Page 62
Exhibit 10(iii)A(9)
NATIONAL SERVICE INDUSTRIES, INC.
SUPPLEMENTAL DEFERRED SAVINGS PLAN
(Effective As of September 18, 1996)
Page 63
Exhibit 10(iii)A(9)
NATIONAL SERVICE INDUSTRIES, INC.
SUPPLEMENTAL DEFERRED SAVINGS PLAN
TABLE OF CONTENTS
ARTICLE I INTRODUCTION AND ESTABLISHMENT.........................................................................1
ARTICLE II DEFINITIONS...........................................................................................1
2.1 Account 1
2.2 Annual Valuation Date...............................................................................1
2.3 Beneficiary.........................................................................................1
2.4 Change in Capitalization............................................................................1
2.5 Change in Control...................................................................................2
2.6 Class Year Subaccount...............................................................................3
2.7 Code 3
2.8 Company 3
2.9 Compensation........................................................................................3
2.10 Division...........................................................................................4
2.11 Deferral Subaccount................................................................................4
2.12 Election Form......................................................................................4
2.13 Employer...........................................................................................4
2.14 ERISA 4
2.15 Executive..........................................................................................4
2.16 Executive Savings Plan.............................................................................4
2.17 Fair Market Value..................................................................................4
2.18 Fiscal Year........................................................................................5
2.19 Matching Subaccount................................................................................5
2.20 Participant........................................................................................5
2.21 Plan 5
2.22 Plan Administrator.................................................................................5
2.23 Plan Year..........................................................................................5
2.24 Prime Rate.........................................................................................6
2.25 Retirement.........................................................................................6
2.26 Shares 6
2.27 Subsidiary.........................................................................................6
2.28 Supplemental Subaccount............................................................................6
2.29 Termination for Cause..............................................................................6
2.30 Termination of Service.............................................................................6
2.31 Total and Permanent Disability.....................................................................7
2.32 Valuation Date.....................................................................................7
2.33 Year of Service....................................................................................7
ARTICLE III PARTICIPATION; DEFERRAL ELECTION.....................................................................1
3.1 Eligibility to Participate..........................................................................1
3.2 Deferral Election...................................................................................1
3.3 Executive Savings Plan..............................................................................2
ARTICLE IV PARTICIPANTS' ACCOUNTS; EMPLOYER CONTRIBUTION CREDITS.................................................1
4.1 Accounting for Participants' Interests..............................................................1
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Exhibit 10(iii)A(9)
4.2 Vesting of a Participant's Account..................................................................2
4.3 Distribution of a Participant's Account.............................................................3
4.4 Hardship............................................................................................6
4.5 Transfer of Executive Savings Plan Account..........................................................6
ARTICLE V PLAN ADMINISTRATOR.....................................................................................1
5.1 Committee...........................................................................................1
5.2 Right and Duties....................................................................................1
5.3 Compensation, Indemnity and Liability...............................................................2
5.4 Taxes 2
ARTICLE VI CLAIMS PROCEDURE......................................................................................1
6.1 Claims for Benefits.................................................................................1
6.2 Appeals 1
ARTICLE VII AMENDMENT AND TERMINATION; CHANGE IN CONTROL..........................................................
1
7.1 Amendments..........................................................................................1
7.2 Termination of Plan.................................................................................1
7.3 Change In Control Provisions........................................................................1
ARTICLE VIII MISCELLANEOUS.......................................................................................1
8.1 Limitation on Participant's Rights..................................................................1
8.2 Benefits Unfunded...................................................................................1
8.3 Other Plans.........................................................................................1
8.4 Receipt or Release..................................................................................2
8.5 Governing Law.......................................................................................2
8.6 Gender, Tense, and Headings.........................................................................2
8.7 Successors and Assigns; Nonalienation of Benefits...................................................2
8.8 Combination With Other Plan..........................................................................3
APPENDIX A DEFERRAL AND PAYMENT ELECTIONS AND DESIGNATION
OF BENEFICIARY.............................................................................A-1
APPENDIX B ELECTION TO DEFER DISTRIBUTION.............................................................B-1
Page 65
Exhibit 10(iii)A(9)
ARTICLE I
INTRODUCTION AND ESTABLISHMENT
National Service Industries, Inc. ("Company") hereby establishes the
National Service Industries, Inc. Supplemental Deferred Savings Plan ("Plan")
for the benefit of eligible management and highly compensated employees of the
Company and its Subsidiaries and Divisions. The Plan is designed to assist and
encourage eligible employees to accumulate capital and to supplement their
retirement income and to align their interests more closely with those of
shareholders. The Plan provides for elective deferrals of an employee's
compensation, Company matching contributions and supplemental Company
contributions.
The terms of this Plan are applicable only to eligible employees who
are actively employed on or after December 1, 1996. Any employee who terminates
his employment relationship prior to that date shall not be covered by this
Plan.
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Exhibit 10(iii)A(9)
ARTICLE II
DEFINITIONS
When used in this Plan, the following terms shall have the meanings
set forth below unless a different meaning is plainly required by the context:
2.1 "Account" means the records maintained by the Plan Administrator
to determine each Participant's interest under this Plan. Such Account may be
reflected as an entry in the Company's (or Employer's) records, or as a separate
account under a trust, or as a combination of both. Each Participant's Account
shall consist of at least three subaccounts: a Deferral Subaccount to reflect
his deferrals of Compensation; a Matching Subaccount for Employer's matching
contribution credits; a Supplemental Subaccount for any supplemental Employer
contribution credits. The Plan Administrator may establish such additional
subaccounts as it deems necessary for the proper administration of the Plan.
2.2 "Annual Valuation Date" means December 31 of each year while the
Plan is in effect.
2.3 "Beneficiary" means the person or persons last designated in
writing by the Participant to receive the vested amount in his Account in the
event of such Participant's death; or if no designation shall be in effect at
the time of a Participant's death or if all designated Beneficiaries shall have
predeceased the Participant, then the Beneficiary shall be the Participant's
estate or his personal representative.
2.4 "Change in Capitalization" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, a change in
value) or exchange of Shares for a different number or kind of shares or other
securities of the Company, by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, spin-off, split-up, issuance of warrants
or rights or debentures, stock dividend, stock split or reverse stock split,
cash dividend, property dividend, combination or exchange of shares, repurchase
of shares, public offering, private placement, change in corporate structure or
otherwise, which in the judgment of the Plan Administrator is material or
significant.
2.5 "Change in Control" means any of the following events:
(i) The acquisition (other than from the Company) by any
"Person" (as the term person is used for purposes of Sections
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act")) of beneficial ownership (within the meaning of
Page 67
Exhibit 10(iii)A(9)
Rule 13d-3 promulgated under the 1934 Act) of twenty percent
(20%) or more of the combined voting power of the Company's then
outstanding voting securities; or
(ii) The individuals who, as of September 18, 1996, are
members of the Board (the "Incumbent Board"), cease for any
reason to constitute at least two-thirds of the Board; Provided,
however, that if the election, or nomination for election by the
Company's stockholders, of any new director was approved by a
vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Plan, be considered as a
member of the Incumbent Board; or
(iii) Approval by stockholders of the Company of (1) a
merger or consolidation involving the Company if the stockholders
of the Company, immediately before such merger or consolidation
do not, as a result of such merger or consolidation, own,
directly or indirectly, more than seventy percent (70%) of the
combined voting power of the then outstanding voting securities
of the corporation resulting from such merger or consolidation in
substantially the same proportion as their ownership of the
combined voting power of the voting securities of the Company
outstanding immediately before such merger or consolidation, or
(2) a complete liquidation or dissolution of the Company or an
agreement for the sale or other disposition of all or
substantially all of the assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur pursuant to subsection (i) above, solely because twenty percent (20%)
or more of the combined voting power of the Company's then outstanding
securities is acquired by (i) a trustee or other fiduciary holding securities
under one or more employee benefit plans maintained by the Company or any of its
subsidiaries, or (ii) any corporation which, immediately prior to such
acquisition, is owned directly or indirectly by the stockholders of the Company
in the same proportion as their ownership of stock in the Company immediately
prior to such acquisition.
2.6 "Class Year Subaccount" means the subaccount set up under the
Deferral Subaccount to reflect the Participant's deferrals for each Plan Year
and any earnings thereon.
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Exhibit 10(iii)A(9)
2.7 "Code" means the Internal Revenue Code of 1986, as amended.
2.8 "Company" means National Service Industries, Inc., a Delaware
corporation, or its successor or successors.
2.9 "Compensation" means the annual cash compensation (salary plus
annual bonus) paid by the Employer to the Participant for the Plan Year,
provided that a bonus actually paid during a subsequent Plan year based upon
performance during the preceding Plan Year shall be treated as Compensation for
such preceding Plan Year. The Participant's Compensation shall include amounts
deferred by the Participant to this Plan and any other deferred compensation
plan of the Employer (whether or not qualified), and any salary reduction
amounts contributed to a welfare plan. The term "Compensation" shall not include
long-term incentive payments, car allowances and non-cash remuneration, such as
health benefits, life insurance, and other fringe benefits.
2.10 "Division" means any of the operating units or divisions of the
Company, or its Subsidiaries, designated as a Division by the Plan
Administrator.
2.11 "Deferral Subaccount" means the subaccount maintained to reflect
the Participant's deferral of Compensation and any earnings thereon.
2.12 "Election Form" means the form prescribed by the Plan
Administrator on which a Participant may specify the amount of his Compensation
that is to be deferred pursuant to the provisions of Article III, and the manner
of payment of his benefits.
2.13 "Employer" means the Company and any Subsidiary or related
employer designated by the Company to participate in the Plan.
2.14 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
2.15 "Executive" means an officer of the Company, a Subsidiary or one
of the Company's Divisions, and other key employees designated as eligible
pursuant to Section 3.1. Any dispute regarding any individual's classification
shall be determined by the Plan Administrator in its sole discretion.
2.16 "Executive Savings Plan" means the National Service Industries,
Inc. Executive Savings Plan which was established effective September 1, 1994.
2.17 "Fair Market Value" means the fair market value of the Shares as
determined in good faith by the Plan Administrator; provided, however, that (A)
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Exhibit 10(iii)A(9)
if the Shares are admitted to trading on a national securities exchange, Fair
Market Value on any date shall be the closing price reported for the Shares on
such exchange on such date or, if no sale was reported on such date, on the last
date preceding such date on which a sale was reported, (B) if the Shares are
admitted to quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or other comparable quotation system and
have been designated as a National Market System ("CMS") security, Fair Market
Value on any date shall be the last sale price reported for the Shares on such
system on such date or on the last day preceding such date on which a sale was
reported, or (C) if the Shares are admitted to Quotation on NASDAQ and have not
been designated a CMS Security, Fair Market Value on any date shall be the
average of the highest bid and lowest asked prices of the Shares on such system
on such date.
2.18 "Fiscal " means the year commencing on September 1 and ending on
August 31 of the following calendar year, or such other 12-month period used by
the Company for financial reporting purposes.
2.19 "Matching Subaccount" means the subaccount maintained to reflect
the Employer's matching contribution credits and any earnings thereon.
2.20 "Participant" means an Eligible Executive as defined in
Section 3.1 (or an individual who was an Eligible Executive), a portion of whose
Compensation for any Plan Year has been deferred pursuant to the Plan or who has
received Employer Supplemental Subaccount credits, and whose interest in the
Plan has not been wholly distributed.
2.21 "Plan" means the National Service Industries, Inc. Supplemental
Deferred Savings Plan, as set forth herein and as it may be amended from time to
time.
2.22 "Plan Administrator" means the Company or, if applicable, a
committee appointed pursuant to Article V to administer the Plan.
2.23 "Plan Year" means January 1 through the next following December
31, except that the initial Plan Year shall be the period commencing December 1,
1996 and ending December 31, 1997.
2.24 "Prime Rate" means the prime rate of interest on a particular
date of Wachovia Bank of Georgia, N.A. (or its successor), as determined by the
Plan Administrator, or the prime rate interest of of such other bank as may be
selected by the Company.
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Exhibit 10(iii)A(9)
2.25 "Retirement" means termination of the Participant's employment
with all Employers on or after attaining age 60, other than a Termination for
Cause.
2.26 "Shares" means the common stock, par value $1.00 per share, of
the Company (including any new, additional or different stock or securities
resulting from a Change in Capitalization).
2.27 "Subsidiary" means any corporation in an unbroken chain of
corporations, beginning with the Company, if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain. The term "Subsidiary" shall also include a
partnership in which the Company or a Subsidiary owns 50% or more of the profits
interest or capital interest in the partnership.
2.28 "Supplemental Subaccount" means the subaccount established to
reflect the Employer's supplemental contribution credits and any earnings
thereon.
2.29 "Termination for Cause" means the Executive has terminated
employment and has been found by the Plan Administrator to be guilty of theft,
embezzlement, fraud or misappropriation of the Company's property or of any
action which, if the individual were an officer of the Company, would constitute
a breach of fiduciary duty. The final determination of whether a Participant has
incurred a Termination for Cause shall be made by the Plan Administrator.
2.30 "Termination of Service" or similar expression means the
termination of the Participant's employment as an Executive. A Participant who
is granted a temporary leave of absence, whether with or without pay, shall not
be deemed to have terminated his service. In the event of a transfer of an
Executive to a position in which he would no longer be eligible to continue in
this Plan, or in the event of the disability of a Participant, the Plan
Administrator in its sole discretion, shall determine whether a Termination of
Service has occurred.
2.31 "Total and Permanent Disability" means the permanent and lasting
inability of a Participant due to illness, accident, or other physical or mental
incapacity, to perform his usual duties and services for the Employer. The
determination as to whether Total and Permanent Disability exists shall be made
by the Plan Administrator based upon the information provided to it.
2.32 "Valuation Date" means the Annual Valuation Date, and any other
date(s) selected by the Plan Administrator as of which the Accounts of
Participants are valued.
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Exhibit 10(iii)A(9)
2.33 "Year of Service" means, subject to such Break in Service rules
as the Plan Administrator may establish, each Plan Year in which the Eligible
Employee is credited with 1,000 or more Hours of Service with the Employer,
including years commencing prior to the date of adoption of the Plan. Hours of
Service shall be determined hereunder in accordance with the Company's general
rules for determining such hours under its tax-qualified plans.
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Exhibit 10(iii)A(9)
ARTICLE III
PARTICIPATION; DEFERRAL ELECTION
3.1 Eligibility to Participate. Prior to, or at the beginning of,
each Plan Year, the Company (or its designee) shall specify the Executives who
are eligible to make deferral elections under the Plan for the following Plan
Year and to receive Matching Subaccount and Supplemental Subaccount credits (an
"Eligible Executive"). Such eligibility designation may be made by establishing
a minimum compensation level for participation or by the use of such other
criteria as the Company (or its designee) deems appropriate from time to time.
3.2 Deferral Election. Each Eligible Executive may elect on an
Election Form to have a portion of the salary to be received by the Executive
for the period December 1, 1996 through December 31, 1997 and the annual bonus
for the fiscal year ending August 31, 1997 ("Initial Election Period"), deferred
in accordance with the terms and conditions of the Plan. The Eligible
Executive's election for the Initial Election Period shall be effective December
1, 1996, or such later date as may be determined by the Plan Administrator for
administrative reasons. The election with respect to the bonus for the Initial
Election Period shall be coordinated with the Eligible Executive's election (if
any) under the Executive Savings Plan in the manner provided in Section 4.5.
For any Plan Year thereafter in which he is eligible to participate,
the Eligible Executive may elect to defer a portion of his Compensation in
accordance with the terms of the Plan. The Plan Administrator may provide for a
separate election with respect to salary and annual bonus. The amount that may
be deferred for any Plan Year shall not be less than $1,000, nor an aggregate of
more than fifty percent (50%) of his Compensation for such Plan Year.
An Executive desiring to exercise such election shall, prior to the
beginning of the Initial Election Period and each Plan Year thereafter (or prior
to or coincident with the beginning of the Eligible Executive's initial
employment or eligibility, if such employment or eligibility commences other
than at the beginning of a Plan Year), complete an Election Form indicating the
percentage of his Compensation for such Plan Year that he elects to have
deferred. If the Eligible Executive's election would result in a deferral
greater than the maximum provided herein, any deferred amount shall be reduced
to the maximum limit.
An election to defer Compensation must be filed with the Plan
Administrator within the time period prescribed by the Plan Administrator. If a
Participant fails to file a properly completed and duly executed Election Form
with the Plan Administrator by the prescribed time, he will be deemed to have
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Exhibit 10(iii)A(9)
elected not to defer any Compensation under this Plan for the Plan Year, except
to the extent the Plan Administrator in its sole discretion permits an extension
of the election period. An Eligible Executive may not, after the applicable
election date change (increase or decrease) the percentage of Compensation he
has elected to defer for a Plan Year.
A Participant may at any time during the Plan Year terminate an
election to defer salary (but not the bonus) and discontinue future salary
deferrals of Compensation under this Plan by providing written notice to the
Plan Administrator prior to the start of the next payroll period for which
Compensation will be payable. In such event, Compensation earned for services
subsequent to such termination notice will be paid directly to the Participant
and will not be subject to his prior deferral election. A Participant who elects
to discontinue participation in the Plan for a Plan Year may not recommence
participation in the Plan until the next following Plan Year (or such later Plan
Year in which he is again eligible to participate), provided the Participant
completes and executes the required Election Form. Increases or decreases in the
amount a Participant elects to defer (other than a suspension of deferrals)
shall not be permitted during the Plan Year.
The Eligible Executive may designate on the Election Form (or on a
separate form provided by the Plan Administrator) a Beneficiary (or
Beneficiaries) to receive payment of amounts in his Account in the event of his
death.
3.3 Executive Savings Plan. If the Plan is otherwise terminated by the
Company before it becomes fully effective, the deferrals elected under Section
3.1 shall be made to the Executive Savings Plan and shall be held and
distributed in accordance with the provisions of such plan. In such event, no
Employer matching contribution credits or supplemental contribution credits will
be made to the Plan or the Executive Savings Plan.
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Exhibit 10(iii)A(9)
ARTICLE IV
PARTICIPANTS' ACCOUNTS; EMPLOYER CONTRIBUTION CREDITS
4.1 Accounting for Participants' Interests.
(a) Deferral Subaccount. Each Participant's Deferral Subaccount shall
be credited with the amounts of Compensation deferred by the Participant under
this Plan. The timing and manner in which amounts are credited to a
Participant's Deferral Subaccount under this Plan shall be determined by the
Plan Administrator in its discretion, but the deferral election shall be applied
to each pay period in which the Participant has Compensation during his period
of participation in the Plan. The Participant's Deferral Subaccount shall be
credited with interest at the Prime Rate on each Annual Valuation Date based
upon the amount credited to such Subaccount as of the preceding Annual Valuation
Date, and at such other times, if any, as may be determined by the Plan
Administrator.
(b) Matching Subaccount. As of the end of each Plan Year, unless the
Board otherwise determines, an amount shall be credited to the Participant's
Matching Subaccount equal to 25% of the amount of the Participant's deferrals
for such Plan Year, provided that the maximum amount credited to a Participant's
Matching Subaccount for a Plan Year shall not exceed five percent (5%) of the
Participant's Compensation for such Plan Year. An Eligible Executive who is
covered by a defined benefit supplemental executive retirement plan maintained
by the Employer shall not be eligible to receive Employer matching contribution
credits under the Plan.
Unless the Company otherwise determines for the Plan Year, the amount
credited to a Participant's Matching Subaccount for the year shall be deemed to
be in the form of cash, Shares, or a combination of cash and Shares, as elected
by the Participant on the Election Form for such year. To the extent the amount
is deemed to be credited in cash, the Matching Subaccount will be credited with
interest at the Prime Rate on each Annual Valuation Date (and at such other
dates, if any, as may be determined by the Plan Administrator); if Shares are
deemed to be credited, the Matching Subaccount will be adjusted on each Annual
Valuation Date (and at such other dates ,if any, as may be determined by the
Plan Administrator) as if it were invested in Shares to reflect any dividends
(including reinvestment of such dividends in Shares), distributions, stock
dividends, stock splits or similar actions with respect to the Shares since the
preceding Annual Valuation Date (or such other date).
(c) Supplemental Subaccount. As of the end of each Plan Year, unless
the Board otherwise determines, there shall be credited to the Supplemental
Subaccount of each Eligible Employee who is employed on the last day of the Plan
Year and who has a Year of Service for such Plan Year an amount equal to three
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Exhibit 10(iii)A(9)
percent (3%) of the Eligible Employee's Compensation for such Plan Year. An
Eligible Executive who is covered by a defined benefit supplemental executive
retirement plan maintained by the Employer shall not be eligible to receive
Employer supplemental contribution credits under the Plan.
Unless the Company otherwise determines, the amount credited to an
Eligible Employee's Supplemental Subaccount shall be deemed to be in the form of
Shares. If Shares are deemed to be credited, the Supplemental Subaccount will be
adjusted on each Annual Valuation Date (and at such other dates, if any, as may
be determined by the Plan Administrator) as if it were invested in Shares to
reflect any dividends (including reinvestment of such dividends in Shares),
distributions, stock dividends, stock splits or similar action with respect to
the Shares since the preceding Annual Valuation Date (or such other date).
(d) Crediting of Shares. The number of Shares to credit to a
Participant's Matching Subaccount or Supplemental Subaccount as of an Annual
Valuation Date (or other date, as provided above) shall be determined by
converting the cash credit otherwise required to Shares using the Fair Market
Value of a Share on such date.
4.2 Vesting of a Participant's Account.
(a) Deferral Subaccount. Except as provided in the next sentence, a
Participant's interest in the amount credited to his Deferral Subaccount shall
at all times be 100% vested and nonforfeitable. If a Participant incurs a
Termination for Cause, he shall forfeit all earnings credited on all amounts
deferred to his Deferral Subaccount that have not yet been fully distributed to
him under Section 4.3.
(b) Matching and Supplemental Subaccounts. Except in the event of a
Termination For Cause, a Participant's interest in the amount credited to his
Matching Subaccount and Supplemental Subaccount shall become (i) 100% vested and
nonforfeitable upon his death, Total and Permanent Disability, Retirement or
completion of 10 or more Years of Service and attainment of age 55 while
actively employed, and (ii) 50% vested upon completion of 5 Years of Service and
attainment of age 55 while actively employed, with such vesting increasing 10%
per year for each additional Year of Service up to 10 years. Subject to Article
VII, if the Participant incurs a Termination for Cause (regardless of whether he
is otherwise vested) or if the Participant's employment is terminated prior to
the time specified for vesting in the preceding sentence, his entire Matching
and Supplemental Subaccounts shall be forfeited.
4.3 Distribution of a Participant's Account. Subject to Article VII, a
Participant's Account shall be distributed as follows:
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Exhibit 10(iii)A(9)
(a) Deferral Subaccount. (i) Except as provided in (ii) and (iii)
below, distribution of each Class Year Subaccount of a Participant shall be made
in a single lump sum payment as soon as practicable after the January 1 next
following five (5) full Plan Years after the Class Year. For example, the
distribution of the 1997 Class Year Subaccount (the Participant's deferrals
credited to him for the year ended December 31, 1997) shall be made on or about
January 1, 2003, and for the 1998 Class Year Subaccount on or about January 1,
2004, and so on.
(ii) Election to Defer Distribution. A Participant who will become
eligible to receive distribution of a Class Year Subaccount under (i) above may
elect to defer to the January 1 of a later year (subject to the limitations
provided below) the distribution of such Class Year Subaccount. The election to
defer distribution of a Class Year Subaccount must be filed prior to the end of
the fourth Plan Year immediately following the Class Year for such Class Year
Subaccount. For example, for the 1997 Class Year Subaccount, the election must
be filed prior to January 1, 2002. The Participant's deferral election for a
Class Year Subaccount must indicate (A) the January 1 when he desires his
benefit to be paid or to commence, which date must be at least two (2) years
after the date he could initially have received a distribution, and (B) whether
the distribution should be made in a lump sum or in annual installments over a
period of up to ten (10) years; provided, that the lump sum payment shall be
made not later than the year in which he attains age 70 and the last installment
payment shall be made later than the year in which the Participant attains age
75. A Participant's Class Year Subaccount for which a deferral election is made
under this subsection (b) shall continue to be credited with earnings under
Section 4.1(a) until the amount is fully distributed (except as limited in the
case of a Termination for Cause).
(iii) Death, Disability or Termination of Service Prior to Vesting.
(A) Notwithstanding the existence of a deferral election under Section
4.3(a)(ii), in the event of a Participant's death, Total and Permanent
Disability, or a Termination of Service prior to the Participant's completion of
5 Years of Service and attainment of age 55, distribution of the vested balance
credited to a Participant's Deferral Subaccount shall be made to the Participant
(or his Beneficiary in the event of death) as soon as practical. Payment of the
Participant's Deferral Subaccount shall be made in a lump sum. In the event
payments are made pursuant to this subsection (a)(iii), earnings shall be
credited under Section 4.1(a) until all amounts have been distributed (except as
limited in the case of Termination for Cause).
(B) In the event a Participant terminates after completing 5 years of
Service and attaining age 55 (except for death and Total and Permanent
Disability), the vested balance credited to a Participant's Deferral Subaccount
shall be distributed to him in a lump sum as soon as practical; provided, that
Page 77
Exhibit 10(iii)A(9)
any Class Year Subaccounts as to which he has properly elected under subsection
(ii) above a delayed distribution and/or payment in installments shall be
distributed in accordance with such elections; provided, further, that any such
Participant may elect prior to termination to make the deferral election in (ii)
above with respect to any Class Year Subaccounts as to which the five-year
period has not yet passed and that would otherwise be payable more than one (1)
year in the future.
(b) Matching and Supplemental Subaccounts. (i) The vested amounts
(determined in accordance with Section 4.2(b)) credited to a Participant's
Matching Subaccount and Supplemental Subaccount shall be payable in a lump sum
as soon as practical after the Participant's death, Total and Permanent
Disability or Termination of Service, unless, in the case of a termination other
than for death or Total and Permanent Disability, the Participant has elected a
delayed payment date and/or payment in installments on the Election Form;
provided that the lump sum payment shall be made not later than the year in
which he attains age 70 and the last installment payment shall be made not later
than the year in which the Participant attains age 75. The Plan Administrator
may establish rules to permit Participants to change the form and timing of
their payment election, provided that no such change shall be effective unless
it is made at least two (2) years prior to the Participant's Termination of
Service. In the event of death after Termination of Service, distribution of the
remaining amount credited to the Participant's Matching Subaccount and
Supplemental Subaccount shall be made to a Beneficiary in a lump sum as soon as
practical after the Participant's death.
(ii) In the event all or any portion of the Participant's Matching
Subaccount and Supplemental Subaccount is deemed to be invested in Shares, the
Company may at its discretion permit the Participant to elect to receive a
distribution of all or any portion of the amount credited to the Subaccounts in
Shares in full satisfaction of the Company's obligations hereunder. Any
fractional Share shall be paid in cash.
The obligation of the Company to deliver Shares under the Plan shall
be subject to all applicable laws, rules and regulations, including all
applicable federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or appropriate by
the Company. Notwithstanding anything contained in the Plan to the contrary, in
the event that the disposition of Shares acquired pursuant to the Plan is not
covered by a then current registration statement under the Securities Act of
1933, as amended, and is not otherwise exempt from such registration, such
Shares shall be restricted against transfer to the extent required by the
Securities Act of 1933, as amended, and Rule 144 or other regulations
thereunder. The Company may require any individual receiving Shares pursuant to
Page 78
Exhibit 10(iii)A(9)
the Plan, as a condition precedent to receipt of Shares to represent and warrant
to the Company in writing that the Shares acquired by such individual are
acquired without a view to any distribution thereof and will not be sold or
transferred other than pursuant to an effective registration thereof under said
Act or pursuant to an exemption applicable under the Securities Act of 1933, as
amended, or the rules and regulations promulgated thereunder. The certificates
evidencing any of such Shares shall be appropriately legended to reflect their
status as restricted securities.
4.4 Hardship. A Participant who is suffering an unforeseen and severe
financial hardship as a result of (i) an illness or accident of the Participant
or his immediately family, (ii) loss of Participant's property due to casualty,
or (iii) for such other reasons as the Plan Administrator may establish, may
file a written request with the Plan Administrator for distribution of all or a
portion of the amount credited to his Deferral Subaccount. The Plan
Administrator shall have the sole discretion to determine whether to grant a
Participant's hardship request and the amount to distribute to the Participant.
The Plan Administrator shall have authority in connection with such hardship
request to accelerate the payment of any Class Year Subaccounts which have been
deferred pursuant to Section 4.3(a).
4.5 Transfer of Executive Savings Plan Account. A Participant in the
Plan who is also a participant in the Executive Savings Plan shall have the
amount credited to his "Account" (as defined in the Executive Savings Plan)
transferred to the Plan as soon as practical after the Plan has been fully
implemented by the Company, or at such earlier or later date as may be selected
by the Company. The amount credited to the Participant's Account in the
Executive Savings Plan shall be credited to his Deferral Subaccount hereunder
and shall thereafter be held and distributed in accordance with the rules of the
Plan applicable to the Deferral Subaccount.
In the event the Plan is fully implemented prior to the date the
bonuses for the Fiscal Year ending August 31, 1997 are paid, the deferral of
bonuses for such year to the Executive Savings Plan shall be made to the Plan
and shall be treated in the same manner as a deferral for the Initial Election
Period.
Page 79
Exhibit 10(iii)A(9)
ARTICLE V
PLAN ADMINISTRATOR
5.1 Committee. The Plan Administrator shall be the Company or such
committee as may be designated by the Company to administer and manage the Plan.
Members of any committee shall not be required to be employees of the Company or
Participants. Action of the Plan Administrator may be taken with or without a
meeting of committee members. If a member of the committee is a Participant in
the Plan, he shall not participate in any decision which solely affects his own
Account.
5.2 Right and Duties. The Plan Administrator shall have the
discretionary authority to administer and manage the Plan and shall have all
powers necessary to accomplish that purpose, including (but not limited to) the
following:
(a) To construe, interpret, and administer this Plan;
(b) To make allocations and determinations required by this Plan, and
to maintain records relating to Participants' Accounts;
(c) To compute and certify to the Company the amount and kinds of
benefits payable to Participants or their beneficiaries, and to determine the
time and manner in which such benefits are to be paid;
(d) To authorize all disbursements by the Company pursuant to this
Plan;
(e) To maintain (or cause to be maintained) all the necessary records
of the administration of this Plan;
(f) To make and publish such rules for the regulation of this Plan as
are not inconsistent with the terms hereof;
(g) To delegate to other individuals or entities from time to time the
performance of any of its duties or responsibilities hereunder; and
(h) To hire agents, accountants, actuaries, consultants and legal
counsel to assist in operating and administering the Plan.
The Plan Administrator shall have the exclusive discretionary
authority to construe and to interpret the Plan, to decide all questions of
eligibility for benefits and to determine the amount and manner of payment of
such benefits, and its decisions on such matters shall be final and conclusive
on all parties.
5.3 Compensation, Indemnity and Liability. The Plan Administrator
shall serve as such without bond and without compensation for services
Page 80
Exhibit 10(iii)A(9)
hereunder. All expenses of the Plan and the Plan Administrator shall be paid by
the Company. If the Plan Administrator is a committee, no member of the
committee shall be liable for any act or omission of any other member of the
committee, nor for any act or omission on his own part, excepting his own
willful misconduct. The Company shall indemnify and hold harmless the Plan
Administrator and each member of the committee against any and all expenses and
liabilities, including reasonable legal fees and expenses, arising out of his
membership on the committee, excepting only expenses and liabilities arising out
of his own willful misconduct.
5.4 Taxes. If the whole or any part of any Participant's Account shall
become liable for the payment of any estate, inheritance, income, or other tax
which the Company shall be required to pay or withhold, the Company shall have
the full power and authority to withhold and pay such tax out of any monies or
other property in its hand for the account of the Participant whose interests
hereunder are so liable. The Company shall provide notice of any such
withholding. Prior to making any payment, the Company may require such releases
or other documents from any lawful taxing authority as it shall deem necessary.
Page 81
Exhibit 10(iii)A(9)
ARTICLE VI
CLAIMS PROCEDURE
6.1 Claims for Benefits. If a Participant or beneficiary (hereafter,
"Claimant") does not receive timely payment of any benefits which he believes
are due and payable under the Plan, he may make a claim for benefits to the Plan
Administrator. The claim for benefits must be in writing and addressed to the
Plan Administrator or to the Company. If the claim for benefits is denied, the
Plan Administrator shall notify the Claimant in writing within 90 days after the
Plan Administrator initially received the benefit claim. However, if special
circumstances require an extension of time for processing the claim, the Plan
Administrator shall furnish notice of the extension to the Claimant prior to the
termination of the initial 90-day period and such extension shall not exceed one
additional, consecutive 90-day period. Any notice of a denial of benefits shall
advise the Claimant of the basis for the denial, any additional material or
information necessary for the Claimant to perfect his claim, and the steps which
the Claimant must take to have his claim for benefits reviewed.
6.2 Appeals. Each Claimant whose claim for benefits has been denied
may file a written request for a review of his claim by the Plan Administrator.
The request for review must be filed by the Claimant within 60 days after he
received the written notice denying his claim. The decision of the Plan
Administrator will be made within 60 days after receipt of a request for review
and shall be communicated in writing to the Claimant. Such written notice shall
set forth the basis for the Plan Administrator's decision. If there are special
circumstances which require an extension of time for completing the review, the
Plan Administrator's decision shall be rendered not later than 120 days after
receipt of a request for review.
Page 82
Exhibit 10(iii)A(9)
ARTICLE VII
AMENDMENT AND TERMINATION; CHANGE IN CONTROL
7.1 Amendments. Subject to Section 7.3, the Company (or its designee)
shall have the right in its sole discretion to amend this Plan in any manner at
any time; provided, however, that no such amendment shall reduce the
Participant's vested interest in his Account under Section 4.2 at that time. Any
amendment shall be in writing and executed by a duly authorized officer of the
Company. All Participants shall be bound by such amendment.
7.2 Termination of Plan. The Company expects to continue this Plan,
but does not obligate itself to do so. Subject to Section 7.3, the Company
reserves the right to discontinue and terminate the Plan at any time, in whole
or in part, for any reason (including a change, or an impending change, in the
tax laws of the United States or any State). If the Plan is terminated, the Plan
Administrator shall be notified of such action in a writing executed by a duly
authorized officer of the Company, and the Plan shall be terminated at the time
therein set forth. Termination of the Plan shall be binding on all Participants,
but in no event may such termination reduce the amounts credited at that time to
any Participant's Account. If this Plan is terminated, amounts theretofore
credited to Participant's Deferral Subaccount, Matching Subaccount and
Supplemental Subaccount, including interest and earnings from the last Valuation
Date to the termination date, shall either be paid in a lump sum immediately, or
distributed in some other manner consistent with this Plan, as determined by the
Plan Administrator in its sole discretion.
7.3 Change In Control Provisions.
(a) Amendment or Termination. Notwithstanding anything contained in
this Plan to the contrary, for a period of two (2) years following a Change in
Control this Plan shall not be terminated or amended to reduce, suspend or
eliminate any Eligible Executive's or Participant's benefits or participation
(or right to participate) provided under this Plan, including, without
limitation, the benefits provided in Articles III and IV. Any amendment or
termination of this Plan which a Participant reasonably demonstrates (i) was at
the request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control, or (ii) otherwise arose in
connection with or in anticipation of a Change in Control, and which was not
consented to in writing by the Participant shall be null and void, and shall
have no effect whatsoever with respect to the Participant.
(b) Termination of Employment. Notwithstanding anything contained in
this Plan to the contrary, if a Participant's employment is terminated by the
Company (other than for "Cause" as defined in (c) below) or by the Participant
Page 83
Exhibit 10(iii)A(9)
for any reason within two (2) years following a Change in Control, the
Participant's Account shall become fully vested and the Company shall, within
five (5) days, pay to the Participant a lump sum cash payment of the full amount
credited to his Account (including any Class Year Subaccounts subject to a
deferral election under Section 4.3(b), Matching Subaccount and Supplemental
Subaccount) with earnings determined under Section 4.1 credited thereto to the
date of payment. If a Participant's employment is terminated (i) for Cause (as
defined in (c) below) within two (2) years following a Change in Control or
(ii) for any reason more than two (2) years after a Change in Control, the
provisions of Article IV shall apply to the distribution of the Participant's
Account.
(c) Cause. For purposes of Section 7.3(b), a termination for "Cause"
is a termination of the Executive evidenced by a resolution adopted in good
faith by two-thirds of the Board of Directors of the Company that the
Participant (i) intentionally and continually failed to substantially perform
his duties with the Company (other than a failure resulting from the
Participant's incapacity due to physical or mental illness) which failure
continued for a period of at least thirty (30) days after a written notice of
demand for substantial performance has been delivered to the Participant
specifying the manner in which the Participant has failed to substantially
perform, or (ii) intentionally engaged in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise; provided, however,
that no termination of the Participant's employment shall be for Cause as set
forth in clause (ii) above until (x) there shall have been delivered to the
Participant a copy of a written notice setting forth that the Participant was
guilty of the conduct set forth in clause (ii) and specifying the particulars
thereof in detail, and (y) the Participant shall have been provided an
opportunity to be heard by the Board (with the assistance of the Participant's
counsel if the Participant so desires). No act, nor failure to act, on the
Participant's part, shall be considered "intentional" unless he has acted or
failed to act, with an absence of good faith and without a reasonable belief
that his action or failure to act was in the best interest of the Company.
Notwithstanding anything contained in this Agreement to the contrary, in the
case of any Participant who is a party to a Severance Protection Agreement, no
failure to perform by the Participant after a Notice of Termination (as defined
in the Participant's Severance Protection Agreement) is given by the Participant
shall constitute Cause for purposes of this Plan.
Page 84
Exhibit 10(iii)A(9)
ARTICLE VIII
MISCELLANEOUS
8.1 Limitation on Participant's Rights. Participation in this Plan
shall not give any Participant the right to be retained in the Company's employ
or the employ of any Employer, or any right or interest in this Plan or any
assets of the Company other than as herein provided. The Company reserves the
right to terminate the employment of any Participant without any liability for
any claim against the Company under this Plan, except to the extent provided
herein.
8.2 Benefits Unfunded. The benefits provided by this Plan shall be
unfunded. All amounts payable under this Plan to Participants shall be paid from
the general assets of the Company, and nothing contained in this Plan shall
require the Company to set aside or hold in trust any amounts or assets for the
purpose of paying benefits to Participants. This Plan shall create only a
contractual obligation on the part of the Company, and Participants shall have
the status of general unsecured creditors of the Company under the Plan with
respect to amounts of Compensation they defer hereunder or any other obligation
of the Company to pay benefits pursuant hereto. Any funds of the Company
available to pay benefits pursuant to the Plan shall be subject to the claims of
general creditors of the Company, and may be used for any purpose by the
Company.
Notwithstanding the preceding paragraph, the Company may at any time
transfer assets, including Shares, to a trust for purposes of paying all or any
part of its obligations under this Plan. However, to the extent provided in the
trust only, such transferred amounts shall remain subject to the claims of
general creditors of the Company. To the extent that assets are held in a trust
when a Participant's benefits under the Plan become payable, the Plan
Administrator shall direct the trustee to pay such benefits to the Participant
from the assets of the trust.
8.3 Other Plans. This Plan shall not affect the right of any Executive
or Participant to participate in and receive benefits under and in accordance
with the provisions of any other employee benefit plans which are now or
hereafter maintained by the Company, unless the terms of such other employee
benefit plan or plans specifically provide otherwise.
8.4 Receipt or Release. Any payment to a Participant in accordance
with the provisions of this Plan shall, to the extent thereof, be in full
satisfaction of all claims against the Plan Administrator, the Company and any
Employer, and the Plan Administrator may require such Participant, as a
condition precedent to such payment, to execute a receipt and release to such
effect.
8.5 Governing Law. This Plan shall be construed, administered, and
governed in all respects in accordance with applicable federal law and, to the
Page 85
Exhibit 10(iii)A(9)
extent not preempted by federal law, in accordance with the laws of the State of
Georgia. If any provisions of this instrument shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.
8.6 Gender, Tense, and Headings. In this Plan, whenever the context so
indicates, the singular or plural number and the masculine, feminine, or neuter
gender shall be deemed to include the other. Headings and subheadings in this
Plan are inserted for convenience of reference only and are not considered in
the construction of the provisions hereof.
8.7 Successors and Assigns; Nonalienation of Benefits. This Plan shall
inure to the benefit of and be binding upon the parties hereto and their
successors and assigns; provided, however, that the amounts credited to the
Account of a Participant shall not (except as provided in Section 5.4) be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, charge, garnishment, execution or levy of any kind, either
voluntary or involuntary, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise dispose of any right to
any benefits payable hereunder, including, without limitation, any assignment or
alienation in connection with a separation, divorce, child support or similar
arrangement, shall be null and void and not binding on the Plan or the Company.
In addition to any obligations imposed by law upon any successor to the Company,
the Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to substantially all of the business or
assets of the Company to expressly agree to assume and perform this Agreement in
the same manner that the Company would be required to perform it.
8.8 Combination With Other Plan. The Plan may be combined or merged
with other deferred compensation plans of the Company and the Plan Administrator
shall establish the terms and conditions relating to any such merger.
Page 86
Exhibit 10(iii)A(9)
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by
its duly authorized officers as of the date and year first written above.
NATIONAL SERVICE INDUSTRIES, INC.
By:________________________
Page 87
Exhibit 10(iii)A(9)
NATIONAL SERVICE INDUSTRIES, INC.
SUPPLEMENTAL DEFERRED SAVINGS PLAN
DEFERRAL AND PAYMENT ELECTIONS
AND DESIGNATION OF BENEFICIARY
To the Plan Administrator:
I hereby agree to participate in the NATIONAL SERVICE INDUSTRIES, INC.
SUPPLEMENTAL DEFERRED SAVINGS PLAN (the "Plan") pursuant to the terms and
conditions of such Plan contained in the Plan document adopted by NATIONAL
SERVICE INDUSTRIES, INC. ("Company"), all of which terms and conditions are
incorporated herein by reference.
I. DEFERRAL ELECTIONS
a. Salary Deferral: I hereby elect to defer the amount of my Salary
indicated below for the period December 1, 1996 to December 31,
1997:
_____% of my Salary
$_____ of my Salary (amounts will be deducted
equally over the pay periods)
Other _________________________________
b. Annual Bonus Deferral: I hereby elect to defer the amount of my
Annual Bonus indicated below for the Company's Fiscal Year
commencing September 1, 1996 and ending August 31, 1997:
_____% of my Annual Bonus
$_____ of my Annual Bonus (if my Annual Bonus is less than this
amount, 100% of my Annual Bonus will be deferred).
_____% of my Annual Bonus above $________ (specify dollar level
above which percentage of Annual Bonus will be deferred).
Page 88
Exhibit 10(iii)A(9)
Other _________________________________
NOTE:If you have already elected to defer a portion of your
fiscal 1997 bonus to the Executive Savings Plan, that
election will be recognized first before any bonus amounts
are deferred to this Plan. However, the Company intends to
merge the Executive Savings Plan with this Plan and, in such
event, your deferrals under the Executive Savings Plan will
be transferred to this Plan.
c. Deferral Limitation: Notwithstanding my election in this Section
I, I understand that my annual deferral cannot be less than
$1,000 nor exceed 50% of my Compensation (Salary and Annual
Bonus) for the Plan Year and, that in the event my election does
not satisfy these limitations, the Plan Administrator will adjust
my election in an appropriate manner.
If, for any reason, this Plan is not finally implemented, any
deferrals under this Plan will be made to the Executive Savings
Plan.
II. ELECTION FOR MATCHING SUBACCOUNT CREDITS
I hereby elect to have the Employer's credits to my Matching
Subaccount for the period covered by this election treated as if they were
invested as follows:
100% in cash, with interest credited at the Prime Rate
100% in Shares of the Company, with earnings credited as if
invested in such Shares
Page 89
Exhibit 10(iii)A(9)
50%in cash and 50% in Shares
NOTE:This deemed investment election must be made each year with
respect to Matching Subaccount credits for such year and the
Company may elect not to allow the election for any year.
III. BENEFIT PAYMENT ELECTION
Subject to the provisions of the Plan, I hereby elect to receive
payment of the vested portion of the Employer's credits to my Matching
Subaccount and Supplemental Subaccount on the date(s) and in the
manner specified below:
Based on Termination of Service Based on Designated Age
Year Amount or % Age Amount or %
Termination of
Service
Termination +1
Termination +2
Termination +3
Termination +4
Termination +5
Termination +6
Termination +7
Termination +8
Termination +9
NOTE:
(1) Except for the year in which you terminate or attain the
designated age, all payments will be made on or about
January 1 of the year indicated. If you elect installment
payments, it must be in 10% increments.
(2) Your Subaccounts will not be vested unless you terminate on
or after age 55 with at least 5 Years of Service.
(3) If you wish payments to start at a specified age, enter the
age at which you want payments to start (which must be at
least age 60), but payments will not start until after
Termination of Service (at which time all back payments will
also be made).
Page 90
Exhibit 10(iii)A(9)
(4) If you elect a lump sum, it must be made no later than the
year in which you attain age 70. If you elect installments,
your last installment payment must be made no later than the
year in which you attain age 75.
IV. BENEFICIARY DESIGNATION
I designate the following person(s) as Primary and Contingent
Beneficiaries under the Plan with respect to all vested amounts credited to my
Account:
Primary Beneficiary(ies):
______________________ __________________ __________________
Name % Benefit Relationship
______________________ __________________ __________________
Name % Benefit Relationship
______________________ __________________ __________________
Name % Benefit Relationship
Page 91
Exhibit 10(iii)A(9)
Contingent Beneficiary(ies): (will only receive benefits if none of
the Primary Beneficiary(ies) survives the Participant)
______________________ __________________ __________________
Name % Benefit Relationship
______________________ __________________ __________________
Name % Benefit Relationship
______________________ __________________ __________________
Name % Benefit Relationship
V. SIGNATURE
I retain the right, at any time, to change the Beneficiary designation
in Section IV above by giving written notice of such change to the Plan
Administrator and to make such other changes to this Election Form as may be
permitted by the Plan. I hereby agree to be bound by all of the terms and
conditions of the Plan, as it may be amended from time to time.
Dated: ____________________
S.S.N.
Received By Company: _______________________
Signature Date
Page 92
Exhibit 10(iii)A(9)
ELECTION TO DEFER DISTRIBUTION