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Exhibit 10(iii)A(k)
NONQUALIFIED STOCK OPTION AGREEMENT
FOR CORPORATE OFFICERS
THIS AGREEMENT, made as of the _____ day of
_____________, 199___ (the "Grant Date"), between National
Service Industries, Inc., a Delaware corporation (the
"Company"), and ______________________ (the "Optionee").
WHEREAS, the Company has adopted the National Service
Industries, Inc. Long-Term Incentive Program (the "Program")
in order to provide additional incentive to certain officers
and employees of the Company and its Subsidiaries; and
WHEREAS, the Committee responsible for administration
of the Program for corporate officers has determined to
grant an option to the Optionee as provided herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of Option.
1.1 The Company hereby grants to the Optionee the
right and option (the "Option") to purchase all or any part
of an aggregate of _____________ whole Shares subject to,
and in accordance with, the terms and conditions set forth
in this Agreement.
1.2 The Option is not intended to qualify as an
Incentive Stock Option within the meaning of Section 422 of
the Code.
1.3 This Agreement shall be construed in
accordance and consistent with, and subject to, the
provisions of the Program (the provisions of which are
incorporated herein by reference) and, except as otherwise
expressly set forth herein, the capitalized terms used in
this Agreement shall have the same definitions as set forth
in the Program.
2. Purchase Price.
The price at which the Optionee shall be entitled
to purchase Shares upon the exercise of the Option shall be
$_________ per Share.
3. Duration of Option.
The Option shall be exercisable to the extent and
in the manner provided herein for a period of ten (10) years
from the Grant Date (the "Exercise Term"); provided,
however, that the Option may be earlier terminated as
provided in Section 6 hereof.
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Exhibit 10(iii)A(k)
4. Exercisability of Option.
Unless otherwise provided in this Agreement or the
Program, the Option shall entitle the Optionee to purchase,
in whole at any time or in part from time to time,
_________________________________, and each such right of
purchase shall be cumulative and shall continue, unless
sooner exercised or terminated as herein provided during the
remaining period of the Exercise Term.
5. Manner of Exercise and Payment.
5.1 Subject to the terms and conditions of this
Agreement and the Program, the Option may be exercised by
delivery of written notice to the Company at its principal
executive office. Such notice shall state that the Optionee
is electing to exercise the Option and the number of Shares
in respect of which the Option is being exercised and shall
be signed by the person or persons exercising the Option.
If requested by the Committee, such person or persons shall
(i) deliver this Agreement to the Secretary of the Company
who shall endorse thereon a notation of such exercise and
(ii) provide satisfactory proof as to the right of such
person or persons to exercise the Option.
5.2 The notice of exercise described in Section
5.1 shall be accompanied by the full purchase price for the
Shares in respect of which the Option is being exercised, in
cash, by check, or by transferring Shares to the Company
having a Fair market value on the day preceding the date of
exercise equal to the cash amount for which such Shares are
substituted.
5.3 Upon receipt of notice of exercise and full
payment for the Shares in respect of which the Option is
being exercised, the Company shall, subject to Section 17 of
the Program, take such action as may be necessary to effect
the transfer to the Optionee of the number of Shares as to
which such exercise was effective.
5.4 The Optionee shall not be deemed to be the
holder of, or to have any of the rights of a holder with
respect to any Shares subject to the Option until (i) the
Option shall have been exercised pursuant to the terms of
this Agreement and the Optionee shall have paid the full
purchase price for the number of Shares in respect of which
the Option was exercised, (ii) the Company shall have issued
and delivered the Shares to the Optionee, and (iii) the
Optionee's name shall have been entered as a stockholder of
record on the books of the Company, whereupon the Optionee
shall have full voting and other ownership rights with
respect to such Shares.
6. Termination of Employment.
6.1 Death, Disability, Retirement, or Change in
Control. If the employment of the Optionee is terminated as
a result of his death, Disability, Retirement,
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Exhibit 10(iii)A(k)
or within two (2) years following a Change in Control, the
Option shall continue to be exercisable in whole or in part
(to the extent exercisable on the date of the Optionee's
termination of employment) at any time within three (3)
years after the date of such termination of employment, but
in no event after the expiration of the Exercise Term. In
the event of the Optionee's death, the Option shall be
exercisable, to the extent provided in the Program and this
Agreement, by the legatee or legatees under his will, or by
his personal representatives or distributees and such person
or persons shall be substituted for the Optionee each time
the Optionee is referred to herein.
6.2 Other Termination of Employment. If the
employment of the Optionee is terminated for any reason
other than the reasons set forth in Section 6.1 (including
the Optionee's ceasing to be employed by a Subsidiary or
Division as a result of the sale of such Subsidiary or
Division or an interest in such Subsidiary or Division), the
Option shall terminate on the date of the Optionee's
termination of employment, whether or not exercisable.
7. Effect of Change in Control.
Notwithstanding anything contained in this
Agreement to the contrary, in the event of a Change in
Control, (i) the Option shall become immediately and fully
exercisable, and (ii) the Optionee will be permitted to
surrender for cancellation, within sixty (60) days after
such Change in Control, the Option or any portion of the
Option to the extent not yet exercised and the Optionee
shall be entitled to receive immediately a cash payment in
an amount equal to the excess, if any, of (A) the greater of
(x) the Fair market value, on the date preceding the date of
the surrender, of the Shares subject to the Option or
portion of the Option surrendered or (y) the Adjusted Fair
Market value of the Shares subject to the Option or the
portion of the Option surrendered, over (B) the aggregate
purchase price for such Shares under the Option; provided,
however, that if the Option was granted within six (6)
months prior to the Change in Control and the Optionee may
be subject to liability under Section 16(b) of the Exchange
Act, the Optionee shall be entitled to surrender for
cancellation the Option or any portion of the Option during
the sixty (60) day period following the expiration of six
(6) months from the Grant Date and to receive the amount
described above with respect to such surrender for
cancellation.
8. Nontransferability.
The Option shall not be transferable other than-by
will or by the laws of descent and distribution.
Notwithstanding the foregoing, the Option may be
transferred, in whole or in part, without consideration, by
written instrument signed by the Optionee, to any members of
the immediate family of Optionee (i.e., spouse, children and
grandchildren), any trusts for the benefit of such family
members or any partnerships whose only partners are such
family members (the "Permitted Transferees"). Appropriate
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Exhibit 10(iii)A(k)
evidence of any such transfer to the Permitted Transferees
shall be delivered to the Company at its principal executive
office. During the lifetime of the Optionee, the Option
shall be exercisable only by the Optionee, or, if
applicable, by the Permitted Transferees.
9. No Right to Continued Employment.
Nothing in this Agreement or the Program shall be
interpreted or construed to confer upon the Optionee any
right with respect to continuance of employment by the
Company, nor shall this Agreement or the Program interfere
in any way with the right of the Company to terminate the
Optionee's employment at any time.
10. Adjustments.
In the event of a Change in Capitalization, the
Committee may make appropriate adjustments to the number and
class of Shares or other stock or securities subject to the
Option and the purchase price for such Shares or other stock
or securities. The Committee's adjustment shall be made in
accordance with the provisions of Section 11 of the Program
and shall be effective and final, binding, and conclusive
for all purposes of the Program and this Agreement.
11. Terminating Events.
Subject to Section 7 hereof, upon the effective
date of (i) the liquidation or dissolution of the Company or
(ii) a merger or consolidation of the Company (a
"Transaction"), the Option shall continue in effect in
accordance with its terms and the Optionee shall be entitled
to receive in respect of all Shares subject to the Option,
upon exercise of the Option, the same number and kind of
stock, securities, cash, property, or other consideration
that each holder of Shares was entitled to receive in the
Transaction.
12. Withholding of Taxes.
12.1 The Company shall have the right to deduct
from any distribution of cash to the Optionee an amount
equal to the federal, state, and local income taxes and
other amounts as may be required by law to be withheld (the
"Withholding Taxes") with respect to the Option. If the
Optionee is entitled to receive Shares upon exercise of the
Option, the Optionee shall pay the Withholding Taxes to the
Company in cash prior to the issuance of such Shares. In
satisfaction of the Withholding Taxes, the Optionee may make
a written election (the "Tax Election"), which may be
accepted or rejected in the discretion of the Committee, to
have withheld a portion of the Shares issuable to him or her
upon exercise of the Option, having an aggregate Fair Market
value on the date preceding the Tax Date (as defined below)
equal to the Withholding Taxes, provided that (i) if the
Optionee may be subject to liability under Section 16(b) of
the Exchange Act
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Exhibit 10(iii)A(k)
(unless his or her employment was terminated due
to Disability or death), (A) the Optionee makes the Tax
Election at least six (6) months after the Grant Date and
(B) the Tax Election is made either at least six (6) months
prior to the date that the amount of the Withholding Taxes
are determined (the "Tax Date") or during the ten (10) day
period beginning on the third business day and ending on the
twelfth business day following the release for publication
of the Company's quarterly or annual statements of earnings,
(ii) the Tax Election is made prior to the Tax Date, and
(iii) the Tax Election is irrevocable; provided, however, in
the event that the Tax Date occurs subsequent to the
exercise of the Option, the Optionee shall tender back to
the Company on the Tax Date that number of Shares having a
Fair Market Value on the date preceding the Tax Date equal
to the Withholding Taxes.
13. Employee Bound by the Program.
The Optionee hereby acknowledges receipt of a copy
of the Program and agrees to be bound by all the terms and
provisions thereof.
14. Modification of Agreement.
This Agreement may be modified, amended,
suspended, or terminated, and any terms or conditions may be
waived, but only by a written instrument executed by the
parties hereto.
15. Severability.
Should any provision of this Agreement be held by
a court of competent jurisdiction to be unenforceable or
invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall
continue it full force in accordance with their terms.
16. Governing Law.
The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws
of the State of Delaware without giving effect to the
conflicts of laws principles thereof.
17. Successors in Interest.
This Agreement shall inure to the benefit of and
be binding upon each successor to the Company. This
Agreement shall inure to the benefit of the Optionee's legal
representatives and Permitted Transferees. All obligations
imposed upon the Optionee and all rights granted to the
Company under this Agreement shall be final, binding, and
conclusive upon the Optionee's heirs, executors,
administrators, successors, and Permitted Transferees.
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Exhibit 10(iii)A(k)
18. Resolution of Disputes.
Any dispute or disagreement which may arise under,
or as a result of, or in any way relate to, the
interpretation, construction, or application of this
Agreement shall be determined by the Committee. Any
determination made hereunder shall be final, binding, and
conclusive on the Optionee and the Company for all purposes.
ATTEST: NATIONAL SERVICE INDUSTRIES,
INC.
/s/ Kenyon W. Murphy By: /s/ D. Raymond
Riddle
Secretary D. Raymond Riddle
Chairman of the Board
and Chief Executive
Officer
Name of Optionee: