harper* Timothy S. O'Toole* ) )
Will J. Hoekman* D. Walter Robbins, Jr.* ) )
Jerome E. Schnee* ) )

- --------------------
* Naomi C. Dallob, General Counsel and Secretary of the Company, by signing her
name hereto signs this document on behalf of each of the persons indicated
above pursuant to powers of attorney duly executed by such persons and filed
with the Securities and Exchange Commission.

March 26, 1996 /s/ Naomi C. Dallob
- -------------- ---------------------------------
Date Naomi C. Dallob
(Attorney-in-Fact and a Director)

13
ROTO-ROOTER, INC. AND SUBSIDIARY COMPANIES

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

1993, 1994 AND 1995

PAGE(S)

ROTO-ROOTER, INC. CONSOLIDATED FINANCIAL
STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

Report of Independent Accountants......................... 9 *
Consolidated Statement of Income.......................... 10 *
Consolidated Balance Sheet................................ 11 *
Consolidated Statement of Cash Flows...................... 12 *
Consolidated Statement of Stockholders' Equity............ 13 *
Notes to Consolidated Financial Statements................ 14-18*

Report of Independent Accountants on Financial Statement
Schedule................................................ S-2

Schedule II -- Valuation and Qualifying Accounts.......... S-3

*Indicates page numbers in the Roto-Rooter, Inc. 1995 Annual Report to
Stockholders.

The consolidated financial statements of Roto-Rooter, Inc. listed
above, appearing in the accompanying Roto-Rooter, Inc. 1995 Annual Report to
Stockholders, are incorporated herein by reference. The financial statement
schedule should be read in conjunction with the consolidated financial
statements listed above. Schedules not included have been omitted because they
are not applicable or the required information is shown in the financial
statements or notes thereto as listed above.

S-1
14
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE

To the Board of Directors
of Roto-Rooter, Inc.

Our audits of the consolidated financial statements referred to in our report
dated February 1, 1996 appearing on page 9 of the 1995 Annual Report to
Stockholders of Roto-Rooter, Inc. (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the Financial Statement Schedule listed in Item 14 of
this Form 10-K. In our opinion, the Financial Statement Schedule presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.

- -----------------------
PRICE WATERHOUSE LLP

Cincinnati, Ohio
February 1, 1996

S-2
15

SCHEDULE II

ROTO-ROOTER, INC. AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS
(amounts in thousands)

=============================================================================================================
Additions
Balance at Charged to Balance at
Beginning Costs and Deductions End of
Descriptions of Period Expenses (a) Period
- -------------------------------------------------------------------------------------------------------------

Qualifying Accounts Deducted
from Assets:
Allowance for Doubtful Accounts:

For the Year 1993 $468 $538 $(354) $ 652
==== ==== ====== ======

For the Year 1994 $652 $610 $(378) $ 884
==== ==== ====== ======

For the Year 1995 $884 $672 $(506) $1,050
==== ==== ====== ======

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(a) Deductions include accounts considered uncollectible or written off,
net of recoveries.

S-3

16
INDEX TO EXHIBITS

Page Number or
Incorporation by Reference
--------------------------
Exhibit File No. and Previous
Number Filing Date Exhibit No.
- ------- ------------ -----------

2. Exchange Agreement dated August S-1 2
13, 1984 between Chemed Registration
Corporation and Roto-Rooter, Inc. No. 2-97456
5/2/85

3.1 Certificate of Incorporation of Form 10-K 2
Roto-Rooter, Inc. 3/27/92

3.2 By-Laws of Roto-Rooter, Inc. Form 10-K 3
3/27/93

10.1 Executive Salary Protection Plan Form 10-K 10.2
of Roto-Rooter, Inc., as amended 3/30/94
May 17, 1993

10.2 1984 Stock Incentive Plan of Roto- Form 10-K 6
Rooter, Inc., as amended through 3/27/92
May 20, 1991

10.4 1981 Stock Incentive Plan of Form 10-K 9
Chemed Corporation, as amended 3/27/92
through May 20, 1991

10.5 1983 Incentive Stock Option Plan Form 10-K 10
of Chemed Corporation, as amended 3/27/92
through May 20, 1991

10.6 1986 Stock Incentive Plan of Form 10-K 11
Chemed Corporation, as amended 3/27/92
through May 20, 1991

10.7 1988 Stock Incentive Plan of Form 10-K 12
Chemed Corporation, as amended 3/27/92
through May 20, 1991

10.8 Service America Systems, Inc. Form 10-K 10.8
Retirement and Savings Plan 3/28/95

10.9 Roto-Rooter Management Company Form 10-K 14
Deferred Compensation Plan 3/24/88

10.10 Amendment No. 1 to Roto-Rooter Form 10-K 10.11
Management Company Deferred 3/30/94
Compensation Plan, effective
January 1, 1993

17
INDEX TO EXHIBITS

Page Number or
Incorporation by Reference
--------------------------
Exhibit File No. and Previous
Number Filing Date Exhibit No.
- ------- ------------ -----------

10.11 Roto-Rooter Management Company Form 10-K 10.12
Deferred Compensation Plan, No. 2, 3/30/94
effective October 1, 1993

10.12 1987 Stock Incentive Plan of Roto- Form 10-K 14
Rooter, Inc., as amended through 3/27/92
May 20, 1991

10.13 1990 Stock Incentive Plan of Roto- Form 10-K 15
Rooter, Inc., as amended through 3/27/92
May 20, 1991

10.14 1993 Stock Incentive Plan of Roto- Form 10-K 10.15
Rooter, Inc., effective May 17, 3/30/94
1993

10.15 1991 Convenient Home Services Form 10-K 18
Stock Option Plan 3/25/93

10.16 Service America Deferred Form 10-K 10.26
Compensation Plan 3/28/95

10.17 1990 Standard Form of Roto-Rooter Form 10-K 17
Franchise Agreement 3/27/92

10.18 1995 Standard Form of Roto-Rooter Form 10-K 10.18
Franchise Agreement 3/28/95

10.19 Employment Agreement with Form 10-K 18
Executives 3/25/91

10.20 Amendment No. 5 to Employment *
Agreement with William R. Griffin

10.21 Amendment No. 5 to Employment *
Agreement with Douglas B. Harper

10.22 Amendment No. 5 to Employment *
Agreement with Lawrence Gillis

10.23 Amendment No. 5 to Employment *
Agreement with Patrick L. Johnson

10.24 Amendment No. 5 to Employment *
Agreement with Brian A. Brumm

10.25 License Agreement between Roto- Form 10-K 21
Rooter Corporation and Roto-Rooter 3/25/93
Services Company

10.26 Roto-Rooter 1995 Stock Incentive *
Plan

10.27 Split Dollar Agreements *

18
INDEX TO EXHIBITS

Page Number or
Incorporation by Reference
--------------------------
Exhibit File No. and Previous
Number Filing Date Exhibit No.
- ------- ------------ -----------

11. Statement re: Computation of Per *
Share Earnings

13. 1995 Annual Report to Stockholders *

21. Subsidiaries of Roto-Rooter, Inc. *

23. Consent of Independent Accountants *

24. Powers of Attorney *

27. Financial Data Schedule *

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* Filed herewith