8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 5, 2005

RURAL/METRO CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	0-22056	86-0746929
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

9221 East Via De Ventura

Scottsdale, Arizona

85258

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code: (480) 606-3886

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

The Management Incentive Program (“MIP”) is an annual cash incentive plan for key executives and employees of Rural/Metro Corporation (the “Company”). Performance goals are created between the Company and the participant that document the participant’s accountabilities, and define levels of award opportunities on those accountabilities. On April 5, 2005, the Board of Directors (the “Board”) of the Company approved the final form of MIP for 2005. The 2005 MIP provides for award opportunities varying from 50% to 125% of the participant’s base salary at the chief executive officer level; 31% to 75% of the participant’s base salary at the senior or executive vice president level; and 28% to 67% of the participant’s base salary at the group president, corporate vice president and managing director level. For the CEO, 100% of the potential award is based upon achievement of consolidated net income from continuing operations. For other participants, 70% of the participant’s award is based upon achievement of consolidated net income from continuing operations; provided that, in the case of group presidents, 50% of the award is based upon operating income from continuing operations of the applicable group, as defined. The potential award is adjusted ratably for achievement between 90% and 150% of the applicable budgeted target. No award is payable for performance below 90% of the applicable budgeted target, and awards are capped at achievement of 150% of the applicable budgeted target. For all participants other than the CEO, the remaining 30% of the award is based upon achievement of individual goals tailored to the responsibilities of the participant’s position. The MIP permits the CEO, in conjunction with the Compensation Committee of the Board of Directors, to recommend an incentive award in excess of 100% of the maximum potential bonus based on individual achievement of goals. The MIP is administered by the Compensation Committee of the Board of Directors. Final award determinations are made by the Board of Directors.

As previously disclosed, in December 2004 the Board of Directors approved an incentive program providing a bonus opportunity for officers and employees subject to completion of a refinancing transaction, with the Board retaining full discretion to determine the amount of bonuses, if any. The Company completed a refinancing transaction in March 2005. At its meeting held April 5, 2005, the Board determined that several participants satisfied the criteria for receipt of a bonus payment pursuant to the incentive program, and thereupon approved the payment of such bonuses . Bonuses were based upon the contributions of the participants to completion of the refinancing transaction. Bonus awards include one-time payments of $300,000 to Kristine B. Ponczak, Vice President and Treasurer, and $210,000 to Barry D. Landon, Senior Vice President of Billing and Collections, President of Southwest Ambulance and President of Arizona/Oregon Fire Services, as well as aggregate payments of $1,290,000 to nine additional key participants.

The Board is continuing to review the extent to which bonuses, if any, may be awarded under this program to the Chief Executive Officer and Chief Financial Officer. Among other factors, the Board will base its evaluation upon its assessment of the overall application of the terms and conditions of the debt instruments associated with the refinancing, including, without limitation, applicable financial and operational covenants. The Board has not set a date for completion of its evaluation.

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Item 9.01 Financial Statements and Exhibits

(c) Exhibits.

10.1 Rural/Metro Management Incentive Program Summary

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RURAL/METRO CORPORATION
Date: April 11, 2005	By:	/s/ Michael S. Zarriello
		Michael S. Zarriello Senior Vice President and Chief Financial Officer

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Exhibit Index

Exhibit No.	Description
10.1	Rural/Metro Management Incentive Program Summary

5

EX-10.1

Exhibit 10.1

Rural/Metro Management Incentive Program Summary

Purpose of Plan

Rural/Metro’s Management Incentive Program (MIP) is an annual cash incentive plan for the key executive positions as designated below. The MIP is designed to promote, recognize, and financially reward exceptional performance. This is accomplished by:

• Establishing goals to encourage and influence superior performance and a high degree of accountability

• Communicating to eligible employees the importance of performance excellence, of substantially exceeding budget expectations, and of achieving other objectives annually agreed to as “soft goals”

• Aligning executive accountability and corporate goals

This Plan summary document does not establish enforceable employee rights, contractual or otherwise, and does not establish an employment relationship enforceable by the participant. Further, the annual amounts, budget expectations, and soft goals require review and approval by the Board of Directors.

Plan Document

In an effort to provide the incentive to outperform the goal, “Consolidated Budgeted Net Income from Continuing Operations”, in the case of corporate executives and “Regional Budgeted Operating Income from Continuing Operations”, in the case of Group Presidents, the Company has established a “sliding scale” award system as follows:

Percentage of Goal	CEO		Executive Vice President		Senior Vice President		Corporate Vice President		Group Presidents
90%	50.00	%	31.00	%	31.00	%	28.00	%	28.00	%
100%	80.00	%	50.00	%	50.00	%	45.00	%	45.00	%
125%	100.00	%	62.00	%	62.00	%	56.00	%	56.00	%
150%	125.00	%	75.00	%	75.00	%	67.00	%	67.00	%

The potential award is adjusted incrementally at each 1% point for goal achievements between 90% and 150%.

For example: If the Company achieved 104% of goal; the CEO award would calculate to 83.20% (or 1.04 * 80%), while the Senior Vice President award would calculate to 52% (or 1.04 * 50%).

Note: The MIP is discretionary and subject to change or termination by the Board of Directors at any time without notice.

Administration

• The Compensation Committee of the Board of Directors, under the leadership of the Chair, is responsible for the overall administration of the MIP. The Compensation Committee is, therefore, defined as the “Plan Administrator”.

• The CEO and the company’s Vice President & Treasurer serve as staff to the Plan Administrator to provide reports, make recommended design modifications, and ensure accuracy of reporting.

• The Plan Administrator resolves any disputes concerning the plan, including payout disputes.

• The Board of Directors approves any or all recommendations made by the Compensation Committee before they are considered to be adopted.

Duration of the Plan

The MIP is measured in terms of hard and soft goals. Hard goals are measured from July 1^st to June 30^th of the respective fiscal year, and soft goals are measured from January 1^st to November 30^th of the respective calendar year. The MIP is, by design and intent, fully discretionary and the provisions may be modified at any time to meet specific business objectives of the Company.

The MIP is designed as a calendar year plan; however, audited June 30th fiscal year–end financial statements available by September 30th are utilized to substantiate hard goal achievements.

Eligibility

To participate in the MIP, certain eligibility requirements apply in addition to the position titles designated above, i.e., throughout the duration of the specific MIP period as defined above, the participant must:

• Not be functioning under any corrective action plan;

• Not terminate (or give notice to terminate) his/her employment with the company (unless otherwise agreed to in a separate employment agreement); and

• Unless specifically exempted by the Plan Administor, have continuously functioned in an eligible position until the MIP payout date.

Determination of Scoring Criteria

• Awards are calculated utilizing the predetermined relative value scoring criteria established for each annual goal. Ultimately, however, the eligibility for, and payment of, any and all incentive compensation under the MIP is entirely discretionary and subject to the recommendation of the Plan Administrator and approval of the Board of Directors.

• The MIP allows the Chief Executive Officer in conjunction with the Compensation Committee to recommend an incentive award that may be in excess of 100% of the projected relative value scoring criteria based on individual achievements of hard and soft goals.

• Participants who are hired, transferred or promoted into or out of an eligible position or whose employment ends due to death, disability, retirement or separation under the Corporation’s Severance Policy, may, but need not be, considered for a prorated incentive award based on the actual number of months worked.

• In the case of a participant transferring from one eligible position to another eligible position, past performance is considered in determining an award.

Development of Scoring Criteria

• Unless otherwise stipulated by an employment agreement, each participant develops, in cooperation with their Supervisor, specific scoring criteria including hard and soft goals. The ‘percentage of goal’ to be applied is primarily based on “Consolidated Actual Net Income from Continuing Operations”, or in the case of Group Presidents on “Regional Actual Operating Income from Continuing Operations” as adjusted for cost of capital and goodwill impairment charges, if any. The Board of Directors, at its discretion, can adjust the Consolidated Actual Net Income from Continuing Operations calculation to consider Board actions taken in the best long-term interest of the Company. Hard goals are then weighted at 70% and soft goals are weighted at 30% of the overall award. Soft goals are specific to regional or corporate directives with emphasis on accountability related to each individual participant.

• The Plan Scoring Criteria Form (“PSCF”) outlines specific goals with an assigned relative value weighting. This relative value weighting is reviewed and recommended by the Plan Administrator with final approval of the Board of Directors.

• It is envisioned that the MIP relative value scoring criteria will total 100%; however, at the recommendation of the Plan Administrator and by approval of the Board of Directors this award may exceed 100%.

Payout Conditions

• A preliminary report is given to the Board of Directors in October presenting the audited numbers for the hard goals and the preliminary expectations on the soft goals. The majority of the soft goals are completed by October, therefore, it is possible to provide a reasonable estimate. Any necessary updates on soft goals completed after the October Board meeting will be provided during the December meeting.

• It is the intention of this Plan that the Board of Directors will receive the appropriate information at the December Board Meeting to review and approve the awards and the awards would be paid as soon as possible after each December Board Meeting but in no case later than December 31^st.

• Incentive awards are calculated using the participants’ annual base pay at the time of the award payout.

• Incentive awards are subject to normal payroll withholding.