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CORRESP
1
filename1.htm

    rollinscorr80508.htm

      Direct
phone: 404.873.8528

      Direct
fax: 404.873.8529

      E-mail:
stephen.fox@agg.com

      www.agg.com

    VIA
EDGAR

    August 5,
2008

    Mr.
Michael McTiernan

    Special
Counsel

    United
States Securities and Exchange Commission

    Division
of Corporation Finance

    100 F
Street, N.E.

    Washington,
DC   20549

              RE:

              Rollins,
      Inc.

              File
      No. 001-04422

              Form
      10-K for the year ended December 31,
2007

    Dear Mr.
McTiernan:

    We are
legal counsel to Rollins, Inc. (the “Company”).  This letter provides
the Company’s responses to the comment in your letter dated July 22, 2008 about
the Company’s Schedule 14A filed March 17, 2008.  In an effort to
facilitate the Staff’s review, we have repeated the comment prior to setting
forth the Company’s response thereto.

    Schedule
14A

    Compensation Discussion and
Analysis

    Performance-Based Plan, page
18

              1.

              We
      note your disclosure that bonus amounts are based on specific performance
      targets and that in 2007 these targets were met and bonuses
      paid.  In future filings, please disclose the actual performance
      targets, the actual performance results and an analysis of how this
      impacted the actual bonus amounts paid to each named executive
      officer.  If you believe some or all of this disclosure would
      cause you competitive harm, please provide us with additional information
      specifically detailing your competitive harm analysis.  Refer to
      Instruction 4 to Item 402(b) of Regulation S-K.  Please advise
      us regarding how you intend to revise this disclosure in the
      future.

    Mr.
Michael McTiernan

      August 5,
2008

      Page 2 of
5

    Company
Response:

    The
Company discloses in its Compensation Discussion and Analysis (“CD&A”) that
it maintains a performance-based bonus plan which allows specified executives
the opportunity to achieve a stated percentage of their respective salaries as
bonuses depending upon achievement of bonus performance goals pre-set each year
by the Compensation Committee of the Company’s Board of
Directors.  The CD&A describes the nature of those performance
goals as specific levels of revenue growth, pre-tax profit and pre-tax profit
improvement over the prior year.1  The CD&A does not specify the
quantitative amount of those performance goals, but does contain a statement
about how likely it is that the Company will achieve the goals.  The
Company describes under the caption “Grant of Plan-Based Awards” the “target,”
“threshold” and “maximum” amount of bonuses for which each executive is eligible
under the bonus plan, and discloses under the caption “Summary Compensation
Table” the amount of the bonus earned under that plan.

    In
conducting its analysis about whether or not to disclose the quantitative
performance targets, the Company considered, among other things, whether the
performance goals involved confidential trade secrets or confidential commercial
or financial information the disclosure of which would result in competitive
harm. Instruction 4 to Item 402(b) of Regulation S-K provides that companies
need not disclose performance goals if the disclosure would result in
competitive harm, and that the standard to determine competitive harm is the
same standard applicable to requests for confidential treatment pursuant to
Securities Act Rule 406 and Exchange Act Rule 24b-2, each of which incorporates
the criteria for non-disclosure when relying upon Exemption 4 of the Freedom of
Information Act.  The courts have interpreted Exemption 4 as affording
protection from disclosure to information that is (1) commercial or financial,
(2) obtained from a person outside the government and (3) privileged or
confidential. Gulf &
Western Industries, Inc. v. United States, 615 F.2d 527, 529 (D.C. Cir.
1979); National Parks &
Conversation Ass’n v. Morton, 498 F.2d 765, 766 (D.C. Cir. 1974),
subsequent appeal sub. nom.
National Parks & Conversation Ass’n v. Kleppe, 547 F.2d 673 (D.C.
Cir. 1976).  In order to show the likelihood of competitive harm under
this standard, it is not necessary to show actual competitive harm, and it is
sufficient to show actual competition and the likelihood of substantial
competitive injury. National
Parks & Conservation Ass’n v. Morton, 498 F.2d at 770. The
District of Columbia’s Circuit Court of Appeals held that information furnished
to the government on a voluntary basis should be afforded confidentiality if it
is of a kind that the provider would not customarily release to the public.
Critical Mass Energy Project
v. Nuclear Regulatory Commission, 975 F.2d 871 (D.C. Cir.
1992).

        1 The CD&A also
discloses that two of the Company’s named executives participate in the
Company’s Home Office Plan.  The participants may earn five percent
(5%) of the participant’s salary in 2007 (ten percent (10%) of the participant’s
salary in 2008) for achievement of the participant’s expense plan goal (that is,
maintaining expenses below a stated level for a group of the Company’s
administrative departments at the corporate level), and up to five percent (5%)
of salary (for both 2007 and 2008) for achieving certain internal customer
service survey results. The Company did not disclose the quantitative component
of these goals in part because the performance targets are not material to the
context of the Company’s executive compensation policies or
decisions.  For each participant, the maximum bonus which could be
earned for each of the goals in 2007 was $20,000 or less.  In
addition, the Company considered whether or not the disclosure of these
performance targets was necessary for an understanding of the Company’s
compensation.  The Company concluded that the disclosure of these
goals would not provide any meaningful information and therefore was not useful
to provide an understanding of the Company’s
compensation.

      Mr.
Michael McTiernan

        August 5,
2008

        Page 3 of
5

    The
financial measures comprised within the Company’s performance goals are taken
from the Company’s highly confidential and sensitive internal operating budget,
projections and business plan.  The Company undertakes significant
measures to protect this information from inadvertent disclosure by, among other
things, restricting the persons who have access to the information to those
selected individuals who have a need to know the information, and limiting those
individuals to persons who have obligations to the Company not to disclose the
information in an unauthorized manner.

    Disclosure
of the performance goals, even after the fact, would result in serious
competitive injury to the Company.  The Company conducts its business
in a highly competitive environment with most of the businesses which operate in
competition with the Company not being subject to public reporting or
obligations to disclose similar information about themselves.  The
Company believes that its competitors regularly review the Company’s publicly
reported data to gain insights about the Company and their competitive responses
to the Company’s business decisions.  Information about the Company’s
business which competitors might attempt to extrapolate or infer from disclosure
of the performance targets includes, without limitation, the
following:

              ·

              Business
      priorities, areas of emphasis and investment strategies.  For
      example, review of targeted revenues, pre-tax profit and pre-tax profit
      improvement performance goals would allow competitors access to data from
      which to evaluate the Company’s degree of emphasis on increasing revenues
      or making investments in initiatives which would cause the Company to
      record additional expenses in current
periods.

              ·

              Levels
      of investments in infrastructure or business initiatives to support
      revenues or improve profit margins in future periods, and specific
      business activities such as changes to customer service
      offerings.

              ·

              Insights
      into compensation practices for all key employees.  For example,
      the Company uses its annual operating budgets (which are the same budgets
      used for setting the performance goals) as a metric from which to
      compensate many of its employees other than its executive
      officers.  Therefore, the disclosure of these performance
      targets would provide competitors with information which would allow them
      to recruit our employees or adjust their compensation practices in a
      manner adversely affecting our
operations.

      Mr.
Michael McTiernan

        August 5,
2008

        Page 4 of
5

    If the
Company was required to disclose the performance targets, the Compensation
Committee would be forced to consider changes in the metrics used to compensate
its executive officers in order to avoid disclosure of those
metrics.

    In
deciding whether or not to disclose the performance targets, the Company also
considered whether that disclosure is necessary for a full understanding of the
Company’s compensation.  The Company believes that the CD&A
discloses all of the material terms of the Company’s bonus plan including the
nature of each performance measure in the bonus plan.  In addition,
the proxy statement sets forth the range of potential bonus payments under the
bonus plan, and the amount of the actual bonus payment earned under the bonus
plan.  The actual payment amount can be compared against the range of
potential payments to determine that the executives did not fully earn the
highest bonus potential under the bonus plan.  The Company believes
that this information provides to investors the details necessary for a robust
understanding of the purpose, operation and funding of the
plan.  Disclosure of the performance targets would not materially
increase that understanding, but would result in competitive injury to the
Company.

    Another
factor considered by the Company in deciding whether to disclose the performance
targets is the potential for disclosure of the performance targets to confuse
investors.  The Company does not publicly release financial forecasts
setting forth a quantitative estimate of the Company’s financial performance for
any given future accounting period.  Due to the nature of the
performance targets, the Company anticipates that capital markets may attempt to
extrapolate from the disclosure of performance targets the financial results
which the Company expects to report for future accounting
periods.  The performance targets, however, have been prepared and are
designed to be used for purposes other than forecasted data which the Company
would provide to capital markets if the Company were to publicly announce its
projected operating results.  Performance goals in fact have
historically been higher than the Company’s actual results.

    For the
foregoing reasons, the Company does not intend to disclose its performance
targets.  The Company, however, acknowledges the Staff’s comments and
will in future filings enhance disclosure in its CD&A on the degree of
difficulty to achieve the undisclosed targets.  The Company has stated
in its CD&A that “[t]hese cash compensation performance goals…are difficult
to achieve, but achievable.”  In future disclosure, the Company will
state that these performance goals are intended to create an incentive for
improving the Company’s financial performance and not as a modest goal with an
implied assurance that substantially all of the bonuses will be earned, coupled
with disclosure of historical information indicating the relative achievement of
bonus potential over prior years to demonstrate that the full bonus potential
has not historically been achieved by the Company’s executives.

      Mr.
Michael McTiernan

        August 5,
2008

        Page 5 of
5

    The
Company has authorized us to advise you that the Company acknowledges
that:

              ·

              the
      company is responsible for the adequacy and accuracy of the disclosure in
      the filing;

              ·

              staff
      comments or changes to disclosure in response to staff comments do not
      foreclose the Commission from taking any action with respect to the
      filing; and

              ·

              the
      company may not assert staff comments as a defense in any proceeding
      initiated by the Commission or any person under the federal securities
      laws of the United States.

    Please
direct any further comments or questions to me at (404) 873-8528.

    Sincerely,

    ARNALL
GOLDEN GREGORY LLP

    /s/ Stephen D.
Fox
Stephen
D. Fox

    cc:         Mr.
Harry J. Cynkus